Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net
income attributable to Valero stockholders of $856 million, or
$2.01 per share, for the third quarter of 2018 compared to $841
million, or $1.91 per share, for the third quarter of
2017.
“We operated well in the third quarter and
delivered solid financial performance,” said Joe Gorder, Valero
Chairman, President and Chief Executive Officer. “We
continued to capture benefits from our investments in crude oil
logistics and light crude processing. We also continued to
deliver on our commitments to grow the earnings capability of the
company through acquisitions and growth investments while
delivering returns to our stockholders.”
RefiningThe refining segment
reported $1.3 billion of operating income for the third quarter of
2018 compared to $1.4 billion for the third quarter of 2017.
The $90 million decrease is mainly due to lower gasoline and
secondary products margins.
Refinery throughput capacity utilization was 99
percent, with throughput volumes averaging 3.1 million barrels
per day in the third quarter of 2018. This compares to 2.9
million barrels per day in the third quarter of 2017, during which
five of our refineries were impacted by Hurricane Harvey. The
company exported a total of 421,000 barrels per day of gasoline and
distillate during the third quarter of 2018.
Biofuel blending costs were $94 million in the
third quarter of 2018, which is $136 million less than in the third
quarter of 2017, mainly due to lower Renewable Identification
Number (RIN) prices.
EthanolThe ethanol segment
reported $21 million of operating income for the third quarter of
2018 compared to $82 million for the third quarter of 2017.
The decrease in operating income is attributed primarily to lower
ethanol prices. Ethanol production volumes of 4 million
gallons per day were in line with the third quarter of
2017.
VLPThe VLP segment, which is
composed of Valero Energy Partners LP, the company’s majority-owned
midstream master limited partnership, reported $90 million of
operating income for the third quarter of 2018 compared to
$69 million for the third quarter of 2017. The $21
million increase is mostly driven by contributions from the Port
Arthur terminal assets and Parkway Pipeline, which the Partnership
acquired from Valero in November 2017. These assets were
formerly a part of the refining segment.
Corporate and OtherGeneral and
administrative expenses were $209 million in the third quarter
of 2018 compared to $225 million in the third quarter of
2017. The effective tax rate was 24 percent for the third
quarter of 2018.
Investing and Financing
ActivitiesCapital investments in the third quarter of 2018
totaled $604 million. Included in this amount is $435 million
associated with sustaining the business, such as turnaround,
catalyst, and regulatory compliance expenditures, with the balance
for growth.
Valero returned $775 million to stockholders in
the third quarter, of which $341 million was paid as dividends
and the balance was used to purchase 3.8 million shares of its
common stock.
Net cash provided by operating activities in the
third quarter was $496 million. Included in this amount is a
$729 million use of cash to fund working capital. Excluding
working capital, adjusted net cash provided by operating activities
was $1.2 billion.
The company continues to target a total payout
ratio between 40 and 50 percent of adjusted net cash provided by
operating activities for 2018. Valero defines total payout
ratio as the sum of dividends and stock buybacks divided by
adjusted net cash provided by operating activities.
Liquidity and Financial
PositionValero ended the third quarter of 2018 with
$9.1 billion of total debt and $3.6 billion of cash and
cash equivalents. The debt to capital ratio, net of
$2.0 billion in cash, was 24 percent.
Strategic UpdateThe expansion
of the Diamond Green Diesel plant to 16,500 barrels per day of
renewable diesel production capacity was completed in August 2018
and is running well. Development continues on a project to
further expand the facility’s production capacity to a total of
44,000 barrels per day, with a final investment decision expected
before year-end.
In September, Valero’s Board of Directors
approved a project to construct a 55,000 barrel per day coker and a
sulfur recovery unit at the Port Arthur refinery for a total cost
of $975 million. When completed in 2022, the refinery is
expected to benefit from improved turnaround efficiency, reduced
feedstock costs, and increased crude oil throughput
capacity.
“We’re excited that the coker project is moving
forward,” commented Gorder. “The additional coker capacity
will create two independent process trains and improve the Port
Arthur refinery’s turnaround efficiency.”
In October, the company entered into an
agreement to acquire three ethanol plants from Green Plains
Renewable Energy with a total nameplate capacity of 280 million
gallons per year at a cost of $300 million plus working capital
estimated at $28 million. The plants are strategically
located in the U.S. corn belt and utilize the same process
technologies as Valero’s existing facilities, enabling the capture
of commercial and operational synergies and the transfer of best
practices. This transaction is expected to close in the
fourth quarter of 2018.
Also in October, Valero and the Partnership
announced the execution of a merger agreement under which Valero
plans to acquire all of the Partnership’s outstanding publicly held
common units at a price of $42.25 per common unit in cash.
This transaction is expected to be immediately accretive and to
close as soon as possible following the satisfaction of certain
customary closing conditions.
Construction continues on schedule for the
Houston and St. Charles alkylation units, the Central Texas
pipelines and terminals, the Pasadena products terminal, and the
Pembroke cogeneration plant, with startups expected in 2019 and
2020.
Capital investment plans of $2.7 billion for
2018, of which $1.0 billion is for growth projects and $1.7
billion is for sustaining the business, remain unchanged.
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
1.45 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 the Partnership, 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, Executive 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,” “target,” “will,” “plans,” and other similar expressions
identify forward-looking statements. The forward-looking
statements contained herein include statements related to the
proposed merger with the Partnership as described above. 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 the company’s control,
such as delays in construction timing, other factors and, with
respect to the proposed merger, include, but are not limited to,
failure of closing conditions, delays in the consummation of the
proposed merger and changes to business plans, as circumstances
warrant. These factors may influence Valero’s and/or the
Partnership’s ability to consummate the proposed merger on the
expected time frame or at all. 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, quarterly reports on Form 10-Q and our other reports 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.
Important Information About the Proposed
Merger Valero has filed with the SEC a Current Report on
Form 8-K, which contains, among other things, a copy of the merger
agreement and the support agreement for the proposed merger with
the Partnership. VLO’s stockholders may obtain, without
charge, a copy of VLO’s Form 8-K announcing the execution of the
merger agreement and the support agreement, and other relevant
documents filed with the SEC from the SEC’s website at www.sec.gov.
VLO’s stockholders will also be able to obtain, without
charge, a copy of VLO’s Form 8-K announcing the execution of the
merger agreement and the support agreement, and other documents
relating to the proposed merger (when available) at
www.valero.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 refining operating
income, refining margin, ethanol margin, adjusted VLP operating
income, and adjusted net cash provided by operating
activities. 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 non-GAAP measures to their most directly
comparable U.S. GAAP measures. In note (g) 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
CORPORATIONEARNINGS RELEASE
TABLESFINANCIAL
HIGHLIGHTS(millions of dollars, except per share
amounts)(unaudited)
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Statement of income data |
|
|
|
|
|
|
|
Revenues |
$ |
30,849 |
|
|
$ |
23,562 |
|
|
$ |
88,303 |
|
|
$ |
67,588 |
|
Cost of sales: |
|
|
|
|
|
|
|
Cost of materials and other (a) |
27,701 |
|
|
20,329 |
|
|
79,317 |
|
|
59,366 |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
1,193 |
|
|
1,135 |
|
|
3,439 |
|
|
3,370 |
|
Depreciation and amortization expense |
504 |
|
|
484 |
|
|
1,499 |
|
|
1,457 |
|
Total cost of sales |
29,398 |
|
|
21,948 |
|
|
84,255 |
|
|
64,193 |
|
Other operating expenses (c) |
10 |
|
|
44 |
|
|
41 |
|
|
44 |
|
General and administrative expenses
(excludingdepreciation and amortization expense reflected below)
(b) (d) |
209 |
|
|
225 |
|
|
695 |
|
|
592 |
|
Depreciation and amortization expense |
13 |
|
|
13 |
|
|
39 |
|
|
39 |
|
Operating income |
1,219 |
|
|
1,332 |
|
|
3,273 |
|
|
2,720 |
|
Other income, net (b) (e) |
42 |
|
|
23 |
|
|
88 |
|
|
76 |
|
Interest and debt expense, net of capitalized
interest |
(111 |
) |
|
(114 |
) |
|
(356 |
) |
|
(354 |
) |
Income before income tax expense |
1,150 |
|
|
1,241 |
|
|
3,005 |
|
|
2,442 |
|
Income tax expense (f) |
276 |
|
|
378 |
|
|
674 |
|
|
686 |
|
Net income |
874 |
|
|
863 |
|
|
2,331 |
|
|
1,756 |
|
Less: Net income attributable to noncontrolling
interests (a) |
18 |
|
|
22 |
|
|
161 |
|
|
62 |
|
Net income attributable to Valero Energy
Corporationstockholders |
$ |
856 |
|
|
$ |
841 |
|
|
$ |
2,170 |
|
|
$ |
1,694 |
|
|
|
|
|
|
|
|
|
Earnings per common share |
$ |
2.01 |
|
|
$ |
1.91 |
|
|
$ |
5.05 |
|
|
$ |
3.80 |
|
Weighted-average common shares outstanding (in
millions) |
425 |
|
|
439 |
|
|
428 |
|
|
444 |
|
|
|
|
|
|
|
|
|
Earnings per common share – assuming dilution |
$ |
2.01 |
|
|
$ |
1.91 |
|
|
$ |
5.05 |
|
|
$ |
3.80 |
|
Weighted-average common shares outstanding –assuming
dilution (in millions) |
427 |
|
|
441 |
|
|
430 |
|
|
446 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESFINANCIAL HIGHLIGHTS BY
SEGMENT(millions of
dollars)(unaudited)
|
Refining |
|
Ethanol |
|
VLP |
|
Corporate and
Eliminations |
|
Total |
Three months ended September 30, 2018 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
29,984 |
|
|
$ |
864 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
30,849 |
|
Intersegment revenues |
5 |
|
|
68 |
|
|
140 |
|
|
(213 |
) |
|
— |
|
Total revenues |
29,989 |
|
|
932 |
|
|
140 |
|
|
(212 |
) |
|
30,849 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other |
27,137 |
|
|
776 |
|
|
— |
|
|
(212 |
) |
|
27,701 |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) |
1,047 |
|
|
116 |
|
|
31 |
|
|
(1 |
) |
|
1,193 |
|
Depreciation and amortization expense |
466 |
|
|
19 |
|
|
19 |
|
|
— |
|
|
504 |
|
Total cost of sales |
28,650 |
|
|
911 |
|
|
50 |
|
|
(213 |
) |
|
29,398 |
|
Other operating expenses (c) |
10 |
|
|
— |
|
|
— |
|
|
— |
|
|
10 |
|
General and administrative expenses
(excludingdepreciation and amortization expense
reflectedbelow) |
— |
|
|
— |
|
|
— |
|
|
209 |
|
|
209 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating income by segment |
$ |
1,329 |
|
|
$ |
21 |
|
|
$ |
90 |
|
|
$ |
(221 |
) |
|
$ |
1,219 |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2017 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
22,728 |
|
|
$ |
834 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
23,562 |
|
Intersegment revenues |
1 |
|
|
48 |
|
|
110 |
|
|
(159 |
) |
|
— |
|
Total revenues |
22,729 |
|
|
882 |
|
|
110 |
|
|
(159 |
) |
|
23,562 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other |
19,818 |
|
|
669 |
|
|
— |
|
|
(158 |
) |
|
20,329 |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
996 |
|
|
114 |
|
|
26 |
|
|
(1 |
) |
|
1,135 |
|
Depreciation and amortization expense |
455 |
|
|
17 |
|
|
12 |
|
|
— |
|
|
484 |
|
Total cost of sales |
21,269 |
|
|
800 |
|
|
38 |
|
|
(159 |
) |
|
21,948 |
|
Other operating expenses (c) |
41 |
|
|
— |
|
|
3 |
|
|
— |
|
|
44 |
|
General and administrative expenses
(excludingdepreciation and amortization expense reflectedbelow)
(b) |
— |
|
|
— |
|
|
— |
|
|
225 |
|
|
225 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating income by segment |
$ |
1,419 |
|
|
$ |
82 |
|
|
$ |
69 |
|
|
$ |
(238 |
) |
|
$ |
1,332 |
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESFINANCIAL HIGHLIGHTS BY
SEGMENT(millions of
dollars)(unaudited)
|
Refining |
|
Ethanol |
|
VLP |
|
CorporateandEliminations |
|
Total |
Nine months ended September 30, 2018 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
85,675 |
|
|
$ |
2,625 |
|
|
$ |
— |
|
|
$ |
3 |
|
|
$ |
88,303 |
|
Intersegment revenues |
10 |
|
|
156 |
|
|
407 |
|
|
(573 |
) |
|
— |
|
Total revenues |
85,685 |
|
|
2,781 |
|
|
407 |
|
|
(570 |
) |
|
88,303 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other (a) |
77,608 |
|
|
2,279 |
|
|
— |
|
|
(570 |
) |
|
79,317 |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) |
3,013 |
|
|
336 |
|
|
93 |
|
|
(3 |
) |
|
3,439 |
|
Depreciation and amortization expense |
1,385 |
|
|
57 |
|
|
57 |
|
|
— |
|
|
1,499 |
|
Total cost of sales |
82,006 |
|
|
2,672 |
|
|
150 |
|
|
(573 |
) |
|
84,255 |
|
Other operating expenses (c) |
41 |
|
|
— |
|
|
— |
|
|
— |
|
|
41 |
|
General and administrative expenses
(excludingdepreciation and amortization expense reflectedbelow)
(d) |
— |
|
|
— |
|
|
— |
|
|
695 |
|
|
695 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
39 |
|
|
39 |
|
Operating income by segment |
$ |
3,638 |
|
|
$ |
109 |
|
|
$ |
257 |
|
|
$ |
(731 |
) |
|
$ |
3,273 |
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2017 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
65,030 |
|
|
$ |
2,558 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
67,588 |
|
Intersegment revenues |
1 |
|
|
136 |
|
|
326 |
|
|
(463 |
) |
|
— |
|
Total revenues |
65,031 |
|
|
2,694 |
|
|
326 |
|
|
(463 |
) |
|
67,588 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other |
57,662 |
|
|
2,166 |
|
|
— |
|
|
(462 |
) |
|
59,366 |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
2,966 |
|
|
330 |
|
|
75 |
|
|
(1 |
) |
|
3,370 |
|
Depreciation and amortization expense |
1,358 |
|
|
63 |
|
|
36 |
|
|
— |
|
|
1,457 |
|
Total cost of sales |
61,986 |
|
|
2,559 |
|
|
111 |
|
|
(463 |
) |
|
64,193 |
|
Other operating expenses (c) |
41 |
|
|
— |
|
|
3 |
|
|
— |
|
|
44 |
|
General and administrative expenses
(excludingdepreciation and amortization expense reflectedbelow)
(b) |
— |
|
|
— |
|
|
— |
|
|
592 |
|
|
592 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
39 |
|
|
39 |
|
Operating income by segment |
$ |
3,004 |
|
|
$ |
135 |
|
|
$ |
212 |
|
|
$ |
(631 |
) |
|
$ |
2,720 |
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(g)(millions of dollars, except per share
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation of net income attributable to Valero
EnergyCorporation stockholders to adjusted net
incomeattributable to Valero Energy Corporation
stockholders |
|
|
|
|
|
|
|
Net income attributable to Valero Energy
Corporationstockholders |
$ |
856 |
|
|
$ |
841 |
|
|
$ |
2,170 |
|
|
$ |
1,694 |
|
Exclude adjustments: |
|
|
|
|
|
|
|
Blender’s tax credit attributable to Valero
EnergyCorporation stockholders (a) |
— |
|
|
— |
|
|
90 |
|
|
— |
|
Income tax expense related to the blender’s tax
credit |
— |
|
|
— |
|
|
(11 |
) |
|
— |
|
Blender’s tax credit attributable to Valero
EnergyCorporation stockholders, net of taxes |
— |
|
|
— |
|
|
79 |
|
|
— |
|
Texas City Refinery fire expenses |
— |
|
|
— |
|
|
(14 |
) |
|
— |
|
Income tax benefit related to Texas City
Refineryfire expenses |
— |
|
|
— |
|
|
3 |
|
|
— |
|
Texas City Refinery fire expenses, net of taxes |
— |
|
|
— |
|
|
(11 |
) |
|
— |
|
Environmental reserve adjustments (d) |
— |
|
|
— |
|
|
(108 |
) |
|
— |
|
Income tax benefit related to the environmental
reserveadjustments |
— |
|
|
— |
|
|
24 |
|
|
— |
|
Environmental reserve adjustments, net of taxes |
— |
|
|
— |
|
|
(84 |
) |
|
— |
|
Loss on early redemption of debt (e) |
— |
|
|
— |
|
|
(38 |
) |
|
— |
|
Income tax benefit related to the loss on
earlyredemption of debt |
— |
|
|
— |
|
|
9 |
|
|
— |
|
Loss on early redemption of debt, net of taxes |
— |
|
|
— |
|
|
(29 |
) |
|
— |
|
Total adjustments |
— |
|
|
— |
|
|
(45 |
) |
|
— |
|
Adjusted net income attributable toValero Energy
Corporation stockholders |
$ |
856 |
|
|
$ |
841 |
|
|
$ |
2,215 |
|
|
$ |
1,694 |
|
|
|
|
|
|
|
|
|
Reconciliation of earnings per common share –
assumingdilution to adjusted earnings per common
share –assuming dilution |
|
|
|
|
|
|
|
Earnings per common share – assuming dilution |
$ |
2.01 |
|
|
$ |
1.91 |
|
|
$ |
5.05 |
|
|
$ |
3.80 |
|
Exclude adjustments: |
|
|
|
|
|
|
|
Blender’s tax credit attributable to Valero
EnergyCorporation stockholders (a) |
— |
|
|
— |
|
|
0.18 |
|
|
— |
|
Texas City Refinery fire expenses |
— |
|
|
— |
|
|
(0.03 |
) |
|
— |
|
Environmental reserve adjustments (d) |
— |
|
|
— |
|
|
(0.19 |
) |
|
— |
|
Loss on early redemption of debt (e) |
— |
|
|
— |
|
|
(0.07 |
) |
|
— |
|
Total adjustments |
— |
|
|
— |
|
|
(0.11 |
) |
|
— |
|
Adjusted earnings per common share – assuming
dilution |
$ |
2.01 |
|
|
$ |
1.91 |
|
|
$ |
5.16 |
|
|
$ |
3.80 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(g)(millions of
dollars)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation of operating income by segment to
segmentmargin, and reconciliation of operating
income bysegment to adjusted operating income by
segment |
|
|
|
|
|
|
|
Refining segment |
|
|
|
|
|
|
|
Refining operating income |
$ |
1,329 |
|
|
$ |
1,419 |
|
|
$ |
3,638 |
|
|
$ |
3,004 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
170 |
|
|
— |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
(1,047 |
) |
|
(996 |
) |
|
(3,013 |
) |
|
(2,966 |
) |
Depreciation and amortization expense |
(466 |
) |
|
(455 |
) |
|
(1,385 |
) |
|
(1,358 |
) |
Other operating expenses (c) |
(10 |
) |
|
(41 |
) |
|
(41 |
) |
|
(41 |
) |
Refining margin |
$ |
2,852 |
|
|
$ |
2,911 |
|
|
$ |
7,907 |
|
|
$ |
7,369 |
|
|
|
|
|
|
|
|
|
Refining operating income |
$ |
1,329 |
|
|
$ |
1,419 |
|
|
$ |
3,638 |
|
|
$ |
3,004 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
170 |
|
|
— |
|
Other operating expenses (c) |
(10 |
) |
|
(41 |
) |
|
(41 |
) |
|
(41 |
) |
Adjusted refining operating income |
$ |
1,339 |
|
|
$ |
1,460 |
|
|
$ |
3,509 |
|
|
$ |
3,045 |
|
|
|
|
|
|
|
|
|
Ethanol segment |
|
|
|
|
|
|
|
Ethanol operating income |
$ |
21 |
|
|
$ |
82 |
|
|
$ |
109 |
|
|
$ |
135 |
|
Exclude: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) |
(116 |
) |
|
(114 |
) |
|
(336 |
) |
|
(330 |
) |
Depreciation and amortization expense |
(19 |
) |
|
(17 |
) |
|
(57 |
) |
|
(63 |
) |
Ethanol margin |
$ |
156 |
|
|
$ |
213 |
|
|
$ |
502 |
|
|
$ |
528 |
|
|
|
|
|
|
|
|
|
VLP segment |
|
|
|
|
|
|
|
VLP operating income |
$ |
90 |
|
|
$ |
69 |
|
|
$ |
257 |
|
|
$ |
212 |
|
Exclude: Other operating expenses (c) |
— |
|
|
(3 |
) |
|
— |
|
|
(3 |
) |
Adjusted VLP operating income |
$ |
90 |
|
|
$ |
72 |
|
|
$ |
257 |
|
|
$ |
215 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(g)(millions of
dollars)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation of refining segment operating income
torefining margin (by region), and reconciliation
ofrefining segment operating income to adjusted
refiningsegment operating income (by region)
(h) |
|
|
|
|
|
|
|
U.S. Gulf Coast region |
|
|
|
|
|
|
|
Refining operating income |
$ |
591 |
|
|
$ |
602 |
|
|
$ |
1,856 |
|
|
$ |
1,445 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
167 |
|
|
— |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
(579 |
) |
|
(564 |
) |
|
(1,687 |
) |
|
(1,715 |
) |
Depreciation and amortization expense |
(287 |
) |
|
(281 |
) |
|
(839 |
) |
|
(839 |
) |
Other operating expenses (c) |
(9 |
) |
|
(41 |
) |
|
(39 |
) |
|
(41 |
) |
Refining margin |
$ |
1,466 |
|
|
$ |
1,488 |
|
|
$ |
4,254 |
|
|
$ |
4,040 |
|
|
|
|
|
|
|
|
|
Refining operating income |
$ |
591 |
|
|
$ |
602 |
|
|
$ |
1,856 |
|
|
$ |
1,445 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
167 |
|
|
— |
|
Other operating expenses (c) |
(9 |
) |
|
(41 |
) |
|
(39 |
) |
|
(41 |
) |
Adjusted refining operating income |
$ |
600 |
|
|
$ |
643 |
|
|
$ |
1,728 |
|
|
$ |
1,486 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region |
|
|
|
|
|
|
|
Refining operating income |
$ |
418 |
|
|
$ |
359 |
|
|
$ |
1,008 |
|
|
$ |
641 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
2 |
|
|
— |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
(149 |
) |
|
(146 |
) |
|
(447 |
) |
|
(442 |
) |
Depreciation and amortization expense |
(68 |
) |
|
(64 |
) |
|
(201 |
) |
|
(196 |
) |
Refining margin |
$ |
635 |
|
|
$ |
569 |
|
|
$ |
1,654 |
|
|
$ |
1,279 |
|
|
|
|
|
|
|
|
|
Refining operating income |
$ |
418 |
|
|
$ |
359 |
|
|
$ |
1,008 |
|
|
$ |
641 |
|
Exclude: blender’s tax credit (a) |
— |
|
|
— |
|
|
2 |
|
|
— |
|
Adjusted refining operating income |
$ |
418 |
|
|
$ |
359 |
|
|
$ |
1,006 |
|
|
$ |
641 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(g)(millions of
dollars)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Reconciliation of refining segment operating income
torefining margin (by region), and reconciliation
ofrefining segment operating income to adjusted
refiningsegment operating income (by region) (h)
(continued) |
|
|
|
|
|
|
|
North Atlantic region |
|
|
|
|
|
|
|
Refining operating income |
$ |
322 |
|
|
$ |
327 |
|
|
$ |
620 |
|
|
$ |
785 |
|
Exclude: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
(149 |
) |
|
(138 |
) |
|
(432 |
) |
|
(379 |
) |
Depreciation and amortization expense |
(52 |
) |
|
(53 |
) |
|
(167 |
) |
|
(150 |
) |
Refining margin |
$ |
523 |
|
|
$ |
518 |
|
|
$ |
1,219 |
|
|
$ |
1,314 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
|
|
|
Refining operating income (loss) |
$ |
(2 |
) |
|
$ |
131 |
|
|
$ |
154 |
|
|
$ |
133 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
1 |
|
|
— |
|
Operating expenses (excluding depreciation
andamortization expense reflected below) (b) |
(170 |
) |
|
(148 |
) |
|
(447 |
) |
|
(430 |
) |
Depreciation and amortization expense |
(59 |
) |
|
(57 |
) |
|
(178 |
) |
|
(173 |
) |
Other operating expenses (c) |
(1 |
) |
|
— |
|
|
(2 |
) |
|
— |
|
Refining margin |
$ |
228 |
|
|
$ |
336 |
|
|
$ |
780 |
|
|
$ |
736 |
|
|
|
|
|
|
|
|
|
Refining operating income (loss) |
$ |
(2 |
) |
|
$ |
131 |
|
|
$ |
154 |
|
|
$ |
133 |
|
Exclude: |
|
|
|
|
|
|
|
Blender’s tax credit (a) |
— |
|
|
— |
|
|
1 |
|
|
— |
|
Other operating expenses (c) |
(1 |
) |
|
— |
|
|
(2 |
) |
|
— |
|
Adjusted refining operating income (loss) |
$ |
(1 |
) |
|
$ |
131 |
|
|
$ |
155 |
|
|
$ |
133 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESREFINING SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per barrel
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Throughput volumes (thousand barrels per day) |
|
|
|
|
|
|
|
Feedstocks: |
|
|
|
|
|
|
|
Heavy sour crude oil |
466 |
|
|
446 |
|
|
476 |
|
|
470 |
|
Medium/light sour crude oil |
424 |
|
|
420 |
|
|
422 |
|
|
461 |
|
Sweet crude oil |
1,527 |
|
|
1,348 |
|
|
1,392 |
|
|
1,301 |
|
Residuals |
244 |
|
|
215 |
|
|
233 |
|
|
226 |
|
Other feedstocks |
144 |
|
|
147 |
|
|
128 |
|
|
146 |
|
Total feedstocks |
2,805 |
|
|
2,576 |
|
|
2,651 |
|
|
2,604 |
|
Blendstocks and other |
295 |
|
|
317 |
|
|
326 |
|
|
313 |
|
Total throughput volumes |
3,100 |
|
|
2,893 |
|
|
2,977 |
|
|
2,917 |
|
|
|
|
|
|
|
|
|
Yields (thousand barrels per day) |
|
|
|
|
|
|
|
Gasolines and blendstocks |
1,478 |
|
|
1,401 |
|
|
1,429 |
|
|
1,406 |
|
Distillates |
1,201 |
|
|
1,108 |
|
|
1,135 |
|
|
1,122 |
|
Other products (i) |
460 |
|
|
420 |
|
|
451 |
|
|
426 |
|
Total yields |
3,139 |
|
|
2,929 |
|
|
3,015 |
|
|
2,954 |
|
|
|
|
|
|
|
|
|
Operating statistics (g) (j) |
|
|
|
|
|
|
|
Refining margin (from Table Page 5) |
$ |
2,852 |
|
|
$ |
2,911 |
|
|
$ |
7,907 |
|
|
$ |
7,369 |
|
Adjusted refining operating income (from Table Page
5) |
$ |
1,339 |
|
|
$ |
1,460 |
|
|
$ |
3,509 |
|
|
$ |
3,045 |
|
Throughput volumes (thousand barrels per day) |
3,100 |
|
|
2,893 |
|
|
2,977 |
|
|
2,917 |
|
|
|
|
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
10.00 |
|
|
$ |
10.94 |
|
|
$ |
9.73 |
|
|
$ |
9.26 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per barrel ofthroughput
(b) |
3.67 |
|
|
3.75 |
|
|
3.71 |
|
|
3.73 |
|
Depreciation and amortization expense per barrel
ofthroughput |
1.64 |
|
|
1.71 |
|
|
1.70 |
|
|
1.71 |
|
Adjusted refining operating income per barrel of
throughput |
$ |
4.69 |
|
|
$ |
5.48 |
|
|
$ |
4.32 |
|
|
$ |
3.82 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESETHANOL SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per gallon
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Operating statistics (g) (j) |
|
|
|
|
|
|
|
Ethanol margin (from Table Page 5) |
$ |
156 |
|
|
$ |
213 |
|
|
$ |
502 |
|
|
$ |
528 |
|
Ethanol operating income (from Table Page 5) |
$ |
21 |
|
|
$ |
82 |
|
|
$ |
109 |
|
|
$ |
135 |
|
Production volumes (thousand gallons per day) |
4,069 |
|
|
4,032 |
|
|
4,061 |
|
|
3,949 |
|
|
|
|
|
|
|
|
|
Ethanol margin per gallon of production |
$ |
0.42 |
|
|
$ |
0.57 |
|
|
$ |
0.45 |
|
|
$ |
0.49 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per gallonof
production |
0.31 |
|
|
0.30 |
|
|
0.30 |
|
|
0.31 |
|
Depreciation and amortization expense per gallon
ofproduction |
0.05 |
|
|
0.05 |
|
|
0.05 |
|
|
0.05 |
|
Ethanol operating income per gallon of
production |
$ |
0.06 |
|
|
$ |
0.22 |
|
|
$ |
0.10 |
|
|
$ |
0.13 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESVLP SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per barrel
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Operating statistics (j) |
|
|
|
|
|
|
|
Pipeline transportation revenue |
$ |
31 |
|
|
$ |
23 |
|
|
$ |
93 |
|
|
$ |
71 |
|
Terminaling revenue |
107 |
|
|
86 |
|
|
309 |
|
|
253 |
|
Storage and other revenue |
2 |
|
|
1 |
|
|
5 |
|
|
2 |
|
Total VLP revenues |
$ |
140 |
|
|
$ |
110 |
|
|
$ |
407 |
|
|
$ |
326 |
|
|
|
|
|
|
|
|
|
Pipeline transportation throughput (thousand barrels
per day) |
1,141 |
|
|
859 |
|
|
1,079 |
|
|
941 |
|
Pipeline transportation revenue per barrel of
throughput |
$ |
0.30 |
|
|
$ |
0.29 |
|
|
$ |
0.32 |
|
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
Terminaling throughput (thousand barrels per
day) |
3,767 |
|
|
2,694 |
|
|
3,576 |
|
|
2,760 |
|
Terminaling revenue per barrel of throughput |
$ |
0.31 |
|
|
$ |
0.34 |
|
|
$ |
0.32 |
|
|
$ |
0.34 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESREFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION(millions of dollars, except per barrel
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Operating statistics by region (h) |
|
|
|
|
|
|
|
U.S. Gulf Coast region (g) (j) |
|
|
|
|
|
|
|
Refining margin (from Table Page 6) |
$ |
1,466 |
|
|
$ |
1,488 |
|
|
$ |
4,254 |
|
|
$ |
4,040 |
|
Adjusted refining operating income (from Table Page
6) |
$ |
600 |
|
|
$ |
643 |
|
|
$ |
1,728 |
|
|
$ |
1,486 |
|
Throughput volumes (thousand barrels per day) |
1,834 |
|
|
1,657 |
|
|
1,764 |
|
|
1,713 |
|
|
|
|
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
8.69 |
|
|
$ |
9.76 |
|
|
$ |
8.84 |
|
|
$ |
8.64 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per barrel ofthroughput
(b) |
3.43 |
|
|
3.71 |
|
|
3.50 |
|
|
3.66 |
|
Depreciation and amortization expense per barrel
ofthroughput |
1.71 |
|
|
1.84 |
|
|
1.75 |
|
|
1.80 |
|
Adjusted refining operating income per barrel of
throughput |
$ |
3.55 |
|
|
$ |
4.21 |
|
|
$ |
3.59 |
|
|
$ |
3.18 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region (g)
(j) |
|
|
|
|
|
|
|
Refining margin (from Table Page 6) |
$ |
635 |
|
|
$ |
569 |
|
|
$ |
1,654 |
|
|
$ |
1,279 |
|
Adjusted refining operating income (from Table Page
6) |
$ |
418 |
|
|
$ |
359 |
|
|
$ |
1,006 |
|
|
$ |
641 |
|
Throughput volumes (thousand barrels per day) |
459 |
|
|
465 |
|
|
471 |
|
|
464 |
|
|
|
|
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
15.04 |
|
|
$ |
13.31 |
|
|
$ |
12.86 |
|
|
$ |
10.10 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per barrel ofthroughput
(b) |
3.53 |
|
|
3.42 |
|
|
3.47 |
|
|
3.49 |
|
Depreciation and amortization expense per barrel
ofthroughput |
1.61 |
|
|
1.48 |
|
|
1.57 |
|
|
1.54 |
|
Adjusted refining operating income per barrel of
throughput |
$ |
9.90 |
|
|
$ |
8.41 |
|
|
$ |
7.82 |
|
|
$ |
5.07 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESREFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION(millions of dollars, except per barrel
amounts)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Operating statistics by region (h)
(continued) |
|
|
|
|
|
|
|
North Atlantic region (g) (j) |
|
|
|
|
|
|
|
Refining margin (from Table Page 7) |
$ |
523 |
|
|
$ |
518 |
|
|
$ |
1,219 |
|
|
$ |
1,314 |
|
Refining operating income (from Table Page 7) |
$ |
322 |
|
|
$ |
327 |
|
|
$ |
620 |
|
|
$ |
785 |
|
Throughput volumes (thousand barrels per day) |
509 |
|
|
489 |
|
|
455 |
|
|
490 |
|
|
|
|
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
11.17 |
|
|
$ |
11.51 |
|
|
$ |
9.81 |
|
|
$ |
9.83 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per barrel ofthroughput
(b) |
3.18 |
|
|
3.06 |
|
|
3.48 |
|
|
2.84 |
|
Depreciation and amortization expense per barrel
ofthroughput |
1.12 |
|
|
1.17 |
|
|
1.34 |
|
|
1.12 |
|
Refining operating income per barrel of
throughput |
$ |
6.87 |
|
|
$ |
7.28 |
|
|
$ |
4.99 |
|
|
$ |
5.87 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region (g) (j) |
|
|
|
|
|
|
|
Refining margin (from Table Page 7) |
$ |
228 |
|
|
$ |
336 |
|
|
$ |
780 |
|
|
$ |
736 |
|
Adjusted refining operating income (loss) (from
TablePage 7) |
$ |
(1 |
) |
|
$ |
131 |
|
|
$ |
155 |
|
|
$ |
133 |
|
Throughput volumes (thousand barrels per day) |
298 |
|
|
282 |
|
|
287 |
|
|
250 |
|
|
|
|
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
8.33 |
|
|
$ |
12.97 |
|
|
$ |
9.94 |
|
|
$ |
10.80 |
|
Less: |
|
|
|
|
|
|
|
Operating expenses (excluding depreciation
andamortization expense reflected below) per barrel ofthroughput
(b) |
6.22 |
|
|
5.72 |
|
|
5.70 |
|
|
6.32 |
|
Depreciation and amortization expense per barrel
ofthroughput |
2.15 |
|
|
2.22 |
|
|
2.27 |
|
|
2.53 |
|
Adjusted refining operating income (loss) per barrel
ofthroughput |
$ |
(0.04 |
) |
|
$ |
5.03 |
|
|
$ |
1.97 |
|
|
$ |
1.95 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESAVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Feedstocks (dollars per barrel) |
|
|
|
|
|
|
|
Brent crude oil |
$ |
75.93 |
|
|
$ |
52.21 |
|
|
$ |
72.67 |
|
|
$ |
52.59 |
|
Brent less West Texas Intermediate (WTI) crude
oil |
6.23 |
|
|
4.05 |
|
|
5.81 |
|
|
3.18 |
|
Brent less Alaska North Slope (ANS) crude oil |
0.38 |
|
|
0.02 |
|
|
0.47 |
|
|
0.35 |
|
Brent less Louisiana Light Sweet (LLS) crude
oil |
1.63 |
|
|
0.57 |
|
|
1.64 |
|
|
0.77 |
|
Brent less Argus Sour Crude Index (ASCI) crude
oil |
5.12 |
|
|
3.85 |
|
|
5.21 |
|
|
4.28 |
|
Brent less Maya crude oil |
9.74 |
|
|
5.66 |
|
|
10.70 |
|
|
7.54 |
|
LLS crude oil |
74.30 |
|
|
51.64 |
|
|
71.03 |
|
|
51.82 |
|
LLS less ASCI crude oil |
3.49 |
|
|
3.28 |
|
|
3.57 |
|
|
3.51 |
|
LLS less Maya crude oil |
8.11 |
|
|
5.09 |
|
|
9.06 |
|
|
6.77 |
|
WTI crude oil |
69.70 |
|
|
48.16 |
|
|
66.86 |
|
|
49.41 |
|
|
|
|
|
|
|
|
|
Natural gas (dollars per million British Thermal
Units) |
2.96 |
|
|
2.91 |
|
|
3.01 |
|
|
3.00 |
|
|
|
|
|
|
|
|
|
Products (dollars per barrel, unless otherwise
noted) |
|
|
|
|
|
|
|
U.S. Gulf Coast: |
|
|
|
|
|
|
|
CBOB gasoline less Brent |
7.08 |
|
|
14.36 |
|
|
7.28 |
|
|
11.17 |
|
Ultra-low-sulfur diesel less Brent |
13.91 |
|
|
15.89 |
|
|
13.72 |
|
|
12.67 |
|
Propylene less Brent |
5.49 |
|
|
(1.74 |
) |
|
(2.62 |
) |
|
(0.16 |
) |
CBOB gasoline less LLS |
8.71 |
|
|
14.93 |
|
|
8.92 |
|
|
11.94 |
|
Ultra-low-sulfur diesel less LLS |
15.54 |
|
|
16.46 |
|
|
15.36 |
|
|
13.44 |
|
Propylene less LLS |
7.12 |
|
|
(1.17 |
) |
|
(0.98 |
) |
|
0.61 |
|
U.S. Mid-Continent: |
|
|
|
|
|
|
|
CBOB gasoline less WTI |
16.68 |
|
|
19.28 |
|
|
15.40 |
|
|
15.38 |
|
Ultra-low-sulfur diesel less WTI |
22.77 |
|
|
21.99 |
|
|
21.54 |
|
|
16.86 |
|
North Atlantic: |
|
|
|
|
|
|
|
CBOB gasoline less Brent |
10.43 |
|
|
17.72 |
|
|
9.89 |
|
|
12.99 |
|
Ultra-low-sulfur diesel less Brent |
15.54 |
|
|
17.06 |
|
|
15.58 |
|
|
13.78 |
|
U.S. West Coast: |
|
|
|
|
|
|
|
CARBOB 87 gasoline less ANS |
13.52 |
|
|
22.11 |
|
|
15.05 |
|
|
20.63 |
|
CARB diesel less ANS |
17.85 |
|
|
20.46 |
|
|
17.94 |
|
|
16.54 |
|
CARBOB 87 gasoline less WTI |
19.37 |
|
|
26.14 |
|
|
20.39 |
|
|
23.46 |
|
CARB diesel less WTI |
23.70 |
|
|
24.49 |
|
|
23.28 |
|
|
19.37 |
|
New York Harbor corn crush (dollars per gallon) |
0.18 |
|
|
0.31 |
|
|
0.18 |
|
|
0.28 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONEARNINGS RELEASE
TABLESOTHER FINANCIAL
DATA(millions of dollars, except per share
amounts)(unaudited)
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
2018 |
|
2017 |
Balance sheet data |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
$ |
19,891 |
|
|
$ |
19,312 |
|
Cash and cash equivalents included in
current assets |
|
3,551 |
|
|
5,850 |
|
Inventories included in current assets |
|
|
|
|
7,501 |
|
|
6,384 |
|
Current liabilities |
|
|
|
|
12,482 |
|
|
11,071 |
|
Current portion of debt and capital lease
obligations includedin current liabilities |
|
199 |
|
|
122 |
|
Debt and capital lease obligations, less
current portion |
|
|
|
8,877 |
|
|
8,750 |
|
Total debt and capital lease obligations |
|
|
|
|
9,076 |
|
|
8,872 |
|
Valero Energy Corporation stockholders’
equity |
|
|
|
21,910 |
|
|
21,991 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net cash provided by operating activities and
adjustednet cash provided by operating activities
(g) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ |
496 |
|
|
$ |
1,037 |
|
|
$ |
2,693 |
|
|
$ |
3,822 |
|
Exclude: |
|
|
|
|
|
|
|
Changes in current assets and current
liabilities |
(729 |
) |
|
(315 |
) |
|
(1,174 |
) |
|
544 |
|
Adjusted net cash provided by operating
activities |
$ |
1,225 |
|
|
$ |
1,352 |
|
|
$ |
3,867 |
|
|
$ |
3,278 |
|
|
|
|
|
|
|
|
|
Dividends per common share |
$ |
0.80 |
|
|
$ |
0.70 |
|
|
$ |
2.40 |
|
|
$ |
2.10 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONNOTES TO EARNINGS RELEASE
TABLES
(a) Cost of materials and other for the nine months ended
September 30, 2018 includes a benefit of $170 million for
the biodiesel blender’s tax credit attributable to volumes blended
during 2017. The benefit was recognized in February 2018 because
the legislation authorizing the credit was passed and signed into
law in that month. The $170 million pre-tax benefit is
included in the refining segment and includes $80 million
attributable to noncontrolling interest and $90 million
attributable to Valero Energy Corporation stockholders.
(b) Effective January 1, 2018, we adopted the provisions of
Accounting Standards Update 2017-07, “Compensation—Retirement
Benefits (Topic 715),” which resulted in the reclassification
of the non-service component of net periodic pension cost and net
periodic postretirement benefit cost from operating expenses
(excluding depreciation and amortization expense) and general and
administrative expenses (excluding depreciation and amortization
expense) to other income, net. This resulted in an increase of
$10 million and $31 million in operating expenses
(excluding depreciation and amortization expense) and a decrease of
$4 million and $5 million in general and administrative
expenses (excluding depreciation and amortization expense) for the
three and nine months ended September 30, 2017,
respectively.
(c) Other operating expenses reflects expenses that are not
associated with our cost of sales and include cost to repair,
remediate, and restore our facilities to normal operations
following a non-operating event such as a natural disaster or a
major unplanned outage.
(d) General and administrative expenses (excluding depreciation
and amortization expense) for the nine months ended
September 30, 2018 includes a charge of $108 million for
an environmental reserve adjustment associated with certain
non-operating sites.
(e) Other income, net for the nine months ended
September 30, 2018 includes a $38 million charge from the
early redemption of $750 million 9.375 percent senior
notes due March 15, 2019.
(f) As a result of the Tax Cut and Jobs Act of 2017 enacted on
December 22, 2017, the U.S. statutory income tax rate was
reduced from 35 percent to 21 percent. Therefore,
earnings from our U.S. operations for the three and nine months
ended September 30, 2018 are now taxed at 21 percent,
resulting in a lower effective tax rate compared to the three and
nine months ended September 30, 2017.
(g) We use certain financial measures (as noted below) in the
earnings release tables and accompanying earnings release that are
not defined under U.S. generally accepted accounting principles
(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 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 excluding
the items noted below, along with their related income tax effect.
We have excluded these items because we believe that they are not
indicative of our core operating performance in 2018 and that their
exclusion 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 excluded item
is provided below.- Blender’s tax credit - The blender’s tax credit
is attributable to volumes blended during 2017 and is not related
to 2018 activities, as described in note (a).- Texas City
Refinery fire expenses - The costs incurred to respond to and
assess the damage caused by the fire that occurred at the Texas
City Refinery on April 19, 2018 are specific to that event and
are not ongoing costs incurred in our operations.- Environmental
reserve adjustments - The environmental reserve adjustments are
attributable to sites that were shut down by prior owners and
subsequently acquired by us (referred to by us as non-operating
sites), as described in note (d).- Loss on early redemption of
debt - The penalty and other expenses incurred in connection with
the early redemption of our 9.375 percent senior notes due in
March 15, 2019 (see note (e)) 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
operating income excluding the blender’s tax credit, operating
expenses (excluding depreciation and amortization expense), other
operating expenses, and depreciation and amortization expense. 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.
- Ethanol margin is defined as ethanol operating
income excluding operating expenses (excluding depreciation and
amortization expense) and depreciation and amortization expense. 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 2017 blender’s
tax credit received in 2018 (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 VLP operating income is defined as
VLP segment operating income excluding other operating expenses. We
believe this is an important measure of our VLP 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 changes in current assets and current
liabilities. 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.
(h)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.
(i)Primarily includes petrochemicals, gas oils,
No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
(j)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 and per gallon of
production amounts are calculated by dividing the associated dollar
amount by the throughput volumes, production volumes, pipeline
transportation throughput volumes, or terminaling throughput
volumes for the period, as applicable.
Throughput volumes, production volumes, pipeline
transportation throughput volumes, and terminaling throughput
volumes are calculated by multiplying throughput volumes per day,
production volumes per day, pipeline transportation throughput
volumes per day, and terminaling throughput volumes per day (as
provided in the accompanying tables), respectively, by the number
of days in the applicable period.
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