- Reported a net loss attributable to Valero stockholders of $704
million, or $1.73 per share, including estimated excess energy cost
of $579 million, or $1.15 per share, related to impacts from Winter
Storm Uri
- Returned $400 million in cash to stockholders through dividends
and declared a regular quarterly cash dividend of $0.98 per
share
- Announced the development of a large-scale carbon capture and
storage project with BlackRock and Navigator
- Announced the sale of a partial interest in the Pasadena marine
terminal joint venture (MVP Terminalling) for $270 million
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a
net loss attributable to Valero stockholders of $704 million, or
$1.73 per share, for the first quarter of 2021, compared to a net
loss of $1.9 billion, or $4.54 per share, for the first quarter of
2020. The operating loss in the first quarter of 2021 includes
estimated excess energy costs of $579 million, or $1.15 per share,
related to impacts from Winter Storm Uri. Excluding the adjustments
shown in the accompanying earnings release tables, adjusted net
income attributable to Valero stockholders for the first quarter of
2020 was $140 million, or $0.34 per share. First quarter 2020
adjusted results exclude an after-tax lower of cost or market, or
LCM, inventory valuation adjustment of approximately $2.0
billion.
“Winter Storm Uri impacted operations and operating costs of
many facilities in the U.S. Gulf Coast and U.S. Mid-Continent
regions, including our facilities,” said Joe Gorder, Valero
Chairman and Chief Executive Officer. “I am very proud of our team
for safely managing the utilities curtailments and the freeze by
idling or shutting down the affected facilities and resuming
operations without incident.”
Refining
The refining segment reported a $592 million operating loss for
the first quarter of 2021, compared to an operating loss of $2.1
billion for the first quarter of 2020. The first quarter 2021
adjusted operating loss was $554 million, compared to adjusted
operating income of $329 million in the first quarter of 2020,
which excludes the LCM inventory valuation adjustment. The
operating loss for the first quarter of 2021 includes estimated
excess energy costs of $525 million related to impacts from Winter
Storm Uri. Refinery throughput volumes averaged 2.4 million barrels
per day in the first quarter of 2021, which was 414 thousand
barrels per day lower than the first quarter of 2020.
“We are encouraged by the substantial increase in products
demand and refining margins in the last three months,” said Gorder.
“In fact, we achieved positive operating income and operating cash
flow in March.”
Renewable Diesel
The renewable diesel segment, which consists of the Diamond
Green Diesel (DGD) joint venture, reported $203 million of
operating income for the first quarter of 2021, compared to $198
million for the first quarter of 2020. Renewable diesel sales
volumes averaged 867 thousand gallons per day in the first quarter
of 2021.
“We are leveraging our global liquid fuels platform to continue
expanding our long-term competitive advantage in renewables,” said
Gorder. “Valero’s operational expertise and commercial strength are
demonstrated by the record operating income and renewable diesel
margin by this segment in the first quarter of 2021.”
Ethanol
The ethanol segment reported a $56 million operating loss for
the first quarter of 2021, compared to an operating loss of $197
million for the first quarter of 2020. The operating loss for the
first quarter of 2021 includes estimated excess energy costs of $54
million related to impacts from Winter Storm Uri. First quarter
2020 adjusted operating loss was $69 million, which excludes the
LCM inventory valuation adjustment. Ethanol production volumes
averaged 3.6 million gallons per day in the first quarter of 2021,
which was 541 thousand gallons per day lower than the first quarter
of 2020.
Corporate and Other
General and administrative expenses were $208 million in the
first quarter of 2021, compared to $177 million in the first
quarter of 2020. The effective tax rate for the first quarter of
2021 was 19 percent.
Investing and Financing Activities
Capital investments totaled $582 million in the first quarter of
2021, of which $333 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to our
partner’s 50 percent share of DGD and those related to other
variable interest entities, capital investments attributable to
Valero were $479 million.
Net cash used in operating activities was $52 million in the
first quarter of 2021. Included in this amount was a $184 million
favorable impact from working capital and $108 million associated
with our joint venture partner’s share of DGD’s net cash provided
by operating activities, excluding changes in DGD’s working
capital. Excluding these items, adjusted net cash used in operating
activities was $344 million.
Valero returned $400 million to stockholders through dividends
in the first quarter of 2021.
Valero continues to target a long-term total payout ratio
between 40 and 50 percent of adjusted net cash provided by
operating activities. Valero defines total payout ratio as the sum
of dividends and 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 our joint venture partner’s
ownership interest in DGD.
Liquidity and Financial Position
Valero ended the first quarter of 2021 with $14.7 billion of
total debt and finance lease obligations and $2.3 billion of cash
and cash equivalents. The debt to capitalization ratio, net of cash
and cash equivalents, was 40 percent as of March 31, 2021.
Strategic Update
Valero continues to evaluate and pursue economic projects that
lower the carbon intensity of its products. Valero announced that
it is partnering with BlackRock and Navigator for a large-scale
carbon capture and storage system in the U.S. Midwest that would
capture and store carbon dioxide (CO2) from eight of Valero’s
ethanol plants, making a lower carbon intensity ethanol product to
be marketed in low carbon fuel markets. The system is expected to
be capable of storing 5 million metric tonnes of CO2 per year.
In addition, Valero and its joint venture partner continue to
steadily expand DGD’s capacity to produce low carbon intensity
renewable diesel. The DGD plant expansion at St. Charles (DGD 2),
which is expected to increase renewable diesel production by 400
million gallons per year, is on track to be completed and
operational in the middle of the fourth quarter of 2021. The St.
Charles expansion will also provide the capability to market 30
million gallons per year of renewable naphtha into low carbon fuel
markets. The new DGD plant at Port Arthur (DGD 3), which is
expected to produce 470 million gallons per year of renewable
diesel, is expected to commence operations in the second half of
2023, increasing DGD’s total annual production capacity to
approximately 1.2 billion gallons of renewable diesel and 50
million gallons of renewable naphtha.
Refinery optimization projects that are expected to reduce cost
and improve margin capture, are progressing on schedule. The
Pembroke Cogen project is on track to be completed in the third
quarter of 2021 and the Port Arthur Coker project is expected to be
completed in 2023.
On April 19, Valero sold a 24.99 percent membership interest in
its Pasadena marine terminal joint venture for $270 million. Valero
will retain a 25.01 percent interest in the joint venture.
Capital investments attributable to Valero are forecasted to be
$2.0 billion in 2021, of which approximately 60 percent is for
sustaining the business and approximately 40 percent is for growth
projects. Over half of Valero’s 2021 growth capital is allocated to
expanding the renewable diesel business.
“Continued improvement in product demand and refining margins
supports a positive outlook for our refining business,” said
Gorder. “Those improvements coupled with our growth strategy and
operational expertise in low carbon renewable fuels, further
strengthens Valero’s long-term competitive advantage.”
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 an international manufacturer and
marketer of transportation fuels and petrochemical products. Valero
is a Fortune 50 company based in San Antonio, Texas, and it
operates 15 petroleum refineries with a combined throughput
capacity of approximately 3.2 million barrels per day and 13
ethanol plants with a combined production capacity of approximately
1.69 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. Valero is also a joint venture partner in
Diamond Green Diesel, which owns and operates a renewable diesel
plant in Norco, Louisiana. Diamond Green Diesel is North America’s
largest biomass-based diesel plant. Valero sells its products in
the wholesale rack or bulk markets in the U.S., Canada, the U.K.,
Ireland and Latin America. Approximately 7,000 outlets carry
Valero’s brand names. Please visit www.investorvalero.com for more
information.
Valero Contacts Investors: Homer Bhullar, Vice President
– Investor Relations, 210-345-1982 Eric Herbort, Senior Manager –
Investor Relations, 210-345-3331 Gautam Srivastava, Senior Manager
– 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 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,” “forecast,” 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 based on
numerous factors, including those outside of the company’s control,
such as delays in construction timing and other factors, including
but not limited to the impacts of COVID-19. For more information
concerning 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.
COVID-19 Disclosure
The global pandemic has significantly reduced global economic
activity and resulted in airlines dramatically cutting back on
flights and a decrease in motor vehicle use. As a result, there has
also been a decline in the demand for, and thus also the market
prices of, crude oil and certain of our products, particularly our
refined petroleum products. Many uncertainties remain with respect
to COVID-19, including its resulting economic effects and any
future recovery, and we are unable to predict the ultimate economic
impacts from COVID-19, how quickly national economies can recover
once the pandemic subsides, the timing or effectiveness of the
vaccine distribution, or whether any recovery will ultimately
experience a reversal or other setbacks. However, the adverse
impact of the economic effects on us has been and will likely
continue to be significant. We believe we have proactively
addressed many of the known impacts of COVID-19 to the extent
possible and will strive to continue to do so, but there can be no
guarantee that these measures will be fully effective. For more
information, see our annual report on Form 10-K, quarterly reports
on Form 10-Q, and other reports filed with the Securities and
Exchange Commission.
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 (loss)
attributable to Valero stockholders, adjusted earnings (loss) per
common share – assuming dilution, refining margin, renewable diesel
margin, ethanol margin, adjusted refining operating income (loss),
adjusted ethanol operating income (loss), 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 U.S. GAAP measures. Note (d) 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
March 31,
2021
2020
Statement of income data
Revenues
$
20,806
$
22,102
Cost of sales:
Cost of materials and other (a)
18,992
19,952
Lower of cost or market (LCM) inventory
valuation adjustment (b)
—
2,542
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
1,656
1,124
Depreciation and amortization expense
566
569
Total cost of sales
21,214
24,187
Other operating expenses
38
2
General and administrative expenses
(excluding
depreciation and amortization expense
reflected below)
208
177
Depreciation and amortization expense
12
13
Operating loss
(666
)
(2,277
)
Other income, net
45
32
Interest and debt expense, net of
capitalized interest
(149
)
(125
)
Loss before income tax benefit
(770
)
(2,370
)
Income tax benefit
(148
)
(616
)
Net loss
(622
)
(1,754
)
Less: Net income attributable to
noncontrolling interests
82
97
Net loss attributable to Valero Energy
Corporation stockholders
$
(704
)
$
(1,851
)
Loss per common share
$
(1.73
)
$
(4.54
)
Weighted-average common shares outstanding
(in millions)
407
408
Loss per common share – assuming
dilution
$
(1.73
)
$
(4.54
)
Weighted-average common shares outstanding
–
assuming dilution (in millions) (c)
407
408
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 March 31,
2021
Revenues:
Revenues from external customers
$
19,469
$
352
$
985
$
—
$
20,806
Intersegment revenues
3
79
60
(142
)
—
Total revenues
19,472
431
1,045
(142
)
20,806
Cost of sales:
Cost of materials and other (a)
18,022
187
924
(141
)
18,992
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
1,471
29
156
—
1,656
Depreciation and amortization expense
533
12
21
—
566
Total cost of sales
20,026
228
1,101
(141
)
21,214
Other operating expenses
38
—
—
—
38
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
208
208
Depreciation and amortization expense
—
—
—
12
12
Operating income (loss) by segment
$
(592
)
$
203
$
(56
)
$
(221
)
$
(666
)
Three months ended March 31,
2020
Revenues:
Revenues from external customers
$
20,985
$
306
$
811
$
—
$
22,102
Intersegment revenues
2
53
64
(119
)
—
Total revenues
20,987
359
875
(119
)
22,102
Cost of sales:
Cost of materials and other
19,127
130
813
(118
)
19,952
LCM inventory valuation adjustment (b)
2,414
—
128
—
2,542
Operating expenses (excluding depreciation
and
amortization expense reflected below)
995
20
109
—
1,124
Depreciation and amortization expense
536
11
22
—
569
Total cost of sales
23,072
161
1,072
(118
)
24,187
Other operating expenses
2
—
—
—
2
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
177
177
Depreciation and amortization expense
—
—
—
13
13
Operating income (loss) by segment
$
(2,087
)
$
198
$
(197
)
$
(191
)
$
(2,277
)
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
(d)
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
March 31,
2021
2020
Reconciliation of net loss attributable
to Valero Energy
Corporation stockholders to adjusted
net income (loss)
attributable to Valero Energy
Corporation stockholders
Net loss attributable to Valero Energy
Corporation
stockholders
$
(704
)
$
(1,851
)
Adjustments:
LCM inventory valuation adjustment (b)
—
2,542
Income tax benefit related to the LCM
inventory
valuation adjustment
—
(551
)
LCM inventory valuation adjustment, net of
taxes
—
1,991
Adjusted net income (loss) attributable
to
Valero Energy Corporation stockholders
$
(704
)
$
140
Reconciliation of loss per common share
–
assuming dilution to adjusted earnings
(loss) per common
share – assuming dilution
Loss per common share – assuming dilution
(c)
$
(1.73
)
$
(4.54
)
Adjustments:
LCM inventory valuation adjustment (b)
—
4.88
Adjusted earnings (loss) per common share
– assuming dilution (c)
$
(1.73
)
$
0.34
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2021
2020
Reconciliation of operating income
(loss) by segment to
segment margin, and reconciliation of
operating income (loss)
by segment to adjusted operating income
(loss) by segment
Refining segment
Refining operating loss
$
(592
)
$
(2,087
)
Adjustments:
LCM inventory valuation adjustment (b)
—
2,414
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
1,471
995
Depreciation and amortization expense
533
536
Other operating expenses
38
2
Refining margin
$
1,450
$
1,860
Refining operating loss
$
(592
)
$
(2,087
)
Adjustments:
LCM inventory valuation adjustment (b)
—
2,414
Other operating expenses
38
2
Adjusted refining operating income
(loss)
$
(554
)
$
329
Renewable diesel segment
Renewable diesel operating income
$
203
$
198
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
29
20
Depreciation and amortization expense
12
11
Renewable diesel margin
$
244
$
229
Ethanol segment
Ethanol operating loss
$
(56
)
$
(197
)
Adjustments:
LCM inventory valuation adjustment (b)
—
128
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
156
109
Depreciation and amortization expense
21
22
Ethanol margin
$
121
$
62
Ethanol operating loss
$
(56
)
$
(197
)
Adjustment: LCM inventory valuation
adjustment (b)
—
128
Adjusted ethanol operating loss
$
(56
)
$
(69
)
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2021
2020
Reconciliation of refining segment
operating income (loss) to
refining margin (by region), and
reconciliation of refining
segment operating income (loss) to
adjusted refining
segment operating income (loss) (by
region) (e)
U.S. Gulf Coast region
Refining operating loss
$
(508
)
$
(942
)
Adjustments:
LCM inventory valuation adjustment (b)
—
1,113
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
994
558
Depreciation and amortization expense
332
334
Other operating expenses
31
—
Refining margin
$
849
$
1,063
Refining operating loss
$
(508
)
$
(942
)
Adjustments:
LCM inventory valuation adjustment (b)
—
1,113
Other operating expenses
31
—
Adjusted refining operating income
(loss)
$
(477
)
$
171
U.S. Mid-Continent region
Refining operating loss
$
(10
)
$
(220
)
Adjustments:
LCM inventory valuation adjustment (b)
—
283
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
190
164
Depreciation and amortization expense
84
83
Other operating expenses
7
—
Refining margin
$
271
$
310
Refining operating loss
$
(10
)
$
(220
)
Adjustments:
LCM inventory valuation adjustment (b)
—
283
Other operating expenses
7
—
Adjusted refining operating income
(loss)
$
(3
)
$
63
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2021
2020
Reconciliation of refining segment
operating income (loss) to
refining margin (by region), and
reconciliation of refining
segment operating income (loss) to
adjusted refining
segment operating income (loss) (by
region) (e)
(continued)
North Atlantic region
Refining operating income (loss)
$
55
$
(714
)
Adjustments:
LCM inventory valuation adjustment (b)
—
874
Operating expenses (excluding depreciation
and
amortization expense reflected below)
140
141
Depreciation and amortization expense
52
53
Other operating expenses
—
2
Refining margin
$
247
$
356
Refining operating income (loss)
$
55
$
(714
)
Adjustments:
LCM inventory valuation adjustment (b)
—
874
Other operating expenses
—
2
Adjusted refining operating income
$
55
$
162
U.S. West Coast region
Refining operating loss
$
(129
)
$
(211
)
Adjustments:
LCM inventory valuation adjustment (b)
—
144
Operating expenses (excluding depreciation
and
amortization expense reflected below)
147
132
Depreciation and amortization expense
65
66
Refining margin
$
83
$
131
Refining operating loss
$
(129
)
$
(211
)
Adjustment: LCM inventory valuation
adjustment (b)
—
144
Adjusted refining operating loss
$
(129
)
$
(67
)
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
March 31,
2021
2020
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
354
360
Medium/light sour crude oil
275
252
Sweet crude oil
1,143
1,538
Residuals
192
235
Other feedstocks
102
100
Total feedstocks
2,066
2,485
Blendstocks and other
344
339
Total throughput volumes
2,410
2,824
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,191
1,317
Distillates
894
1,046
Other products (f)
352
478
Total yields
2,437
2,841
Operating statistics (a) (d)
(g)
Refining margin
$
1,450
$
1,860
Adjusted refining operating income
(loss)
$
(554
)
$
329
Throughput volumes (thousand barrels per
day)
2,410
2,824
Refining margin per barrel of
throughput
$
6.68
$
7.24
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
6.78
3.87
Depreciation and amortization expense per
barrel of
throughput
2.46
2.09
Adjusted refining operating income (loss)
per barrel of
throughput
$
(2.56
)
$
1.28
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
March 31,
2021
2020
Operating statistics (d) (g)
Renewable diesel margin
$
244
$
229
Renewable diesel operating income
$
203
$
198
Sales volumes (thousand gallons per
day)
867
867
Renewable diesel margin per gallon of
sales
$
3.13
$
2.90
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of sales
0.38
0.24
Depreciation and amortization expense per
gallon of sales
0.14
0.15
Renewable diesel operating income per
gallon of sales
$
2.61
$
2.51
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
March 31,
2021
2020
Operating statistics (a) (d)
(g)
Ethanol margin
$
121
$
62
Adjusted ethanol operating loss
$
(56
)
$
(69
)
Production volumes (thousand gallons per
day)
3,562
4,103
Ethanol margin per gallon of
production
$
0.38
$
0.16
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of production
0.49
0.29
Depreciation and amortization expense per
gallon of production
0.06
0.05
Adjusted ethanol operating loss per gallon
of production
$
(0.17
)
$
(0.18
)
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
March 31,
2021
2020
Operating statistics by region
(e)
U.S. Gulf Coast region (a) (d)
(g)
Refining margin
$
849
$
1,063
Adjusted refining operating income
(loss)
$
(477
)
$
171
Throughput volumes (thousand barrels per
day)
1,514
1,670
Refining margin per barrel of
throughput
$
6.23
$
7.00
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
7.29
3.67
Depreciation and amortization expense per
barrel of throughput
2.44
2.20
Adjusted refining operating income (loss)
per barrel of throughput
$
(3.50
)
$
1.13
U.S. Mid-Continent region (a) (d)
(g)
Refining margin
$
271
$
310
Adjusted refining operating income
(loss)
$
(3
)
$
63
Throughput volumes (thousand barrels per
day)
385
431
Refining margin per barrel of
throughput
$
7.82
$
7.90
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
5.49
4.19
Depreciation and amortization expense per
barrel of throughput
2.41
2.11
Adjusted refining operating income (loss)
per barrel of throughput
$
(0.08
)
$
1.60
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
March 31,
2021
2020
Operating statistics by region (e)
(continued)
North Atlantic region (d) (g)
Refining margin
$
247
$
356
Adjusted refining operating income
$
55
$
162
Throughput volumes (thousand barrels per
day)
320
487
Refining margin per barrel of
throughput
$
8.57
$
8.02
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.87
3.17
Depreciation and amortization expense per
barrel of throughput
1.78
1.19
Adjusted refining operating income per
barrel of throughput
$
1.92
$
3.66
U.S. West Coast region (d) (g)
Refining margin
$
83
$
131
Adjusted refining operating loss
$
(129
)
$
(67
)
Throughput volumes (thousand barrels per
day)
191
236
Refining margin per barrel of
throughput
$
4.81
$
6.12
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
8.56
6.16
Depreciation and amortization expense per
barrel of throughput
3.79
3.07
Adjusted refining operating loss per
barrel of throughput
$
(7.54
)
$
(3.11
)
See Notes to Earnings Release
Tables
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
March 31,
2021
2020
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
61.09
$
50.90
Brent less West Texas Intermediate (WTI)
crude oil
3.26
4.92
Brent less Alaska North Slope (ANS) crude
oil
0.33
(0.50
)
Brent less Louisiana Light Sweet (LLS)
crude oil
1.11
2.76
Brent less Argus Sour Crude Index (ASCI)
crude oil
2.99
5.01
Brent less Maya crude oil
4.70
9.74
LLS crude oil
59.98
48.14
LLS less ASCI crude oil
1.88
2.25
LLS less Maya crude oil
3.59
6.98
WTI crude oil
57.84
45.98
Natural gas (dollars per million
British Thermal Units)
19.66
1.82
Products (dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB)
gasoline less Brent
10.12
2.37
Ultra-low-sulfur (ULS) diesel less
Brent
10.19
11.26
Propylene less Brent
18.50
(21.04
)
CBOB gasoline less LLS
11.23
5.13
ULS diesel less LLS
11.30
14.02
Propylene less LLS
19.61
(18.28
)
U.S. Mid-Continent:
CBOB gasoline less WTI
14.82
7.69
ULS diesel less WTI
17.21
17.31
North Atlantic:
CBOB gasoline less Brent
11.56
4.28
ULS diesel less Brent
11.89
14.29
U.S. West Coast:
California Reformulated Gasoline
Blendstock of
Oxygenate Blending (CARBOB) 87 gasoline
less ANS
14.56
7.82
California Air Resources Board (CARB)
diesel less ANS
14.14
17.22
CARBOB 87 gasoline less WTI
17.49
13.24
CARB diesel less WTI
17.07
22.64
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
March 31,
2021
2020
Renewable diesel
New York Mercantile Exchange ULS
diesel
(dollars per gallon)
$
1.74
$
1.55
Biodiesel Renewable Identification Number
(RIN)
(dollars per RIN)
1.18
0.46
California Low-Carbon Fuel Standard
(dollars per metric ton)
195.30
206.03
Chicago Board of Trade (CBOT) soybean oil
(dollars per
pound)
0.48
0.30
Ethanol
CBOT corn (dollars per bushel)
5.39
3.74
New York Harbor ethanol (dollars per
gallon)
1.78
1.33
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
March 31, 2021
December 31,
2020
Balance sheet data
Current assets
$
17,591
$
15,844
Cash and cash equivalents included in
current assets
2,254
3,313
Inventories included in current assets
5,881
6,038
Current liabilities
12,307
9,283
Current portion of debt and finance lease
obligations
included in current liabilities
734
723
Debt and finance lease obligations, less
current portion
13,930
13,954
Total debt and finance lease
obligations
14,664
14,677
Valero Energy Corporation stockholders’
equity
17,801
18,801
Three Months Ended
March 31,
2021
2020
Reconciliation of net cash used in
operating activities to
adjusted net cash provided by (used in)
operating
activities (d)
Net cash used in operating activities
$
(52
)
$
(49
)
Exclude:
Changes in current assets and current
liabilities
184
(1,107
)
Diamond Green Diesel LLC’s (DGD) adjusted
net cash
provided by operating activities
attributable to our joint
venture partner’s ownership interest in
DGD
108
104
Adjusted net cash provided by (used in)
operating activities
$
(344
)
$
954
Three Months Ended
March 31,
2021
2020
Dividends per common share
$
0.98
$
0.98
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2021
2020
Reconciliation of total capital
investments to capital
investments attributable to Valero
(d)
Capital expenditures (excluding variable
interest entities
(VIEs))
$
160
$
299
Capital expenditures of VIEs:
DGD
153
74
Other VIEs
26
62
Deferred turnaround and catalyst cost
expenditures
(excluding VIEs)
230
309
Deferred turnaround and catalyst cost
expenditures
of DGD
1
4
Investments in unconsolidated joint
ventures
12
19
Total capital investments
582
767
Adjustments:
DGD’s capital investments attributable to
our joint
venture partner
(77)
(39)
Capital expenditures of other VIEs
(26)
(62)
Capital investments attributable to
Valero
$
479
$
666
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
In mid-February 2021, many of our refineries and plants were
impacted to varying extents by the severe cold, utility
disruptions, and higher energy costs resulting from Winter Storm
Uri. The higher energy costs were driven by an increase in the
prices of natural gas and electricity that significantly exceeded
rates that we consider normal, such as the average rates we
incurred the month preceding the storm. As a result, our operating
loss for the three months ended March 31, 2021 includes estimated
excess energy costs of $579 million ($1.15 per share).
The above-mentioned pre-tax estimated
excess energy charge is reflected in our statement of income line
items and attributable to our reportable segments as follows (in
millions):
Refining
Renewable Diesel
Ethanol
Total
Cost of materials and other
$
47
$
—
$
—
$
47
Operating expenses (excluding depreciation
and amortization expense)
478
—
54
532
Total estimated excess energy costs
$
525
$
—
$
54
$
579
The estimated excess energy costs
attributable to our refining segment are associated with the
refining segment regions as follows (in millions, except per barrel
amounts):
U.S. Gulf Coast
U.S. Mid-
Continent
Other Regions
Combined
Refining
Segment
Cost of materials and other
$
45
$
2
$
—
$
47
Operating expenses (excluding depreciation
and amortization expense)
437
38
3
478
Total estimated excess energy costs
$
482
$
40
$
3
$
525
Effect of estimated excess energy
costs on operating statistics (g)
Refining margin per barrel of throughput
(d)
$
0.33
$
0.06
n/a
$
0.22
Operating expenses (excluding depreciation
and amortization expense) per barrel of throughput
3.21
1.11
n/a
2.21
Adjusted refining operating income (loss)
per barrel of throughput (d)
$
3.54
$
1.17
n/a
$
2.43
The estimated excess energy costs
attributable to our ethanol segment affected that segment’s
operating statistics of “operating expenses (excluding depreciation
and amortization expenses) per gallon of production” and “adjusted
operating loss per gallon of production” by $0.16 (see note (d)
below).
(b)
The market value of our inventories accounted for under the
last-in, first-out method fell below their historical cost on an
aggregate basis as of March 31, 2020. As a result, we recorded an
LCM inventory valuation adjustment of $2.5 billion in March 2020.
Of the $2.5 billion adjustment, $2.4 billion and $128 million are
attributable to our refining and ethanol segments,
respectively.
(c)
Common equivalent shares have been excluded from the computation
of loss per common share – assuming dilution for the three months
ended March 31, 2021 and 2020, and adjusted loss per common share –
assuming dilution for the three months ended March 31, 2021, as the
effect of including such shares would be antidilutive.
Common equivalent shares have been
included in the computation of adjusted earnings per common share –
assuming dilution for the three months ended March 31, 2020, as the
effect of including such shares is dilutive. Weighted-average
shares outstanding – assuming dilution used to calculate adjusted
earnings per common share – assuming dilution is 409 million
shares.
(d)
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 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 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 (loss) attributable to Valero Energy
Corporation stockholders is defined as net loss attributable to
Valero Energy Corporation stockholders adjusted to exclude the
effect of the LCM inventory valuation adjustment, which is
described in note (b), and its related income tax effect. The LCM
inventory valuation adjustment is the result of the market value of
our inventories as of March 31, 2020 falling below their historical
cost, with the decline in market value resulting from the decline
in product market prices associated with the negative economic
impacts from COVID-19. The adjustment obscures our financial
performance because it does not result from decisions made by us;
therefore, we have excluded the adjustment from adjusted net income
attributable to Valero Energy Corporation stockholders.
- Adjusted earnings (loss) per common share – assuming
dilution is defined as adjusted net income (loss) attributable
to Valero Energy Corporation stockholders divided by the number of
weighted-average shares outstanding in the applicable period,
assuming dilution (see note (c)).
- Refining margin is defined as refining segment operating
income (loss) excluding the LCM inventory valuation adjustment (see
note (b)), 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
loss excluding the LCM inventory valuation adjustment (see note
(b)), 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 (loss) is defined as
refining segment operating income (loss) excluding the LCM
inventory valuation adjustment (see note (b)) and other operating
expenses. We believe adjusted refining operating income (loss) 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 loss is defined as ethanol
segment operating loss excluding the LCM inventory valuation
adjustment (see note (b)). We believe this 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 our joint venture
partner’s ownership interest in DGD – We are a 50/50 joint venture
partner in Diamond Green Diesel Holdings LLC (DGD) and we
consolidate DGD’s financial statements. Our renewable diesel
segment includes the operations of DGD and the associated
activities to market renewable diesel. 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 partners 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 partner 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 our joint
venture partner’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
March 31,
2021
2020
DGD operating cash flow data
Net cash provided by operating
activities
$
207
$
167
Exclude: changes in current assets and
current liabilities
(9
)
(40
)
Adjusted net cash provided by operating
activities
216
207
Our partner’s ownership interest
50
%
50
%
DGD’s adjusted net cash provided by
operating activities attributable to our joint venture partner’s
ownership interest in DGD
$
108
$
104
- Capital investments attributable to Valero is defined as
all capital expenditures, deferred turnaround and catalyst cost
expenditures, and investments in unconsolidated joint ventures
presented in our consolidated statements of cash flows, excluding
the portion of DGD’s capital investments attributable to our joint
venture partner and all of the capital expenditures of other
VIEs.
DGD’s partners 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 partner, 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 our other consolidated VIEs 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.
(e)
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.
(f)
Primarily includes petrochemicals, gas oils, No. 6 fuel oil,
petroleum coke, sulfur, and asphalt.
(g)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210422005551/en/
Investors: Homer Bhullar, Vice President – Investor Relations,
210-345-1982 Eric Herbort, Senior Manager – Investor Relations,
210-345-3331 Gautam Srivastava, Senior Manager – Investor
Relations, 210-345-3992 Media: Lillian Riojas, Executive Director –
Media Relations and Communications, 210-345-5002
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