- Reported net income attributable to Valero stockholders of $4.7
billion, or $11.57 per share
- Reported adjusted net income attributable to Valero
stockholders of $4.6 billion, or $11.36 per share
- Reduced debt by $300 million through the acquisition of the
4.00 percent Gulf Opportunity Zone Revenue Bonds (GO Zone Bonds),
reducing Valero’s debt by $2.3 billion since the second half of
2021
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $4.7 billion, or
$11.57 per share, for the second quarter of 2022, compared to $162
million, or $0.39 per share, for the second quarter of 2021.
Excluding the adjustments shown in the accompanying earnings
release tables, adjusted net income attributable to Valero
stockholders was $4.6 billion, or $11.36 per share, for the second
quarter of 2022, compared to $260 million, or $0.63 per share, for
the second quarter of 2021.
“We continue to maximize refinery run rates, while executing our
long-standing commitment to safe, reliable and environmentally
responsible operations,” said Joe Gorder, Valero Chairman and Chief
Executive Officer. “Our refinery utilization rate increased from
the pandemic low of 74 percent in the second quarter of 2020 to 94
percent in the second quarter of 2022.”
Refining
The Refining segment reported operating income of $6.2 billion
for the second quarter of 2022, compared to $349 million for the
second quarter of 2021. Adjusted operating income was $6.1 billion
for the second quarter of 2022, compared to $442 million for the
second quarter of 2021. Refining throughput volumes averaged 3.0
million barrels per day in the second quarter of 2022, which was
127 thousand barrels per day higher than the second quarter of
2021.
Renewable Diesel
The Renewable Diesel segment, which consists of the Diamond
Green Diesel (DGD) joint venture, reported $152 million of
operating income for the second quarter of 2022, compared to $248
million for the second quarter of 2021. Renewable diesel sales
volumes averaged 2.2 million gallons per day in the second quarter
of 2022, which was 1.3 million gallons per day higher than the
second quarter of 2021. The higher sales volumes in the second
quarter of 2022 were attributable to the fourth quarter 2021
startup of the DGD expansion project at St. Charles (DGD 2).
Ethanol
The Ethanol segment reported $101 million of operating income
for the second quarter of 2022, compared to $99 million for the
second quarter of 2021. Adjusted operating income, which primarily
excludes the gain from the sale of our Jefferson ethanol plant
whose operations were idled in 2020, was $79 million for the second
quarter of 2022. Ethanol production volumes averaged 3.9 million
gallons per day in the second quarter of 2022.
Corporate and Other
General and administrative expenses were $233 million in the
second quarter of 2022, compared to $176 million in the second
quarter of 2021. The effective tax rate for the second quarter of
2022 was 22 percent.
Investing and Financing Activities
Net cash provided by operating activities was $5.8 billion in
the second quarter of 2022. Included in this amount was a $594
million favorable impact from working capital and $90 million
associated with the other joint venture member’s share of DGD’s net
cash provided by operating activities, excluding changes in DGD’s
working capital. Excluding these items, adjusted net cash provided
by operating activities was $5.2 billion in the second quarter of
2022.
Capital investments totaled $653 million in the second quarter
of 2022, of which $298 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to the other
joint venture member’s 50 percent share of DGD and those related to
other variable interest entities, capital investments attributable
to Valero were $524 million.
In the second quarter, Valero further reduced its debt through
the acquisition of the $300 million of 4.00 percent GO Zone Bonds.
This transaction, combined with debt reduction and refinancing
transactions completed in the second half of 2021 and the first
quarter of 2022, have collectively reduced Valero’s debt by $2.3
billion.
“We raised $4.0 billion of incremental debt in 2020 due to the
negative impacts of the pandemic on our business,” said Gorder.
“Since then, we have reduced our debt by $2.3 billion and will
evaluate further deleveraging opportunities.”
Liquidity and Financial Position
Valero ended the second quarter of 2022 with $10.9 billion of
total debt, $2.0 billion of finance lease obligations and $5.4
billion of cash and cash equivalents, compared to $13.0 billion of
total debt, $1.6 billion of finance lease obligations and $2.3
billion of cash and cash equivalents at the end of the first
quarter of 2021. As a result, the debt to capitalization ratio, net
of cash and cash equivalents, was 25 percent as of June 30, 2022,
down from the pandemic high of 40 percent at the end of the first
quarter of 2021.
Strategic Update
Refinery optimization projects that are expected to reduce costs
and improve margin capture are progressing on schedule. The Port
Arthur Coker project, which is expected to increase the refinery’s
throughput capacity, while also improving turnaround efficiency, is
expected to be completed in the first half of 2023.
The DGD project located next to Valero’s Port Arthur refinery
(DGD 3), which is expected to have renewable diesel production
capacity of 470 million gallons per year, should commence
operations in the fourth quarter of 2022. The total annual DGD
production capacity is expected to nearly double to approximately
1.2 billion gallons of renewable diesel and 50 million gallons of
renewable naphtha upon commencement of DGD 3’s operations.
BlackRock and Navigator’s carbon sequestration project is still
expected to begin startup activities in late 2024. Valero is
expected to be the anchor shipper with eight of its ethanol plants
connected to this system, producing a lower carbon intensity
ethanol product expected to be marketed in low-carbon fuel markets
that should result in a higher product margin.
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
We are a multinational manufacturer and marketer of
petroleum-based and low-carbon liquid transportation fuels and
petrochemical products, and we sell our products primarily in the
United States (U.S.), Canada, the United Kingdom (U.K.), Ireland,
and Latin America. We own 15 petroleum refineries located in the
U.S., Canada, and the U.K. with a combined throughput capacity of
approximately 3.2 million barrels per day (BPD). We are a joint
venture member in Diamond Green Diesel Holdings LLC (DGD), which
owns a renewable diesel plant in Norco, Louisiana with a production
capacity of 700 million gallons per year, and we own 12 ethanol
plants located in the Mid-Continent region of the U.S. with a
combined production capacity of approximately 1.6 billion gallons
per year. We manage our operations through our Refining, Renewable
Diesel, and Ethanol segments. Please visit www.investorvalero.com
for more information.
Valero Contacts
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Director – 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 and the accompanying tables
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. Forward-looking statements in this
release and the accompanying tables include those relating to our
greenhouse gas emissions targets, expected timing of completion and
performance of projects, future market and industry conditions,
future operating and financial performance, and management of
future risks. 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 legislative or political changes or
developments, market dynamics, cyberattacks, weather events, and
other matters affecting our operations or the demand for our
products. These factors also include, but are not limited to, the
uncertainties that remain with respect to the Russia-Ukraine
conflict, the impact of inflation on margins and costs, the
COVID-19 pandemic, variants of the COVID-19 virus, governmental and
societal responses thereto, including requirements and mandates
with respect to COVID-19 vaccines, vaccine distribution and
administration levels, and the adverse effects the foregoing may
have on our business or economic conditions generally. For more
information concerning these and other factors that could cause
actual results to differ from those expressed or forecasted, see
Valero’s annual report on Form 10-K, quarterly reports on Form
10‑Q, and other reports filed with the Securities and Exchange
Commission and available on Valero’s website at www.valero.com.
Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release
tables include references to financial measures that are not
defined under U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include adjusted net income (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, adjusted net cash provided by
operating activities, and capital investments attributable to
Valero. These non-GAAP financial measures have been included to
help facilitate the comparison of operating results between
periods. See the accompanying earnings release tables for a
reconciliation of non-GAAP measures to their most directly
comparable GAAP measures. Note (g) 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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Statement of income data
Revenues
$
51,641
$
27,748
$
90,183
$
48,554
Cost of sales:
Cost of materials and other (a) (b)
42,946
25,249
77,895
44,241
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
1,626
1,214
3,005
2,870
Depreciation and amortization expense
(c)
590
576
1,185
1,142
Total cost of sales
45,162
27,039
82,085
48,253
Other operating expenses
15
12
34
50
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(d)
233
176
438
384
Depreciation and amortization expense
12
12
23
24
Operating income (loss)
6,219
509
7,603
(157
)
Other income, net (e)
33
102
13
147
Interest and debt expense, net of
capitalized interest
(142
)
(150
)
(287
)
(299
)
Income (loss) before income tax
expense
6,110
461
7,329
(309
)
Income tax expense (f)
1,342
169
1,594
21
Net income (loss)
4,768
292
5,735
(330
)
Less: Net income attributable to
noncontrolling interests
75
130
137
212
Net income (loss) attributable to Valero
Energy Corporation stockholders
$
4,693
$
162
$
5,598
$
(542
)
Earnings (loss) per common
share
$
11.58
$
0.39
$
13.75
$
(1.34
)
Weighted-average common shares outstanding
(in millions)
404
407
406
407
Earnings (loss) per common share –
assuming dilution
$
11.57
$
0.39
$
13.74
$
(1.34
)
Weighted-average common shares outstanding
– assuming dilution (in millions)
404
407
406
407
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 June 30,
2022
Revenues:
Revenues from external customers
$
49,495
$
855
$
1,291
$
—
$
51,641
Intersegment revenues
11
596
201
(808
)
—
Total revenues
49,506
1,451
1,492
(808
)
51,641
Cost of sales:
Cost of materials and other (a)
41,313
1,213
1,226
(806
)
42,946
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,402
58
167
(1
)
1,626
Depreciation and amortization expense
(c)
565
28
(3
)
—
590
Total cost of sales
43,280
1,299
1,390
(807
)
45,162
Other operating expenses
14
—
1
—
15
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(d)
—
—
—
233
233
Depreciation and amortization expense
—
—
—
12
12
Operating income by segment
$
6,212
$
152
$
101
$
(246
)
$
6,219
Three months ended June 30,
2021
Revenues:
Revenues from external customers
$
25,968
$
496
$
1,284
$
—
$
27,748
Intersegment revenues
1
76
84
(161
)
—
Total revenues
25,969
572
1,368
(161
)
27,748
Cost of sales:
Cost of materials and other
24,000
281
1,130
(162
)
25,249
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,064
31
119
—
1,214
Depreciation and amortization expense
544
12
20
—
576
Total cost of sales
25,608
324
1,269
(162
)
27,039
Other operating expenses
12
—
—
—
12
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
176
176
Depreciation and amortization expense
—
—
—
12
12
Operating income by segment
$
349
$
248
$
99
$
(187
)
$
509
See Operating Highlights by
Segment.
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Six months ended June 30, 2022
Revenues:
Revenues from external customers
$
86,308
$
1,450
$
2,425
$
—
$
90,183
Intersegment revenues
15
982
328
(1,325
)
—
Total revenues
86,323
2,432
2,753
(1,325
)
90,183
Cost of sales:
Cost of materials and other (a)
74,919
1,968
2,330
(1,322
)
77,895
Operating expenses (excluding depreciation
and amortization expense reflected below)
2,595
109
302
(1
)
3,005
Depreciation and amortization expense
(c)
1,114
54
17
—
1,185
Total cost of sales
78,628
2,131
2,649
(1,323
)
82,085
Other operating expenses
32
—
2
—
34
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(d)
—
—
—
438
438
Depreciation and amortization expense
—
—
—
23
23
Operating income by segment
$
7,663
$
301
$
102
$
(463
)
$
7,603
Six months ended June 30, 2021
Revenues:
Revenues from external customers
$
45,437
$
848
$
2,269
$
—
$
48,554
Intersegment revenues
4
155
144
(303
)
—
Total revenues
45,441
1,003
2,413
(303
)
48,554
Cost of sales:
Cost of materials and other (b)
42,022
468
2,054
(303
)
44,241
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
2,535
60
275
—
2,870
Depreciation and amortization expense
1,077
24
41
—
1,142
Total cost of sales
45,634
552
2,370
(303
)
48,253
Other operating expenses
50
—
—
—
50
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
384
384
Depreciation and amortization expense
—
—
—
24
24
Operating income (loss) by segment
$
(243
)
$
451
$
43
$
(408
)
$
(157
)
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
(g)
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Reconciliation of net income (loss)
attributable to Valero Energy Corporation stockholders to
adjusted net income (loss) attributable to Valero Energy
Corporation stockholders
Net income (loss) attributable to Valero
Energy Corporation
stockholders
$
4,693
$
162
$
5,598
$
(542
)
Adjustments:
Modification of renewable volume
obligation (RVO) (a)
(104
)
81
(104
)
161
Income tax expense related to modification
of RVO
23
(18
)
23
(36
)
Modification of RVO, net of taxes
(81
)
63
(81
)
125
Gain on sale of ethanol plant (c)
(23
)
—
(23
)
—
Income tax expense related to gain on sale
of ethanol plant
5
—
5
—
Gain on sale of ethanol plant, net of
taxes
(18
)
—
(18
)
—
Environmental reserve adjustment (d)
20
—
20
—
Income tax benefit related to
environmental reserve adjustment
(5
)
—
(5
)
—
Environmental reserve adjustment, net of
taxes
15
—
15
—
Loss on early retirement of debt (e)
—
—
50
—
Income tax benefit related to loss on
early retirement of debt
—
—
(11
)
—
Loss on early retirement of debt, net of
taxes
—
—
39
—
Gain on sale of MVP interest (e)
—
(62
)
—
(62
)
Income tax expense related to gain on sale
of MVP interest
—
14
—
14
Gain on sale of MVP interest, net of
taxes
—
(48
)
—
(48
)
Diamond Pipeline asset impairment (e)
—
24
—
24
Income tax benefit related to Diamond
Pipeline asset
impairment
—
(5
)
—
(5
)
Diamond Pipeline asset impairment, net of
taxes
—
19
—
19
Income tax expense related to changes in
statutory tax rates (f)
—
64
—
64
Total adjustments
(84
)
98
(45
)
160
Adjusted net income (loss) attributable to
Valero Energy Corporation stockholders
$
4,609
$
260
$
5,553
$
(382
)
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
(g)
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Reconciliation of earnings (loss) per
common share – assuming dilution to adjusted earnings (loss)
per common share – assuming dilution
Earnings (loss) per common share –
assuming dilution
$
11.57
$
0.39
$
13.74
$
(1.34
)
Adjustments:
Modification of RVO (a)
(0.20
)
0.15
(0.20
)
0.30
Gain on sale of ethanol plant (c)
(0.05
)
—
(0.05
)
—
Environmental reserve adjustment (d)
0.04
—
0.04
—
Loss on early retirement of debt (e)
—
—
0.10
—
Gain on sale of MVP interest (e)
—
(0.12
)
—
(0.12
)
Diamond Pipeline asset impairment (e)
—
0.05
—
0.05
Income tax expense related to changes in
statutory tax rates (f)
—
0.16
—
0.16
Total adjustments
(0.21
)
0.24
(0.11
)
0.39
Adjusted earnings (loss) per common share
– assuming dilution
$
11.36
$
0.63
$
13.63
$
(0.95
)
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
(g)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
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 income (loss)
$
6,212
$
349
$
7,663
$
(243
)
Adjustments:
Modification of RVO (a)
(104
)
81
(104
)
161
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
1,402
1,064
2,595
2,535
Depreciation and amortization expense
565
544
1,114
1,077
Other operating expenses
14
12
32
50
Refining margin
$
8,089
$
2,050
$
11,300
$
3,580
Refining operating income (loss)
$
6,212
$
349
$
7,663
$
(243
)
Adjustments:
Modification of RVO (a)
(104
)
81
(104
)
161
Other operating expenses
14
12
32
50
Adjusted Refining operating income
(loss)
$
6,122
$
442
$
7,591
$
(32
)
Renewable Diesel segment
Renewable Diesel operating income
$
152
$
248
$
301
$
451
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
58
31
109
60
Depreciation and amortization expense
28
12
54
24
Renewable Diesel margin
$
238
$
291
$
464
$
535
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
(g)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
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 (continued)
Ethanol segment
Ethanol operating income
$
101
$
99
$
102
$
43
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
167
119
302
275
Depreciation and amortization expense
(c)
(3
)
20
17
41
Other operating expenses
1
—
2
—
Ethanol margin
$
266
$
238
$
423
$
359
Ethanol operating income
$
101
$
99
$
102
$
43
Adjustments:
Gain on sale of ethanol plant (c)
(23
)
—
(23
)
—
Other operating expenses
1
—
2
—
Adjusted Ethanol operating income
$
79
$
99
$
81
$
43
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
(g)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
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) (h)
U.S. Gulf Coast region
Refining operating income (loss)
$
3,399
$
159
$
4,395
$
(349
)
Adjustments:
Modification of RVO (a)
(74
)
58
(74
)
116
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
814
611
1,469
1,605
Depreciation and amortization expense
341
334
673
666
Other operating expenses
5
10
23
41
Refining margin
$
4,485
$
1,172
$
6,486
$
2,079
Refining operating income (loss)
$
3,399
$
159
$
4,395
$
(349
)
Adjustments:
Modification of RVO (a)
(74
)
58
(74
)
116
Other operating expenses
5
10
23
41
Adjusted Refining operating income
(loss)
$
3,330
$
227
$
4,344
$
(192
)
U.S. Mid-Continent region
Refining operating income
$
959
$
123
$
1,101
$
113
Adjustments:
Modification of RVO (a)
(19
)
14
(19
)
28
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
199
159
371
349
Depreciation and amortization expense
85
85
166
169
Other operating expenses
—
2
—
9
Refining margin
$
1,224
$
383
$
1,619
$
668
Refining operating income
$
959
$
123
$
1,101
$
113
Adjustments:
Modification of RVO (a)
(19
)
14
(19
)
28
Other operating expenses
—
2
—
9
Adjusted Refining operating income
$
940
$
139
$
1,082
$
150
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
(g)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
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) (h) (continued)
North Atlantic region
Refining operating income
$
1,222
$
1
$
1,508
$
56
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
192
151
398
291
Depreciation and amortization expense
66
59
135
111
Other operating expenses
9
—
9
—
Refining margin
$
1,489
$
211
$
2,050
$
458
Refining operating income
$
1,222
$
1
$
1,508
$
56
Adjustment: Other operating expenses
9
—
9
—
Adjusted Refining operating income
$
1,231
$
1
$
1,517
$
56
U.S. West Coast region
Refining operating income (loss)
$
632
$
66
$
659
$
(63
)
Adjustments:
Modification of RVO (a)
(11
)
9
(11
)
17
Operating expenses (excluding depreciation
and amortization expense reflected below)
197
143
357
290
Depreciation and amortization expense
73
66
140
131
Refining margin
$
891
$
284
$
1,145
$
375
Refining operating income (loss)
$
632
$
66
$
659
$
(63
)
Adjustment: Modification of RVO (a)
(11
)
9
(11
)
17
Adjusted Refining operating income
(loss)
$
621
$
75
$
648
$
(46
)
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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
376
389
351
372
Medium/light sour crude oil
442
330
408
303
Sweet crude oil
1,413
1,421
1,418
1,282
Residuals
229
249
227
221
Other feedstocks
127
126
114
114
Total feedstocks
2,587
2,515
2,518
2,292
Blendstocks and other
375
320
363
332
Total throughput volumes
2,962
2,835
2,881
2,624
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,452
1,432
1,422
1,312
Distillates
1,135
1,035
1,081
965
Other products (i)
407
401
404
377
Total yields
2,994
2,868
2,907
2,654
Operating statistics (b) (g)
(j)
Refining margin
$
8,089
$
2,050
$
11,300
$
3,580
Adjusted Refining operating income
(loss)
$
6,122
$
442
$
7,591
$
(32
)
Throughput volumes (thousand barrels per
day)
2,962
2,835
2,881
2,624
Refining margin per barrel of
throughput
$
30.01
$
7.95
$
21.67
$
7.54
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
5.20
4.13
4.98
5.34
Depreciation and amortization expense per
barrel of throughput
2.10
2.11
2.14
2.27
Adjusted Refining operating income (loss)
per barrel of throughput
$
22.71
$
1.71
$
14.55
$
(0.07
)
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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating statistics (g) (j)
Renewable Diesel margin
$
238
$
291
$
464
$
535
Renewable Diesel operating income
$
152
$
248
$
301
$
451
Sales volumes (thousand gallons per
day)
2,182
923
1,961
895
Renewable Diesel margin per gallon of
sales
$
1.20
$
3.46
$
1.31
$
3.30
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of sales
0.29
0.36
0.31
0.37
Depreciation and amortization expense per
gallon of sales
0.15
0.15
0.15
0.15
Renewable Diesel operating income per
gallon of sales
$
0.76
$
2.95
$
0.85
$
2.78
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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating statistics (b) (g)
(j)
Ethanol margin
$
266
$
238
$
423
$
359
Adjusted Ethanol operating income
$
79
$
99
$
81
$
43
Production volumes (thousand gallons per
day)
3,861
4,203
3,953
3,884
Ethanol margin per gallon of
production
$
0.75
$
0.62
$
0.59
$
0.51
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of
production
0.47
0.31
0.42
0.39
Depreciation and amortization expense per
gallon of production (c)
(0.01
)
0.05
0.03
0.06
Gain on sale of ethanol plant per gallon
of production (c)
0.07
—
0.03
—
Adjusted Ethanol operating income per
gallon of production
$
0.22
$
0.26
$
0.11
$
0.06
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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating statistics by region
(h)
U.S. Gulf Coast region (b) (g)
(j)
Refining margin
$
4,485
$
1,172
$
6,486
$
2,079
Adjusted Refining operating income
(loss)
$
3,330
$
227
$
4,344
$
(192
)
Throughput volumes (thousand barrels per
day)
1,750
1,731
1,722
1,623
Refining margin per barrel of
throughput
$
28.17
$
7.44
$
20.81
$
7.08
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
5.11
3.88
4.71
5.46
Depreciation and amortization expense per
barrel of throughput
2.15
2.12
2.16
2.27
Adjusted Refining operating income (loss)
per barrel of throughput
$
20.91
$
1.44
$
13.94
$
(0.65
)
U.S. Mid-Continent region (b) (g)
(j)
Refining margin
$
1,224
$
383
$
1,619
$
668
Adjusted Refining operating income
$
940
$
139
$
1,082
$
150
Throughput volumes (thousand barrels per
day)
449
476
434
431
Refining margin per barrel of
throughput
$
29.99
$
8.86
$
20.59
$
8.58
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.88
3.67
4.71
4.48
Depreciation and amortization expense per
barrel of throughput
2.09
1.98
2.12
2.17
Adjusted Refining operating income per
barrel of throughput
$
23.02
$
3.21
$
13.76
$
1.93
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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating statistics by region (h)
(continued)
North Atlantic region (g) (j)
Refining margin
$
1,489
$
211
$
2,050
$
458
Adjusted Refining operating income
$
1,231
$
1
$
1,517
$
56
Throughput volumes (thousand barrels per
day)
483
356
484
338
Refining margin per barrel of
throughput
$
33.85
$
6.52
$
23.41
$
7.48
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.37
4.66
4.55
4.76
Depreciation and amortization expense per
barrel of throughput
1.49
1.85
1.53
1.81
Adjusted Refining operating income per
barrel of throughput
$
27.99
$
0.01
$
17.33
$
0.91
U.S. West Coast region (g) (j)
Refining margin
$
891
$
284
$
1,145
$
375
Adjusted Refining operating income
(loss)
$
621
$
75
$
648
$
(46
)
Throughput volumes (thousand barrels per
day)
280
272
241
232
Refining margin per barrel of
throughput
$
34.93
$
11.45
$
26.19
$
8.93
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
7.74
5.79
8.18
6.92
Depreciation and amortization expense per
barrel of throughput
2.83
2.63
3.20
3.11
Adjusted Refining operating income (loss)
per barrel of throughput
$
24.36
$
3.03
$
14.81
$
(1.10
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
111.69
$
69.00
$
104.52
$
65.05
Brent less West Texas Intermediate (WTI)
crude oil
3.03
2.91
2.96
3.09
Brent less Alaska North Slope (ANS) crude
oil
(0.78
)
0.56
0.48
0.45
Brent less Louisiana Light Sweet (LLS)
crude oil
1.54
1.05
1.06
1.08
Brent less Argus Sour Crude Index (ASCI)
crude oil
6.59
3.34
5.76
3.17
Brent less Maya crude oil
7.91
6.13
8.21
5.42
LLS crude oil
110.15
67.95
103.46
63.97
LLS less ASCI crude oil
5.05
2.29
4.70
2.09
LLS less Maya crude oil
6.37
5.08
7.15
4.34
WTI crude oil
108.66
66.09
101.56
61.96
Natural gas (dollars per million
British Thermal Units)
7.23
2.93
5.78
11.30
Products (dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB) gasoline less Brent
31.33
14.43
23.50
12.28
Ultra-low-sulfur (ULS) diesel less
Brent
55.95
12.99
41.95
11.59
Propylene less Brent
(38.56
)
(20.41
)
(33.69
)
(0.96
)
CBOB gasoline less LLS
32.87
15.48
24.56
13.36
ULS diesel less LLS
57.49
14.04
43.01
12.67
Propylene less LLS
(37.02
)
(19.36
)
(32.63
)
0.12
U.S. Mid-Continent:
CBOB gasoline less WTI
36.08
19.93
26.05
17.38
ULS diesel less WTI
60.16
18.42
43.72
17.82
North Atlantic:
CBOB gasoline less Brent
41.58
17.37
29.63
14.47
ULS diesel less Brent
70.25
15.07
51.36
13.48
U.S. West Coast:
California Reformulated Gasoline
Blendstock of Oxygenate Blending (CARBOB) 87 gasoline less ANS
55.06
27.18
41.76
20.87
California Air Resources Board (CARB)
diesel less ANS
58.37
15.28
45.32
14.71
CARBOB 87 gasoline less WTI
58.87
29.53
44.24
23.51
CARB diesel less WTI
62.18
17.63
47.80
17.35
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Renewable Diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$
4.03
$
2.00
$
3.54
$
1.87
Biodiesel Renewable Identification Number
(RIN) (dollars per RIN)
1.70
1.71
1.57
1.44
California Low-Carbon Fuel Standard
(dollars per metric ton)
104.30
184.82
121.47
190.06
Chicago Board of Trade (CBOT) soybean oil
(dollars per pound)
0.80
0.63
0.74
0.56
Ethanol
CBOT corn (dollars per bushel)
7.77
6.58
7.24
5.98
New York Harbor ethanol (dollars per
gallon)
2.84
2.38
2.61
2.08
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
June 30,
December 31,
2022
2021
Balance sheet data
Current assets
$
27,409
$
21,165
Cash and cash equivalents included in
current assets
5,392
4,122
Inventories included in current assets
7,147
6,265
Current liabilities
21,969
16,851
Valero Energy Corporation stockholders’
equity
20,969
18,430
Total equity
22,733
19,817
Debt and finance lease obligations:
Debt –
Current portion of debt (excluding
variable interest entities (VIEs))
$
—
$
300
Debt, less current portion of debt
(excluding VIEs)
10,055
10,820
Total debt (excluding VIEs)
10,055
11,120
Current portion of debt attributable to
VIEs
843
810
Debt, less current portion of debt
attributable to VIEs
—
20
Total debt attributable to VIEs
843
830
Total debt
10,898
11,950
Finance lease obligations –
Current portion of finance lease
obligations (excluding VIEs)
166
141
Finance lease obligations, less current
portion (excluding VIEs)
1,545
1,502
Total finance lease obligations (excluding
VIEs)
1,711
1,643
Current portion of finance lease
obligations attributable to VIEs
13
13
Finance lease obligations, less current
portion attributable to VIEs
258
264
Total finance lease obligations
attributable to VIEs
271
277
Total finance lease obligations
1,982
1,920
Total debt and finance lease
obligations
$
12,880
$
13,870
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Reconciliation of net cash provided by
operating activities to adjusted net cash provided by
operating activities (g)
Net cash provided by operating
activities
$
5,845
$
2,008
$
6,433
$
1,956
Exclude:
Changes in current assets and current
liabilities
594
1,067
(128
)
1,251
Diamond Green Diesel LLC’s (DGD) adjusted
net cash provided by operating activities attributable to the other
joint venture member’s ownership interest in DGD
90
132
175
240
Adjusted net cash provided by operating
activities
$
5,161
$
809
$
6,386
$
465
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Reconciliation of capital investments
to capital investments attributable to Valero (g)
Capital expenditures (excluding VIEs)
$
172
$
101
$
324
$
261
Capital expenditures of VIEs:
DGD
239
245
458
398
Other VIEs
6
9
19
35
Deferred turnaround and catalyst cost
expenditures (excluding VIEs)
228
196
681
426
Deferred turnaround and catalyst cost
expenditures of DGD
7
—
13
1
Investments in nonconsolidated joint
ventures
1
(3
)
1
9
Capital investments
653
548
1,496
1,130
Adjustments:
DGD’s capital investments attributable to
the other joint venture member
(123
)
(122
)
(235
)
(199
)
Capital expenditures of other VIEs
(6
)
(9
)
(19
)
(35
)
Capital investments attributable to
Valero
$
524
$
417
$
1,242
$
896
Dividends per common share
$
0.98
$
0.98
$
1.96
$
1.96
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
Under the Renewable Fuel Standard program,
the U.S. Environmental Protection agency (EPA) is required to set
annual quotas for the volume of renewable fuels that obligated
parties, such as us, must blend into petroleum-based transportation
fuels consumed in the U.S. The quotas are used to determine an
obligated party’s RVO. The EPA released a final rule on June 3,
2022 that, among other things, reduced the quotas for 2020 and, for
the first time, established quotas for 2021 and 2022.
In 2020, we recognized the cost of the RVO
using the 2020 quotas set by the EPA at that time, and in 2021 and
the three months ended March 31, 2022, we recognized the cost of
the RVO using our estimates of the quotas. As a result of the final
rule released by the EPA on June 3, 2022 as noted above, we
recognized a benefit of $104 million in the three and six months
ended June 30, 2022 primarily related to the modification of the
2020 quotas. The impacts to the estimated cost of the RVO
recognized by us in 2021 and the three months ended March 31, 2022
were not significant; however, there were impacts in the 2021
quarterly periods as follows: (i) benefit of $80 million for the
three months ended March 31, 2021; (ii) benefit of $81 million for
the three months ended June 30, 2021; (iii) benefit of $58 million
for the three months ended September 30, 2021; and (iv) charge of
$220 million related to the three months ended December 31,
2021.
(b)
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 arising
out of Winter Storm Uri. The higher energy costs resulted from 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 six months ended June 30, 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 (j)
Refining margin per barrel of throughput
(g)
$
0.15
$
0.03
n/a
$
0.10
Operating expenses (excluding depreciation
and amortization expense) per barrel of throughput
1.49
0.49
n/a
1.01
Adjusted Refining operating income (loss)
per barrel of throughput (g)
$
1.64
$
0.52
n/a
$
1.11
The estimated excess energy costs
attributable to our Ethanol segment affected that segment’s
operating statistics of (i) operating expenses (excluding
depreciation and amortization expenses) per gallon of production
and (ii) adjusted operating income per gallon of production by
$0.08 (see note (g) below).
(c)
In June 2022, we sold our ethanol plant
located in Jefferson, Wisconsin, which ceased operations and was
written down to estimated salvage value in 2021, for $32 million.
Depreciation and amortization expense for the three and six months
ended June 30, 2022 includes a gain on the sale of $23 million.
(d)
General and administrative expenses
(excluding depreciation and amortization expense) for the three and
six months ended June 30, 2022 includes a charge of $20 million for
an environmental reserve adjustment associated with a non-operating
site.
(e)
“Other income, net” includes the
following:
- a charge of $50 million in the six months ended June 30, 2022
from the early retirement of approximately $1.4 billion aggregate
principal amount of various series of our senior notes;
- a gain of $62 million in the three and six months ended June
30, 2021 on the sale of a 24.99 percent membership interest in MVP
Terminalling, LLC (MVP), a nonconsolidated joint venture with a
subsidiary of Magellan Midstream Partners, L.P., for $270 million;
and
- a charge of $24 million in the three and six months ended June
30, 2021 representing our portion of the asset impairment loss
recognized by Diamond Pipeline LLC, a nonconsolidated joint venture
with a subsidiary of Plains All American Pipeline, L.P., resulting
from the joint venture’s cancellation of its pipeline extension
project.
(f)
Certain statutory income tax rate changes
(primarily an increase in the U.K. rate from 19 percent to 25
percent effective in 2023) were enacted during the second quarter
of 2021 that resulted in the remeasurement of our deferred tax
liabilities. Under GAAP, we are required to recognize the effect of
a change in tax law in the period of enactment. As a result, we
recognized deferred income tax expense of $64 million in the three
and six months ended June 30, 2021, which represented the net
increase in our deferred tax liabilities resulting from the changes
in the income tax rates.
(g)
We use certain financial measures (as
noted below) in the earnings release tables and accompanying
earnings release that are not defined under GAAP and are considered
to be non-GAAP measures.
We have defined these non-GAAP measures
and believe they are useful to the external users of our financial
statements, including industry analysts, investors, lenders, and
rating agencies. We believe these measures are useful to assess our
ongoing financial performance because, when reconciled to their
most comparable GAAP measures, they provide improved comparability
between periods after adjusting for certain items that we believe
are not indicative of our core operating performance and that may
obscure our underlying business results and trends. These non-GAAP
measures should not be considered as alternatives to their most
comparable GAAP measures nor should they be considered in isolation
or as a substitute for an analysis of our results of operations as
reported under GAAP. In addition, these non-GAAP measures may not
be comparable to similarly titled measures used by other companies
because we may define them differently, which diminishes their
utility.
Non-GAAP measures are as follows:
- Adjusted net income (loss) attributable to Valero Energy
Corporation stockholders is defined as net income (loss)
attributable to Valero Energy Corporation stockholders adjusted to
reflect the items noted below, along with their related income tax
effect. The income tax effect for the adjustments was calculated
using a combined federal and state statutory rate for the U.S-based
adjustments of 22.5 percent and a local statutory income tax rate
for foreign-based adjustments. We have adjusted for these items
because we believe that they are not indicative of our core
operating performance and that their adjustment results in an
important measure of our ongoing financial performance to better
assess our underlying business results and trends. The basis for
our belief with respect to each adjustment is provided below.
– Modification of RVO – The net
benefit resulting from the modification of our RVO for 2020 and
2021 that was recognized by us in June 2022 is not associated with
the cost of the RVO generated by our operations during the three
and six months ended June 30, 2022. See note (a) for additional
details.
On the other hand, the net
benefit resulting from the modification of our RVO for 2021 that
was recognized by us in June 2022 is associated with the cost of
the RVO generated by our operations throughout 2021. Therefore, the
adjustment reflects the portion of the benefit that is associated
with the cost of the RVO generated by our operations during the
three and six months ended June 30, 2021.
– Gain on sale of ethanol plant
– The gain on the sale of our Jefferson ethanol plant (see note
(c)) is not indicative of our ongoing operations.
– Environmental reserve
adjustment – The environmental reserve adjustment is attributable
to a site that was shut down by prior owners and subsequently
acquired by us (referred to by us as a non-operating site (see note
(d)).
– Loss on early retirement of
debt – Premiums and other expenses incurred in connection with the
early retirement of approximately $1.4 billion aggregate principal
amount of various series of our senior notes (see note (e)) are not
associated with the ongoing costs of our borrowing and financing
activities.
– Gain on sale of MVP interest
– The gain on the sale of a 24.99 percent membership interest in
MVP (see note (e)) is not indicative of our ongoing operations.
– Diamond Pipeline asset
impairment – The asset impairment loss related to the cancellation
of a capital project associated with Diamond Pipeline LLC (see note
(e)) is not indicative of our ongoing operations.
– Income tax expense related to
changes in statutory tax rates – The income tax expense related to
changes in certain statutory income tax rates (see note (f)) is not
indicative of income tax expense associated with the pre-tax
results for the three and six months ended June 30, 2021.
- 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.
- Refining margin is defined as Refining segment operating
income (loss) excluding the modification of RVO adjustment (see
note (a)), operating expenses (excluding depreciation and
amortization expense), depreciation and amortization expense, and
other operating expenses. We believe Refining margin is an
important measure of our Refining segment’s operating and financial
performance as it is the most comparable measure to the industry’s
market reference product margins, which are used by industry
analysts, investors, and others to evaluate our performance.
- Renewable Diesel margin is defined as Renewable Diesel
segment operating income excluding operating expenses (excluding
depreciation and amortization expense) and depreciation and
amortization expense. We believe Renewable Diesel margin is an
important measure of our Renewable Diesel segment’s operating and
financial performance as it is the most comparable measure to the
industry’s market reference product margins, which are used by
industry analysts, investors, and others to evaluate our
performance.
- Ethanol margin is defined as Ethanol segment operating
income excluding operating expenses (excluding depreciation and
amortization expense), depreciation and amortization expense, and
other operating expenses. We believe Ethanol margin is an important
measure of our Ethanol segment’s operating and financial
performance as it is the most comparable measure to the industry’s
market reference product margins, which are used by industry
analysts, investors, and others to evaluate our performance.
- Adjusted Refining operating income (loss) is defined as
Refining segment operating income (loss) excluding the modification
of RVO adjustment (see note (a)) 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 income is defined as Ethanol
segment operating income excluding the gain on sale of ethanol
plant (see note (c)) and other operating expenses. We believe
adjusted Ethanol operating income is an important measure of our
Ethanol segment’s operating and financial performance because it
excludes items that are not indicative of that segment’s core
operating performance.
- Adjusted net cash provided by operating activities is
defined as net cash provided by operating activities excluding the
items noted below. We believe adjusted net cash provided by
operating activities is an important measure of our ongoing
financial performance to better assess our ability to generate cash
to fund our investing and financing activities. The basis for our
belief with respect to each excluded item is provided below.
– Changes in current assets and
current liabilities – Current assets net of current liabilities
represents our operating liquidity. We believe that the change in
our operating liquidity from period to period does not represent
cash generated by our operations that is available to fund our
investing and financing activities.
– DGD’s adjusted net cash
provided by operating activities attributable to the other joint
venture member’s ownership interest in DGD – We are a 50 percent
joint venture member in DGD and we consolidate DGD’s financial
statements. Our Renewable Diesel segment includes the operations of
DGD and the associated activities to market 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 members use DGD’s
operating cash flow (excluding changes in its current assets and
current liabilities) to fund its capital investments rather than
distribute all of that cash to themselves. Nevertheless, DGD’s
operating cash flow is effectively attributable to each member and
only 50 percent of DGD’s operating cash flow should be attributed
to our net cash provided by operating activities. Therefore, we
have adjusted our net cash provided by operating activities for the
portion of DGD’s operating cash flow attributable to the other
joint venture member’s ownership interest because we believe that
it more accurately reflects the operating cash flow available to us
to fund our investing and financing activities. The adjustment is
calculated as follows (in millions):
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
DGD operating cash flow data
Net cash provided by operating
activities
$
128
$
256
$
149
$
463
Exclude: Changes in current assets and
current
liabilities
(51
)
(8
)
(200
)
(17
)
Adjusted net cash provided by
operating
activities
179
264
349
480
Other joint venture member’s ownership
interest
50
%
50
%
50
%
50
%
DGD’s adjusted net cash provided by
operating
activities attributable to the other joint
venture
member’s ownership interest in DGD
$
90
$
132
$
175
$
240
- Capital investments attributable to Valero is defined as all
capital expenditures, deferred turnaround and catalyst cost
expenditures, and investments in nonconsolidated joint ventures
presented in our consolidated statements of cash flows, excluding
the portion of DGD’s capital investments attributable to the other
joint venture member and all of the capital expenditures of VIEs
other than DGD.
DGD’s members use DGD’s operating cash
flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Because DGD’s operating cash flow
is effectively attributable to each member, only 50 percent of
DGD’s capital investments should be attributed to our net share of
total capital investments. We also exclude the capital expenditures
of other VIEs that we consolidate because we do not operate those
VIEs. We believe capital investments attributable to Valero is an
important measure because it more accurately reflects our capital
investments.
(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, 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/20220727006077/en/
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Director – 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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