- Reported net income attributable to Valero stockholders of $3.1
billion, or $8.29 per share
- Reported adjusted net income attributable to Valero
stockholders of $3.1 billion, or $8.27 per share
- Reduced debt by $199 million
- Returned over $1.8 billion to stockholders through dividends
and stock buybacks and declared a regular quarterly cash dividend
on common stock of $1.02 per share
- Completed the Port Arthur Coker project in March and
successfully commenced operations in April
- Valero’s Diamond Green Diesel (DGD) joint venture approved a
Sustainable Aviation Fuel (SAF) project at the DGD Port Arthur
plant
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $3.1 billion, or
$8.29 per share, for the first quarter of 2023, compared to $905
million, or $2.21 per share, for the first quarter of 2022.
Excluding the adjustments shown in the accompanying earnings
release tables, adjusted net income attributable to Valero
stockholders was $3.1 billion, or $8.27 per share, for the first
quarter of 2023, compared to $944 million, or $2.31 per share, for
the first quarter of 2022.
Refining
The Refining segment reported operating income of $4.1 billion
for the first quarter of 2023, compared to $1.5 billion for the
first quarter of 2022. Refining throughput volumes averaged 2.9
million barrels per day in the first quarter of 2023.
“Our refineries operated at a 93 percent capacity utilization
rate in the first quarter, despite planned maintenance at several
of our facilities, illustrating the benefits from our long-standing
commitment to operational excellence,” said Joe Gorder, Valero’s
Chairman and Chief Executive Officer.
Renewable Diesel
The Renewable Diesel segment, which consists of the DGD joint
venture, reported $205 million of operating income for the first
quarter of 2023, compared to $149 million for the first quarter of
2022. Segment sales volumes averaged 3.0 million gallons per day in
the first quarter of 2023, which was 1.3 million gallons per day
higher than the first quarter of 2022. The higher sales volumes
were due to the impact of additional volumes from the startup of
the DGD Port Arthur plant in the fourth quarter of 2022.
Ethanol
The Ethanol segment reported $39 million of operating income for
the first quarter of 2023, compared to $1 million for the first
quarter of 2022. Ethanol production volumes averaged 4.2 million
gallons per day in the first quarter of 2023, which was 138
thousand gallons per day higher than the first quarter of 2022.
Corporate and Other
General and administrative expenses were $244 million in the
first quarter of 2023, compared to $205 million in the first
quarter of 2022. The effective tax rate for the first quarter of
2023 was 22 percent.
Investing and Financing Activities
Net cash provided by operating activities was $3.2 billion in
the first quarter of 2023. Included in this amount was a $534
million unfavorable change in working capital and $123 million of
net cash provided by operating activities associated with the other
joint venture member’s share of DGD, excluding changes in DGD’s
working capital. Excluding these items, adjusted net cash provided
by operating activities was $3.6 billion in the first quarter of
2023.
Capital investments totaled $524 million in the first quarter of
2023, of which $341 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to the other
joint venture member’s share of DGD, capital investments
attributable to Valero were $467 million.
Valero returned over $1.8 billion to stockholders in the first
quarter of 2023, of which $379 million was paid as dividends and
$1.5 billion was for the purchase of approximately 11.0 million
shares of common stock, resulting in a payout ratio of 52 percent
of adjusted net cash provided by operating activities.
Valero continues to target an annual payout ratio between 40 and
50 percent of adjusted net cash provided by operating activities.
Valero defines payout ratio as the sum of dividends 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 the other joint venture member’s share of DGD.
On January 31, Valero announced an increase of its quarterly
cash dividend on common stock from $0.98 per share to $1.02 per
share.
Liquidity and Financial Position
Valero further reduced its debt by $199 million, ending the
first quarter of 2023 with $9.0 billion of total debt, $2.4 billion
of finance lease obligations and $5.5 billion of cash and cash
equivalents. The debt to capitalization ratio, net of cash and cash
equivalents, was 18 percent as of March 31, 2023.
Strategic Update
The Port Arthur Coker project was completed in March and
successfully commenced operations in April. The project is expected
to increase Port Arthur refinery’s throughput capacity and enhance
its ability to process incremental volumes of sour crude oils and
residual feedstocks, while also improving turnaround
efficiency.
In January, Valero’s DGD joint venture approved a SAF project at
the DGD Port Arthur plant, which will give the plant the ability to
upgrade approximately 50 percent of its current 470 million gallon
annual renewable diesel production capacity to SAF. The project is
expected to be completed in 2025 and is estimated to cost $315
million, with half of that attributable to Valero. With the
completion of this project, DGD is expected to be one of the
largest manufacturers of SAF in the world.
BlackRock and Navigator’s carbon sequestration project is
progressing and they are expecting to begin startup activities in
late 2024. Valero expects to be the anchor shipper with eight of
its ethanol plants connected to this system, which should allow it
to produce a lower carbon intensity ethanol product and
significantly improve the margin profile and competitive
positioning of its ethanol business.
“Our team continues to successfully execute a strategy that
enables us to meet the challenge of supplying the world’s need for
reliable and affordable energy in an environmentally responsible
manner,” said Gorder. “The tenets of our strategy – pursuing
excellence in operations, deploying capital with an uncompromising
focus on returns, and honoring our commitment to stockholders –
have been in place for nearly a decade and continue to position us
well for the future.”
Conference Call
Valero’s senior management will hold a conference call at 10
a.m. ET today to discuss this earnings release and to provide an
update on operations and strategy.
About Valero
Valero Energy Corporation, through its subsidiaries
(collectively, “Valero”), is a multinational manufacturer and
marketer of petroleum-based and low-carbon liquid transportation
fuels and petrochemical products, and it sells its products
primarily in the United States (“U.S.”), Canada, the United Kingdom
(“U.K.”), Ireland and Latin America. Valero owns 15 petroleum
refineries located in the U.S., Canada and the U.K. with a combined
throughput capacity of approximately 3.2 million barrels per day.
Valero is a joint venture member in Diamond Green Diesel Holdings
LLC, which owns two renewable diesel plants located in the U.S.
Gulf Coast region with a combined production capacity of
approximately 1.2 billion gallons per year, and Valero owns 12
ethanol plants located in the U.S. Mid-Continent region with a
combined production capacity of approximately 1.6 billion gallons
per year. Valero manages its operations through its Refining,
Renewable Diesel, and Ethanol segments. Please visit
investorvalero.com for more information.
Valero Contacts Investors: Homer Bhullar, Vice President
– Investor Relations and Finance, 210-345-1982 Eric Herbort,
Director – Investor Relations, 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
earnings release tables, or made during the conference call, that
state Valero’s or management’s expectations or predictions of the
future are forward-looking statements intended to be covered by the
safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. The words “believe,” “expect,”
“should,” “estimates,” “intend,” “target,” “will,” “plans,”
“forecast,” and other similar expressions identify forward-looking
statements. Forward-looking statements in this release and the
accompanying earnings release tables include, and those made on the
conference call may include, statements relating to Valero’s
low-carbon fuels strategy, expected timing of completion, cost and
performance of projects, future market and industry conditions,
future operating and financial performance, future production and
manufacturing ability and size, and management of future risks,
among other matters. It is important to note that actual results
could differ materially from those projected in such
forward-looking statements based on numerous factors, including
those outside of Valero’s control, such as legislative or political
changes or developments, market dynamics, cyberattacks, weather
events, and other matters affecting Valero’s operations or the
demand for Valero’s products. These factors also include, but are
not limited to, the uncertainties that remain with respect to
current or contemplated legal, political or regulatory developments
that are adverse to or restrict refining and marketing operations,
or that impose profits, windfall or margin taxes or penalties, the
Russia-Ukraine conflict, the impact of inflation on margins and
costs, economic activity levels, and the adverse effects the
foregoing may have on Valero’s business plan, strategy, operations
and financial performance. For more information concerning these
and other factors that could cause actual results to differ from
those expressed or forecasted, see Valero’s annual report on Form
10-K, quarterly reports on Form 10‑Q, and other reports filed with
the Securities and Exchange Commission and available on Valero’s
website at www.valero.com.
Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release
tables include references to financial measures that are not
defined under U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include adjusted net income attributable to
Valero stockholders, adjusted earnings per common share – assuming
dilution, Refining margin, Renewable Diesel margin, Ethanol margin,
adjusted Refining operating income, adjusted Ethanol operating
income, adjusted net cash provided by operating activities, and
capital investments attributable to Valero. These non-GAAP
financial measures have been included to help facilitate the
comparison of operating results between periods. See the
accompanying earnings release tables for a reconciliation of
non-GAAP measures to their most directly comparable GAAP measures.
Note (b) 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,
2023
2022
Statement of income data
Revenues
$
36,439
$
38,542
Cost of sales:
Cost of materials and other
30,005
34,949
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,477
1,379
Depreciation and amortization expense
650
595
Total cost of sales
32,132
36,923
Other operating expenses
10
19
General and administrative expenses
(excluding
depreciation and amortization expense
reflected below)
244
205
Depreciation and amortization expense
10
11
Operating income
4,043
1,384
Other income (expense), net (a)
129
(20
)
Interest and debt expense, net of
capitalized interest
(146
)
(145
)
Income before income tax expense
4,026
1,219
Income tax expense
880
252
Net income
3,146
967
Less: Net income attributable to
noncontrolling interests
79
62
Net income attributable to Valero Energy
Corporation
stockholders
$
3,067
$
905
Earnings per common share
$
8.30
$
2.21
Weighted-average common shares outstanding
(in millions)
369
408
Earnings per common share – assuming
dilution
$
8.29
$
2.21
Weighted-average common shares outstanding
–
assuming dilution (in millions)
369
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,
2023
Revenues:
Revenues from external customers
$
34,407
$
935
$
1,097
$
—
$
36,439
Intersegment revenues
3
745
223
(971
)
—
Total revenues
34,410
1,680
1,320
(971
)
36,439
Cost of sales:
Cost of materials and other
28,510
1,331
1,131
(967
)
30,005
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,261
86
130
—
1,477
Depreciation and amortization expense
572
58
20
—
650
Total cost of sales
30,343
1,475
1,281
(967
)
32,132
Other operating expenses
10
—
—
—
10
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
244
244
Depreciation and amortization expense
—
—
—
10
10
Operating income by segment
$
4,057
$
205
$
39
$
(258
)
$
4,043
Three months ended March 31,
2022
Revenues:
Revenues from external customers
$
36,813
$
595
$
1,134
$
—
$
38,542
Intersegment revenues
4
386
127
(517
)
—
Total revenues
36,817
981
1,261
(517
)
38,542
Cost of sales:
Cost of materials and other
33,606
755
1,104
(516
)
34,949
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,193
51
135
—
1,379
Depreciation and amortization expense
549
26
20
—
595
Total cost of sales
35,348
832
1,259
(516
)
36,923
Other operating expenses
18
—
1
—
19
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
205
205
Depreciation and amortization expense
—
—
—
11
11
Operating income by segment
$
1,451
$
149
$
1
$
(217
)
$
1,384
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
(b)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2023
2022
Reconciliation of net income
attributable to Valero Energy
Corporation stockholders to adjusted
net income
attributable to Valero Energy
Corporation stockholders
Net income attributable to Valero Energy
Corporation
stockholders
$
3,067
$
905
Adjustment:
Loss (gain) on early retirement of debt
(a)
(11
)
50
Income tax (benefit) expense related to
loss (gain) on early
retirement of debt
2
(11
)
Loss (gain) on early retirement of debt,
net of taxes
(9
)
39
Adjusted net income attributable to
Valero Energy Corporation stockholders
$
3,058
$
944
Reconciliation of earnings per common
share –
assuming dilution to adjusted earnings
per common
share – assuming dilution
Earnings per common share – assuming
dilution
$
8.29
$
2.21
Adjustment: Loss (gain) on early
retirement of debt (a)
(0.02
)
0.10
Adjusted earnings per common share –
assuming dilution
$
8.27
$
2.31
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
(b)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2023
2022
Reconciliation of operating income by
segment to segment
margin, and reconciliation of operating
income by segment
to adjusted operating income by
segment
Refining segment
Refining operating income
$
4,057
$
1,451
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,261
1,193
Depreciation and amortization expense
572
549
Other operating expenses
10
18
Refining margin
$
5,900
$
3,211
Refining operating income
$
4,057
$
1,451
Adjustment: Other operating expenses
10
18
Adjusted Refining operating income
$
4,067
$
1,469
Renewable Diesel segment
Renewable Diesel operating income
$
205
$
149
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
86
51
Depreciation and amortization expense
58
26
Renewable Diesel margin
$
349
$
226
Ethanol segment
Ethanol operating income
$
39
$
1
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
130
135
Depreciation and amortization expense
20
20
Other operating expenses
—
1
Ethanol margin
$
189
$
157
Ethanol operating income
$
39
$
1
Adjustment: Other operating expenses
—
1
Adjusted Ethanol operating income
$
39
$
2
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
(b)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2023
2022
Reconciliation of Refining segment
operating income to Refining
margin (by region), and reconciliation
of Refining segment
operating income to adjusted Refining
segment operating
income (by region) (c)
U.S. Gulf Coast region
Refining operating income
$
2,667
$
996
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
686
655
Depreciation and amortization expense
349
332
Other operating expenses
10
18
Refining margin
$
3,712
$
2,001
Refining operating income
$
2,667
$
996
Adjustment: Other operating expenses
10
18
Adjusted Refining operating income
$
2,677
$
1,014
U.S. Mid-Continent region
Refining operating income
$
602
$
142
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
194
172
Depreciation and amortization expense
82
81
Refining margin
$
878
$
395
North Atlantic region
Refining operating income
$
629
$
286
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
180
206
Depreciation and amortization expense
63
69
Refining margin
$
872
$
561
U.S. West Coast region
Refining operating income
$
159
$
27
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
201
160
Depreciation and amortization expense
78
67
Refining margin
$
438
$
254
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,
2023
2022
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
344
326
Medium/light sour crude oil
323
373
Sweet crude oil
1,489
1,423
Residuals
224
226
Other feedstocks
140
101
Total feedstocks
2,520
2,449
Blendstocks and other
410
351
Total throughput volumes
2,930
2,800
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,451
1,392
Distillates
1,099
1,027
Other products (d)
402
401
Total yields
2,952
2,820
Operating statistics (b) (e)
Refining margin
$
5,900
$
3,211
Adjusted Refining operating income
$
4,067
$
1,469
Throughput volumes (thousand barrels per
day)
2,930
2,800
Refining margin per barrel of
throughput
$
22.37
$
12.74
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.78
4.73
Depreciation and amortization expense per
barrel of
throughput
2.17
2.18
Adjusted Refining operating income per
barrel of
throughput
$
15.42
$
5.83
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,
2023
2022
Operating statistics (b) (e)
Renewable Diesel margin
$
349
$
226
Renewable Diesel operating income
$
205
$
149
Sales volumes (thousand gallons per
day)
2,988
1,738
Renewable Diesel margin per gallon of
sales
$
1.30
$
1.45
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of sales
0.32
0.33
Depreciation and amortization expense per
gallon of sales
0.22
0.16
Renewable Diesel operating income per
gallon of sales
$
0.76
$
0.96
See Notes to Earnings
Release.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
ETHANOL SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
March 31,
2023
2022
Operating statistics (b) (e)
Ethanol margin
$
189
$
157
Adjusted Ethanol operating income
$
39
$
2
Production volumes (thousand gallons per
day)
4,183
4,045
Ethanol margin per gallon of
production
$
0.50
$
0.43
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of production
0.34
0.37
Depreciation and amortization expense per
gallon of production
0.05
0.06
Adjusted Ethanol operating income per
gallon of production
$
0.11
$
—
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
March 31,
2023
2022
Operating statistics by region
(c)
U.S. Gulf Coast region (b) (e)
Refining margin
$
3,712
$
2,001
Adjusted Refining operating income
$
2,677
$
1,014
Throughput volumes (thousand barrels per
day)
1,714
1,694
Refining margin per barrel of
throughput
$
24.06
$
13.13
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.45
4.30
Depreciation and amortization expense per
barrel of
throughput
2.26
2.18
Adjusted Refining operating income per
barrel of
throughput
$
17.35
$
6.65
U.S. Mid-Continent region (b)
(e)
Refining margin
$
878
$
395
Refining operating income
$
602
$
142
Throughput volumes (thousand barrels per
day)
493
420
Refining margin per barrel of
throughput
$
19.77
$
10.45
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.36
4.53
Depreciation and amortization expense per
barrel of
throughput
1.85
2.15
Refining operating income per barrel
of
throughput
$
13.56
$
3.77
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,
2023
2022
Operating statistics by region (c)
(continued)
North Atlantic region (b) (e)
Refining margin
$
872
$
561
Refining operating income
$
629
$
286
Throughput volumes (thousand barrels per
day)
464
484
Refining margin per barrel of
throughput
$
20.89
$
12.87
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.32
4.73
Depreciation and amortization expense per
barrel of
throughput
1.52
1.57
Refining operating income per barrel
of
throughput
$
15.05
$
6.57
U.S. West Coast region (b) (e)
Refining margin
$
438
$
254
Refining operating income
$
159
$
27
Throughput volumes (thousand barrels per
day)
259
202
Refining margin per barrel of
throughput
$
18.81
$
13.97
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
8.61
8.79
Depreciation and amortization expense per
barrel of
throughput
3.35
3.72
Refining operating income per barrel
of
throughput
$
6.85
$
1.46
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
March 31,
2023
2022
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
82.20
$
97.34
Brent less West Texas Intermediate (WTI)
crude oil
6.09
2.88
Brent less WTI Houston crude oil
4.29
1.31
Brent less Dated Brent crude oil
0.92
(3.90
)
Brent less Argus Sour Crude Index crude
oil
8.41
4.93
Brent less Maya crude oil
19.39
8.50
Brent less Western Canadian Select Houston
crude oil
17.36
9.65
WTI crude oil
76.11
94.46
Natural gas (dollars per million
British Thermal Units)
2.25
4.32
Renewable volume obligation (RVO)
(dollars per barrel) (f)
8.20
6.44
Product margins (RVO adjusted unless
otherwise noted)
(dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB)
gasoline less Brent
10.03
9.23
Ultra-low-sulfur (ULS) diesel less
Brent
30.27
21.51
Propylene less Brent (not RVO
adjusted)
(42.21
)
(28.82
)
U.S. Mid-Continent:
CBOB gasoline less WTI
17.70
9.58
ULS diesel less WTI
34.10
20.83
North Atlantic:
CBOB gasoline less Brent
11.32
11.24
ULS diesel less Brent
33.30
26.03
U.S. West Coast:
California Reformulated Gasoline
Blendstock of
Oxygenate Blending 87 gasoline less
Brent
24.71
20.29
California Air Resources Board diesel less
Brent
31.83
24.10
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
March 31,
2023
2022
Renewable Diesel
New York Mercantile Exchange ULS
diesel
(dollars per gallon)
$
2.93
$
3.04
Biodiesel Renewable Identification Number
(RIN)
(dollars per RIN)
1.63
1.43
California Low-Carbon Fuel Standard carbon
credit
(dollars per metric ton)
65.68
138.63
U.S. Gulf Coast (USGC) used cooking oil
(dollars per pound)
0.62
0.78
USGC distillers corn oil (dollars per
pound)
0.63
0.77
USGC fancy bleachable tallow (dollars per
pound)
0.60
0.71
Ethanol
Chicago Board of Trade corn (dollars per
bushel)
6.60
6.70
New York Harbor ethanol (dollars per
gallon)
2.30
2.39
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
March 31,
December 31,
2023
2022
Balance sheet data
Current assets
$
23,335
$
24,133
Cash and cash equivalents included in
current assets
5,521
4,862
Inventories included in current assets
7,455
6,752
Current liabilities
15,365
17,461
Valero Energy Corporation stockholders’
equity
24,977
23,561
Total equity
27,067
25,468
Debt and finance lease obligations:
Debt –
Current portion of debt (excluding
variable interest entities (VIEs))
$
167
$
—
Debt, less current portion of debt
(excluding VIEs)
8,018
8,380
Total debt (excluding VIEs)
8,185
8,380
Current portion of debt attributable to
VIEs
840
861
Debt, less current portion of debt
attributable to VIEs
12
—
Total debt attributable to VIEs
852
861
Total debt
9,037
9,241
Finance lease obligations –
Current portion of finance lease
obligations (excluding VIEs)
186
184
Finance lease obligations, less current
portion (excluding VIEs)
1,457
1,453
Total finance lease obligations (excluding
VIEs)
1,643
1,637
Current portion of finance lease
obligations attributable to VIEs
65
64
Finance lease obligations, less current
portion attributable to VIEs
686
693
Total finance lease obligations
attributable to VIEs
751
757
Total finance lease obligations
2,394
2,394
Total debt and finance lease
obligations
$
11,431
$
11,635
Three Months Ended
March 31,
2023
2022
Reconciliation of net cash provided by
operating activities to
adjusted net cash provided by operating
activities (b)
Net cash provided by operating
activities
$
3,170
$
588
Exclude:
Changes in current assets and current
liabilities
(534
)
(722
)
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
123
85
Adjusted net cash provided by operating
activities
$
3,581
$
1,225
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
March 31,
2023
2022
Reconciliation of capital investments
to capital
investments attributable to Valero
(b)
Capital expenditures (excluding VIEs)
$
175
$
152
Capital expenditures of VIEs:
DGD
90
219
Other VIEs
—
13
Deferred turnaround and catalyst cost
expenditures
(excluding VIEs)
235
453
Deferred turnaround and catalyst cost
expenditures
of DGD
24
6
Capital investments
524
843
Adjustments:
DGD’s capital investments attributable to
the other joint
venture member
(57
)
(112
)
Capital expenditures of other VIEs
—
(13
)
Capital investments attributable to
Valero
$
467
$
718
Dividends per common share
$
1.02
$
0.98
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
“Other income (expense), net”
includes the following:
◦
a net gain of $11 million in the
three months ended March 31, 2023 related to the early retirement
of approximately $199 million aggregate principal amount of various
series of our senior notes; and
◦
a charge of $50 million in the
three months ended March 31, 2022 related to the early retirement
of approximately $1.4 billion aggregate principal amount of various
series of our senior notes.
(b)
We use certain financial measures
(as noted below) in the earnings release tables and accompanying
earnings release that are not defined under GAAP and are considered
to be non-GAAP measures.
We have defined these non-GAAP
measures and believe they are useful to the external users of our
financial statements, including industry analysts, investors,
lenders, and rating agencies. We believe these measures are useful
to assess our ongoing financial performance because, when
reconciled to their most comparable GAAP measures, they provide
improved comparability between periods after adjusting for certain
items that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These non-GAAP measures should not be considered as
alternatives to their most comparable GAAP measures nor should they
be considered in isolation or as a substitute for an analysis of
our results of operations as reported under GAAP. In addition,
these non-GAAP measures may not be comparable to similarly titled
measures used by other companies because we may define them
differently, which diminishes their utility.
Non-GAAP measures are as
follows:
◦
Adjusted net income
attributable to Valero Energy Corporation stockholders is
defined as net income attributable to Valero Energy Corporation
stockholders excluding the loss (gain) on early retirement of debt
and its related income tax effect. The loss (gain) on early
retirement of debt (see note (a)) includes discounts, premiums, and
other expenses recognized in connection with the early retirement
of various series of our senior notes that are not associated with
the ongoing costs of our borrowing and financing activities;
therefore, we have excluded this item from adjusted net income
attributable to Valero Energy Corporation stockholders. The income
tax effect for the adjustment was calculated using a combined U.S.
federal and state statutory rate of 22.5 percent.
◦
Adjusted earnings per common
share – assuming dilution is defined as adjusted net income
attributable to Valero Energy Corporation stockholders divided by
the number of weighted-average shares outstanding in the applicable
period, assuming dilution.
◦
Refining margin is defined
as Refining segment operating income excluding operating expenses
(excluding depreciation and amortization expense), depreciation and
amortization expense, and other operating expenses. We believe
Refining margin is an important measure of our Refining segment’s
operating and financial performance as it is the most comparable
measure to the industry’s market reference product margins, which
are used by industry analysts, investors, and others to evaluate
our performance.
◦
Renewable Diesel margin is
defined as Renewable Diesel segment operating income excluding
operating expenses (excluding depreciation and amortization
expense) and depreciation and amortization expense. We believe
Renewable Diesel margin is an important measure of our Renewable
Diesel segment’s operating and financial performance as it is the
most comparable measure to the industry’s market reference product
margins, which are used by industry analysts, investors, and others
to evaluate our performance.
◦
Ethanol margin is defined
as Ethanol segment operating income excluding operating expenses
(excluding depreciation and amortization expense), depreciation and
amortization expense, and other operating expenses. We believe
Ethanol margin is an important measure of our Ethanol segment’s
operating and financial performance as it is the most comparable
measure to the industry’s market reference product margins, which
are used by industry analysts, investors, and others to evaluate
our performance.
◦
Adjusted Refining operating
income is defined as Refining segment operating income
excluding other operating expenses. We believe adjusted Refining
operating income is an important measure of our Refining segment’s
operating and financial performance because it excludes items that
are not indicative of that segment’s core operating
performance.
◦
Adjusted Ethanol operating
income is defined as Ethanol segment operating income excluding
other operating expenses. We believe adjusted Ethanol operating
income is an important measure of our Ethanol segment’s operating
and financial performance because it excludes items that are not
indicative of that segment’s core operating performance.
◦
Adjusted net cash provided by
operating activities is defined as net cash provided by
operating activities excluding the items noted below. We believe
adjusted net cash provided by operating activities is an important
measure of our ongoing financial performance to better assess our
ability to generate cash to fund our investing and financing
activities. The basis for our belief with respect to each excluded
item is provided below.
–
Changes in current assets and
current liabilities – Current assets net of current liabilities
represents our operating liquidity. We believe that the change in
our operating liquidity from period to period does not represent
cash generated by our operations that is available to fund our
investing and financing activities.
–
DGD’s adjusted net cash provided
by operating activities attributable to the other joint venture
member’s ownership interest in DGD – We are a 50 percent joint
venture member in DGD and we consolidate DGD’s financial
statements. Our Renewable Diesel segment includes the operations of
DGD and the associated activities to market its products. Because
we consolidate DGD’s financial statements, all of DGD’s net cash
provided by operating activities (or operating cash flow) is
included in our consolidated net cash provided by operating
activities.
DGD’s members use DGD’s operating
cash flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Nevertheless, DGD’s operating cash
flow is effectively attributable to each member and only 50 percent
of DGD’s operating cash flow should be attributed to our net cash
provided by operating activities. Therefore, we have adjusted our
net cash provided by operating activities for the portion of DGD’s
operating cash flow attributable to the other joint venture
member’s ownership interest because we believe that it more
accurately reflects the operating cash flow available to us to fund
our investing and financing activities. The adjustment is
calculated as follows (in millions):
Three Months Ended
March 31,
2023
2022
DGD operating cash flow data
Net cash provided by (used in) operating
activities
$
(71
)
$
21
Exclude: Changes in current assets and
current liabilities
(318
)
(149
)
Adjusted net cash provided by operating
activities
247
170
Other joint venture member’s ownership
interest
50
%
50
%
DGD’s adjusted net cash provided by
operating activities attributable to
the other joint venture member’s ownership
interest in DGD
$
123
$
85
◦
Capital investments
attributable to Valero is defined as all capital expenditures
and deferred turnaround and catalyst cost expenditures presented in
our consolidated statements of cash flows, excluding the portion of
DGD’s capital investments attributable to the other joint venture
member and all of the capital expenditures of VIEs other than
DGD.
DGD’s members use DGD’s operating
cash flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Because DGD’s operating cash flow
is effectively attributable to each member, only 50 percent of
DGD’s capital investments should be attributed to our net share of
total capital investments. We also exclude the capital expenditures
of other VIEs that we consolidate because we do not operate those
VIEs. We believe capital investments attributable to Valero is an
important measure because it more accurately reflects our capital
investments.
(c)
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.
(d)
Primarily includes
petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur,
and asphalt.
(e)
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.
(f)
The RVO cost represents the
average market cost on a per barrel basis to comply with the
Renewable Fuel Standard program. The RVO cost is calculated by
multiplying (i) the average market price during the applicable
period for the RINs associated with each class of renewable fuel
(i.e., biomass-based diesel, cellulosic biofuel, advanced biofuel,
and total renewable fuel) by (ii) the quotas for the volume of each
class of renewable fuel that must be blended into petroleum-based
transportation fuels consumed in the U.S., as set or proposed by
the U.S. Environmental Protection Agency, on a percentage basis for
each class of renewable fuel.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005980/en/
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
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