Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a
net loss attributable to Valero stockholders of $1.9 billion,
or $4.54 per share, for the first quarter of 2020 compared to
net income of $141 million, or $0.34 per share, for the
first quarter of 2019. Excluding the adjustments shown in the
accompanying earnings release tables, adjusted net income
attributable to Valero stockholders was $140 million, or $0.34 per
share, for the first quarter of 2020 and $181 million, or $0.43 per
share, for the first quarter of 2019. First quarter 2020 adjusted
results exclude an after-tax lower of cost or market, or LCM,
inventory valuation adjustment of approximately $2.0 billion.
“It’s been a very challenging start to the year
with significant impacts to families, communities and businesses
world-wide brought on by the COVID-19 pandemic,” said Joe Gorder,
Valero Chairman and Chief Executive Officer. “Valero entered this
economic downturn in a position of strength, and our team has been
thorough, decisive and swift in our operational, financial and
community support response.”
RefiningThe refining segment
reported a $2.1 billion operating loss for the first quarter
of 2020 compared to $479 million of operating income for the
first quarter of 2019. First quarter 2020 adjusted operating
income, excluding the LCM inventory valuation adjustment, was $329
million. Refinery throughput volumes averaged 2.8 million
barrels per day in the first quarter of 2020, which is in line with
the first quarter of 2019.
Renewable DieselThe renewable
diesel segment reported $198 million of operating income for
the first quarter of 2020 compared to $49 million for the
first quarter of 2019. After adjusting for the retroactive
blender’s tax credit, renewable diesel operating income was $121
million for the first quarter of 2019. Renewable diesel sales
volumes averaged 867 thousand gallons per day in the first
quarter of 2020, an increase of 77 thousand gallons per day
versus the first quarter of 2019.
EthanolThe ethanol segment
reported a $197 million operating loss for the first quarter
of 2020, compared to $3 million of operating income for the first
quarter of 2019. The first quarter 2020 adjusted operating loss,
excluding the LCM inventory valuation adjustment, was $69 million.
The decrease in operating income was attributed primarily to lower
ethanol prices and higher corn prices. Ethanol production volumes
averaged 4.1 million gallons per day in the first quarter of
2020, which is in line with the first quarter of 2019.
Corporate and OtherGeneral and
administrative expenses were $177 million in the first quarter
of 2020 compared to $209 million in the first quarter of
2019. The effective tax rate for the first quarter of 2020
was 26 percent, which was impacted by an expected U.S. federal tax
net operating loss that can be carried back to years prior to the
December 2017 enactment of tax reform in the U.S.
Investing and Financing
ActivitiesCapital investments totaled $705 million in
the first quarter of 2020, of which $468 million was for
sustaining the business, including costs for turnarounds, catalysts
and regulatory compliance. Excluding our partner’s 50 percent share
of Diamond Green Diesel’s (DGD) capital investments, Valero’s
capital investments were approximately $666 million.
Valero returned $548 million, or 57 percent
of adjusted net cash provided by operating activities, to
stockholders in the first quarter of 2020, of which
$401 million was paid as dividends and $147 million was
for the purchase of approximately 2.1 million shares of common
stock.
Net cash used in operating activities was $49
million in the first quarter of 2020. Included in this amount is a
$1.1 billion unfavorable impact from working capital, as well as
our joint venture partner’s share of DGD’s net cash provided by
operating activities, excluding changes in its working capital.
Excluding these items, adjusted net cash provided by operating
activities was $954 million.
Valero continues to target a total payout ratio
between 40 and 50 percent of adjusted net cash provided by
operating activities for 2020. Valero defines total payout ratio as
the sum of dividends and stock buybacks divided by net cash
provided by operating activities adjusted for changes in working
capital and DGD’s net cash provided by operating activities,
excluding changes in its working capital, attributable to our joint
venture partner’s ownership interest in DGD.
Liquidity and Financial
PositionValero ended the first quarter of 2020 with
$11.5 billion of total debt and finance lease obligations and
$1.5 billion of cash and cash equivalents. The debt to
capitalization ratio, net of cash and cash equivalents, was 34% as
of March 31, 2020.
Valero entered into a new 364-day $875 million
revolving credit facility on April 13, which remains undrawn, and
issued $1.5 billion of debt on April 16 composed of $850 million of
2.70% and $650 million of 2.85% senior notes due 2023 and 2025,
respectively.
Strategic UpdateValero expects
to invest approximately $2.1 billion of capital in 2020, a
reduction of $400 million from our prior guidance. The $2.1 billion
includes capital expenditures for turnarounds, catalysts, and joint
venture investments.
The Pasadena terminal project, which expands our
product logistics portfolio, increases our capacity for biofuels
blending and enhances export flexibility, was completed in the
first quarter of 2020. The new St. Charles Alkylation Unit
remains on track to be completed in 2020, and the Diamond Pipeline
expansion should be completed in 2021. The DGD plant expansion
should also be completed in 2021, subject to COVID-19 related
delays. The Port Arthur Coker and the Pembroke Cogen Unit projects
have been slowed, pushing out mechanical completion by 6 to 9
months.
As previously announced, Valero and its joint
venture partner in DGD continue to make progress on the advanced
engineering and development cost review for a potential new
renewable diesel plant at Valero’s Port Arthur, Texas facility. If
the project is approved, operations are expected to commence in
2024, increasing DGD production capacity to over 1.1 billion
gallons annually.
“While a tremendous amount of uncertainty
remains in the near term, our operational and financial flexibility
allow us to navigate through today’s challenging macro
environment,” said Gorder. “Our advantaged footprint and
flexibility to process a wide range of feedstocks, coupled with a
relentless focus on operational excellence and a demonstrated
commitment to stockholders, positions our assets well as our
country and the world return to a more normal way of life.”
Conference CallValero’s senior
management will hold a conference call at 10 a.m. ET
today to discuss this earnings release and to provide an update on
operations and strategy.
About ValeroValero Energy
Corporation, through its subsidiaries (collectively, “Valero”), is
an international manufacturer and marketer of transportation fuels
and petrochemical products. Valero is a Fortune 50 company
based in San Antonio, Texas, and it operates 15 petroleum
refineries with a combined throughput capacity of approximately
3.2 million barrels per day and 14 ethanol plants with a
combined production capacity of approximately 1.73 billion
gallons per year. The petroleum refineries are located in the
United States (U.S.), Canada and the United Kingdom (U.K.), and the
ethanol plants are located in the Mid-Continent region of the U.S.
Valero also is a joint venture partner in Diamond Green Diesel,
which operates a renewable diesel plant in Norco, Louisiana.
Diamond Green Diesel is North America’s largest biomass-based
diesel plant. Valero sells its products in the wholesale rack or
bulk markets in the U.S., Canada, the U.K., Ireland and Latin
America. Approximately 7,000 outlets carry Valero’s brand
names. Please visit www.valero.com for more information.
Valero ContactsInvestors:Homer
Bhullar, Vice President – Investor Relations, 210-345-1982Eric
Herbort, Senior Manager – Investor Relations, 210-345-3331Gautam
Srivastava, Manager – Investor Relations, 210-345-3992
Media:Lillian Riojas, Executive Director – Media
Relations and Communications, 210-345-5002
Safe-Harbor StatementStatements
contained in this release that state the company’s or management’s
expectations or predictions of the future are forward-looking
statements intended to be covered by the safe harbor provisions of
the Securities Act of 1933 and the Securities Exchange Act of
1934. The words “believe,” “expect,” “should,” “estimates,”
“intend,” “target,” “will,” “plans,” and other similar expressions
identify forward-looking statements. It is important to note
that actual results could differ materially from those projected in
such forward-looking statements based on numerous factors,
including those outside of the company’s control, such as delays in
construction timing and other factors, including but not limited to
the impacts of COVID-19. For more information concerning
factors that could cause actual results to differ from those
expressed or forecasted, see Valero’s annual reports on
Form 10-K, quarterly reports on Form 10-Q, and other
reports filed with the Securities and Exchange Commission and
available on Valero’s website at www.valero.com.
COVID-19 DisclosureThe global
pandemic has significantly reduced global economic activity and
resulted in airlines dramatically cutting back on flights and a
decrease in motor vehicle use at a time when seasonal driving
patterns typically result in an increase of consumer demand for
gasoline. As a result, there has also been a decline in the demand
for, and thus also the market prices of, crude oil and certain of
our products, particularly our refined petroleum products and most
notably gasoline and jet fuel. Many uncertainties remain with
respect to COVID-19, including its resulting economic effects and
any future recovery, and we are unable to predict the ultimate
economic impacts from COVID-19 and how quickly national economies
can recover once the pandemic subsides. However, the adverse impact
of the economic effects on us has been and will likely continue to
be significant. We believe we have proactively addressed many of
the known impacts of COVID-19 to the extent possible and will
strive to continue to do so, but there can be no guarantee that
these measures will be fully effective. For more information, see
our Current Report on Form 8-K filed with the Securities and
Exchange Commission on April 13, 2020.
Use of Non-GAAP Financial
InformationThis earnings release and the accompanying
earnings release tables include references to financial measures
that are not defined under U.S. generally accepted accounting
principles (GAAP). These non-GAAP measures include adjusted
net income attributable to Valero stockholders, adjusted earnings
per common share – assuming dilution, refining margin, renewable
diesel margin, ethanol margin, adjusted refining operating income,
adjusted renewable diesel operating income, adjusted ethanol
operating income, and adjusted net cash provided by operating
activities. These non-GAAP financial measures have been
included to help facilitate the comparison of operating results
between periods. See the accompanying earnings release tables
for a reconciliation of non-GAAP measures to their most directly
comparable U.S. GAAP measures. Note (e) to the earnings
release tables provides reasons for the use of these non-GAAP
financial measures.
|
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESFINANCIAL
HIGHLIGHTS(millions of dollars, except per share
amounts)(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Statement of income
data |
|
|
|
Revenues |
$ |
22,102 |
|
|
$ |
24,263 |
|
Cost of sales: |
|
|
|
Cost of materials and other (a) |
19,952 |
|
|
21,978 |
|
Lower of cost or market (LCM) inventory valuation adjustment
(b) |
2,542 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
1,124 |
|
|
1,215 |
|
Depreciation and amortization expense |
569 |
|
|
537 |
|
Total cost of sales |
24,187 |
|
|
23,730 |
|
Other operating expenses |
2 |
|
|
2 |
|
General and administrative expenses (excluding depreciation and
amortization expense reflected below) |
177 |
|
|
209 |
|
Depreciation and amortization expense |
13 |
|
|
14 |
|
Operating income (loss) |
(2,277 |
) |
|
308 |
|
Other income, net |
32 |
|
|
22 |
|
Interest and debt expense, net of capitalized interest |
(125 |
) |
|
(112 |
) |
Income (loss) before income tax expense (benefit) |
(2,370 |
) |
|
218 |
|
Income tax expense (benefit) |
(616 |
) |
|
51 |
|
Net income (loss) |
(1,754 |
) |
|
167 |
|
Less: Net income attributable to noncontrolling interests (a) |
97 |
|
|
26 |
|
Net income (loss) attributable to Valero Energy Corporation
stockholders |
$ |
(1,851 |
) |
|
$ |
141 |
|
|
|
|
|
Earnings (loss) per
common share |
$ |
(4.54 |
) |
|
$ |
0.34 |
|
Weighted-average common shares outstanding (in millions) |
408 |
|
|
416 |
|
|
|
|
|
Earnings (loss) per
common share – assuming dilution |
$ |
(4.54 |
) |
|
$ |
0.34 |
|
Weighted-average common shares outstanding – assuming dilution (in
millions) (c) |
408 |
|
|
418 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESFINANCIAL HIGHLIGHTS BY
SEGMENT(millions of
dollars)(unaudited) |
|
|
Refining |
|
RenewableDiesel |
|
Ethanol |
|
CorporateandEliminations |
|
Total |
Three months ended
March 31, 2020 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
20,985 |
|
|
$ |
306 |
|
|
$ |
811 |
|
|
$ |
— |
|
|
$ |
22,102 |
|
Intersegment revenues |
2 |
|
|
53 |
|
|
64 |
|
|
(119 |
) |
|
— |
|
Total revenues |
20,987 |
|
|
359 |
|
|
875 |
|
|
(119 |
) |
|
22,102 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other (a) |
19,127 |
|
|
130 |
|
|
813 |
|
|
(118 |
) |
|
19,952 |
|
LCM inventory valuation adjustment (b) |
2,414 |
|
|
— |
|
|
128 |
|
|
— |
|
|
2,542 |
|
Operating expenses (excluding depreciation and amortization
expense reflected below) |
995 |
|
|
20 |
|
|
109 |
|
|
— |
|
|
1,124 |
|
Depreciation and amortization expense |
536 |
|
|
11 |
|
|
22 |
|
|
— |
|
|
569 |
|
Total cost of sales |
23,072 |
|
|
161 |
|
|
1,072 |
|
|
(118 |
) |
|
24,187 |
|
Other operating expenses |
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
General and administrative expenses (excluding depreciation and
amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
177 |
|
|
177 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating income (loss) by segment |
$ |
(2,087 |
) |
|
$ |
198 |
|
|
$ |
(197 |
) |
|
$ |
(191 |
) |
|
$ |
(2,277 |
) |
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2019 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues from external customers |
$ |
23,218 |
|
|
$ |
252 |
|
|
$ |
793 |
|
|
$ |
— |
|
|
$ |
24,263 |
|
Intersegment revenues |
2 |
|
|
51 |
|
|
52 |
|
|
(105 |
) |
|
— |
|
Total revenues |
23,220 |
|
|
303 |
|
|
845 |
|
|
(105 |
) |
|
24,263 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Cost of materials and other |
21,165 |
|
|
224 |
|
|
694 |
|
|
(105 |
) |
|
21,978 |
|
Operating expenses (excluding depreciation and amortization
expense reflected below) |
1,071 |
|
|
19 |
|
|
125 |
|
|
— |
|
|
1,215 |
|
Depreciation and amortization expense |
503 |
|
|
11 |
|
|
23 |
|
|
— |
|
|
537 |
|
Total cost of sales |
22,739 |
|
|
254 |
|
|
842 |
|
|
(105 |
) |
|
23,730 |
|
Other operating expenses |
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
General and administrative expenses (excluding depreciation
and amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
209 |
|
|
209 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
14 |
|
|
14 |
|
Operating income by segment |
$ |
479 |
|
|
$ |
49 |
|
|
$ |
3 |
|
|
$ |
(223 |
) |
|
$ |
308 |
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(e)(millions of dollars, except per share
amounts)(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Reconciliation of net
income (loss) attributable to Valero Energy Corporation
stockholders to adjusted net income attributable to Valero Energy
Corporation stockholders |
|
|
|
Net income (loss) attributable to Valero Energy Corporation
stockholders |
$ |
(1,851 |
) |
|
$ |
141 |
|
Adjustments: |
|
|
|
LCM inventory valuation adjustment (b) |
2,542 |
|
|
— |
|
Income tax benefit related to the LCM inventory valuation
adjustment |
(551 |
) |
|
— |
|
LCM inventory valuation adjustment, net of taxes |
1,991 |
|
|
— |
|
2019 blender’s tax credit attributable to Valero Energy
Corporation stockholders (a) |
— |
|
|
41 |
|
Income tax expense related to 2019 blender’s tax credit |
— |
|
|
(1 |
) |
2019 blender’s tax credit attributable to Valero Energy Corporation
stockholders, net of taxes |
— |
|
|
40 |
|
Total adjustments |
1,991 |
|
|
40 |
|
Adjusted net income attributable to Valero Energy Corporation
stockholders |
$ |
140 |
|
|
$ |
181 |
|
|
|
|
|
Reconciliation of
earnings (loss) per common share – assuming dilution to adjusted
earnings per common share –assuming dilution |
|
|
|
Earnings (loss) per common share – assuming dilution (c) |
$ |
(4.54 |
) |
|
$ |
0.34 |
|
Adjustments: |
|
|
|
LCM inventory valuation adjustment (b) |
4.88 |
|
|
— |
|
2019 blender’s tax credit attributable to Valero Energy Corporation
stockholders (a) |
— |
|
|
0.09 |
|
Total adjustments |
4.88 |
|
|
0.09 |
|
Adjusted earnings per common share – assuming dilution (d) |
$ |
0.34 |
|
|
$ |
0.43 |
|
See Notes to Earnings Release Tables.
|
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTSREPORTED UNDER U.S. GAAP
(e)(millions of
dollars)(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
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) |
$ |
(2,087 |
) |
|
$ |
479 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
5 |
|
LCM inventory valuation adjustment (b) |
2,414 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
995 |
|
|
1,071 |
|
Depreciation and amortization expense |
536 |
|
|
503 |
|
Other operating expenses |
2 |
|
|
2 |
|
Refining margin |
$ |
1,860 |
|
|
$ |
2,060 |
|
|
|
|
|
Refining operating income (loss) |
$ |
(2,087 |
) |
|
$ |
479 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
5 |
|
LCM inventory valuation adjustment (b) |
2,414 |
|
|
— |
|
Other operating expenses |
2 |
|
|
2 |
|
Adjusted refining operating income |
$ |
329 |
|
|
$ |
486 |
|
|
|
|
|
Renewable diesel segment |
|
|
|
Renewable diesel operating income |
$ |
198 |
|
|
$ |
49 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
72 |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
20 |
|
|
19 |
|
Depreciation and amortization expense |
11 |
|
|
11 |
|
Renewable diesel margin |
$ |
229 |
|
|
$ |
151 |
|
|
|
|
|
Renewable diesel operating income |
$ |
198 |
|
|
$ |
49 |
|
Adjustment: 2019 blender’s tax credit (a) |
— |
|
|
72 |
|
Adjusted renewable diesel operating income |
$ |
198 |
|
|
$ |
121 |
|
|
|
|
|
Ethanol segment |
|
|
|
Ethanol operating income (loss) |
$ |
(197 |
) |
|
$ |
3 |
|
Adjustments: |
|
|
|
LCM inventory valuation adjustment (b) |
128 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
109 |
|
|
125 |
|
Depreciation and amortization expense |
22 |
|
|
23 |
|
Ethanol margin |
$ |
62 |
|
|
$ |
151 |
|
|
|
|
|
Ethanol operating income (loss) |
$ |
(197 |
) |
|
$ |
3 |
|
Adjustment: LCM inventory valuation adjustment (b) |
128 |
|
|
— |
|
Adjusted ethanol operating income (loss) |
$ |
(69 |
) |
|
$ |
3 |
|
See Notes to Earnings Release Tables.
|
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE
AMOUNTSREPORTED UNDER U.S. GAAP (e)(millions of
dollars)(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
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) (f) |
|
|
|
U.S. Gulf Coast region |
|
|
|
Refining operating income (loss) |
$ |
(942 |
) |
|
$ |
118 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
3 |
|
LCM inventory valuation adjustment (b) |
1,113 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
558 |
|
|
599 |
|
Depreciation and amortization expense |
334 |
|
|
310 |
|
Other operating expenses |
— |
|
|
1 |
|
Refining margin |
$ |
1,063 |
|
|
$ |
1,031 |
|
|
|
|
|
Refining operating income (loss) |
$ |
(942 |
) |
|
$ |
118 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
3 |
|
LCM inventory valuation adjustment (b) |
1,113 |
|
|
— |
|
Other operating expenses |
— |
|
|
1 |
|
Adjusted refining operating income |
$ |
171 |
|
|
$ |
122 |
|
|
|
|
|
U.S. Mid-Continent region |
|
|
|
Refining operating income (loss) |
$ |
(220 |
) |
|
$ |
236 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
1 |
|
LCM inventory valuation adjustment (b) |
283 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
164 |
|
|
166 |
|
Depreciation and amortization expense |
83 |
|
|
75 |
|
Refining margin |
$ |
310 |
|
|
$ |
478 |
|
|
|
|
|
Refining operating income (loss) |
$ |
(220 |
) |
|
$ |
236 |
|
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
1 |
|
LCM inventory valuation adjustment (b) |
283 |
|
|
— |
|
Adjusted refining operating income |
$ |
63 |
|
|
$ |
237 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESRECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE
AMOUNTSREPORTED UNDER U.S. GAAP (e)(millions of
dollars)(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
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) (f) (continued) |
|
|
|
North Atlantic region |
|
|
|
Refining operating income (loss) |
$ |
(714 |
) |
|
$ |
176 |
|
Adjustments: |
|
|
|
LCM inventory valuation adjustment (b) |
874 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
141 |
|
|
147 |
|
Depreciation and amortization expense |
53 |
|
|
53 |
|
Other operating expenses |
2 |
|
|
— |
|
Refining margin |
$ |
356 |
|
|
$ |
376 |
|
|
|
|
|
Refining operating income (loss) |
$ |
(714 |
) |
|
$ |
176 |
|
Adjustments: |
|
|
|
LCM inventory valuation adjustment (b) |
874 |
|
|
— |
|
Other operating expenses |
2 |
|
|
— |
|
Adjusted refining operating income |
$ |
162 |
|
|
$ |
176 |
|
|
|
|
|
U.S. West Coast region |
|
|
|
Refining operating loss |
$ |
(211 |
) |
|
$ |
(51 |
) |
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
1 |
|
LCM inventory valuation adjustment (b) |
144 |
|
|
— |
|
Operating expenses (excluding depreciation and amortization expense
reflected below) |
132 |
|
|
159 |
|
Depreciation and amortization expense |
66 |
|
|
65 |
|
Other operating expenses |
— |
|
|
1 |
|
Refining margin |
$ |
131 |
|
|
$ |
175 |
|
|
|
|
|
Refining operating loss |
$ |
(211 |
) |
|
$ |
(51 |
) |
Adjustments: |
|
|
|
2019 blender’s tax credit (a) |
— |
|
|
1 |
|
LCM inventory valuation adjustment (b) |
144 |
|
|
— |
|
Other operating expenses |
— |
|
|
1 |
|
Adjusted refining operating loss |
$ |
(67 |
) |
|
$ |
(49 |
) |
See Notes to Earnings Release Tables.
|
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESREFINING SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per barrel
amounts)(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Throughput volumes
(thousand barrels per day) |
|
|
|
Feedstocks: |
|
|
|
Heavy sour crude oil |
360 |
|
|
410 |
|
Medium/light sour crude oil |
252 |
|
|
338 |
|
Sweet crude oil |
1,538 |
|
|
1,476 |
|
Residuals |
235 |
|
|
145 |
|
Other feedstocks |
100 |
|
|
153 |
|
Total feedstocks |
2,485 |
|
|
2,522 |
|
Blendstocks and other |
339 |
|
|
343 |
|
Total throughput volumes |
2,824 |
|
|
2,865 |
|
|
|
|
|
Yields (thousand
barrels per day) |
|
|
|
Gasolines and blendstocks |
1,317 |
|
|
1,397 |
|
Distillates |
1,046 |
|
|
1,089 |
|
Other products (g) |
478 |
|
|
406 |
|
Total yields |
2,841 |
|
|
2,892 |
|
|
|
|
|
Operating statistics
(e) (h) |
|
|
|
Refining margin |
$ |
1,860 |
|
|
$ |
2,060 |
|
Adjusted refining operating income |
$ |
329 |
|
|
$ |
486 |
|
Throughput volumes (thousand barrels per day) |
2,824 |
|
|
2,865 |
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
7.24 |
|
|
$ |
8.00 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per barrel of throughput |
3.87 |
|
|
4.15 |
|
Depreciation and amortization expense per barrel of throughput |
2.09 |
|
|
1.96 |
|
Adjusted refining operating income per barrel of throughput |
$ |
1.28 |
|
|
$ |
1.89 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESRENEWABLE DIESEL SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per gallon
amounts)(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating statistics
(e) (h) |
|
|
|
Renewable diesel margin |
$ |
229 |
|
|
$ |
151 |
|
Adjusted renewable diesel operating income |
$ |
198 |
|
|
$ |
121 |
|
Sales volumes (thousand gallons per day) |
867 |
|
|
790 |
|
|
|
|
|
Renewable diesel margin per gallon of sales |
$ |
2.90 |
|
|
$ |
2.12 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization
expense reflected below) per gallon of sales |
0.24 |
|
|
0.26 |
|
Depreciation and amortization expense per gallon of sales |
0.15 |
|
|
0.16 |
|
Adjusted renewable diesel operating income per gallon of
sales |
$ |
2.51 |
|
|
$ |
1.70 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESETHANOL SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per gallon
amounts)(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating statistics
(e) (h) |
|
|
|
Ethanol margin |
$ |
62 |
|
|
$ |
151 |
|
Adjusted ethanol operating income (loss) |
$ |
(69 |
) |
|
$ |
3 |
|
Production volumes (thousand gallons per day) |
4,103 |
|
|
4,217 |
|
|
|
|
|
Ethanol margin per gallon of production |
$ |
0.16 |
|
|
$ |
0.40 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per gallon of production |
0.29 |
|
|
0.33 |
|
Depreciation and amortization expense per gallon of production |
0.05 |
|
|
0.06 |
|
Adjusted ethanol operating income (loss) per gallon of
production |
$ |
(0.18 |
) |
|
$ |
0.01 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESETHANOL SEGMENT OPERATING
HIGHLIGHTS(millions of dollars, except per gallon
amounts)(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating statistics
by region (f) |
|
|
|
U.S. Gulf Coast region (e) (h) |
|
|
|
Refining margin |
$ |
1,063 |
|
|
$ |
1,031 |
|
Adjusted refining operating income |
$ |
171 |
|
|
$ |
122 |
|
Throughput volumes (thousand barrels per day) |
1,670 |
|
|
1,670 |
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
7.00 |
|
|
$ |
6.87 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per barrel of throughput |
3.67 |
|
|
3.98 |
|
Depreciation and amortization expense per barrel
of throughput |
2.20 |
|
|
2.07 |
|
Adjusted refining operating income per barrel of throughput |
$ |
1.13 |
|
|
$ |
0.82 |
|
|
|
|
|
U.S. Mid-Continent region (e) (h) |
|
|
|
Refining margin |
$ |
310 |
|
|
$ |
478 |
|
Adjusted refining operating income |
$ |
63 |
|
|
$ |
237 |
|
Throughput volumes (thousand barrels per day) |
431 |
|
|
441 |
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
7.90 |
|
|
$ |
12.04 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per barrel of throughput |
4.19 |
|
|
4.19 |
|
Depreciation and amortization expense per barrel
of throughput |
2.11 |
|
|
1.88 |
|
Adjusted refining operating income per barrel of throughput |
$ |
1.60 |
|
|
$ |
5.97 |
|
See Notes to Earnings Release Tables.
|
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESREFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION(millions of dollars, except per barrel
amounts)(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating statistics
by region (f) (continued) |
|
|
|
North Atlantic region (e) (h) |
|
|
|
Refining margin |
$ |
356 |
|
|
$ |
376 |
|
Adjusted refining operating income |
$ |
162 |
|
|
$ |
176 |
|
Throughput volumes (thousand barrels per day) |
487 |
|
|
491 |
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
8.02 |
|
|
$ |
8.52 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per barrel of throughput |
3.17 |
|
|
3.33 |
|
Depreciation and amortization expense per barrel ofthroughput |
1.19 |
|
|
1.19 |
|
Adjusted refining operating income per barrel of throughput |
$ |
3.66 |
|
|
$ |
4.00 |
|
|
|
|
|
U.S. West Coast region (e) (h) |
|
|
|
Refining margin |
$ |
131 |
|
|
$ |
175 |
|
Adjusted refining operating loss |
$ |
(67 |
) |
|
$ |
(49 |
) |
Throughput volumes (thousand barrels per day) |
236 |
|
|
263 |
|
|
|
|
|
Refining margin per barrel of throughput |
$ |
6.12 |
|
|
$ |
7.32 |
|
Less: |
|
|
|
Operating expenses (excluding depreciation and amortization expense
reflected below) per barrel of throughput |
6.16 |
|
|
6.70 |
|
Depreciation and amortization expense per barrel of throughput |
3.07 |
|
|
2.74 |
|
Adjusted refining operating loss per barrel of throughput |
$ |
(3.11 |
) |
|
$ |
(2.12 |
) |
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESAVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Refining |
|
|
|
Feedstocks (dollars per barrel) |
|
|
|
Brent crude oil |
$ |
50.90 |
|
|
$ |
63.82 |
|
Brent less West Texas Intermediate (WTI) crude oil |
4.92 |
|
|
8.94 |
|
Brent less Alaska North Slope (ANS) crude oil |
(0.50 |
) |
|
(0.68 |
) |
Brent less Louisiana Light Sweet (LLS) crude oil |
2.76 |
|
|
1.45 |
|
Brent less Argus Sour Crude Index (ASCI) crude oil |
5.01 |
|
|
2.89 |
|
Brent less Maya crude oil |
9.74 |
|
|
5.04 |
|
LLS crude oil |
48.14 |
|
|
62.37 |
|
LLS less ASCI crude oil |
2.25 |
|
|
1.44 |
|
LLS less Maya crude oil |
6.98 |
|
|
3.59 |
|
WTI crude oil |
45.98 |
|
|
54.88 |
|
|
|
|
|
Natural gas (dollars per million British Thermal
Units) |
1.82 |
|
|
2.86 |
|
|
|
|
|
Products (dollars per barrel, unless otherwise
noted) |
|
|
|
U.S. Gulf Coast: |
|
|
|
Conventional Blendstock of Oxygenate Blending (CBOB) gasoline
less Brent |
2.37 |
|
|
0.16 |
|
Ultra-low-sulfur (ULS) diesel less Brent |
11.26 |
|
|
14.99 |
|
Propylene less Brent |
(21.04 |
) |
|
(20.64 |
) |
CBOB gasoline less LLS |
5.13 |
|
|
1.61 |
|
ULS diesel less LLS |
14.02 |
|
|
16.44 |
|
Propylene less LLS |
(18.28 |
) |
|
(19.19 |
) |
U.S. Mid-Continent: |
|
|
|
CBOB gasoline less WTI |
7.69 |
|
|
9.69 |
|
ULS diesel less WTI |
17.31 |
|
|
24.89 |
|
North Atlantic: |
|
|
|
CBOB gasoline less Brent |
4.28 |
|
|
1.25 |
|
ULS diesel less Brent |
14.29 |
|
|
17.43 |
|
U.S. West Coast: |
|
|
|
California Reformulated Gasoline Blendstock of Oxygenate
Blending (CARBOB) 87 gasoline less ANS |
7.82 |
|
|
7.73 |
|
California Air Resources Board (CARB) diesel less ANS |
17.22 |
|
|
16.20 |
|
CARBOB 87 gasoline less WTI |
13.24 |
|
|
17.35 |
|
CARB diesel less WTI |
22.64 |
|
|
25.82 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE TABLESAVERAGE
MARKET REFERENCE PRICES AND DIFFERENTIALS(unaudited) |
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Renewable
diesel |
|
|
|
New York Mercantile Exchange ULS diesel (dollars per gallon) |
$ |
1.55 |
|
|
$ |
1.94 |
|
Biodiesel Renewable Identification Number (RIN) (dollars per
RIN) |
0.46 |
|
|
0.51 |
|
California Low-Carbon Fuel Standard (dollars per metric ton) |
206.03 |
|
|
194.21 |
|
Chicago Board of Trade (CBOT) soybean oil (dollars per pound) |
0.30 |
|
|
0.29 |
|
|
|
|
|
Ethanol |
|
|
|
CBOT corn (dollars per bushel) |
3.74 |
|
|
3.73 |
|
New York Harbor ethanol (dollars per gallon) |
1.33 |
|
|
1.44 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATIONEARNINGS RELEASE
TABLESOTHER FINANCIAL
DATA(millions of dollars, except per share
amounts)(unaudited) |
|
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
Balance sheet
data |
|
|
|
Current assets |
$ |
11,465 |
|
|
$ |
18,969 |
|
Cash and cash equivalents included in current assets |
1,515 |
|
|
2,583 |
|
Inventories included in current assets |
3,675 |
|
|
7,013 |
|
Current liabilities |
8,732 |
|
|
13,160 |
|
Current portion of debt and finance lease obligations included in
current liabilities |
886 |
|
|
494 |
|
Debt and finance lease obligations, less current portion |
10,574 |
|
|
9,178 |
|
Total debt and finance lease obligations |
11,460 |
|
|
9,672 |
|
Valero Energy Corporation stockholders’ equity |
18,842 |
|
|
21,803 |
|
|
|
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Reconciliation of net
cash provided by (used in) operating
activities to adjusted net cash provided
by operating activities (e) |
|
|
|
Net cash provided by (used in) operating activities |
$ |
(49 |
) |
|
$ |
877 |
|
Exclude: |
|
|
|
Changes in current assets and current liabilities |
(1,107 |
) |
|
130 |
|
Diamond Green Diesel LLC’s (DGD) adjusted net cash provided by
operating activities attributable to our joint venture partner’s
ownership interest in DGD |
104 |
|
|
30 |
|
Adjusted net cash provided by operating activities |
$ |
954 |
|
|
$ |
717 |
|
|
|
|
|
Dividends per common
share |
$ |
0.98 |
|
|
$ |
0.90 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY
CORPORATIONNOTES TO EARNINGS RELEASE
TABLES
(a) Cost of materials and other for the three
months ended March 31, 2020 includes a benefit of
$79 million related to the blender’s tax credit attributable
to volumes blended during that period, all of which is related to
our renewable diesel segment. The legislation authorizing the
credit through December 31, 2022 was passed and signed into
law in December 2019, and that legislation also applied
retroactively to volumes blended during 2019 (2019 blender’s tax
credit). The entire 2019 blender’s tax credit was recognized by us
in December 2019 because the law was enacted in that month, but the
benefit attributable to volumes blended during the three months
ended March 31, 2019 was $77 million, of which
$5 million and $72 million relates to our refining and
renewable diesel segments, respectively.
Of the $77 million benefit related to the
three months ended March 31, 2019, $41 million is
attributable to Valero Energy Corporation stockholders, with the
remaining amount attributable to noncontrolling interest.
(b) The market value of our inventories as of
March 31, 2020 fell below their historical cost on an
aggregate basis, excluding materials and supplies. As a result, we
recorded an LCM inventory valuation adjustment of $2.5 billion
($2.0 billion after tax) in March 2020. Of the
$2.5 billion adjustment, $2.4 billion and
$128 million is attributable to our refining and ethanol
segments, respectively.
(c) Common equivalent shares have been excluded
from the computation of diluted loss per common share for the three
months ended March 31, 2020, as the effect of including such
shares would be antidilutive.
(d) Common equivalent shares have been included
in the computation of adjusted earnings per common share-assuming
dilution for the three months ended March 31, 2020, as the
effect of including such shares is dilutive. Weighted-average
shares outstanding – assuming dilution used to calculate adjusted
earnings per common share – assuming dilution is 409 million
shares.
(e) We use certain financial measures (as noted
below) in the earnings release tables and accompanying earnings
release that are not defined under U.S. GAAP and are
considered to be non-GAAP measures.
We have defined these non-GAAP measures and
believe they are useful to the external users of our financial
statements, including industry analysts, investors, lenders, and
rating agencies. We believe these measures are useful to assess our
ongoing financial performance because, when reconciled to their
most comparable U.S. GAAP measures, they provide improved
comparability between periods after adjusting for certain items
that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These non-GAAP measures should not be considered as
alternatives to their most comparable U.S. GAAP measures nor
should they be considered in isolation or as a substitute for an
analysis of our results of operations as reported under
U.S. GAAP. In addition, these non-GAAP measures may not be
comparable to similarly titled measures used by other companies
because we may define them differently, which diminishes their
utility.
Non-GAAP measures are as follows:
- Adjusted net income
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. 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.
— LCM inventory valuation adjustment – The LCM
inventory valuation adjustment, which is described in
note (b), is the result of the market value of our inventories
as of March 31, 2020 falling below their historical cost, with
the decline in market value resulting from the decline in crude oil
and product market prices associated with the negative economic
impacts from COVID-19. The adjustment obscures our financial
performance because it does not result from decisions made by us;
therefore, we have excluded the adjustment from adjusted net income
attributable to Valero Energy Corporation stockholders.
— 2019 blender’s tax credit attributable to
Valero Energy Corporation stockholders – The 2019 blender’s tax
credit was recognized by us in December 2019, but it is
attributable to volumes blended throughout 2019. Therefore, the
adjustment reflects the portion of the 2019 blender’s tax credit
that is associated with volumes blended during the three months
ended March 31, 2019. See note (a) for additional
details.
- 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 (see note (d)).
- Refining margin is
defined as refining operating income (loss) adjusted to reflect the
2019 blender’s tax credit (see note (a)), and excluding the
LCM inventory valuation adjustment (see note (b)), operating
expenses (excluding depreciation and amortization expense),
depreciation and amortization expense, and other operating
expenses. We believe refining margin is an important measure of our
refining segment’s operating and financial performance as it is the
most comparable measure to the industry’s market reference product
margins, which are used by industry analysts, investors, and others
to evaluate our performance.
- Renewable diesel
margin is defined as renewable diesel operating income
adjusted to reflect the 2019 blender’s tax credit (see
note (a)), and 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 operating income (loss) excluding the LCM
inventory valuation adjustment (see note (b)), operating
expenses (excluding depreciation and amortization expense), and
depreciation and amortization expense. We believe ethanol margin is
an important measure of our ethanol segment’s operating and
financial performance as it is the most comparable measure to the
industry’s market reference product margins, which are used by
industry analysts, investors, and others to evaluate our
performance.
- Adjusted refining operating
income (loss) is defined as refining segment operating
income (loss) adjusted to reflect the 2019 blender’s tax credit
(see note (a)), and excluding the LCM inventory valuation
adjustment (see note (b)) and other operating expenses. We
believe adjusted refining operating income is an important measure
of our refining segment’s operating and financial performance
because it excludes items that are not indicative of that segment’s
core operating performance.
- Adjusted renewable diesel
operating income is defined as renewable diesel segment
operating income adjusted to reflect the 2019 blender’s tax credit
(see note (a)). We believe this is an important measure of our
renewable diesel 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 (loss) is defined as ethanol segment operating
income (loss) excluding the LCM inventory valuation adjustment (see
note (b)). We believe this is an important measure of our
ethanol segment’s operating and financial performance because it
excludes items that are not indicative of that segment’s core
operating performance.
- Adjusted net cash provided
by operating activities is defined as net cash provided by
(used in) operating activities excluding the items noted below. We
believe adjusted net cash provided by operating activities is an
important measure of our ongoing financial performance to better
assess our ability to generate cash to fund our investing and
financing activities. The basis for our belief with respect to each
excluded item is provided below. — Changes
in current assets and current liabilities – Current assets net of
current liabilities represents our operating liquidity. We believe
that the change in our operating liquidity from period to period
does not represent cash generated by our operations that is
available to fund our investing and financing activities.
— DGD’s adjusted net cash provided by operating
activities attributable to our joint venture partner’s ownership
interest in DGD – We are a 50/50 joint venture partner in DGD
and consolidate DGD’s financial statements; as a result, all of
DGD’s net cash provided by operating activities (or operating cash
flow) is included in our consolidated net cash provided by
operating activities.DGD’s partners use DGD’s operating cash flow
(excluding changes in its current assets and current liabilities)
to fund its capital investments rather than distribute all of that
cash to themselves. Nevertheless, DGD’s operating cash flow is
effectively attributable to each partner and only 50 percent
of DGD’s operating cash flow should be attributed to our net cash
provided by operating activities. Therefore, we have adjusted our
net cash provided by operating activities for the portion of DGD’s
operating cash flow attributable to our joint venture partner’s
ownership interest because we believe that it more accurately
reflects the operating cash flow available to us to fund our
investing and financing activities. The adjustment is calculated as
follows (in millions):
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
DGD operating cash
flow data |
|
|
|
Net cash provided by operating activities |
$ |
167 |
|
|
$ |
33 |
|
Less: changes in current assets and current liabilities |
(40 |
) |
|
(27 |
) |
Adjusted net cash provided by operating activities |
207 |
|
|
60 |
|
Our partner’s ownership interest |
50 |
% |
|
50 |
% |
DGD’s adjusted net cash provided by operating activities
attributable to our joint venture partner’s ownership interest in
DGD |
$ |
104 |
|
|
$ |
30 |
|
|
|
|
|
|
|
|
|
(f) 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.
(g) Primarily includes petrochemicals, gas oils,
No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
(h) 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.
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