Valero Energy Corporation (NYSE:VLO) (“Valero”) today reported net
income attributable to Valero stockholders of $2.4 billion, or
$5.42 per share, for the fourth quarter of 2017 compared to $367
million, or $0.81 per share, for the fourth quarter of
2016. Excluding an income tax benefit of $1.9 billion, or
$4.26 per share, that resulted from the Tax Cuts and Jobs Act of
2017 (Tax Reform), fourth quarter 2017 adjusted net income
attributable to Valero stockholders was $509 million, or $1.16 per
share. For the year ended December 31, 2017, net income
attributable to Valero stockholders was $4.1 billion, or $9.16 per
share, compared to $2.3 billion, or $4.94 per share for
2016. Excluding the income tax benefit for 2017 and other
adjustments reflected in the accompanying earnings release tables
for 2016, adjusted net income attributable to Valero stockholders
for 2017 was $2.2 billion, or $4.96 per share, compared to
$1.7 billion, or $3.72 per share, for 2016.
“We performed very well this year,” said Joe
Gorder, Valero Chairman, President and Chief Executive Officer. “We
achieved a number of operational performance records and delivered
solid financial results.”
RefiningThe refining segment
reported $982 million of operating income for the fourth quarter of
2017 compared to $645 million for the fourth quarter of 2016, which
has been retrospectively revised to reflect the operating results
of Valero Energy Partners LP (NYSE:VLP) as a separate segment
consistent with Valero’s current segment presentation. Fourth
quarter 2017 operating income includes $17 million of expenses
primarily related to ongoing repairs at certain of the company’s
U.S. Gulf Coast refineries to address damage resulting from
Hurricane Harvey. Excluding those repair costs, operating
income increased by $354 million, primarily driven by higher
distillate and gasoline margins in most regions and wider discounts
for domestic sweet crude oils relative to Brent crude oil, partly
offset by narrower discounts for medium and heavy sour crude oils
versus Brent.
Refinery throughput capacity utilization was 96
percent, and throughput volumes averaged 3.0 million barrels
per day in the fourth quarter of 2017, which is 156,000 barrels per
day higher than the fourth quarter of 2016. The company
exported a total of 392,000 barrels per day of gasoline and
distillate during the fourth quarter of 2017.
“Our Port Arthur refinery completed its
post-hurricane recovery efforts and resumed normal operations in
the fourth quarter,” Gorder, said.
Biofuel blending costs were $311 million in the
fourth quarter of 2017, which is $94 million higher than in the
fourth quarter of 2016, and $942 million in 2017, which is $193
million higher than in 2016. The higher cost is mainly due to
higher Renewable Identification Number (RIN) prices.
“Looking ahead, we continue to see a favorable
fundamental environment, with abundant crude oil supply and strong
products demand being supported by global economic growth,” Gorder
said. “We’re also encouraged by the potential benefits to the
refining industry from Tax Reform and the reduction in the global
limit for fuel oil sulfur.”
EthanolThe ethanol segment
reported $37 million of operating income for the fourth quarter of
2017 compared to $126 million for the fourth quarter of 2016.
The decrease in operating income is attributed primarily to margin
pressure resulting from lower ethanol prices. Ethanol
production volumes averaged 4.0 million gallons per day in the
fourth quarter of 2017, which is 53,000 gallons per day higher than
in the fourth quarter of 2016.
VLPThe VLP segment reported $80
million of operating income for the fourth quarter of 2017 compared
to $70 million for the fourth quarter of 2016. The
increase in operating income is mostly driven by contributions from
the Red River pipeline segment, which was acquired in January 2017,
and the Port Arthur terminal assets and Parkway Pipeline, which
were acquired in November 2017.
Corporate and OtherGeneral and
administrative expenses were $238 million in the fourth
quarter of 2017 compared to $208 million in the fourth quarter of
2016. For 2017, general and administrative expenses of
$835 million were $120 million higher than in 2016 mainly due
to reserve adjustments and a fee related to the termination of an
agreement to acquire certain terminals in Northern California owned
by Plains All American Pipeline, L.P. Excluding the income
tax benefit related to Tax Reform, the effective tax rate was 30
percent for the fourth quarter of 2017.
Investing and Financing
ActivitiesCapital investments totaled $641 million in
the fourth quarter of 2017, of which $142 million was for
turnarounds and catalyst. For 2017, capital investments
totaled $2.4 billion, consisting of $1.3 billion for
sustaining the business and $1.1 billion for growth
projects.
Valero returned $727 million to stockholders in
the fourth quarter, of which $421 million was for the purchase
of 5 million shares of its common stock and the balance was
paid as dividends. In 2017, Valero returned $2.6 billion to
stockholders, or 63 percent of adjusted net cash provided by
operating activities, consisting of $1.4 billion in stock buybacks
and $1.2 billion in dividends. Net cash provided by operating
activities in 2017 was $5.5 billion. Included in this amount
is the favorable impact from a $1.3 billion decrease in working
capital. Excluding the change in working capital, net cash
generated was $4.2 billion.
The company is targeting a total payout ratio
between 40 and 50 percent of adjusted net cash provided by
operating activities for 2018. Valero defines total payout
ratio as the sum of dividends and stock buybacks divided by net
cash provided by operating activities adjusted for changes in
working capital.
“With a lower tax burden in 2018 resulting from
Tax Reform, we expect to see a significant benefit to Valero’s net
cash provided by operating activities,” commented Gorder.
On January 23, the company announced a 14
percent increase in its quarterly common stock dividend from $0.70
per share to $0.80 per share, payable on March 6, 2018, to holders
of record on February 13, 2018. The Board of Directors also
approved an incremental $2.5 billion share repurchase
authorization. Valero has approximately $1.2 billion of
repurchase authority available under its previously announced
buyback authorization, giving it $3.7 billion available for stock
repurchases going forward.
Liquidity and Financial
PositionValero ended the fourth quarter of 2017 with
$8.9 billion of total debt and $5.9 billion of cash and
temporary cash investments. The debt to capital ratio, net of
$2.0 billion in cash, was 23 percent.
Strategic UpdateThe Diamond
Pipeline and the Wilmington cogeneration plant both started up in
November and are performing as expected. The 200,000 barrels
per day Diamond Pipeline increases Valero’s crude blend quality and
supply flexibility, including access to many crude oil grades in
Cushing, Oklahoma, for the Memphis refinery. The Wilmington
refinery is benefitting from reduced operating expenses and
improved supply reliability for power and steam.
“We were excited to receive our first barrels of
crude oil off the Diamond Pipeline,” said Gorder. “With
current price differentials between WTI and LLS crude oil, our
Memphis refinery is enjoying a significant cost advantage versus
crude delivered on Capline.”
Valero expects to invest $2.7 billion of capital
in 2018, of which $1.0 billion is for growth projects and $1.7
billion is for sustaining the business. Included in the
growth investments is the construction of a new 25,000 barrels per
day alkylation unit at the St. Charles refinery, which received
final approval from the company’s Board of Directors last
week. Total cost for the alkylation unit is estimated at $400
million, and completion is expected in the second half of
2020.
Conference CallValero’s senior
management will hold a conference call at 10 a.m. ET today to
discuss this earnings release and to provide an update on
operations and strategy.
About ValeroValero Energy
Corporation, through its subsidiaries, is an international
manufacturer and marketer of transportation fuels and other
petrochemical products. Valero, a Fortune 50 company based in
San Antonio, Texas, with approximately 10,000 employees, is an
independent petroleum refiner and ethanol producer, and its assets
include 15 petroleum refineries with a combined throughput
capacity of approximately 3.1 million barrels per day and
11 ethanol plants with a combined production capacity of
1.4 billion gallons per year. The petroleum refineries
are located in the United States (U.S.), Canada and the United
Kingdom (U.K.), and the ethanol plants are located in the
Mid-Continent region of the U.S. In addition, Valero owns the
2 percent general partner interest and a majority limited partner
interest in Valero Energy Partners LP, a midstream master limited
partnership. Valero sells its products in both the wholesale
rack and bulk markets, and approximately 7,400 outlets carry
Valero’s brand names in the U.S., Canada, the U.K. and
Ireland. Please visit www.valero.com for more
information.
Valero ContactsInvestors:John
Locke, Vice President – Investor Relations, 210-345-3077Karen Ngo,
Senior Manager – Investor Relations, 210-345-4574Tom Mahrer,
Manager – Investor Relations, 210-345-1953
Media:Lillian Riojas, 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,” “targeting,” 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. For more information
concerning factors that could cause actual results to differ from
those expressed or forecasted, see Valero’s annual reports on Form
10-K, quarterly reports on Form 10-Q and our other reports filed
with the SEC and on Valero’s website at www.valero.com, and VLP’s
annual reports on Form 10-K and quarterly reports on Form 10-Q
filed with the SEC and on VLP’s website at
www.valeroenergypartners.com.
Use of Non-GAAP Financial
InformationThis earnings release and the accompanying
earnings release tables include references to financial measures
that are not defined under U.S. generally accepted accounting
principles (GAAP). These non-GAAP measures include adjusted net
income attributable to Valero stockholders, adjusted earnings per
common share – assuming dilution, adjusted operating income,
refining margin, ethanol margin, and adjusted net cash provided by
operating activities. We have included these non-GAAP
financial measures to help facilitate the comparison of operating
results between periods. See the accompanying earnings
release tables for a reconciliation of non-GAAP measures to their
most directly comparable U.S. GAAP measures. In note (g) to the
earnings release tables, we disclose the reasons why we believe our
use of these non-GAAP financial measures provides useful
information.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS |
(millions of dollars, except per share
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Statement of
income data |
|
|
|
|
|
|
|
Operating
revenues |
$ |
26,392 |
|
|
$ |
20,712 |
|
|
$ |
93,980 |
|
|
$ |
75,659 |
|
Cost of
sales: |
|
|
|
|
|
|
|
Cost of
materials and other |
23,671 |
|
|
18,302 |
|
|
83,037 |
|
|
65,962 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
1,123 |
|
|
1,114 |
|
|
4,462 |
|
|
4,207 |
|
Depreciation and amortization expense |
477 |
|
|
455 |
|
|
1,934 |
|
|
1,846 |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(747 |
) |
Total
cost of sales |
25,271 |
|
|
19,871 |
|
|
89,433 |
|
|
71,268 |
|
Other
operating expenses (b) |
17 |
|
|
— |
|
|
61 |
|
|
— |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) |
238 |
|
|
208 |
|
|
835 |
|
|
715 |
|
Depreciation and amortization expense |
13 |
|
|
13 |
|
|
52 |
|
|
48 |
|
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
56 |
|
Operating
income |
853 |
|
|
620 |
|
|
3,599 |
|
|
3,572 |
|
Other
income, net |
26 |
|
|
21 |
|
|
76 |
|
|
56 |
|
Interest
and debt expense, net of capitalized interest |
(114 |
) |
|
(112 |
) |
|
(468 |
) |
|
(446 |
) |
Income
before income tax expense (benefit) |
765 |
|
|
529 |
|
|
3,207 |
|
|
3,182 |
|
Income
tax expense (benefit) (c) (d) (e) |
(1,635 |
) |
|
113 |
|
|
(949 |
) |
|
765 |
|
Net
income |
2,400 |
|
|
416 |
|
|
4,156 |
|
|
2,417 |
|
Less: Net
income attributable to noncontrolling interests |
29 |
|
|
49 |
|
|
91 |
|
|
128 |
|
Net
income attributable to Valero Energy Corporation stockholders |
$ |
2,371 |
|
|
$ |
367 |
|
|
$ |
4,065 |
|
|
$ |
2,289 |
|
|
|
|
|
|
|
|
|
Earnings per
common share |
$ |
5.43 |
|
|
$ |
0.81 |
|
|
$ |
9.17 |
|
|
$ |
4.94 |
|
Weighted-average common shares outstanding (in millions) |
435 |
|
|
451 |
|
|
442 |
|
|
461 |
|
|
|
|
|
|
|
|
|
Earnings per
common share – assuming dilution |
$ |
5.42 |
|
|
$ |
0.81 |
|
|
$ |
9.16 |
|
|
$ |
4.94 |
|
Weighted-average common shares outstanding – assuming dilution (in
millions) |
437 |
|
|
453 |
|
|
444 |
|
|
464 |
|
|
|
|
|
|
|
|
|
Dividends per
common share |
$ |
0.70 |
|
|
$ |
0.60 |
|
|
$ |
2.80 |
|
|
$ |
2.40 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(millions of dollars) |
(unaudited) |
|
|
Refining (f) |
|
Ethanol |
|
VLP (f) |
|
CorporateandEliminations |
|
Total |
Three months
ended December 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
25,621 |
|
|
$ |
766 |
|
|
$ |
— |
|
|
$ |
5 |
|
|
$ |
26,392 |
|
Intersegment revenues |
5 |
|
|
40 |
|
|
126 |
|
|
(171 |
) |
|
— |
|
Total
operating revenues |
25,626 |
|
|
806 |
|
|
126 |
|
|
(166 |
) |
|
26,392 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
23,203 |
|
|
638 |
|
|
— |
|
|
(170 |
) |
|
23,671 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
982 |
|
|
113 |
|
|
29 |
|
|
(1 |
) |
|
1,123 |
|
Depreciation and amortization expense |
442 |
|
|
18 |
|
|
17 |
|
|
— |
|
|
477 |
|
Total
cost of sales |
24,627 |
|
|
769 |
|
|
46 |
|
|
(171 |
) |
|
25,271 |
|
Other
operating expenses (b) |
17 |
|
|
— |
|
|
— |
|
|
— |
|
|
17 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
238 |
|
|
238 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating
income by segment |
$ |
982 |
|
|
$ |
37 |
|
|
$ |
80 |
|
|
$ |
(246 |
) |
|
$ |
853 |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31, 2016 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
19,666 |
|
|
$ |
1,046 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
20,712 |
|
Intersegment revenues |
— |
|
|
75 |
|
|
105 |
|
|
(180 |
) |
|
— |
|
Total
operating revenues |
19,666 |
|
|
1,121 |
|
|
105 |
|
|
(180 |
) |
|
20,712 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
17,615 |
|
|
867 |
|
|
— |
|
|
(180 |
) |
|
18,302 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
980 |
|
|
110 |
|
|
24 |
|
|
— |
|
|
1,114 |
|
Depreciation and amortization expense |
426 |
|
|
18 |
|
|
11 |
|
|
— |
|
|
455 |
|
Total
cost of sales |
19,021 |
|
|
995 |
|
|
35 |
|
|
(180 |
) |
|
19,871 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
208 |
|
|
208 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating
income by segment |
$ |
645 |
|
|
$ |
126 |
|
|
$ |
70 |
|
|
$ |
(221 |
) |
|
$ |
620 |
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(millions of dollars) |
(unaudited) |
|
|
Refining (f) |
|
Ethanol |
|
VLP (f) |
|
CorporateandEliminations |
|
Total |
Year ended
December 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
90,651 |
|
|
$ |
3,324 |
|
|
$ |
— |
|
|
$ |
5 |
|
|
$ |
93,980 |
|
Intersegment revenues |
6 |
|
|
176 |
|
|
452 |
|
|
(634 |
) |
|
— |
|
Total
operating revenues |
90,657 |
|
|
3,500 |
|
|
452 |
|
|
(629 |
) |
|
93,980 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
80,865 |
|
|
2,804 |
|
|
— |
|
|
(632 |
) |
|
83,037 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
3,917 |
|
|
443 |
|
|
104 |
|
|
(2 |
) |
|
4,462 |
|
Depreciation and amortization expense |
1,800 |
|
|
81 |
|
|
53 |
|
|
— |
|
|
1,934 |
|
Total
cost of sales |
86,582 |
|
|
3,328 |
|
|
157 |
|
|
(634 |
) |
|
89,433 |
|
Other
operating expenses (b) |
58 |
|
|
— |
|
|
3 |
|
|
— |
|
|
61 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
835 |
|
|
835 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
52 |
|
|
52 |
|
Operating
income by segment |
$ |
4,017 |
|
|
$ |
172 |
|
|
$ |
292 |
|
|
$ |
(882 |
) |
|
$ |
3,599 |
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2016 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
71,968 |
|
|
$ |
3,691 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
75,659 |
|
Intersegment revenues |
— |
|
|
210 |
|
|
363 |
|
|
(573 |
) |
|
— |
|
Total
operating revenues |
71,968 |
|
|
3,901 |
|
|
363 |
|
|
(573 |
) |
|
75,659 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
63,405 |
|
|
3,130 |
|
|
— |
|
|
(573 |
) |
|
65,962 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
3,696 |
|
|
415 |
|
|
96 |
|
|
— |
|
|
4,207 |
|
Depreciation and amortization expense |
1,734 |
|
|
66 |
|
|
46 |
|
|
— |
|
|
1,846 |
|
Lower of
cost or market inventory valuation adjustment (a) |
(697 |
) |
|
(50 |
) |
|
— |
|
|
— |
|
|
(747 |
) |
Total
cost of sales |
68,138 |
|
|
3,561 |
|
|
142 |
|
|
(573 |
) |
|
71,268 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) |
— |
|
|
— |
|
|
— |
|
|
715 |
|
|
715 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
48 |
|
|
48 |
|
Asset
impairment loss (c) |
56 |
|
|
— |
|
|
— |
|
|
— |
|
|
56 |
|
Operating
income by segment |
$ |
3,774 |
|
|
$ |
340 |
|
|
$ |
221 |
|
|
$ |
(763 |
) |
|
$ |
3,572 |
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
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 December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
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 |
$ |
2,371 |
|
|
$ |
367 |
|
|
$ |
4,065 |
|
|
$ |
2,289 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
747 |
|
Income
tax expense related to the lower of cost or market inventory
valuation adjustment |
— |
|
|
— |
|
|
— |
|
|
(168 |
) |
Lower of
cost or market inventory valuation adjustment, net of taxes |
— |
|
|
— |
|
|
— |
|
|
579 |
|
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
(56 |
) |
Income
tax benefit on Aruba Disposition (c) |
— |
|
|
— |
|
|
— |
|
|
42 |
|
Income
tax benefit from Tax Reform (d) |
1,862 |
|
|
— |
|
|
1,862 |
|
|
— |
|
Total
adjustments |
1,862 |
|
|
— |
|
|
1,862 |
|
|
565 |
|
Adjusted
net income attributable to Valero Energy Corporation
stockholders |
$ |
509 |
|
|
$ |
367 |
|
|
$ |
2,203 |
|
|
$ |
1,724 |
|
|
|
|
|
|
|
|
|
Reconciliation
of earnings per common share –
assuming dilution to adjusted earnings per
common share – |
|
|
|
|
|
|
|
assuming
dilution |
|
|
|
|
|
|
|
Earnings
per common share – assuming dilution |
$ |
5.42 |
|
|
$ |
0.81 |
|
|
$ |
9.16 |
|
|
$ |
4.94 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation adjustment, net of taxes
(a) |
— |
|
|
— |
|
|
— |
|
|
1.25 |
|
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
(0.12 |
) |
Income
tax benefit on Aruba Disposition (c) |
— |
|
|
— |
|
|
— |
|
|
0.09 |
|
Income
tax benefit from Tax Reform (d) |
4.26 |
|
|
— |
|
|
4.20 |
|
|
— |
|
Total
adjustments |
4.26 |
|
|
— |
|
|
4.20 |
|
|
1.22 |
|
Adjusted
earnings per common share – assuming dilution |
$ |
1.16 |
|
|
$ |
0.81 |
|
|
$ |
4.96 |
|
|
$ |
3.72 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
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 December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Reconciliation
of operating income by segment to
segment margin, and reconciliation of
operating income by |
|
|
|
|
|
|
|
segment
to adjusted operating income by segment |
|
|
|
|
|
|
|
Refining segment (f) |
|
|
|
|
|
|
|
Refining
operating income |
$ |
982 |
|
|
$ |
645 |
|
|
$ |
4,017 |
|
|
$ |
3,774 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
982 |
|
|
980 |
|
|
3,917 |
|
|
3,696 |
|
Depreciation and amortization expense |
442 |
|
|
426 |
|
|
1,800 |
|
|
1,734 |
|
Other
operating expenses (b) |
17 |
|
|
— |
|
|
58 |
|
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(697 |
) |
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
56 |
|
Refining
margin |
$ |
2,423 |
|
|
$ |
2,051 |
|
|
$ |
9,792 |
|
|
$ |
8,563 |
|
|
|
|
|
|
|
|
|
Refining
operating income |
$ |
982 |
|
|
$ |
645 |
|
|
$ |
4,017 |
|
|
$ |
3,774 |
|
Exclude: |
|
|
|
|
|
|
|
Other
operating expenses (b) |
(17 |
) |
|
— |
|
|
(58 |
) |
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
697 |
|
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
(56 |
) |
Adjusted
refining operating income |
$ |
999 |
|
|
$ |
645 |
|
|
$ |
4,075 |
|
|
$ |
3,133 |
|
|
|
|
|
|
|
|
|
Ethanol segment |
|
|
|
|
|
|
|
Ethanol
operating income |
$ |
37 |
|
|
$ |
126 |
|
|
$ |
172 |
|
|
$ |
340 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
113 |
|
|
110 |
|
|
443 |
|
|
415 |
|
Depreciation and amortization expense |
18 |
|
|
18 |
|
|
81 |
|
|
66 |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Ethanol
margin |
$ |
168 |
|
|
$ |
254 |
|
|
$ |
696 |
|
|
$ |
771 |
|
|
|
|
|
|
|
|
|
Ethanol
operating income |
$ |
37 |
|
|
$ |
126 |
|
|
$ |
172 |
|
|
$ |
340 |
|
Exclude:
Lower of cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
50 |
|
Adjusted
ethanol operating income |
$ |
37 |
|
|
$ |
126 |
|
|
$ |
172 |
|
|
$ |
290 |
|
|
|
|
|
|
|
|
|
VLP segment (f) |
|
|
|
|
|
|
|
VLP
operating income |
$ |
80 |
|
|
$ |
70 |
|
|
$ |
292 |
|
|
$ |
221 |
|
Exclude:
Other operating expenses (b) |
— |
|
|
— |
|
|
(3 |
) |
|
— |
|
Adjusted
VLP operating income |
$ |
80 |
|
|
$ |
70 |
|
|
$ |
295 |
|
|
$ |
221 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
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 December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
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) (h) |
|
|
|
|
|
|
|
U.S. Gulf Coast region (f) |
|
|
|
|
|
|
|
Refining
operating income |
$ |
585 |
|
|
$ |
393 |
|
|
$ |
2,049 |
|
|
$ |
1,797 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
558 |
|
|
551 |
|
|
2,254 |
|
|
2,095 |
|
Depreciation and amortization expense |
270 |
|
|
264 |
|
|
1,109 |
|
|
1,038 |
|
Other
operating expenses (b) |
16 |
|
|
— |
|
|
57 |
|
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(37 |
) |
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
56 |
|
Refining
margin |
$ |
1,429 |
|
|
$ |
1,208 |
|
|
$ |
5,469 |
|
|
$ |
4,949 |
|
|
|
|
|
|
|
|
|
Refining
operating income |
$ |
585 |
|
|
$ |
393 |
|
|
$ |
2,049 |
|
|
$ |
1,797 |
|
Exclude: |
|
|
|
|
|
|
|
Other
operating expenses (b) |
(16 |
) |
|
— |
|
|
(57 |
) |
|
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
37 |
|
Asset
impairment loss (c) |
— |
|
|
— |
|
|
— |
|
|
(56 |
) |
Adjusted
refining operating income |
$ |
601 |
|
|
$ |
393 |
|
|
$ |
2,106 |
|
|
$ |
1,816 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region (f) |
|
|
|
|
|
|
|
Refining
operating income |
$ |
234 |
|
|
$ |
51 |
|
|
$ |
881 |
|
|
$ |
397 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
131 |
|
|
138 |
|
|
567 |
|
|
560 |
|
Depreciation and amortization expense |
65 |
|
|
63 |
|
|
261 |
|
|
254 |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(9 |
) |
Refining
margin |
$ |
430 |
|
|
$ |
252 |
|
|
$ |
1,709 |
|
|
$ |
1,202 |
|
|
|
|
|
|
|
|
|
Refining
operating income |
$ |
234 |
|
|
$ |
51 |
|
|
$ |
881 |
|
|
$ |
397 |
|
Exclude:
Lower of cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
9 |
|
Adjusted
refining operating income |
$ |
234 |
|
|
$ |
51 |
|
|
$ |
881 |
|
|
$ |
388 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
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 December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
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) (h) (continued) |
|
|
|
|
|
|
|
North Atlantic region |
|
|
|
|
|
|
|
Refining
operating income |
$ |
199 |
|
|
$ |
207 |
|
|
$ |
985 |
|
|
$ |
1,355 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
151 |
|
|
138 |
|
|
529 |
|
|
501 |
|
Depreciation and amortization expense |
52 |
|
|
43 |
|
|
202 |
|
|
195 |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(646 |
) |
Refining
margin |
$ |
402 |
|
|
$ |
388 |
|
|
$ |
1,716 |
|
|
$ |
1,405 |
|
|
|
|
|
|
|
|
|
Refining
operating income |
$ |
199 |
|
|
$ |
207 |
|
|
$ |
985 |
|
|
$ |
1,355 |
|
Exclude:
Lower of cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
646 |
|
Adjusted
refining operating income |
$ |
199 |
|
|
$ |
207 |
|
|
$ |
985 |
|
|
$ |
709 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
|
|
|
Refining
operating income (loss) |
$ |
(36 |
) |
|
$ |
(6 |
) |
|
$ |
102 |
|
|
$ |
225 |
|
Add
back: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
142 |
|
|
153 |
|
|
567 |
|
|
540 |
|
Depreciation and amortization expense |
55 |
|
|
56 |
|
|
228 |
|
|
247 |
|
Other
operating expenses (b) |
1 |
|
|
— |
|
|
1 |
|
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
(5 |
) |
Refining
margin |
$ |
162 |
|
|
$ |
203 |
|
|
$ |
898 |
|
|
$ |
1,007 |
|
|
|
|
|
|
|
|
|
Refining
operating income (loss) |
$ |
(36 |
) |
|
$ |
(6 |
) |
|
$ |
102 |
|
|
$ |
225 |
|
Exclude: |
|
|
|
|
|
|
|
Other
operating expenses (b) |
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
Lower of
cost or market inventory valuation adjustment (a) |
— |
|
|
— |
|
|
— |
|
|
5 |
|
Adjusted
refining operating income (loss) |
$ |
(35 |
) |
|
$ |
(6 |
) |
|
$ |
103 |
|
|
$ |
220 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Throughput
volumes (thousand barrels per day) |
|
|
|
|
|
|
|
Feedstocks: |
|
|
|
|
|
|
|
Heavy
sour crude oil |
463 |
|
|
382 |
|
|
469 |
|
|
396 |
|
Medium/light sour crude oil |
448 |
|
|
547 |
|
|
458 |
|
|
526 |
|
Sweet
crude oil |
1,394 |
|
|
1,184 |
|
|
1,323 |
|
|
1,193 |
|
Residuals |
197 |
|
|
243 |
|
|
219 |
|
|
272 |
|
Other
feedstocks |
152 |
|
|
138 |
|
|
148 |
|
|
152 |
|
Total
feedstocks |
2,654 |
|
|
2,494 |
|
|
2,617 |
|
|
2,539 |
|
Blendstocks and other |
355 |
|
|
359 |
|
|
323 |
|
|
316 |
|
Total
throughput volumes |
3,009 |
|
|
2,853 |
|
|
2,940 |
|
|
2,855 |
|
|
|
|
|
|
|
|
|
Yields
(thousand barrels per day) |
|
|
|
|
|
|
|
Gasolines
and blendstocks |
1,473 |
|
|
1,429 |
|
|
1,423 |
|
|
1,404 |
|
Distillates |
1,142 |
|
|
1,047 |
|
|
1,127 |
|
|
1,066 |
|
Other
products (i) |
434 |
|
|
412 |
|
|
428 |
|
|
421 |
|
Total
yields |
3,049 |
|
|
2,888 |
|
|
2,978 |
|
|
2,891 |
|
|
|
|
|
|
|
|
|
Operating
statistics (f) (g) (j) |
|
|
|
|
|
|
|
Refining
margin (from Table Page 5) |
$ |
2,423 |
|
|
$ |
2,051 |
|
|
$ |
9,792 |
|
|
$ |
8,563 |
|
Adjusted
refining operating income (from Table Page 5) |
$ |
999 |
|
|
$ |
645 |
|
|
$ |
4,075 |
|
|
$ |
3,133 |
|
Throughput volumes (thousand barrels per day) |
3,009 |
|
|
2,853 |
|
|
2,940 |
|
|
2,855 |
|
|
|
|
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
8.75 |
|
|
$ |
7.82 |
|
|
$ |
9.12 |
|
|
$ |
8.20 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
3.55 |
|
|
3.74 |
|
|
3.65 |
|
|
3.54 |
|
Depreciation and amortization expense per barrel of throughput |
1.60 |
|
|
1.62 |
|
|
1.67 |
|
|
1.66 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
3.60 |
|
|
$ |
2.46 |
|
|
$ |
3.80 |
|
|
$ |
3.00 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
ETHANOL SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per gallon
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating
statistics (g) (j) |
|
|
|
|
|
|
|
Ethanol
margin (from Table Page 5) |
$ |
168 |
|
|
$ |
254 |
|
|
$ |
696 |
|
|
$ |
771 |
|
Adjusted
ethanol operating income (from Table Page 5) |
$ |
37 |
|
|
$ |
126 |
|
|
$ |
172 |
|
|
$ |
290 |
|
Production volumes (thousand gallons per day) |
4,040 |
|
|
3,987 |
|
|
3,972 |
|
|
3,842 |
|
|
|
|
|
|
|
|
|
Ethanol
margin per gallon of production |
$ |
0.46 |
|
|
$ |
0.69 |
|
|
$ |
0.48 |
|
|
$ |
0.55 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per gallon of production |
0.31 |
|
|
0.30 |
|
|
0.31 |
|
|
0.30 |
|
Depreciation and amortization expense per gallon of production |
0.05 |
|
|
0.05 |
|
|
0.05 |
|
|
0.04 |
|
Adjusted
ethanol operating income per gallon of production |
$ |
0.10 |
|
|
$ |
0.34 |
|
|
$ |
0.12 |
|
|
$ |
0.21 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
VLP SEGMENT OPERATING HIGHLIGHTS
(f) |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating
statistics (j) |
|
|
|
|
|
|
|
Pipeline
transportation revenue |
$ |
30 |
|
|
$ |
20 |
|
|
$ |
101 |
|
|
$ |
78 |
|
Terminaling revenue |
95 |
|
|
84 |
|
|
348 |
|
|
284 |
|
Storage
and other revenue |
1 |
|
|
1 |
|
|
3 |
|
|
1 |
|
Total VLP
operating revenues |
$ |
126 |
|
|
$ |
105 |
|
|
$ |
452 |
|
|
$ |
363 |
|
|
|
|
|
|
|
|
|
Pipeline
transportation throughput (thousand barrels per day) |
1,032 |
|
|
770 |
|
|
964 |
|
|
829 |
|
Pipeline
transportation revenue per barrel of throughput |
$ |
0.31 |
|
|
$ |
0.29 |
|
|
$ |
0.29 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
Terminaling throughput (thousand barrels per day) |
3,273 |
|
|
2,664 |
|
|
2,889 |
|
|
2,265 |
|
Terminaling revenue per barrel of throughput |
$ |
0.32 |
|
|
$ |
0.34 |
|
|
$ |
0.33 |
|
|
$ |
0.34 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating
statistics by region (h) |
|
|
|
|
|
|
|
U.S. Gulf Coast region (f) (g) (j) |
|
|
|
|
|
|
|
Refining
margin (from Table Page 6) |
$ |
1,429 |
|
|
$ |
1,208 |
|
|
$ |
5,469 |
|
|
$ |
4,949 |
|
Adjusted
refining operating income (from Table Page 6) |
$ |
601 |
|
|
$ |
393 |
|
|
$ |
2,106 |
|
|
$ |
1,816 |
|
Throughput volumes (thousand barrels per day) |
1,800 |
|
|
1,653 |
|
|
1,735 |
|
|
1,653 |
|
|
|
|
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
8.63 |
|
|
$ |
7.95 |
|
|
$ |
8.63 |
|
|
$ |
8.18 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
3.38 |
|
|
3.63 |
|
|
3.56 |
|
|
3.46 |
|
Depreciation and amortization expense per barrel of throughput |
1.63 |
|
|
1.74 |
|
|
1.75 |
|
|
1.72 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
3.62 |
|
|
$ |
2.58 |
|
|
$ |
3.32 |
|
|
$ |
3.00 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region (f) (g) (j) |
|
|
|
|
|
|
|
Refining
margin (from Table Page 6) |
$ |
430 |
|
|
$ |
252 |
|
|
$ |
1,709 |
|
|
$ |
1,202 |
|
Adjusted
refining operating income (from Table Page 6) |
$ |
234 |
|
|
$ |
51 |
|
|
$ |
881 |
|
|
$ |
388 |
|
Throughput volumes (thousand barrels per day) |
437 |
|
|
447 |
|
|
457 |
|
|
452 |
|
|
|
|
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
10.72 |
|
|
$ |
6.14 |
|
|
$ |
10.25 |
|
|
$ |
7.28 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
3.25 |
|
|
3.35 |
|
|
3.40 |
|
|
3.39 |
|
Depreciation and amortization expense per barrel of throughput |
1.65 |
|
|
1.55 |
|
|
1.57 |
|
|
1.54 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
5.82 |
|
|
$ |
1.24 |
|
|
$ |
5.28 |
|
|
$ |
2.35 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating
statistics by region (h) (continued) |
|
|
|
|
|
|
|
North Atlantic region (g) (j) |
|
|
|
|
|
|
|
Refining
margin (from Table Page 7) |
$ |
402 |
|
|
$ |
388 |
|
|
$ |
1,716 |
|
|
$ |
1,405 |
|
Adjusted
refining operating income (from Table Page 7) |
$ |
199 |
|
|
$ |
207 |
|
|
$ |
985 |
|
|
$ |
709 |
|
Throughput volumes (thousand barrels per day) |
494 |
|
|
483 |
|
|
491 |
|
|
483 |
|
|
|
|
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
8.84 |
|
|
$ |
8.75 |
|
|
$ |
9.58 |
|
|
$ |
7.95 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
3.31 |
|
|
3.10 |
|
|
2.95 |
|
|
2.84 |
|
Depreciation and amortization expense per barrel of throughput |
1.13 |
|
|
0.99 |
|
|
1.13 |
|
|
1.10 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
4.40 |
|
|
$ |
4.66 |
|
|
$ |
5.50 |
|
|
$ |
4.01 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region (g) (j) |
|
|
|
|
|
|
|
Refining
margin (from Table Page 7) |
$ |
161 |
|
|
$ |
203 |
|
|
$ |
898 |
|
|
$ |
1,007 |
|
Adjusted
refining operating income (loss) (from Table Page 7) |
$ |
(35 |
) |
|
$ |
(6 |
) |
|
$ |
103 |
|
|
$ |
220 |
|
Throughput volumes (thousand barrels per day) |
278 |
|
|
270 |
|
|
257 |
|
|
267 |
|
|
|
|
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
6.27 |
|
|
$ |
8.15 |
|
|
$ |
9.56 |
|
|
$ |
10.30 |
|
Less: |
|
|
|
|
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
5.52 |
|
|
6.16 |
|
|
6.04 |
|
|
5.53 |
|
Depreciation and amortization expense per barrel of throughput |
2.15 |
|
|
2.20 |
|
|
2.43 |
|
|
2.52 |
|
Adjusted
refining operating income (loss) per barrel of throughput |
$ |
(1.40 |
) |
|
$ |
(0.21 |
) |
|
$ |
1.09 |
|
|
$ |
2.25 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
AVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Feedstocks
(dollars per barrel) |
|
|
|
|
|
|
|
Brent
crude oil |
$ |
61.51 |
|
|
$ |
51.09 |
|
|
$ |
54.82 |
|
|
$ |
45.02 |
|
Brent
less West Texas Intermediate (WTI) crude oil |
6.16 |
|
|
1.91 |
|
|
3.92 |
|
|
1.83 |
|
Brent
less Alaska North Slope (ANS) crude oil |
(0.02 |
) |
|
0.96 |
|
|
0.26 |
|
|
1.25 |
|
Brent
less Louisiana Light Sweet (LLS) crude oil |
0.46 |
|
|
0.56 |
|
|
0.69 |
|
|
0.15 |
|
Brent
less Argus Sour Crude Index (ASCI) crude oil |
3.88 |
|
|
5.18 |
|
|
4.18 |
|
|
5.18 |
|
Brent
less Maya crude oil |
8.32 |
|
|
8.34 |
|
|
7.74 |
|
|
8.63 |
|
LLS crude
oil |
61.05 |
|
|
50.53 |
|
|
54.13 |
|
|
44.87 |
|
LLS less
ASCI crude oil |
3.42 |
|
|
4.62 |
|
|
3.49 |
|
|
5.03 |
|
LLS less
Maya crude oil |
7.86 |
|
|
7.78 |
|
|
7.05 |
|
|
8.48 |
|
WTI crude
oil |
55.35 |
|
|
49.18 |
|
|
50.90 |
|
|
43.19 |
|
|
|
|
|
|
|
|
|
Natural gas
(dollars per million British Thermal Units) |
2.90 |
|
|
3.03 |
|
|
2.98 |
|
|
2.46 |
|
|
|
|
|
|
|
|
|
Products
(dollars per barrel, unless otherwise noted) |
|
|
|
|
|
|
|
U.S. Gulf
Coast: |
|
|
|
|
|
|
|
CBOB
gasoline less Brent |
8.49 |
|
|
8.03 |
|
|
10.50 |
|
|
9.17 |
|
Ultra-low-sulfur diesel less Brent |
15.03 |
|
|
12.83 |
|
|
13.26 |
|
|
10.21 |
|
Propylene
less Brent |
2.40 |
|
|
(9.78 |
) |
|
0.48 |
|
|
(6.68 |
) |
CBOB
gasoline less LLS |
8.95 |
|
|
8.59 |
|
|
11.19 |
|
|
9.32 |
|
Ultra-low-sulfur diesel less LLS |
15.49 |
|
|
13.39 |
|
|
13.95 |
|
|
10.36 |
|
Propylene
less LLS |
2.86 |
|
|
(9.22 |
) |
|
1.17 |
|
|
(6.53 |
) |
U.S.
Mid-Continent: |
|
|
|
|
|
|
|
CBOB
gasoline less WTI |
16.43 |
|
|
9.36 |
|
|
15.65 |
|
|
11.82 |
|
Ultra-low-sulfur diesel less WTI |
23.41 |
|
|
13.99 |
|
|
18.50 |
|
|
13.03 |
|
North
Atlantic: |
|
|
|
|
|
|
|
CBOB
gasoline less Brent |
11.31 |
|
|
11.89 |
|
|
12.57 |
|
|
11.99 |
|
Ultra-low-sulfur diesel less Brent |
17.66 |
|
|
14.04 |
|
|
14.75 |
|
|
11.57 |
|
U.S. West
Coast: |
|
|
|
|
|
|
|
CARBOB 87
gasoline less ANS |
10.57 |
|
|
11.56 |
|
|
18.12 |
|
|
17.04 |
|
CARB
diesel less ANS |
18.81 |
|
|
17.34 |
|
|
17.11 |
|
|
14.52 |
|
CARBOB 87
gasoline less WTI |
16.75 |
|
|
12.51 |
|
|
21.78 |
|
|
17.62 |
|
CARB
diesel less WTI |
24.99 |
|
|
18.29 |
|
|
20.77 |
|
|
15.10 |
|
New York
Harbor corn crush (dollars per gallon) |
0.20 |
|
|
0.47 |
|
|
0.26 |
|
|
0.30 |
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
OTHER FINANCIAL DATA |
(millions of dollars) |
(unaudited) |
|
|
|
|
|
|
December 31, |
|
|
|
|
|
2017 |
|
2016 |
Balance sheet
data |
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
$ |
19,312 |
|
|
$ |
16,800 |
|
Cash and temporary cash investments included in current
assets |
|
5,850 |
|
|
4,816 |
|
Inventories included in current assets |
|
|
|
|
6,384 |
|
|
5,709 |
|
Current
liabilities |
|
|
|
|
11,071 |
|
|
8,328 |
|
Current portion of debt and capital lease obligations included
in current liabilities |
|
122 |
|
|
115 |
|
Debt and capital lease obligations, less current portion |
|
|
|
8,750 |
|
|
7,886 |
|
Total
debt and capital lease obligations |
|
|
|
|
8,872 |
|
|
8,001 |
|
Valero Energy Corporation stockholders’ equity |
|
|
|
21,991 |
|
|
20,024 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Cash flow
data |
|
|
|
|
|
|
|
Net cash
provided by operating activities |
$ |
1,660 |
|
|
$ |
998 |
|
|
$ |
5,482 |
|
|
$ |
4,820 |
|
See Notes to Earnings Release Tables.
VALERO ENERGY CORPORATION AND SUBSIDIARIESNOTES
TO EARNINGS RELEASE TABLES
(a) During the year ended December 31,
2016, we recorded a change in our lower of cost or market inventory
valuation reserve that was established on December 31, 2015,
resulting in a noncash benefit of $747 million
($697 million and $50 million attributable to our
refining and ethanol segments, respectively).
(b) Other operating expenses reflects expenses
that are not associated with our cost of sales. Other operating
expenses for the three months and year ended December 31, 2017
primarily includes costs incurred at certain of our United States
(U.S.) Gulf Coast refineries and certain VLP assets due to damage
associated with Hurricane Harvey.
(c) Effective October 1, 2016, we
(i) transferred ownership of all of our assets in Aruba, other
than certain hydrocarbon inventories and working capital, to
Refineria di Aruba N.V., an entity wholly-owned by the Government
of Aruba (GOA), (ii) settled our obligations under various
agreements with the GOA, including agreements that required us to
dismantle our leasehold improvements under certain conditions, and
(iii) sold the working capital of our Aruba operations,
including hydrocarbon inventories, to the GOA, CITGO Aruba Refining
N.V., and CITGO Petroleum Corporation. We refer to this transaction
as the “Aruba Disposition.”
In June 2016, we recognized an asset
impairment loss of $56 million representing all of the
remaining carrying value of the long-lived assets of our crude oil
and refined product terminal and transshipment facility in
Aruba.
In September 2016 and in connection with the
Aruba Disposition, our U.S. subsidiaries cancelled all outstanding
debt obligations owed to them by our Aruba subsidiaries, which
resulted in the recognition by us of an income tax benefit in the
U.S. of $42 million during the year ended December 31,
2016.
(d) On December 22, 2017, the Tax Cuts and
Jobs Act of 2017 (Tax Reform) was enacted, resulting in the
remeasurement of our U.S. deferred taxes and the recognition of a
liability for taxes on the deemed repatriation of our foreign
earnings and profits. Under U.S. generally accepted accounting
principles (GAAP), we are required to recognize the effect of the
Tax Reform in the period of enactment. As a result, we recognized a
$1.9 billion income tax benefit in December 2017, which
represents the estimated impact of Tax Reform. This estimate may be
refined in future periods as further information becomes
available.
(e) The income tax benefit for the three months
ended December 31, 2017 includes an income tax benefit
associated with Tax Reform (see note (d) above). Excluding
this effect, income tax expense was $227 million, resulting in
an effective tax rate of 29.8%. The variation in the customary
relationship between income tax expense and income before income
tax expense for all periods presented is due primarily to earnings
from our international operations that are taxed at statutory rates
that are lower than in the U.S. In addition, for the year ended
December 31, 2016, the variation is due to the recognition of
an income tax benefit in the U.S. in connection with the Aruba
Disposition (see note (c) above).
(f) Effective January 1, 2017, we revised
our reportable segments to align with certain changes in how our
chief operating decision maker manages and allocates resources to
our business. Accordingly, we created a new reportable
segment — VLP. The results of the VLP segment, which
include the results of our majority-owned master limited
partnership referred to by the same name, were transferred from the
refining segment. Comparable prior period information for our
refining segment (as well as that segment’s U.S. Gulf Coast and
U.S. Mid-Continent regions) and VLP segment has been
retrospectively adjusted to reflect our current segment
presentation.
(g) We use certain financial measures (as noted
below) in the earnings release tables and accompanying earnings
release that are not defined under U.S. GAAP and are considered to
be non-GAAP measures.
We have defined these non-GAAP measures and
believe they are useful to the external users of our financial
statements, including industry analysts, investors, lenders, and
rating agencies. We believe these measures are useful to assess our
ongoing financial performance because, when reconciled to their
most comparable U.S. GAAP measures, they provide improved
comparability between periods through the exclusion of certain
items that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These non-GAAP measures should not be considered as
alternatives to their most comparable U.S. GAAP measures nor should
they be considered in isolation or as a substitute for an analysis
of our results of operations as reported under U.S. GAAP. In
addition, these non-GAAP measures may not be comparable to
similarly titled measures used by other companies because we may
define them differently, which diminishes their utility.
Non-GAAP measures are as follows:
- Adjusted net income attributable to Valero Energy
Corporation stockholders is defined as net income
attributable to Valero Energy Corporation stockholders excluding
the lower of cost or market inventory valuation adjustment, its
related income tax effect, the asset impairment loss, the income
tax benefit on the Aruba Disposition, and the Tax Reform income tax
benefit. We believe that these items are not indicative of our core
operating performance and that their exclusion results in an
important measure for our ongoing financial performance to better
assess our underlying business results and trends.
- Adjusted earnings per common share – assuming
dilution is defined as adjusted net income attributable to
Valero Energy Corporation stockholders divided by the number of
weighted-average shares outstanding in the applicable period,
assuming dilution.
- Refining margin is defined as refining
operating income excluding the lower of cost or market inventory
valuation adjustment, operating expenses (excluding depreciation
and amortization expense), other operating expenses, depreciation
and amortization expense, and the asset impairment loss. We believe
refining margin is an important measure of our refining segment’s
operating and financial performance as it is the most comparable
measure to the industry’s market reference product margins, which
are used by industry analysts, investors, and others to evaluate
our performance.
- Ethanol margin is defined as ethanol operating
income excluding the lower of cost or market inventory valuation
adjustment, operating expenses (excluding depreciation and
amortization expense), and depreciation and amortization expense.
We believe ethanol margin is an important measure of our ethanol
segment’s operating and financial performance as it is the most
comparable measure to the industry’s market reference product
margins, which are used by industry analysts, investors, and others
to evaluate our performance.
- Adjusted refining operating income is defined
as refining segment operating income excluding other operating
expenses, the lower of cost or market inventory valuation
adjustment, and the asset impairment loss. 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 operating income excluding the lower of cost or market
inventory valuation adjustment. 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 VLP operating income is defined as
VLP operating income excluding other operating expenses. We believe
this is an important measure of our VLP segment’s operating and
financial performance because it excludes items that are not
indicative of that segment’s core operating performance.
(h) The refining segment regions reflected
herein contain the following refineries: U.S. Gulf
Coast- Corpus Christi East, Corpus Christi West, Houston,
Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers
Refineries; U.S. Mid-Continent- Ardmore, McKee,
and Memphis Refineries; North Atlantic- Pembroke
and Quebec City Refineries; and U.S. West
Coast- Benicia and Wilmington Refineries.
(i) Primarily includes petrochemicals, gas oils,
No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
(j) Valero uses certain operating statistics (as
noted below) in the earnings release tables and the accompanying
earnings release to evaluate performance between comparable
periods. Different companies may calculate them in different
ways.
All per barrel of throughput and per gallon of
production amounts are calculated by dividing the associated dollar
amount by the throughput volumes, production volumes, pipeline
transportation throughput volumes, or terminaling throughput
volumes for the period, as applicable.
Throughput volumes, production volumes, pipeline
transportation throughput volumes, and terminaling throughput
volumes are calculated by multiplying throughput volumes per day,
production volumes per day, pipeline transportation throughput
volumes per day, and terminaling throughput volumes per day (as
provided in the accompanying tables), respectively, by the number
of days in the applicable period.
VALERO ENERGY PARTNERS LP (NYSE:VLP)
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