Valero Energy Corporation (NYSE:VLO) (“Valero”) today reported net
income attributable to Valero stockholders of $469 million, or
$1.09 per share, for the first quarter of 2018 compared to $305
million, or $0.68 per share, for the first quarter of
2017. Excluding the special items reflected in the
accompanying earnings release tables, first quarter 2018 adjusted
net income attributable to Valero stockholders was $431 million, or
$1.00 per share, an increase of 47 percent in adjusted per share
results compared to the first quarter of 2017.
RefiningThe refining segment
reported $922 million of operating income for the first quarter of
2018 compared to $640 million for the first quarter of 2017.
First quarter 2018 operating income includes a $170 million benefit
from the Blender’s Tax Credit and $10 million of expenses primarily
related to ongoing repairs at certain of the company’s refineries
to address damage resulting from Hurricane Harvey in 2017 and other
inclement weather conditions that occurred in the first quarter of
2018. Excluding these special items, operating income was
$762 million, an increase of $122 million versus first quarter
2017 driven primarily by higher distillate margins, partly offset
by narrower discounts for medium and heavy sour crude oils versus
Brent.
Refinery throughput capacity utilization was 94
percent, and throughput volumes averaged 2.9 million barrels
per day in the first quarter of 2018, which is 93,000 barrels per
day higher than the first quarter of 2017. The company
exported a total of 271,000 barrels per day of gasoline and
distillate during the first quarter of 2018.
Biofuel blending costs were $206 million in the
first quarter of 2018, which is $60 million greater than in the
first quarter of 2017, mainly due to higher Renewable
Identification Number (RIN) prices.
“We delivered solid results despite a relatively
soft first quarter, and we remain optimistic on fundamentals for
the balance of the year,” said Joe Gorder, Valero Chairman,
President and Chief Executive Officer. “Our refineries are
well-situated to take advantage of discounted heavy sour and
domestic sweet crude oils versus Brent and to meet the growing
demand for refined products in Latin America.”
EthanolThe ethanol segment
reported $45 million of operating income for the first quarter of
2018 compared to $22 million for the first quarter of 2017.
The increase in operating income is attributed primarily to higher
distillers grain prices. Ethanol production volumes of
4.1 million gallons per day were in line with the first
quarter of 2017.
VLPThe VLP segment, which is
composed of Valero Energy Partners LP (the "Partnership"), the
company’s majority-owned midstream master limited partnership,
reported $84 million of operating income for the first quarter of
2018 compared to $70 million for the first quarter of
2017. The increase in operating income is mostly driven by
contributions from the Port Arthur terminal assets and Parkway
Pipeline, which the Partnership acquired from Valero in November
2017. These assets were formerly a part of the refining
segment.
Corporate and OtherGeneral and
administrative expenses were $238 million in the first quarter
of 2018 compared to $192 million in the first quarter of
2017. The increase in general and administrative expenses is
mainly due to adjustments to our environmental liabilities.
Excluding the benefit related to the retroactive Blender’s Tax
Credit, the effective tax rate was 22 percent for the first quarter
of 2018.
Investing and Financing
ActivitiesCapital investments in the first quarter of 2018
totaled $631 million. Included in this amount is $448 million
associated with sustaining the business, such as turnaround,
catalyst, and regulatory compliance expenditures, with the balance
for growth.
Valero returned $665 million to stockholders in
the first quarter, of which $345 million was paid as dividends
and the balance was used to purchase 3.5 million shares of its
common stock, resulting in a total payout ratio of 57
percent. Net cash provided by operating activities in the
first quarter was $138 million. Included in this amount is a
$1.1 billion use of cash to fund working capital. Excluding
working capital, adjusted net cash provided by operating activities
was $1.2 billion.
The company continues to target 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
adjusted net cash provided by operating activities.
Liquidity and Financial
PositionValero ended the first quarter of 2018 with
$9.0 billion of total debt and $4.7 billion of cash and
temporary cash investments. The debt to capital ratio, net of
$2.0 billion in cash, was 24 percent.
Strategic UpdateThe company
continued to execute its strategy to invest in logistics assets,
increase margin capture, and reduce secondary costs. Diamond
Pipeline throughput increased in the first quarter, providing the
Memphis refinery with additional access to cost-advantaged crude
oil grades in Cushing, Oklahoma. Also during the quarter, the
company acquired the SemLogistics Milford Haven fuels storage
facility in Wales and entered into a joint ownership agreement with
Sunrise Pipeline LLC, a subsidiary of Plains All American Pipeline,
L.P. (“Plains”), which will give Valero undivided ownership of
100,000 barrels per day of capacity in a pipeline that will connect
Midland and Wichita Falls, Texas. Plains will construct and
operate the pipeline, the completion of which is scheduled in the
first quarter of 2019. Both investments enhance supply
flexibility for Valero’s refineries in the United Kingdom and the
U.S. Mid-Continent region of the United States,
respectively.
“We’re seeing benefits from our Diamond Pipeline
investment today, and we look forward to having greater access to
Permian Basin crude oils for our U.S. Mid-Continent refineries upon
completion of the Sunrise Pipeline expansion next year,” said
Gorder.
Construction is progressing on the previously
announced Diamond Green Diesel capacity expansion, the Houston and
St. Charles alkylation units, the Central Texas pipelines and
terminals, and the Pasadena products terminal. These projects
remain on track for completion as scheduled.
Additionally, Valero’s Board of Directors
approved the construction of a 45 megawatt cogeneration plant at
the Pembroke refinery, which is expected to lower its operating
expenses and improve supply reliability for power and steam.
The $170 million project is expected to be completed in 2020.
The company’s capital investment plans for 2018
remain at $2.7 billion, of which $1.0 billion is for growth
projects and $1.7 billion is for sustaining the business.
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
1.45 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 (“VLP”), 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 refining 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 (f)
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 |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS |
(millions of dollars, except per share
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Statement of
income data |
|
|
|
Revenues |
$ |
26,439 |
|
|
$ |
21,772 |
|
Cost of
sales: |
|
|
|
Cost of
materials and other (a) |
23,756 |
|
|
19,428 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
1,136 |
|
|
1,124 |
|
Depreciation and amortization expense |
485 |
|
|
488 |
|
Total
cost of sales |
25,377 |
|
|
21,040 |
|
Other
operating expenses (c) |
10 |
|
|
— |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) (b) (d) |
238 |
|
|
192 |
|
Depreciation and amortization expense |
13 |
|
|
12 |
|
Operating
income |
801 |
|
|
528 |
|
Other
income, net (b) |
51 |
|
|
26 |
|
Interest
and debt expense, net of capitalized interest |
(121 |
) |
|
(121 |
) |
Income
before income tax expense |
731 |
|
|
433 |
|
Income
tax expense (e) |
149 |
|
|
112 |
|
Net
income |
582 |
|
|
321 |
|
Less: Net
income attributable to noncontrolling interests (a) |
113 |
|
|
16 |
|
Net
income attributable to Valero Energy Corporation stockholders |
$ |
469 |
|
|
$ |
305 |
|
|
|
|
|
Earnings per
common share |
$ |
1.09 |
|
|
$ |
0.68 |
|
Weighted-average common shares outstanding (in millions) |
431 |
|
|
448 |
|
|
|
|
|
Earnings per
common share – assuming dilution |
$ |
1.09 |
|
|
$ |
0.68 |
|
Weighted-average common shares outstanding – assuming dilution (in
millions) |
432 |
|
|
451 |
|
|
|
|
|
Dividends per
common share |
$ |
0.80 |
|
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(millions of dollars) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Refining |
|
Ethanol |
|
VLP |
|
CorporateandEliminations |
|
Total |
Three months
ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues
from external customers |
$ |
25,561 |
|
|
$ |
877 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
26,439 |
|
Intersegment revenues |
4 |
|
|
46 |
|
|
132 |
|
|
(182 |
) |
|
— |
|
Total
revenues |
25,565 |
|
|
923 |
|
|
132 |
|
|
(181 |
) |
|
26,439 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other (a) |
23,188 |
|
|
749 |
|
|
— |
|
|
(181 |
) |
|
23,756 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
997 |
|
|
111 |
|
|
29 |
|
|
(1 |
) |
|
1,136 |
|
Depreciation and amortization expense |
448 |
|
|
18 |
|
|
19 |
|
|
— |
|
|
485 |
|
Total
cost of sales |
24,633 |
|
|
878 |
|
|
48 |
|
|
(182 |
) |
|
25,377 |
|
Other
operating expenses (c) |
10 |
|
|
— |
|
|
— |
|
|
— |
|
|
10 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) (d) |
— |
|
|
— |
|
|
— |
|
|
238 |
|
|
238 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Operating
income by segment |
$ |
922 |
|
|
$ |
45 |
|
|
$ |
84 |
|
|
$ |
(250 |
) |
|
$ |
801 |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31, 2017 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues
from external customers |
$ |
20,887 |
|
|
$ |
885 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,772 |
|
Intersegment revenues |
— |
|
|
60 |
|
|
106 |
|
|
(166 |
) |
|
— |
|
Total
revenues |
20,887 |
|
|
945 |
|
|
106 |
|
|
(166 |
) |
|
21,772 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
18,807 |
|
|
787 |
|
|
— |
|
|
(166 |
) |
|
19,428 |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
991 |
|
|
109 |
|
|
24 |
|
|
— |
|
|
1,124 |
|
Depreciation and amortization expense |
449 |
|
|
27 |
|
|
12 |
|
|
— |
|
|
488 |
|
Total
cost of sales |
20,247 |
|
|
923 |
|
|
36 |
|
|
(166 |
) |
|
21,040 |
|
General
and administrative expenses (excluding depreciation and
amortization expense reflected below) (b) |
— |
|
|
— |
|
|
— |
|
|
192 |
|
|
192 |
|
Depreciation and amortization expense |
— |
|
|
— |
|
|
— |
|
|
12 |
|
|
12 |
|
Operating
income by segment |
$ |
640 |
|
|
$ |
22 |
|
|
$ |
70 |
|
|
$ |
(204 |
) |
|
$ |
528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Operating Highlights by Segment.See Notes to
Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (f) |
(millions of dollars, except per share
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
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 |
$ |
469 |
|
|
$ |
305 |
|
Exclude: |
|
|
|
Blender’s
tax credit attributable to Valero Energy Corporation stockholders
(a) |
90 |
|
|
— |
|
Income
tax expense related to the blender’s tax credit |
(11 |
) |
|
— |
|
Blender’s
tax credit attributable to Valero Energy Corporation stockholders,
net of taxes |
79 |
|
|
— |
|
Environmental reserve adjustment (d) |
(52 |
) |
|
— |
|
Income
tax benefit related to the environmental reserve adjustment |
11 |
|
|
— |
|
Environmental reserve adjustment, net of taxes |
(41 |
) |
|
— |
|
Total
adjustments |
38 |
|
|
— |
|
Adjusted
net income attributable to Valero Energy Corporation
stockholders |
$ |
431 |
|
|
$ |
305 |
|
|
|
|
|
Reconciliation
of earnings per common share –
assuming dilution to adjusted earnings per
common share – assuming
dilution |
|
|
|
Earnings
per common share – assuming dilution |
$ |
1.09 |
|
|
$ |
0.68 |
|
Exclude
adjustments: |
|
|
|
Blender’s
tax credit attributable to Valero Energy Corporation stockholders
(a) |
0.18 |
|
|
— |
|
Environmental reserve adjustment (d) |
(0.09 |
) |
|
— |
|
Total
adjustments |
0.09 |
|
|
— |
|
Adjusted
earnings per common share – assuming dilution |
$ |
1.00 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (f) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Reconciliation
of operating income by segment to
segment margin, and reconciliation of
operating income by segment to adjusted
operating income by segment |
|
|
|
Refining segment |
|
|
|
Refining
operating income |
$ |
922 |
|
|
$ |
640 |
|
Exclude: |
|
|
|
Blender’s
tax credit (a) |
170 |
|
|
— |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
(997 |
) |
|
(991 |
) |
Depreciation and amortization expense |
(448 |
) |
|
(449 |
) |
Other
operating expenses (c) |
(10 |
) |
|
— |
|
Refining
margin |
$ |
2,207 |
|
|
$ |
2,080 |
|
|
|
|
|
Refining
operating income |
$ |
922 |
|
|
$ |
640 |
|
Exclude: |
|
|
|
Blender’s
tax credit (a) |
170 |
|
|
— |
|
Other
operating expenses (c) |
(10 |
) |
|
— |
|
Adjusted
refining operating income |
$ |
762 |
|
|
$ |
640 |
|
|
|
|
|
Ethanol segment |
|
|
|
Ethanol
operating income |
$ |
45 |
|
|
$ |
22 |
|
Exclude: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
(111 |
) |
|
(109 |
) |
Depreciation and amortization expense |
(18 |
) |
|
(27 |
) |
Ethanol
margin |
$ |
174 |
|
|
$ |
158 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (f) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
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) (g) |
|
|
|
U.S. Gulf Coast region |
|
|
|
Refining
operating income |
$ |
539 |
|
|
$ |
368 |
|
Exclude: |
|
|
|
Blender’s
tax credit (a) |
167 |
|
|
— |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
(559 |
) |
|
(577 |
) |
Depreciation and amortization expense |
(268 |
) |
|
(279 |
) |
Other
operating expenses (c) |
(10 |
) |
|
— |
|
Refining
margin |
$ |
1,209 |
|
|
$ |
1,224 |
|
|
|
|
|
Refining
operating income |
$ |
539 |
|
|
$ |
368 |
|
Exclude: |
|
|
|
Blender’s
tax credit (a) |
167 |
|
|
— |
|
Other
operating expenses (c) |
(10 |
) |
|
— |
|
Adjusted
refining operating income |
$ |
382 |
|
|
$ |
368 |
|
|
|
|
|
U.S. Mid-Continent region |
|
|
|
Refining
operating income |
$ |
203 |
|
|
$ |
106 |
|
Exclude: |
|
|
|
Blender’s
tax credit (a) |
2 |
|
|
— |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
(151 |
) |
|
(147 |
) |
Depreciation and amortization expense |
(66 |
) |
|
(66 |
) |
Refining
margin |
$ |
418 |
|
|
$ |
319 |
|
|
|
|
|
Refining
operating income |
$ |
203 |
|
|
$ |
106 |
|
Exclude:
blender’s tax credit (a) |
2 |
|
|
— |
|
Adjusted
refining operating income |
$ |
201 |
|
|
$ |
106 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (f) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
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) (g) (continued) |
|
|
|
North Atlantic region |
|
|
|
Refining
operating income |
$ |
161 |
|
|
$ |
197 |
|
Exclude: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) |
(145 |
) |
|
(132 |
) |
Depreciation and amortization expense |
(53 |
) |
|
(48 |
) |
Refining
margin |
$ |
359 |
|
|
$ |
377 |
|
|
|
|
|
U.S. West Coast region |
|
|
|
Refining
operating income (loss) |
$ |
19 |
|
|
$ |
(31 |
) |
Exclude: |
|
|
|
Blender’s
tax credit (a) |
1 |
|
|
— |
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) (b) |
(142 |
) |
|
(135 |
) |
Depreciation and amortization expense |
(61 |
) |
|
(56 |
) |
Refining
margin |
$ |
221 |
|
|
$ |
160 |
|
|
|
|
|
Refining
operating income (loss) |
$ |
19 |
|
|
$ |
(31 |
) |
Exclude:
Blender’s tax credit (a) |
1 |
|
|
— |
|
Adjusted
refining operating income (loss) |
$ |
18 |
|
|
$ |
(31 |
) |
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Throughput
volumes (thousand barrels per day) |
|
|
|
Feedstocks: |
|
|
|
Heavy
sour crude oil |
482 |
|
|
448 |
|
Medium/light sour crude oil |
408 |
|
|
455 |
|
Sweet
crude oil |
1,344 |
|
|
1,245 |
|
Residuals |
222 |
|
|
235 |
|
Other
feedstocks |
119 |
|
|
149 |
|
Total
feedstocks |
2,575 |
|
|
2,532 |
|
Blendstocks and other |
356 |
|
|
306 |
|
Total
throughput volumes |
2,931 |
|
|
2,838 |
|
|
|
|
|
Yields
(thousand barrels per day) |
|
|
|
Gasolines
and blendstocks |
1,401 |
|
|
1,360 |
|
Distillates |
1,109 |
|
|
1,090 |
|
Other
products (h) |
458 |
|
|
425 |
|
Total
yields |
2,968 |
|
|
2,875 |
|
|
|
|
|
Operating
statistics (f) (i) |
|
|
|
Refining
margin (from Table Page 4) |
$ |
2,207 |
|
|
$ |
2,080 |
|
Adjusted
refining operating income (from Table Page 4) |
$ |
762 |
|
|
$ |
640 |
|
Throughput volumes (thousand barrels per day) |
2,931 |
|
|
2,838 |
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
8.36 |
|
|
$ |
8.14 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput (b) |
3.78 |
|
|
3.87 |
|
Depreciation and amortization expense per barrel of throughput |
1.69 |
|
|
1.76 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
2.89 |
|
|
$ |
2.51 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
ETHANOL SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per gallon
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Operating
statistics (f) (i) |
|
|
|
Ethanol
margin (from Table Page 4) |
$ |
174 |
|
|
$ |
158 |
|
Ethanol
operating income (from Table Page 2) |
$ |
45 |
|
|
$ |
22 |
|
Production volumes (thousand gallons per day) |
4,113 |
|
|
4,041 |
|
|
|
|
|
Ethanol
margin per gallon of production |
$ |
0.47 |
|
|
$ |
0.43 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per gallon of production |
0.30 |
|
|
0.30 |
|
Depreciation and amortization expense per gallon of Production |
0.05 |
|
|
0.07 |
|
Ethanol
operating income per gallon of production |
$ |
0.12 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
VLP SEGMENT OPERATING HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Operating
statistics (i) |
|
|
|
Pipeline
transportation revenue |
$ |
31 |
|
|
$ |
23 |
|
Terminaling revenue |
99 |
|
|
83 |
|
Storage
and other revenue |
2 |
|
|
— |
|
Total VLP
revenues |
$ |
132 |
|
|
$ |
106 |
|
|
|
|
|
Pipeline
transportation throughput (thousand barrels per day) |
1,062 |
|
|
962 |
|
Pipeline
transportation revenue per barrel of throughput |
$ |
0.33 |
|
|
$ |
0.27 |
|
|
|
|
|
Terminaling throughput (thousand barrels per day) |
3,396 |
|
|
2,734 |
|
Terminaling revenue per barrel of throughput |
$ |
0.32 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Operating
statistics by region (g) |
|
|
|
U.S. Gulf Coast region (f) (i) |
|
|
|
Refining
margin (from Table Page 5) |
$ |
1,209 |
|
|
$ |
1,224 |
|
Adjusted
refining operating income (from Table Page 5) |
$ |
382 |
|
|
$ |
368 |
|
Throughput volumes (thousand barrels per day) |
1,726 |
|
|
1,703 |
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
7.78 |
|
|
$ |
7.98 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput (b) |
3.60 |
|
|
3.75 |
|
Depreciation and amortization expense per barrel of throughput |
1.72 |
|
|
1.82 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
2.46 |
|
|
$ |
2.41 |
|
|
|
|
|
U.S. Mid-Continent region (f) (i) |
|
|
|
Refining
margin (from Table Page 5) |
$ |
418 |
|
|
$ |
319 |
|
Adjusted
refining operating income (from Table Page 5) |
$ |
201 |
|
|
$ |
106 |
|
Throughput volumes (thousand barrels per day) |
481 |
|
|
445 |
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
9.66 |
|
|
$ |
7.98 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput (b) |
3.48 |
|
|
3.68 |
|
Depreciation and amortization expense per barrel of throughput |
1.53 |
|
|
1.66 |
|
Adjusted
refining operating income per barrel of throughput |
$ |
4.65 |
|
|
$ |
2.64 |
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING HIGHLIGHTS BY
REGION |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Operating
statistics by region (g) (continued) |
|
|
|
North Atlantic region (f) (i) |
|
|
|
Refining
margin (from Table Page 6) |
$ |
359 |
|
|
$ |
377 |
|
Refining
operating income (from Table Page 6) |
$ |
161 |
|
|
$ |
197 |
|
Throughput volumes (thousand barrels per day) |
458 |
|
|
490 |
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
8.70 |
|
|
$ |
8.55 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput |
3.52 |
|
|
2.98 |
|
Depreciation and amortization expense per barrel of throughput |
1.28 |
|
|
1.11 |
|
Refining
operating income per barrel of throughput |
$ |
3.90 |
|
|
$ |
4.46 |
|
|
|
|
|
U.S. West Coast region (f) (i) |
|
|
|
Refining
margin (from Table Page 6) |
$ |
221 |
|
|
$ |
160 |
|
Adjusted
refining operating income (loss) (from Table Page 6) |
$ |
18 |
|
|
$ |
(31 |
) |
Throughput volumes (thousand barrels per day) |
266 |
|
|
200 |
|
|
|
|
|
Refining
margin per barrel of throughput |
$ |
9.22 |
|
|
$ |
8.86 |
|
Less: |
|
|
|
Operating
expenses (excluding depreciation and amortization expense reflected
below) per barrel of throughput (b) |
5.93 |
|
|
7.47 |
|
Depreciation and amortization expense per barrel of throughput |
2.51 |
|
|
3.10 |
|
Adjusted
refining operating income (loss) per barrel of throughput |
$ |
0.78 |
|
|
$ |
(1.71 |
) |
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
AVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
Feedstocks
(dollars per barrel) |
|
|
|
Brent
crude oil |
$ |
67.16 |
|
|
$ |
54.65 |
|
Brent
less West Texas Intermediate (WTI) crude oil |
4.29 |
|
|
2.82 |
|
Brent
less Alaska North Slope (ANS) crude oil |
0.20 |
|
|
0.82 |
|
Brent
less Louisiana Light Sweet (LLS) crude oil |
1.38 |
|
|
1.13 |
|
Brent
less Argus Sour Crude Index (ASCI) crude oil |
4.88 |
|
|
5.05 |
|
Brent
less Maya crude oil |
9.46 |
|
|
9.93 |
|
LLS crude
oil |
65.78 |
|
|
53.52 |
|
LLS less
ASCI crude oil |
3.50 |
|
|
3.92 |
|
LLS less
Maya crude oil |
8.08 |
|
|
8.80 |
|
WTI crude
oil |
62.87 |
|
|
51.83 |
|
|
|
|
|
Natural gas
(dollars per million British Thermal Units) |
3.19 |
|
|
2.95 |
|
|
|
|
|
Products
(dollars per barrel, unless otherwise noted) |
|
|
|
U.S. Gulf
Coast: |
|
|
|
CBOB
gasoline less Brent |
7.28 |
|
|
8.78 |
|
Ultra-low-sulfur diesel less Brent |
13.78 |
|
|
11.12 |
|
Propylene
less Brent |
(6.82 |
) |
|
1.22 |
|
CBOB
gasoline less LLS |
8.66 |
|
|
9.91 |
|
Ultra-low-sulfur diesel less LLS |
15.16 |
|
|
12.25 |
|
Propylene
less LLS |
(5.44 |
) |
|
2.35 |
|
U.S.
Mid-Continent: |
|
|
|
CBOB
gasoline less WTI |
13.47 |
|
|
12.71 |
|
Ultra-low-sulfur diesel less WTI |
19.83 |
|
|
13.99 |
|
North
Atlantic: |
|
|
|
CBOB
gasoline less Brent |
8.88 |
|
|
8.68 |
|
Ultra-low-sulfur diesel less Brent |
15.95 |
|
|
12.06 |
|
U.S. West
Coast: |
|
|
|
CARBOB 87
gasoline less ANS |
13.27 |
|
|
16.77 |
|
CARB
diesel less ANS |
17.28 |
|
|
14.84 |
|
CARBOB 87
gasoline less WTI |
17.36 |
|
|
18.77 |
|
CARB
diesel less WTI |
21.37 |
|
|
16.84 |
|
New York
Harbor corn crush (dollars per gallon) |
0.19 |
|
|
0.23 |
|
|
|
|
|
|
|
See Notes to Earnings Release Tables.
|
VALERO ENERGY CORPORATION |
EARNINGS RELEASE TABLES |
OTHER FINANCIAL DATA |
(millions of dollars) |
(unaudited) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2018 |
|
2017 |
Balance sheet
data |
|
|
|
|
Current
assets |
|
$ |
18,260 |
|
|
$ |
19,312 |
|
Cash and
temporary cash investments included in current assets |
|
4,658 |
|
|
5,850 |
|
Inventories included in current assets |
|
6,555 |
|
|
6,384 |
|
Current
liabilities |
|
10,752 |
|
|
11,071 |
|
Current
portion of debt and capital lease obligations included in current
liabilities |
|
871 |
|
|
122 |
|
Debt and
capital lease obligations, less current portion |
|
8,086 |
|
|
8,750 |
|
Total
debt and capital lease obligations |
|
8,957 |
|
|
8,872 |
|
Valero
Energy Corporation stockholders’ equity |
|
21,877 |
|
|
21,991 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
2017 |
Cash flow
data |
|
|
|
|
Net cash
provided by operating activities |
|
$ |
138 |
|
|
$ |
988 |
|
|
|
|
|
|
|
|
|
|
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, 2018 includes a benefit of
$170 million for the biodiesel blender’s tax credit
attributable to volumes blended during 2017. The benefit was
recognized during the three months ended March 31, 2018
because the legislation authorizing the credit was passed and
signed into law in February 2018. The $170 million pre-tax
benefit is included in the refining segment and includes
$80 million attributable to noncontrolling interest and
$90 million attributable to Valero Energy Corporation
stockholders.
(b) Effective January 1, 2018, we adopted
the provisions of Accounting Standards Update 2017-07,
“Compensation—Retirement Benefits (Topic 715),” which resulted
in the reclassification of the non-service component of net
periodic pension cost and net periodic postretirement benefit cost
from operating expenses (excluding depreciation and amortization
expense) and general and administrative expenses (excluding
depreciation and amortization expense) to “other income, net.”
These new provisions are required to be applied retrospectively.
Accordingly, for the three months ended March 31, 2017, we
reclassified the non-service component out of operating expenses
(excluding depreciation and amortization expense) and general and
administrative expenses (excluding depreciation and amortization
expense) of $7 million and $2 million, respectively, and
into “other income, net.”
(c) Other operating expenses reflects expenses
that are not associated with our cost of sales. Other operating
expenses for the three months ended March 31, 2018 primarily
includes repair costs incurred at certain of our refineries due to
damage associated with inclement weather events in 2018 and
Hurricane Harvey in 2017.
(d) General and administrative
expenses (excluding depreciation and amortization expense) for the
three months ended March 31, 2018 includes a charge of
$52 million for an environmental reserve adjustment associated
with certain non-operating sites.
(e) As a result of the Tax Cut and Jobs Act of
2017 enacted on December 22, 2017, the U.S. statutory income
tax rate was reduced from 35 percent to 21 percent.
Therefore, earnings from our U.S. operations for the three months
ended March 31, 2018 are now taxed at 21 percent,
resulting in a lower effective tax rate compared to the three
months ended March 31, 2017.
(f) 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 blender’s tax credit, the environmental reserve adjustment, and
their related income tax effect. Because the blender’s tax credit
is attributable to volumes blended during 2017 and is not related
to 2018 activities (see note (a)) and the environmental
reserve adjustment is attributable to sites that were shutdown by
prior owners and subsequently acquired by us (referred to by us as
non-operating sites) (see note (d)), we believe that these
items are not indicative of our core operating performance in 2018
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 blender’s tax credit, operating
expenses (excluding depreciation and amortization expense), other
operating expenses, and depreciation and amortization expense. 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 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 the 2017 blender’s
tax credit received in 2018 (see note (a)) 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.
(g) 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.
(h) Primarily includes petrochemicals, gas oils,
No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
(i) 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.
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