- Reported net income attributable to Valero stockholders of $1.9
billion, or $5.40 per share
- Returned over $1.3 billion to stockholders through dividends
and stock buybacks
- Declared a regular quarterly cash dividend on common stock of
$1.02 per share
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $1.9 billion, or
$5.40 per share, for the second quarter of 2023, compared to $4.7
billion, or $11.57 per share, for the second quarter of 2022.
Excluding the adjustments shown in the accompanying earnings
release tables, adjusted net income attributable to Valero
stockholders was $4.6 billion, or $11.36 per share, for the second
quarter of 2022.
Refining
The Refining segment reported operating income of $2.4 billion
for the second quarter of 2023, compared to $6.2 billion for the
second quarter of 2022. Adjusted operating income was $6.1 billion
for the second quarter of 2022. Refining throughput volumes
averaged 3.0 million barrels per day in the second quarter of
2023.
“We are pleased to report solid financial results in the second
quarter, underpinned by strong execution across all of our business
segments,” said Lane Riggs, Valero’s Chief Executive Officer and
President. “Our refineries ran well with throughput capacity
utilization at 94 percent and our U.S. wholesale system set a sales
record of over 1 million barrels per day in May and June.”
Renewable Diesel
The Renewable Diesel segment, which consists of the Diamond
Green Diesel joint venture (DGD), reported $440 million of
operating income for the second quarter of 2023, compared to $152
million for the second quarter of 2022. Segment sales volumes
averaged 4.4 million gallons per day in the second quarter of 2023,
which was 2.2 million gallons per day higher than the second
quarter of 2022. The higher sales volumes were due to the impact of
additional volumes from the startup of the DGD Port Arthur plant in
the fourth quarter of 2022.
Ethanol
The Ethanol segment reported $127 million of operating income
for the second quarter of 2023, compared to $101 million for the
second quarter of 2022. Adjusted operating income for the second
quarter of 2022 was $79 million. Ethanol production volumes
averaged 4.4 million gallons per day in the second quarter of 2023,
which was 582 thousand gallons per day higher than the second
quarter of 2022.
Corporate and Other
General and administrative expenses were $209 million in the
second quarter of 2023, compared to $233 million in the second
quarter of 2022. The effective tax rate for the second quarter of
2023 was 22 percent.
Investing and Financing Activities
Net cash provided by operating activities was $1.5 billion in
the second quarter of 2023. Included in this amount was a $1.2
billion unfavorable change in working capital and $242 million of
adjusted net cash provided by operating activities associated with
the other joint venture member’s share of DGD, excluding changes in
DGD’s working capital. Excluding these items, adjusted net cash
provided by operating activities was $2.5 billion in the second
quarter of 2023.
Capital investments totaled $458 million in the second quarter
of 2023, of which $382 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to the other
joint venture member’s share of DGD, capital investments
attributable to Valero were $433 million.
Valero returned over $1.3 billion to stockholders in the second
quarter of 2023, of which $367 million was paid as dividends and
$951 million was for the purchase of approximately 8.4 million
shares of common stock, resulting in a payout ratio of 53 percent
of adjusted net cash provided by operating activities.
Valero continues to target an annual payout ratio between 40 and
50 percent of adjusted net cash provided by operating activities.
Valero defines payout ratio as the sum of dividends paid and the
total cost of stock buybacks divided by net cash provided by
operating activities adjusted for changes in working capital and
DGD’s net cash provided by operating activities, excluding changes
in its working capital, attributable to the other joint venture
member’s share of DGD.
On July 20, Valero announced a quarterly cash dividend on common
stock of $1.02 per share, payable on September 5, 2023 to holders
of record at the close of business on August 3, 2023.
Liquidity and Financial Position
Valero ended the second quarter of 2023 with $9.0 billion of
total debt, $2.3 billion of finance lease obligations and $5.1
billion of cash and cash equivalents. The debt to capitalization
ratio, net of cash and cash equivalents, was 18 percent as of June
30, 2023.
Strategic Update
The Port Arthur Coker project, which successfully commenced
operations in April, is operating well and at full capacity. The
new coker has increased the refinery’s throughput capacity and
enhanced its ability to process incremental volumes of heavy crudes
and residual feedstocks, while also improving turnaround
efficiency.
The Sustainable Aviation Fuel (SAF) project at the DGD Port
Arthur plant is expected to be completed in 2025 and is estimated
to cost $315 million, with half of that attributable to Valero. The
project is expected to give the plant the ability to upgrade
approximately 50 percent of its current 470 million gallon annual
renewable diesel production capacity to SAF, which is expected to
make DGD one of the largest manufacturers of SAF in the world.
“We remain committed to the core strategy that has been in place
for nearly a decade,” said Riggs. “Our focus on operational
excellence, capital discipline and honoring our commitment to
shareholder returns has served us well and will continue to anchor
our strategy going forward.”
Conference Call
Valero’s senior management will hold a conference call at 10
a.m. ET today to discuss this earnings release and to provide an
update on operations and strategy.
About Valero
Valero Energy Corporation, through its subsidiaries
(collectively, “Valero”), is a multinational manufacturer and
marketer of petroleum-based and low-carbon liquid transportation
fuels and petrochemical products, and it sells its products
primarily in the United States (“U.S.”), Canada, the United Kingdom
(“U.K.”), Ireland and Latin America. Valero owns 15 petroleum
refineries located in the U.S., Canada and the U.K. with a combined
throughput capacity of approximately 3.2 million barrels per day.
Valero is a joint venture member in Diamond Green Diesel Holdings
LLC, which owns two renewable diesel plants located in the U.S.
Gulf Coast region with a combined production capacity of
approximately 1.2 billion gallons per year, and Valero owns 12
ethanol plants located in the U.S. Mid-Continent region with a
combined production capacity of approximately 1.6 billion gallons
per year. Valero manages its operations through its Refining,
Renewable Diesel, and Ethanol segments. Please visit
investorvalero.com for more information.
Safe-Harbor Statement
Statements contained in this release and the accompanying
earnings release tables, or made during the conference call, that
state Valero’s or management’s expectations or predictions of the
future are forward-looking statements intended to be covered by the
safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. The words “believe,” “expect,”
“should,” “estimates,” “intend,” “target,” “will,” “plans,”
“forecast,” and other similar expressions identify forward-looking
statements. Forward-looking statements in this release and the
accompanying earnings release tables include, and those made on the
conference call may include, statements relating to Valero’s
low-carbon fuels strategy, expected timing, cost and performance of
projects, future market and industry conditions, future operating
and financial performance, future production and manufacturing
ability and size, and management of future risks, among other
matters. It is important to note that actual results could differ
materially from those projected in such forward-looking statements
based on numerous factors, including those outside of Valero’s
control, such as legislative or political changes or developments,
market dynamics, cyberattacks, weather events, and other matters
affecting Valero’s operations or the demand for Valero’s products.
These factors also include, but are not limited to, the
uncertainties that remain with respect to current or contemplated
legal, political or regulatory developments that are adverse to or
restrict refining and marketing operations, or that impose profits,
windfall or margin taxes or penalties, the Russia-Ukraine conflict,
the impact of inflation on margins and costs, economic activity
levels, and the adverse effects the foregoing may have on Valero’s
business plan, strategy, operations and financial performance. For
more information concerning these and other factors that could
cause actual results to differ from those expressed or forecasted,
see Valero’s annual report on Form 10-K, quarterly reports on Form
10‑Q, and other reports filed with the Securities and Exchange
Commission and available on Valero’s website at www.valero.com.
Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release
tables include references to financial measures that are not
defined under U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include adjusted net income attributable to
Valero stockholders, adjusted earnings per common share – assuming
dilution, Refining margin, Renewable Diesel margin, Ethanol margin,
adjusted Refining operating income, adjusted Ethanol operating
income, adjusted net cash provided by operating activities, and
capital investments attributable to Valero. These non-GAAP
financial measures have been included to help facilitate the
comparison of operating results between periods. See the
accompanying earnings release tables for a reconciliation of
non-GAAP measures to their most directly comparable GAAP measures.
Note (e) to the earnings release tables provides reasons for the
use of these non-GAAP financial measures.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Statement of income data
Revenues
$
34,509
$
51,641
$
70,948
$
90,183
Cost of sales:
Cost of materials and other (a)
29,430
42,946
59,435
77,895
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,440
1,626
2,917
3,005
Depreciation and amortization expense
(b)
658
590
1,308
1,185
Total cost of sales
31,528
45,162
63,660
82,085
Other operating expenses
2
15
12
34
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(c)
209
233
453
438
Depreciation and amortization expense
11
12
21
23
Operating income
2,759
6,219
6,802
7,603
Other income, net (d)
106
33
235
13
Interest and debt expense, net of
capitalized interest
(148
)
(142
)
(294
)
(287
)
Income before income tax expense
2,717
6,110
6,743
7,329
Income tax expense
595
1,342
1,475
1,594
Net income
2,122
4,768
5,268
5,735
Less: Net income attributable to
noncontrolling interests
178
75
257
137
Net income attributable to Valero Energy
Corporation stockholders
$
1,944
$
4,693
$
5,011
$
5,598
Earnings per common share
$
5.41
$
11.58
$
13.75
$
13.75
Weighted-average common shares outstanding
(in millions)
358
404
363
406
Earnings per common share – assuming
dilution
$
5.40
$
11.57
$
13.74
$
13.74
Weighted-average common shares outstanding
– assuming dilution (in millions)
358
404
363
406
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Three months ended June 30,
2023
Revenues:
Revenues from external customers
$
31,996
$
1,296
$
1,217
$
—
$
34,509
Intersegment revenues
(3
)
950
257
(1,204
)
—
Total revenues
31,993
2,246
1,474
(1,204
)
34,509
Cost of sales:
Cost of materials and other
27,773
1,643
1,199
(1,185
)
29,430
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,205
104
128
3
1,440
Depreciation and amortization expense
582
59
19
(2
)
658
Total cost of sales
29,560
1,806
1,346
(1,184
)
31,528
Other operating expenses
1
—
1
—
2
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
209
209
Depreciation and amortization expense
—
—
—
11
11
Operating income by segment
$
2,432
$
440
$
127
$
(240
)
$
2,759
Three months ended June 30,
2022
Revenues:
Revenues from external customers
$
49,495
$
855
$
1,291
$
—
$
51,641
Intersegment revenues
11
596
201
(808
)
—
Total revenues
49,506
1,451
1,492
(808
)
51,641
Cost of sales:
Cost of materials and other (a)
41,313
1,213
1,226
(806
)
42,946
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,402
58
167
(1
)
1,626
Depreciation and amortization expense
(b)
565
28
(3
)
—
590
Total cost of sales
43,280
1,299
1,390
(807
)
45,162
Other operating expenses
14
—
1
—
15
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(c)
—
—
—
233
233
Depreciation and amortization expense
—
—
—
12
12
Operating income by segment
$
6,212
$
152
$
101
$
(246
)
$
6,219
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
(e)
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Six months ended June 30, 2023
Revenues:
Revenues from external customers
$
66,403
$
2,231
$
2,314
$
—
$
70,948
Intersegment revenues
—
1,695
480
(2,175
)
—
Total revenues
66,403
3,926
2,794
(2,175
)
70,948
Cost of sales:
Cost of materials and other
56,283
2,974
2,330
(2,152
)
59,435
Operating expenses (excluding depreciation
and amortization expense reflected below)
2,466
190
258
3
2,917
Depreciation and amortization expense
1,154
117
39
(2
)
1,308
Total cost of sales
59,903
3,281
2,627
(2,151
)
63,660
Other operating expenses
11
—
1
—
12
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
453
453
Depreciation and amortization expense
—
—
—
21
21
Operating income by segment
$
6,489
$
645
$
166
$
(498
)
$
6,802
Six months ended June 30, 2022
Revenues:
Revenues from external customers
$
86,308
$
1,450
$
2,425
$
—
$
90,183
Intersegment revenues
15
982
328
(1,325
)
—
Total revenues
86,323
2,432
2,753
(1,325
)
90,183
Cost of sales:
Cost of materials and other (a)
74,919
1,968
2,330
(1,322
)
77,895
Operating expenses (excluding depreciation
and amortization expense reflected below)
2,595
109
302
(1
)
3,005
Depreciation and amortization expense
(b)
1,114
54
17
—
1,185
Total cost of sales
78,628
2,131
2,649
(1,323
)
82,085
Other operating expenses
32
—
2
—
34
General and administrative expenses
(excluding depreciation and amortization expense reflected below)
(c)
—
—
—
438
438
Depreciation and amortization expense
—
—
—
23
23
Operating income by segment
$
7,663
$
301
$
102
$
(463
)
$
7,603
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
(e)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of net income
attributable to Valero Energy Corporation stockholders to
adjusted net income attributable to Valero Energy
Corporation stockholders
Net income attributable to Valero Energy
Corporation stockholders
$
1,944
$
4,693
$
5,011
$
5,598
Adjustments:
Modification of renewable volume
obligation (RVO) (a)
—
(104
)
—
(104
)
Income tax expense related to modification
of RVO
—
23
—
23
Modification of RVO, net of taxes
—
(81
)
—
(81
)
Gain on sale of ethanol plant (b)
—
(23
)
—
(23
)
Income tax expense related to gain on sale
of ethanol plant
—
5
—
5
Gain on sale of ethanol plant, net of
taxes
—
(18
)
—
(18
)
Environmental reserve adjustment (c)
—
20
—
20
Income tax benefit related to
environmental reserve adjustment
—
(5
)
—
(5
)
Environmental reserve adjustment, net of
taxes
—
15
—
15
Loss (gain) on early retirement of debt
(d)
—
—
(11
)
50
Income tax (benefit) expense related to
loss (gain) on early retirement of debt
—
—
2
(11
)
Loss (gain) on early retirement of debt,
net of taxes
—
—
(9
)
39
Total adjustments
—
(84
)
(9
)
(45
)
Adjusted net income attributable to Valero
Energy Corporation stockholders
$
1,944
$
4,609
$
5,002
$
5,553
Reconciliation of earnings per common
share – assuming dilution to adjusted earnings per
common share – assuming dilution
Earnings per common share – assuming
dilution
$
5.40
$
11.57
$
13.74
$
13.74
Adjustments:
Modification of RVO (a)
—
(0.20
)
—
(0.20
)
Gain on sale of ethanol plant (b)
—
(0.05
)
—
(0.05
)
Environmental reserve adjustment (c)
—
0.04
—
0.04
Loss (gain) on early retirement of debt
(d)
—
—
(0.02
)
0.10
Total adjustments
—
(0.21
)
(0.02
)
(0.11
)
Adjusted earnings per common share –
assuming dilution
$
5.40
$
11.36
$
13.72
$
13.63
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
(e)
(millions of dollars)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of operating income by
segment to segment margin, and reconciliation of operating
income by segment to adjusted operating income by
segment
Refining segment
Refining operating income
$
2,432
$
6,212
$
6,489
$
7,663
Adjustments:
Modification of RVO (a)
—
(104
)
—
(104
)
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,205
1,402
2,466
2,595
Depreciation and amortization expense
582
565
1,154
1,114
Other operating expenses
1
14
11
32
Refining margin
$
4,220
$
8,089
$
10,120
$
11,300
Refining operating income
$
2,432
$
6,212
$
6,489
$
7,663
Adjustments:
Modification of RVO (a)
—
(104
)
—
(104
)
Other operating expenses
1
14
11
32
Adjusted Refining operating income
$
2,433
$
6,122
$
6,500
$
7,591
Renewable Diesel segment
Renewable Diesel operating income
$
440
$
152
$
645
$
301
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
104
58
190
109
Depreciation and amortization expense
59
28
117
54
Renewable Diesel margin
$
603
$
238
$
952
$
464
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
(e)
(millions of dollars)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of operating income by
segment to segment margin, and reconciliation of operating
income by segment to adjusted operating income by segment
(continued)
Ethanol segment
Ethanol operating income
$
127
$
101
$
166
$
102
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
128
167
258
302
Depreciation and amortization expense
(b)
19
(3
)
39
17
Other operating expenses
1
1
1
2
Ethanol margin
$
275
$
266
$
464
$
423
Ethanol operating income
$
127
$
101
$
166
$
102
Adjustments:
Gain on sale of ethanol plant (b)
—
(23
)
—
(23
)
Other operating expenses
1
1
1
2
Adjusted Ethanol operating income
$
128
$
79
$
167
$
81
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
(e)
(millions of dollars)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of Refining segment
operating income to Refining margin (by region), and
reconciliation of Refining segment operating income to
adjusted Refining segment operating
income (by region) (f)
U.S. Gulf Coast region
Refining operating income
$
1,529
$
3,399
$
4,196
$
4,395
Adjustments:
Modification of RVO (a)
—
(74
)
—
(74
)
Operating expenses (excluding depreciation
and amortization expense reflected below)
674
814
1,360
1,469
Depreciation and amortization expense
358
341
707
673
Other operating expenses
1
5
11
23
Refining margin
$
2,562
$
4,485
$
6,274
$
6,486
Refining operating income
$
1,529
$
3,399
$
4,196
$
4,395
Adjustments:
Modification of RVO (a)
—
(74
)
—
(74
)
Other operating expenses
1
5
11
23
Adjusted Refining operating income
$
1,530
$
3,330
$
4,207
$
4,344
U.S. Mid-Continent region
Refining operating income
$
323
$
959
$
925
$
1,101
Adjustments:
Modification of RVO (a)
—
(19
)
—
(19
)
Operating expenses (excluding depreciation
and amortization expense reflected below)
181
199
375
371
Depreciation and amortization expense
83
85
165
166
Refining margin
$
587
$
1,224
$
1,465
$
1,619
Refining operating income
$
323
$
959
$
925
$
1,101
Adjustment: Modification of RVO (a)
—
(19
)
—
(19
)
Adjusted Refining operating income
$
323
$
940
$
925
$
1,082
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
(e)
(millions of dollars)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of Refining segment
operating income to Refining margin (by region), and
reconciliation of Refining segment operating income to
adjusted Refining segment operating income (by region) (f)
(continued)
North Atlantic region
Refining operating income
$
311
$
1,222
$
940
$
1,508
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
178
192
358
398
Depreciation and amortization expense
66
66
129
135
Other operating expenses
—
9
—
9
Refining margin
$
555
$
1,489
$
1,427
$
2,050
Refining operating income
$
311
$
1,222
$
940
$
1,508
Adjustment: Other operating expenses
—
9
—
9
Adjusted Refining operating income
$
311
$
1,231
$
940
$
1,517
U.S. West Coast region
Refining operating income
$
269
$
632
$
428
$
659
Adjustments:
Modification of RVO (a)
—
(11
)
—
(11
)
Operating expenses (excluding depreciation
and amortization expense reflected below)
172
197
373
357
Depreciation and amortization expense
75
73
153
140
Refining margin
$
516
$
891
$
954
$
1,145
Refining operating income
$
269
$
632
$
428
$
659
Adjustment: Modification of RVO (a)
—
(11
)
—
(11
)
Adjusted Refining operating income
$
269
$
621
$
428
$
648
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
469
376
407
351
Medium/light sour crude oil
321
442
322
408
Sweet crude oil
1,462
1,413
1,475
1,418
Residuals
212
229
218
227
Other feedstocks
96
127
118
114
Total feedstocks
2,560
2,587
2,540
2,518
Blendstocks and other
409
375
410
363
Total throughput volumes
2,969
2,962
2,950
2,881
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,430
1,452
1,441
1,422
Distillates
1,119
1,135
1,109
1,081
Other products (g)
446
407
424
404
Total yields
2,995
2,994
2,974
2,907
Operating statistics (e) (h)
Refining margin
$
4,220
$
8,089
$
10,120
$
11,300
Adjusted Refining operating income
$
2,433
$
6,122
$
6,500
$
7,591
Throughput volumes (thousand barrels per
day)
2,969
2,962
2,950
2,881
Refining margin per barrel of
throughput
$
15.62
$
30.01
$
18.95
$
21.67
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.46
5.20
4.62
4.98
Depreciation and amortization expense per
barrel of throughput
2.16
2.10
2.16
2.14
Adjusted Refining operating income per
barrel of throughput
$
9.00
$
22.71
$
12.17
$
14.55
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RENEWABLE DIESEL SEGMENT
OPERATING HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Operating statistics (e) (h)
Renewable Diesel margin
$
603
$
238
$
952
$
464
Renewable Diesel operating income
$
440
$
152
$
645
$
301
Sales volumes (thousand gallons per
day)
4,400
2,182
3,698
1,961
Renewable Diesel margin per gallon of
sales
$
1.51
$
1.20
$
1.42
$
1.31
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of sales
0.26
0.29
0.28
0.31
Depreciation and amortization expense per
gallon of sales
0.15
0.15
0.18
0.15
Renewable Diesel operating income per
gallon of sales
$
1.10
$
0.76
$
0.96
$
0.85
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
ETHANOL SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Operating statistics (e) (h)
Ethanol margin
$
275
$
266
$
464
$
423
Adjusted Ethanol operating income
$
128
$
79
$
167
$
81
Production volumes (thousand gallons per
day)
4,443
3,861
4,314
3,953
Ethanol margin per gallon of
production
$
0.68
$
0.75
$
0.59
$
0.59
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of
production
0.32
0.47
0.33
0.42
Depreciation and amortization expense per
gallon of production (b)
0.05
(0.01
)
0.05
0.03
Gain on sale of ethanol plant per gallon
of production (b)
—
0.07
—
0.03
Adjusted Ethanol operating income per
gallon of production
$
0.31
$
0.22
$
0.21
$
0.11
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Operating statistics by region
(f)
U.S. Gulf Coast region (e) (h)
Refining margin
$
2,562
$
4,485
$
6,274
$
6,486
Adjusted Refining operating income
$
1,530
$
3,330
$
4,207
$
4,344
Throughput volumes (thousand barrels per
day)
1,800
1,750
1,757
1,722
Refining margin per barrel of
throughput
$
15.64
$
28.17
$
19.73
$
20.81
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.11
5.11
4.28
4.71
Depreciation and amortization expense per
barrel of throughput
2.19
2.15
2.22
2.16
Adjusted Refining operating income per
barrel of throughput
$
9.34
$
20.91
$
13.23
$
13.94
U.S. Mid-Continent region (e)
(h)
Refining margin
$
587
$
1,224
$
1,465
$
1,619
Adjusted Refining operating income
$
323
$
940
$
925
$
1,082
Throughput volumes (thousand barrels per
day)
434
449
463
434
Refining margin per barrel of
throughput
$
14.89
$
29.99
$
17.48
$
20.59
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.60
4.88
4.48
4.71
Depreciation and amortization expense per
barrel of throughput
2.10
2.09
1.97
2.12
Adjusted Refining operating income per
barrel of throughput
$
8.19
$
23.02
$
11.03
$
13.76
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Operating statistics by region (f)
(continued)
North Atlantic region (e) (h)
Refining margin
$
555
$
1,489
$
1,427
$
2,050
Adjusted Refining operating income
$
311
$
1,231
$
940
$
1,517
Throughput volumes (thousand barrels per
day)
463
483
464
484
Refining margin per barrel of
throughput
$
13.15
$
33.85
$
17.00
$
23.41
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.20
4.37
4.26
4.55
Depreciation and amortization expense per
barrel of throughput
1.56
1.49
1.54
1.53
Adjusted Refining operating income per
barrel of throughput
$
7.39
$
27.99
$
11.20
$
17.33
U.S. West Coast region (e) (h)
Refining margin
$
516
$
891
$
954
$
1,145
Adjusted Refining operating income
$
269
$
621
$
428
$
648
Throughput volumes (thousand barrels per
day)
272
280
266
241
Refining margin per barrel of
throughput
$
20.81
$
34.93
$
19.84
$
26.19
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
6.97
7.74
7.77
8.18
Depreciation and amortization expense per
barrel of throughput
3.03
2.83
3.18
3.20
Adjusted Refining operating income per
barrel of throughput
$
10.81
$
24.36
$
8.89
$
14.81
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
77.98
$
111.69
$
80.09
$
104.52
Brent less West Texas Intermediate (WTI)
crude oil
4.22
3.03
5.16
2.96
Brent less WTI Houston crude oil
3.07
1.84
3.68
1.58
Brent less Dated Brent crude oil
(0.45
)
(1.89
)
0.24
(2.90
)
Brent less Argus Sour Crude Index crude
oil
4.74
6.59
6.58
5.76
Brent less Maya crude oil
14.31
7.91
16.85
8.21
Brent less Western Canadian Select Houston
crude oil
9.23
12.34
13.30
11.00
WTI crude oil
73.76
108.66
74.94
101.56
Natural gas (dollars per million
British Thermal Units)
2.00
7.23
2.13
5.78
RVO (dollars per barrel) (i)
7.69
7.80
7.95
7.12
Product margins (RVO adjusted unless
otherwise noted)
(dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB)
gasoline less Brent
12.98
23.53
11.51
16.38
Ultra-low-sulfur (ULS) diesel less
Brent
14.64
48.15
22.46
34.83
Propylene less Brent (not RVO
adjusted)
(38.78
)
(38.56
)
(40.50
)
(33.69
)
U.S. Mid-Continent:
CBOB gasoline less WTI
23.60
28.28
20.65
18.93
ULS diesel less WTI
25.16
52.36
29.63
36.60
North Atlantic:
CBOB gasoline less Brent
22.63
33.78
16.98
22.51
ULS diesel less Brent
17.36
62.45
25.33
44.24
U.S. West Coast:
California Reformulated Gasoline
Blendstock of
Oxygenate Blending 87 gasoline less
Brent
30.63
48.04
27.67
34.16
California Air Resources Board diesel less
Brent
14.80
51.35
23.32
37.72
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Renewable Diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$
2.44
$
4.03
$
2.69
$
3.54
Biodiesel Renewable Identification Number
(RIN) (dollars per RIN)
1.51
1.70
1.57
1.57
California Low-Carbon Fuel Standard carbon
credit (dollars per metric ton)
80.81
104.30
73.25
121.47
U.S. Gulf Coast (USGC) used cooking oil
(dollars per pound)
0.57
0.80
0.60
0.79
USGC distillers corn oil (dollars per
pound)
0.60
0.81
0.62
0.79
USGC fancy bleachable tallow (dollars per
pound)
0.57
0.78
0.59
0.75
Ethanol
Chicago Board of Trade corn (dollars per
bushel)
6.27
7.77
6.44
7.24
New York Harbor ethanol (dollars per
gallon)
2.56
2.84
2.43
2.61
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
June 30,
December 31,
2023
2022
Balance sheet data
Current assets
$
23,695
$
24,133
Cash and cash equivalents included in
current assets
5,075
4,862
Inventories included in current assets
6,961
6,752
Current liabilities
14,948
17,461
Valero Energy Corporation stockholders’
equity
25,851
23,561
Total equity
27,994
25,468
Debt and finance lease obligations:
Debt –
Current portion of debt (excluding
variable interest entities (VIEs))
$
167
$
—
Debt, less current portion of debt
(excluding VIEs)
8,019
8,380
Total debt (excluding VIEs)
8,186
8,380
Current portion of debt attributable to
VIEs
800
861
Debt, less current portion of debt
attributable to VIEs
—
—
Total debt attributable to VIEs
800
861
Total debt
8,986
9,241
Finance lease obligations –
Current portion of finance lease
obligations (excluding VIEs)
176
184
Finance lease obligations, less current
portion (excluding VIEs)
1,431
1,453
Total finance lease obligations (excluding
VIEs)
1,607
1,637
Current portion of finance lease
obligations attributable to VIEs
50
64
Finance lease obligations, less current
portion attributable to VIEs
680
693
Total finance lease obligations
attributable to VIEs
730
757
Total finance lease obligations
2,337
2,394
Total debt and finance lease
obligations
$
11,323
$
11,635
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of net cash provided by
operating activities to adjusted net cash provided by
operating activities (e)
Net cash provided by operating
activities
$
1,512
$
5,845
$
4,682
$
6,433
Exclude:
Changes in current assets and current
liabilities
(1,194
)
594
(1,728
)
(128
)
Diamond Green Diesel LLC’s (DGD) adjusted
net cash provided by operating activities attributable to the other
joint venture member’s ownership interest in DGD
242
90
365
175
Adjusted net cash provided by operating
activities
$
2,464
$
5,161
$
6,045
$
6,386
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of capital investments
to capital investments attributable to Valero (e)
Capital expenditures (excluding VIEs)
$
136
$
172
$
311
$
324
Capital expenditures of VIEs:
DGD
32
239
122
458
Other VIEs
2
6
2
19
Deferred turnaround and catalyst cost
expenditures (excluding VIEs)
273
228
508
681
Deferred turnaround and catalyst cost
expenditures of DGD
15
7
39
13
Investments in nonconsolidated joint
ventures
—
1
—
1
Capital investments
458
653
982
1,496
Adjustments:
DGD’s capital investments attributable to
the other joint venture member
(23
)
(123
)
(80
)
(235
)
Capital expenditures of other VIEs
(2
)
(6
)
(2
)
(19
)
Capital investments attributable to
Valero
$
433
$
524
$
900
$
1,242
Dividends per common share
$
1.02
$
0.98
$
2.04
$
1.96
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a) Under the Renewable Fuel Standard (RFS) program, the
U.S. Environmental Protection Agency (EPA) is required to set
annual quotas for the volume of renewable fuels that obligated
parties, such as us, must blend into petroleum-based transportation
fuels consumed in the U.S. The quotas are used to determine an
obligated party’s RVO. The EPA released a final rule on June 3,
2022 that, among other things, modified the volume standards for
2020 and, for the first time, established volume standards for 2021
and 2022.
In 2020, we recognized the cost of the RVO using the 2020 quotas
set by the EPA at that time, and in 2021 and the three months ended
March 31, 2022, we recognized the cost of the RVO using our
estimates of the quotas. As a result of the final rule released by
the EPA as noted above, we recognized a benefit of $104 million in
the three and six months ended June 30, 2022 primarily related to
the modification of the 2020 quotas.
(b) Depreciation and amortization expense for the three and six
months ended June 30, 2022 includes a gain of $23 million on the
sale of our ethanol plant located in Jefferson, Wisconsin
(Jefferson ethanol plant).
(c) General and administrative expenses (excluding depreciation and
amortization expense) for the three and six months ended June 30,
2022 includes a charge of $20 million for an environmental reserve
adjustment associated with a non-operating site.
(d) “Other income, net” includes the following:
- a net gain of $11 million in the six months ended June 30, 2023
related to the early retirement of $199 million aggregate principal
amount of various series of our senior notes; and
- a charge of $50 million in the six months ended June 30, 2022
related to the early retirement of $1.4 billion aggregate principal
amount of various series of our senior notes.
(e) We use certain financial measures (as noted below) in the
earnings release tables and accompanying earnings release that are
not defined under GAAP and are considered to be non-GAAP measures.
We have defined these non-GAAP measures and believe they are useful
to the external users of our financial statements, including
industry analysts, investors, lenders, and rating agencies. We
believe these measures are useful to assess our ongoing financial
performance because, when reconciled to their most comparable GAAP
measures, they provide improved comparability between periods after
adjusting for certain items that we believe are not indicative of
our core operating performance and that may obscure our underlying
business results and trends. These non-GAAP measures should not be
considered as alternatives to their most comparable GAAP measures
nor should they be considered in isolation or as a substitute for
an analysis of our results of operations as reported under GAAP. In
addition, these non-GAAP measures may not be comparable to
similarly titled measures used by other companies because we may
define them differently, which diminishes their utility.
Non-GAAP measures are as follows:
- Adjusted net income attributable to Valero Energy
Corporation stockholders is defined as net income attributable
to Valero Energy Corporation stockholders adjusted to reflect the
items noted below, along with their related income tax effect. The
income tax effect for the adjustments was calculated using a
combined federal and state statutory rate for the U.S.-based
adjustments of 22.5 percent and a local statutory income tax rate
for foreign-based adjustments. We have adjusted for these items
because we believe that they are not indicative of our core
operating performance and that their adjustment results in an
important measure of our ongoing financial performance to better
assess our underlying business results and trends. The basis for
our belief with respect to each adjustment is provided below.
–
Modification of RVO – The net
benefit resulting from the modification of our RVO for 2020 and
2021 that was recognized by us in June 2022 is not associated with
the cost of the RVO generated by our operations during the three
and six months ended June 30, 2022. See note (a) for additional
details.
–
Gain on sale of ethanol
plant – The gain on the sale of our Jefferson ethanol plant
(see note (b)) is not indicative of our ongoing operations.
–
Environmental reserve
adjustment – The environmental reserve adjustment (see note (c)) is
attributable to a site that was shut down by prior owners and
subsequently acquired by us (referred to by us as a non-operating
site).
–
Loss (gain) on early retirement
of debt – Discounts, premiums, and other expenses recognized in
connection with the early retirement of various series of our
senior notes (see note (d)) are not associated with the ongoing
costs of our borrowing and financing activities.
- Adjusted earnings per common share – assuming dilution
is defined as adjusted net income attributable to Valero Energy
Corporation stockholders divided by the number of weighted-average
shares outstanding in the applicable period, assuming
dilution.
- Refining margin is defined as Refining segment operating
income excluding the modification of RVO adjustment (see note (a)),
operating expenses (excluding depreciation and amortization
expense), depreciation and amortization expense, and other
operating expenses. We believe Refining margin is an important
measure of our Refining segment’s operating and financial
performance as it is the most comparable measure to the industry’s
market reference product margins, which are used by industry
analysts, investors, and others to evaluate our performance.
- Renewable Diesel margin is defined as Renewable Diesel
segment operating income excluding operating expenses (excluding
depreciation and amortization expense) and depreciation and
amortization expense. We believe Renewable Diesel margin is an
important measure of our Renewable Diesel segment’s operating and
financial performance as it is the most comparable measure to the
industry’s market reference product margins, which are used by
industry analysts, investors, and others to evaluate our
performance.
- Ethanol margin is defined as Ethanol segment operating
income excluding operating expenses (excluding depreciation and
amortization expense), depreciation and amortization expense, and
other operating expenses. We believe Ethanol margin is an important
measure of our Ethanol segment’s operating and financial
performance as it is the most comparable measure to the industry’s
market reference product margins, which are used by industry
analysts, investors, and others to evaluate our performance.
- Adjusted Refining operating income is defined as
Refining segment operating income excluding the modification of RVO
adjustment (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.
- Adjusted Ethanol operating income is defined as Ethanol
segment operating income excluding the gain on sale of ethanol
plant (see note (b)) and other operating expenses. We believe
adjusted Ethanol operating income is an important measure of our
Ethanol segment’s operating and financial performance because it
excludes items that are not indicative of that segment’s core
operating performance.
- Adjusted net cash provided by operating activities is
defined as net cash provided by operating activities excluding the
items noted below. We believe adjusted net cash provided by
operating activities is an important measure of our ongoing
financial performance to better assess our ability to generate cash
to fund our investing and financing activities. The basis for our
belief with respect to each excluded item is provided below.
–
Changes in current assets and
current liabilities – Current assets net of current liabilities
represents our operating liquidity. We believe that the change in
our operating liquidity from period to period does not represent
cash generated by our operations that is available to fund our
investing and financing activities.
–
DGD’s adjusted net cash
provided by operating activities attributable to the other joint
venture member’s ownership interest in DGD – We are a 50 percent
joint venture member in DGD and we consolidate DGD’s financial
statements. Our Renewable Diesel segment includes the operations of
DGD and the associated activities to market its products. Because
we consolidate DGD’s financial statements, all of DGD’s net cash
provided by operating activities (or operating cash flow) is
included in our consolidated net cash provided by operating
activities.
DGD’s members use DGD’s
operating cash flow (excluding changes in its current assets and
current liabilities) to fund its capital investments rather than
distribute all of that cash to themselves. Nevertheless, DGD’s
operating cash flow is effectively attributable to each member and
only 50 percent of DGD’s operating cash flow should be attributed
to our net cash provided by operating activities. Therefore, we
have adjusted our net cash provided by operating activities for the
portion of DGD’s operating cash flow attributable to the other
joint venture member’s ownership interest because we believe that
it more accurately reflects the operating cash flow available to us
to fund our investing and financing activities. The adjustment is
calculated as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
DGD operating cash flow data
Net cash provided by operating
activities
$
586
$
128
$
515
$
149
Exclude: Changes in current assets and
current liabilities
102
(51
)
(216
)
(200
)
Adjusted net cash provided by operating
activities
484
179
731
349
Other joint venture member’s ownership
interest
50
%
50
%
50
%
50
%
DGD’s adjusted net cash provided by
operating activities attributable to the other joint venture
member’s ownership interest in DGD
$
242
$
90
$
365
$
175
- Capital investments attributable to Valero is defined as
all capital expenditures and deferred turnaround and catalyst cost
expenditures presented in our consolidated statements of cash
flows, excluding the portion of DGD’s capital investments
attributable to the other joint venture member and all of the
capital expenditures of VIEs other than DGD.
DGD’s members use DGD’s operating cash flow
(excluding changes in its current assets and current liabilities)
to fund its capital investments rather than distribute all of that
cash to themselves. Because DGD’s operating cash flow is
effectively attributable to each member, only 50 percent of DGD’s
capital investments should be attributed to our net share of total
capital investments. We also exclude the capital expenditures of
other VIEs that we consolidate because we do not operate those
VIEs. We believe capital investments attributable to Valero is an
important measure because it more accurately reflects our capital
investments.
(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.
(i) The RVO cost represents the average market cost on a per
barrel basis to comply with the RFS program. The RVO cost is
calculated by multiplying (i) the average market price during the
applicable period for the RINs associated with each class of
renewable fuel (i.e., biomass-based diesel, cellulosic biofuel,
advanced biofuel, and total renewable fuel) by (ii) the quotas for
the volume of each class of renewable fuel that must be blended
into petroleum-based transportation fuels consumed in the U.S., as
set or proposed by the EPA, on a percentage basis for each class of
renewable fuel and adding together the results of each calculation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726838554/en/
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Director – Investor
Relations and Finance, 210-345-3331 Gautam Srivastava, Director –
Investor Relations, 210-345-3992
Media: Lillian Riojas, Executive Director – Media Relations and
Communications, 210-345-5002
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