News / Events

Valero Energy Reports Third Quarter 2023 Results

  • Reported net income attributable to Valero stockholders of $2.6 billion, or $7.49 per share
  • Returned $2.2 billion to stockholders through dividends and stock buybacks

SAN ANTONIO--(BUSINESS WIRE)-- Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $2.6 billion, or $7.49 per share, for the third quarter of 2023, compared to $2.8 billion, or $7.19 per share, for the third quarter of 2022. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $2.8 billion, or $7.14 per share, for the third quarter of 2022.

Refining

The Refining segment reported operating income of $3.4 billion for the third quarter of 2023, compared to $3.8 billion for the third quarter of 2022. Refining throughput volumes averaged 3.0 million barrels per day in the third quarter of 2023.

“Our refineries operated well and achieved 95 percent throughput capacity utilization, which is a testament to our team’s relentless focus on operational excellence,” said Lane Riggs, Valero’s Chief Executive Officer and President. “Product demand remained strong in our U.S. wholesale system, which matched the second quarter record of over 1 million barrels per day of sales volume.”

Renewable Diesel

The Renewable Diesel segment, which consists of the Diamond Green Diesel joint venture (DGD), reported $123 million of operating income for the third quarter of 2023, compared to $212 million for the third quarter of 2022. Segment sales volumes averaged 3.0 million gallons per day in the third quarter of 2023, which was 761 thousand gallons per day higher than the third quarter of 2022. The higher sales volumes were due to the impact of additional volumes from the DGD Port Arthur plant, which started up in the fourth quarter of 2022. Operating income was lower than the third quarter of 2022 primarily due to lower renewable diesel margin in the third quarter of 2023.

Ethanol

The Ethanol segment reported $197 million of operating income for the third quarter of 2023, compared to $1 million for the third quarter of 2022. Ethanol production volumes averaged 4.3 million gallons per day in the third quarter of 2023, which was 831 thousand gallons per day higher than the third quarter of 2022. Operating income was higher than the third quarter of 2022 primarily as a result of higher production volumes and lower corn prices in the third quarter of 2023.

Corporate and Other

General and administrative expenses were $250 million in the third quarter of 2023, compared to $214 million in the third quarter of 2022. The effective tax rate for the third quarter of 2023 was 23 percent.

Investing and Financing Activities

Net cash provided by operating activities was $3.3 billion in the third quarter of 2023. Included in this amount was a $33 million favorable change in working capital and $82 million of adjusted net cash provided by operating activities associated with the other joint venture member’s share of DGD. Excluding these items, adjusted net cash provided by operating activities was $3.2 billion in the third quarter of 2023.

Capital investments totaled $394 million in the third quarter of 2023, of which $303 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 $352 million.

Valero returned $2.2 billion to stockholders in the third quarter of 2023, of which $360 million was paid as dividends and $1.8 billion was for the purchase of approximately 13 million shares of common stock, resulting in a payout ratio of 68 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.

Liquidity and Financial Position

Valero ended the third quarter of 2023 with $9.2 billion of total debt, $2.3 billion of finance lease obligations and $5.8 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 17 percent as of September 30, 2023.

Strategic Update

The Sustainable Aviation Fuel (SAF) project at the DGD Port Arthur plant remains on schedule and is expected to be completed in 2025 and cost $315 million, with half of that attributable to Valero. The project is expected to give the plant the optionality to upgrade approximately 50 percent of its current 470 million gallon renewable diesel annual production capacity to SAF. With the completion of this project, DGD is expected to become one of the largest manufacturers of SAF in the world.

“While there are broader factors that may drive market volatility, we remain focused on things we can control,” said Riggs, “including operating efficiently in a safe, reliable and environmentally responsible manner, maintaining capital discipline by adhering to a minimum return threshold on growth projects, and honoring our commitment to shareholder returns.”

Conference Call

Valero’s senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and it sells its products primarily in the United States (U.S.), Canada, the United Kingdom (U.K.), Ireland and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which owns two renewable diesel plants located in the U.S. Gulf Coast region with a combined production capacity of approximately 1.2 billion gallons per year, and Valero owns 12 ethanol plants located in the U.S. Mid-Continent region with a combined production capacity of approximately 1.6 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel and Ethanol segments. Please visit investorvalero.com for more information.

Valero Contacts

Investors:
Homer Bhullar, Vice President – Investor Relations and Finance, 210-345-1982
Eric Herbort, Director – Investor Relations 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

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, global geopolitical and other conflicts and tensions, 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

FINANCIAL HIGHLIGHTS

(millions of dollars, except per share amounts)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Statement of income data

 

 

 

 

 

 

 

Revenues

$

38,404

 

 

$

44,454

 

 

$

109,352

 

 

$

134,637

 

Cost of sales:

 

 

 

 

 

 

 

Cost of materials and other (a)

 

32,385

 

 

 

38,064

 

 

 

91,820

 

 

 

115,959

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

1,578

 

 

 

1,746

 

 

 

4,495

 

 

 

4,751

 

Depreciation and amortization expense (b)

 

671

 

 

 

621

 

 

 

1,979

 

 

 

1,806

 

Total cost of sales

 

34,634

 

 

 

40,431

 

 

 

98,294

 

 

 

122,516

 

Other operating expenses

 

6

 

 

 

6

 

 

 

18

 

 

 

40

 

General and administrative expenses (excluding

depreciation and amortization expense reflected below) (c)

 

250

 

 

 

214

 

 

 

703

 

 

 

652

 

Depreciation and amortization expense

 

11

 

 

 

11

 

 

 

32

 

 

 

34

 

Operating income

 

3,503

 

 

 

3,792

 

 

 

10,305

 

 

 

11,395

 

Other income, net (d)

 

122

 

 

 

74

 

 

 

357

 

 

 

87

 

Interest and debt expense, net of capitalized interest

 

(149

)

 

 

(138

)

 

 

(443

)

 

 

(425

)

Income before income tax expense

 

3,476

 

 

 

3,728

 

 

 

10,219

 

 

 

11,057

 

Income tax expense

 

813

 

 

 

816

 

 

 

2,288

 

 

 

2,410

 

Net income

 

2,663

 

 

 

2,912

 

 

 

7,931

 

 

 

8,647

 

Less: Net income attributable to noncontrolling interests

 

41

 

 

 

95

 

 

 

298

 

 

 

232

 

Net income attributable to Valero Energy Corporation

stockholders

$

2,622

 

 

$

2,817

 

 

$

7,633

 

 

$

8,415

 

 

 

 

 

 

 

 

 

Earnings per common share

$

7.49

 

 

$

7.20

 

 

$

21.22

 

 

$

20.94

 

Weighted-average common shares outstanding (in millions)

 

349

 

 

 

390

 

 

 

359

 

 

 

400

 

 

 

 

 

 

 

 

 

Earnings per common share – assuming dilution

$

7.49

 

 

$

7.19

 

 

$

21.21

 

 

$

20.93

 

Weighted-average common shares outstanding –

assuming dilution (in millions)

 

349

 

 

 

390

 

 

 

359

 

 

 

401

 

 

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 September 30, 2023

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

36,521

 

$

759

 

$

1,124

 

$

 

 

$

38,404

Intersegment revenues

 

8

 

 

672

 

 

310

 

 

(990

)

 

 

Total revenues

 

36,529

 

 

1,431

 

 

1,434

 

 

(990

)

 

 

38,404

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

 

31,115

 

 

1,169

 

 

1,092

 

 

(991

)

 

 

32,385

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

1,366

 

 

84

 

 

125

 

 

3

 

 

 

1,578

Depreciation and amortization expense

 

597

 

 

55

 

 

20

 

 

(1

)

 

 

671

Total cost of sales

 

33,078

 

 

1,308

 

 

1,237

 

 

(989

)

 

 

34,634

Other operating expenses

 

6

 

 

 

 

 

 

 

 

 

6

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

250

 

 

 

250

Depreciation and amortization expense

 

 

 

 

 

 

 

11

 

 

 

11

Operating income by segment

$

3,445

 

$

123

 

$

197

 

$

(262

)

 

$

3,503

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2022

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

42,280

 

$

967

 

$

1,207

 

$

 

 

$

44,454

Intersegment revenues

 

9

 

 

508

 

 

179

 

 

(696

)

 

 

Total revenues

 

42,289

 

 

1,475

 

 

1,386

 

 

(696

)

 

 

44,454

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

 

36,389

 

 

1,161

 

 

1,203

 

 

(689

)

 

 

38,064

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

1,516

 

 

69

 

 

162

 

 

(1

)

 

 

1,746

Depreciation and amortization expense

 

568

 

 

33

 

 

20

 

 

 

 

 

621

Total cost of sales

 

38,473

 

 

1,263

 

 

1,385

 

 

(690

)

 

 

40,431

Other operating expenses

 

6

 

 

 

 

 

 

 

 

 

6

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

214

 

 

 

214

Depreciation and amortization expense

 

 

 

 

 

 

 

11

 

 

 

11

Operating income by segment

$

3,810

 

$

212

 

$

1

 

$

(231

)

 

$

3,792

 

See Operating Highlights by Segment.

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

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

102,924

 

$

2,990

 

$

3,438

 

$

 

 

$

109,352

Intersegment revenues

 

8

 

 

2,367

 

 

790

 

 

(3,165

)

 

 

Total revenues

 

102,932

 

 

5,357

 

 

4,228

 

 

(3,165

)

 

 

109,352

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

 

87,398

 

 

4,143

 

 

3,422

 

 

(3,143

)

 

 

91,820

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

3,832

 

 

274

 

 

383

 

 

6

 

 

 

4,495

Depreciation and amortization expense

 

1,751

 

 

172

 

 

59

 

 

(3

)

 

 

1,979

Total cost of sales

 

92,981

 

 

4,589

 

 

3,864

 

 

(3,140

)

 

 

98,294

Other operating expenses

 

17

 

 

 

 

1

 

 

 

 

 

18

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

703

 

 

 

703

Depreciation and amortization expense

 

 

 

 

 

 

 

32

 

 

 

32

Operating income by segment

$

9,934

 

$

768

 

$

363

 

$

(760

)

 

$

10,305

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2022

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

128,588

 

$

2,417

 

$

3,632

 

$

 

 

$

134,637

Intersegment revenues

 

24

 

 

1,490

 

 

507

 

 

(2,021

)

 

 

Total revenues

 

128,612

 

 

3,907

 

 

4,139

 

 

(2,021

)

 

 

134,637

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other (a)

 

111,308

 

 

3,129

 

 

3,533

 

 

(2,011

)

 

 

115,959

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

4,111

 

 

178

 

 

464

 

 

(2

)

 

 

4,751

Depreciation and amortization expense (b)

 

1,682

 

 

87

 

 

37

 

 

 

 

 

1,806

Total cost of sales

 

117,101

 

 

3,394

 

 

4,034

 

 

(2,013

)

 

 

122,516

Other operating expenses

 

38

 

 

 

 

2

 

 

 

 

 

40

General and administrative expenses (excluding

depreciation and amortization expense reflected

below) (c)

 

 

 

 

 

 

 

652

 

 

 

652

Depreciation and amortization expense

 

 

 

 

 

 

 

34

 

 

 

34

Operating income by segment

$

11,473

 

$

513

 

$

103

 

$

(694

)

 

$

11,395

 

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 (h)

(millions of dollars)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 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

$

2,622

 

$

2,817

 

 

$

7,633

 

 

$

8,415

 

Adjustments:

 

 

 

 

 

 

 

Modification of renewable volume obligation (RVO) (a)

 

 

 

 

 

 

 

 

 

(104

)

Income tax expense related to modification of RVO

 

 

 

 

 

 

 

 

 

23

 

Modification of RVO, net of taxes

 

 

 

 

 

 

 

 

 

(81

)

Gain on sale of ethanol plant (b)

 

 

 

 

 

 

 

 

 

(23

)

Income tax expense related to gain on sale of ethanol plant

 

 

 

 

 

 

 

 

 

5

 

Gain on sale of ethanol plant, net of taxes

 

 

 

 

 

 

 

 

 

(18

)

Environmental reserve adjustment (c)

 

 

 

 

 

 

 

 

 

20

 

Income tax benefit related to environmental reserve adjustment

 

 

 

 

 

 

 

 

 

(5

)

Environmental reserve adjustment, net of taxes

 

 

 

 

 

 

 

 

 

15

 

Loss (gain) on early retirement of debt (d)

 

 

 

(26

)

 

 

(11

)

 

 

24

 

Income tax (benefit) expense related to loss (gain) on early

retirement of debt

 

 

 

5

 

 

 

2

 

 

 

(6

)

Loss (gain) on early retirement of debt, net of taxes

 

 

 

(21

)

 

 

(9

)

 

 

18

 

Total adjustments

 

 

 

(21

)

 

 

(9

)

 

 

(66

)

Adjusted net income attributable to

Valero Energy Corporation stockholders

$

2,622

 

$

2,796

 

 

$

7,624

 

 

$

8,349

 

Reconciliation of earnings per common share –

assuming dilution to adjusted earnings per common

share – assuming dilution

 

 

 

 

 

 

 

Earnings per common share – assuming dilution

$

7.49

 

$

7.19

 

 

$

21.21

 

 

$

20.93

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

 

 

(0.20

)

Gain on sale of ethanol plant (b)

 

 

 

 

 

 

 

 

 

(0.05

)

Environmental reserve adjustment (c)

 

 

 

 

 

 

 

 

 

0.04

 

Loss (gain) on early retirement of debt (d)

 

 

 

(0.05

)

 

 

(0.02

)

 

 

0.05

 

Total adjustments

 

 

 

(0.05

)

 

 

(0.02

)

 

 

(0.16

)

Adjusted earnings per common share – assuming dilution

$

7.49

 

$

7.14

 

 

$

21.19

 

 

$

20.77

 

 

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
September 30,

 

Nine Months Ended
September 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

$

3,445

 

$

3,810

 

$

9,934

 

$

11,473

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(104

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

1,366

 

 

1,516

 

 

3,832

 

 

4,111

 

Depreciation and amortization expense

 

597

 

 

568

 

 

1,751

 

 

1,682

 

Other operating expenses

 

6

 

 

6

 

 

17

 

 

38

 

Refining margin

$

5,414

 

$

5,900

 

$

15,534

 

$

17,200

 

 

 

 

 

 

 

 

 

Refining operating income

$

3,445

 

$

3,810

 

$

9,934

 

$

11,473

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(104

)

Other operating expenses

 

6

 

 

6

 

 

17

 

 

38

 

Adjusted Refining operating income

$

3,451

 

$

3,816

 

$

9,951

 

$

11,407

 

 

 

 

 

 

 

 

 

Renewable Diesel segment

 

 

 

 

 

 

 

Renewable Diesel operating income

$

123

 

$

212

 

$

768

 

$

513

 

Adjustments:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

84

 

 

69

 

 

274

 

 

178

 

Depreciation and amortization expense

 

55

 

 

33

 

 

172

 

 

87

 

Renewable Diesel margin

$

262

 

$

314

 

$

1,214

 

$

778

 

 

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
September 30,

 

Nine Months Ended
September 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

$

197

 

$

1

 

$

363

 

$

103

 

Adjustments:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

125

 

 

162

 

 

383

 

 

464

 

Depreciation and amortization expense (b)

 

20

 

 

20

 

 

59

 

 

37

 

Other operating expenses

 

 

 

 

 

1

 

 

2

 

Ethanol margin

$

342

 

$

183

 

$

806

 

$

606

 

 

 

 

 

 

 

 

 

Ethanol operating income

$

197

 

$

1

 

$

363

 

$

103

 

Adjustments:

 

 

 

 

 

 

 

Gain on sale of ethanol plant (b)

 

 

 

 

 

 

 

(23

)

Other operating expenses

 

 

 

 

 

1

 

 

2

 

Adjusted Ethanol operating income

$

197

 

$

1

 

$

364

 

$

82

 

 

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
September 30,

 

Nine Months Ended

September 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

$

1,799

 

$

2,072

 

$

5,995

 

$

6,467

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(74

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

761

 

 

870

 

 

2,121

 

 

2,339

 

Depreciation and amortization expense

 

375

 

 

350

 

 

1,082

 

 

1,023

 

Other operating expenses

 

 

 

6

 

 

11

 

 

29

 

Refining margin

$

2,935

 

$

3,298

 

$

9,209

 

$

9,784

 

 

 

 

 

 

 

 

 

Refining operating income

$

1,799

 

$

2,072

 

$

5,995

 

$

6,467

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(74

)

Other operating expenses

 

 

 

6

 

 

11

 

 

29

 

Adjusted Refining operating income

$

1,799

 

$

2,078

 

$

6,006

 

$

6,422

 

 

 

 

 

 

 

 

 

U.S. Mid-Continent region

 

 

 

 

 

 

 

Refining operating income

$

582

 

$

600

 

$

1,507

 

$

1,701

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(19

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

194

 

 

210

 

 

569

 

 

581

 

Depreciation and amortization expense

 

85

 

 

85

 

 

250

 

 

251

 

Refining margin

$

861

 

$

895

 

$

2,326

 

$

2,514

 

 

 

 

 

 

 

 

 

Refining operating income

$

582

 

$

600

 

$

1,507

 

$

1,701

 

Adjustment: Modification of RVO (a)

 

 

 

 

 

 

 

(19

)

Adjusted Refining operating income

$

582

 

$

600

 

$

1,507

 

$

1,682

 

 

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
September 30,

 

Nine Months Ended
September 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

$

612

 

$

785

 

$

1,552

 

$

2,293

 

Adjustments:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

189

 

 

226

 

 

547

 

 

624

 

Depreciation and amortization expense

 

63

 

 

62

 

 

192

 

 

197

 

Other operating expenses

 

1

 

 

 

 

1

 

 

9

 

Refining margin

$

865

 

$

1,073

 

$

2,292

 

$

3,123

 

 

 

 

 

 

 

 

 

Refining operating income

$

612

 

$

785

 

$

1,552

 

$

2,293

 

Adjustment: Other operating expenses

 

1

 

 

 

 

1

 

 

9

 

Adjusted Refining operating income

$

613

 

$

785

 

$

1,553

 

$

2,302

 

 

 

 

 

 

 

 

 

U.S. West Coast region

 

 

 

 

 

 

 

Refining operating income

$

452

 

$

353

 

$

880

 

$

1,012

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(11

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

 

222

 

 

210

 

 

595

 

 

567

 

Depreciation and amortization expense

 

74

 

 

71

 

 

227

 

 

211

 

Other operating expenses

 

5

 

 

 

 

5

 

 

 

Refining margin

$

753

 

$

634

 

$

1,707

 

$

1,779

 

 

 

 

 

 

 

 

 

Refining operating income

$

452

 

$

353

 

$

880

 

$

1,012

 

Adjustments:

 

 

 

 

 

 

 

Modification of RVO (a)

 

 

 

 

 

 

 

(11

)

Other operating expenses

 

5

 

 

 

 

5

 

 

 

Adjusted Refining operating income

$

457

 

$

353

 

$

885

 

$

1,001

 

 

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
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Throughput volumes (thousand barrels per day)

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

Heavy sour crude oil

 

496

 

 

325

 

 

437

 

 

342

Medium/light sour crude oil

 

312

 

 

497

 

 

319

 

 

438

Sweet crude oil

 

1,514

 

 

1,479

 

 

1,488

 

 

1,439

Residuals

 

192

 

 

214

 

 

209

 

 

223

Other feedstocks

 

119

 

 

123

 

 

118

 

 

117

Total feedstocks

 

2,633

 

 

2,638

 

 

2,571

 

 

2,559

Blendstocks and other

 

389

 

 

367

 

 

403

 

 

364

Total throughput volumes

 

3,022

 

 

3,005

 

 

2,974

 

 

2,923

 

 

 

 

 

 

 

 

Yields (thousand barrels per day)

 

 

 

 

 

 

 

Gasolines and blendstocks

 

1,473

 

 

1,457

 

 

1,452

 

 

1,434

Distillates

 

1,158

 

 

1,158

 

 

1,125

 

 

1,107

Other products (g)

 

428

 

 

418

 

 

425

 

 

409

Total yields

 

3,059

 

 

3,033

 

 

3,002

 

 

2,950

 

 

 

 

 

 

 

 

Operating statistics (e) (h)

 

 

 

 

 

 

 

Refining margin

$

5,414

 

$

5,900

 

$

15,534

 

$

17,200

Adjusted Refining operating income

$

3,451

 

$

3,816

 

$

9,951

 

$

11,407

Throughput volumes (thousand barrels per day)

 

3,022

 

 

3,005

 

 

2,974

 

 

2,923

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

19.47

 

$

21.34

 

$

19.13

 

$

21.55

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

 

4.91

 

 

5.48

 

 

4.72

 

 

5.15

Depreciation and amortization expense per barrel of

throughput

 

2.15

 

 

2.06

 

 

2.15

 

 

2.11

Adjusted Refining operating income per barrel of

throughput

$

12.41

 

$

13.80

 

$

12.26

 

$

14.29

 

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
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Operating statistics (e) (h)

 

 

 

 

 

 

 

Renewable Diesel margin

$

262

 

$

314

 

$

1,214

 

$

778

Renewable Diesel operating income

$

123

 

$

212

 

$

768

 

$

513

Sales volumes (thousand gallons per day)

 

2,992

 

 

2,231

 

 

3,460

 

 

2,084

 

 

 

 

 

 

 

 

Renewable Diesel margin per gallon of sales

$

0.95

 

$

1.53

 

$

1.29

 

$

1.37

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of sales

 

0.30

 

 

0.34

 

 

0.29

 

 

0.32

Depreciation and amortization expense per gallon of sales

 

0.20

 

 

0.15

 

 

0.19

 

 

0.15

Renewable Diesel operating income per gallon of sales

$

0.45

 

$

1.04

 

$

0.81

 

$

0.90

 

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

September 30,

 

Nine Months Ended

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Operating statistics (e) (h)

 

 

 

 

 

 

 

Ethanol margin

$

342

 

$

183

 

$

806

 

$

606

Adjusted Ethanol operating income

$

197

 

$

1

 

$

364

 

$

82

Production volumes (thousand gallons per day)

 

4,329

 

 

3,498

 

 

4,319

 

 

3,799

 

 

 

 

 

 

 

 

Ethanol margin per gallon of production

$

0.86

 

$

0.57

 

$

0.68

 

$

0.59

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of production

 

0.32

 

 

0.50

 

 

0.32

 

 

0.45

Depreciation and amortization expense per gallon of production (b)

 

0.05

 

 

0.07

 

 

0.05

 

 

0.04

Gain on sale of ethanol plant per gallon of production (b)

 

 

 

 

 

 

 

0.02

Adjusted Ethanol operating income per gallon of production

$

0.49

 

$

 

$

0.31

 

$

0.08

 

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
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Operating statistics by region (f)

 

 

 

 

 

 

 

U.S. Gulf Coast region (e) (h)

 

 

 

 

 

 

 

Refining margin

$

2,935

 

$

3,298

 

$

9,209

 

$

9,784

Adjusted Refining operating income

$

1,799

 

$

2,078

 

$

6,006

 

$

6,422

Throughput volumes (thousand barrels per day)

 

1,834

 

 

1,813

 

 

1,783

 

 

1,752

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

17.39

 

$

19.76

 

$

18.92

 

$

20.45

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

 

4.51

 

 

5.21

 

 

4.36

 

 

4.89

Depreciation and amortization expense per barrel of

throughput

 

2.22

 

 

2.09

 

 

2.22

 

 

2.14

Adjusted Refining operating income per barrel of

throughput

$

10.66

 

$

12.46

 

$

12.34

 

$

13.42

 

 

 

 

 

 

 

 

U.S. Mid-Continent region (e) (h)

 

 

 

 

 

 

 

Refining margin

$

861

 

$

895

 

$

2,326

 

$

2,514

Adjusted Refining operating income

$

582

 

$

600

 

$

1,507

 

$

1,682

Throughput volumes (thousand barrels per day)

 

456

 

 

441

 

 

461

 

 

437

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

20.53

 

$

22.07

 

$

18.49

 

$

21.10

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

 

4.62

 

 

5.19

 

 

4.52

 

 

4.88

Depreciation and amortization expense per barrel of

throughput

 

2.02

 

 

2.10

 

 

1.98

 

 

2.11

Adjusted Refining operating income per barrel of

throughput

$

13.89

 

$

14.78

 

$

11.99

 

$

14.11

 

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
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Operating statistics by region (f) (continued)

 

 

 

 

 

 

 

North Atlantic region (e) (h)

 

 

 

 

 

 

 

Refining margin

$

865

 

$

1,073

 

$

2,292

 

$

3,123

Adjusted Refining operating income

$

613

 

$

785

 

$

1,553

 

$

2,302

Throughput volumes (thousand barrels per day)

 

461

 

 

479

 

 

463

 

 

482

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

20.39

 

$

24.34

 

$

18.14

 

$

23.72

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

 

4.47

 

 

5.11

 

 

4.33

 

 

4.74

Depreciation and amortization expense per barrel of

throughput

 

1.48

 

 

1.43

 

 

1.52

 

 

1.50

Adjusted Refining operating income per barrel of

throughput

$

14.44

 

$

17.80

 

$

12.29

 

$

17.48

 

 

 

 

 

 

 

 

U.S. West Coast region (e) (h)

 

 

 

 

 

 

 

Refining margin

$

753

 

$

634

 

$

1,707

 

$

1,779

Adjusted Refining operating income

$

457

 

$

353

 

$

885

 

$

1,001

Throughput volumes (thousand barrels per day)

 

271

 

 

272

 

 

267

 

 

252

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

30.19

 

$

25.36

 

$

23.38

 

$

25.89

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

 

8.89

 

 

8.39

 

 

8.15

 

 

8.26

Depreciation and amortization expense per barrel of

throughput

 

2.97

 

 

2.84

 

 

3.11

 

 

3.07

Adjusted Refining operating income per barrel of

throughput

$

18.33

 

$

14.13

 

$

12.12

 

$

14.56

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Refining

 

 

 

 

 

 

 

Feedstocks (dollars per barrel)

 

 

 

 

 

 

 

Brent crude oil

$

86.18

 

 

$

97.59

 

 

$

82.12

 

 

$

102.21

 

Brent less West Texas Intermediate (WTI) crude oil

 

3.72

 

 

 

5.83

 

 

 

4.68

 

 

 

3.91

 

Brent less WTI Houston crude oil

 

2.21

 

 

 

3.69

 

 

 

3.19

 

 

 

2.28

 

Brent less Dated Brent crude oil

 

(0.78

)

 

 

(2.97

)

 

 

(0.10

)

 

 

(2.92

)

Brent less Argus Sour Crude Index crude oil

 

3.43

 

 

 

8.23

 

 

 

5.53

 

 

 

6.58

 

Brent less Maya crude oil

 

8.77

 

 

 

13.11

 

 

 

14.16

 

 

 

9.84

 

Brent less Western Canadian Select Houston crude oil

 

9.98

 

 

 

17.68

 

 

 

12.19

 

 

 

13.22

 

WTI crude oil

 

82.46

 

 

 

91.76

 

 

 

77.44

 

 

 

98.29

 

 

 

 

 

 

 

 

 

Natural gas (dollars per million British Thermal Units)

 

2.38

 

 

 

7.31

 

 

 

2.21

 

 

 

6.29

 

 

 

 

 

 

 

 

 

RVO (dollars per barrel) (i)

 

7.42

 

 

 

8.11

 

 

 

7.77

 

 

 

7.45

 

 

 

 

 

 

 

 

 

Product margins (RVO adjusted unless otherwise noted)

(dollars per barrel)

 

 

 

 

 

 

 

U.S. Gulf Coast:

 

 

 

 

 

 

 

Conventional Blendstock of Oxygenate Blending (CBOB)

gasoline less Brent

 

14.70

 

 

 

5.70

 

 

 

12.57

 

 

 

12.82

 

Ultra-low-sulfur (ULS) diesel less Brent

 

30.87

 

 

 

41.01

 

 

 

25.26

 

 

 

36.89

 

Propylene less Brent (not RVO adjusted)

 

(57.98

)

 

 

(46.73

)

 

 

(46.32

)

 

 

(38.04

)

U.S. Mid-Continent:

 

 

 

 

 

 

 

CBOB gasoline less WTI

 

25.46

 

 

 

19.27

 

 

 

22.25

 

 

 

19.04

 

ULS diesel less WTI

 

37.10

 

 

 

52.25

 

 

 

32.12

 

 

 

41.81

 

North Atlantic:

 

 

 

 

 

 

 

CBOB gasoline less Brent

 

22.93

 

 

 

20.17

 

 

 

18.96

 

 

 

21.73

 

ULS diesel less Brent

 

33.91

 

 

 

44.19

 

 

 

28.19

 

 

 

44.22

 

U.S. West Coast:

 

 

 

 

 

 

 

California Reformulated Gasoline Blendstock of

Oxygenate Blending 87 gasoline less Brent

 

43.33

 

 

 

41.48

 

 

 

32.89

 

 

 

36.59

 

California Air Resources Board diesel less Brent

 

47.66

 

 

 

43.68

 

 

 

31.43

 

 

 

39.70

 

 

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Renewable Diesel

 

 

 

 

 

 

 

New York Mercantile Exchange ULS diesel

(dollars per gallon)

$

3.03

 

$

3.55

 

$

2.80

 

$

3.54

Biodiesel Renewable Identification Number (RIN)

(dollars per RIN)

 

1.40

 

 

1.71

 

 

1.51

 

 

1.61

California Low-Carbon Fuel Standard carbon credit

(dollars per metric ton)

 

74.46

 

 

86.21

 

 

73.65

 

 

109.71

U.S. Gulf Coast (USGC) used cooking oil (dollars per pound)

 

0.64

 

 

0.73

 

 

0.61

 

 

0.77

USGC distillers corn oil (dollars per pound)

 

0.72

 

 

0.73

 

 

0.65

 

 

0.77

USGC fancy bleachable tallow (dollars per pound)

 

0.68

 

 

0.78

 

 

0.62

 

 

0.76

 

 

 

 

 

 

 

 

Ethanol

 

 

 

 

 

 

 

Chicago Board of Trade corn (dollars per bushel)

 

4.99

 

 

6.60

 

 

5.95

 

 

7.02

New York Harbor ethanol (dollars per gallon)

 

2.39

 

 

2.58

 

 

2.42

 

 

2.60

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

 

September 30,

 

December 31,

 

 

2023

 

 

2022

Balance sheet data

 

 

 

Current assets

$

26,577

 

$

24,133

Cash and cash equivalents included in current assets

 

5,831

 

 

4,862

Inventories included in current assets

 

7,513

 

 

6,752

Current liabilities

 

17,592

 

 

17,461

Valero Energy Corporation stockholders’ equity

 

25,975

 

 

23,561

Total equity

 

28,057

 

 

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)

 

8,020

 

 

8,380

Total debt (excluding VIEs)

 

8,187

 

 

8,380

Current portion of debt attributable to VIEs

 

963

 

 

861

Debt, less current portion of debt attributable to VIEs

 

 

 

Total debt attributable to VIEs

 

963

 

 

861

Total debt

 

9,150

 

 

9,241

Finance lease obligations –

 

 

 

Current portion of finance lease obligations (excluding VIEs)

 

179

 

 

184

Finance lease obligations, less current portion (excluding VIEs)

 

1,411

 

 

1,453

Total finance lease obligations (excluding VIEs)

 

1,590

 

 

1,637

Current portion of finance lease obligations attributable to VIEs

 

25

 

 

64

Finance lease obligations, less current portion attributable to VIEs

 

676

 

 

693

Total finance lease obligations attributable to VIEs

 

701

 

 

757

Total finance lease obligations

 

2,291

 

 

2,394

Total debt and finance lease obligations

$

11,441

 

$

11,635

 

Three Months Ended
September 30,

 

Nine Months Ended
September 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

$

3,308

 

$

2,045

 

 

$

7,990

 

 

$

8,478

 

Exclude:

 

 

 

 

 

 

 

Changes in current assets and current liabilities

 

33

 

 

(1,489

)

 

 

(1,695

)

 

 

(1,617

)

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

 

82

 

 

119

 

 

 

447

 

 

 

294

 

Adjusted net cash provided by operating activities

$

3,193

 

$

3,415

 

 

$

9,238

 

 

$

9,801

 

 

 

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
September 30,

 

Nine Months Ended
September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Reconciliation of capital investments to capital

investments attributable to Valero (e)

 

 

 

 

 

 

 

Capital expenditures (excluding VIEs)

$

157

 

 

$

228

 

 

$

468

 

 

$

552

 

Capital expenditures of VIEs:

 

 

 

 

 

 

 

DGD

 

61

 

 

 

224

 

 

 

183

 

 

 

682

 

Other VIEs

 

2

 

 

 

11

 

 

 

4

 

 

 

30

 

Deferred turnaround and catalyst cost expenditures

(excluding VIEs)

 

157

 

 

 

139

 

 

 

665

 

 

 

820

 

Deferred turnaround and catalyst cost expenditures

of DGD

 

17

 

 

 

 

 

 

56

 

 

 

13

 

Investments in nonconsolidated joint ventures

 

 

 

 

 

 

 

 

 

 

1

 

Capital investments

 

394

 

 

 

602

 

 

 

1,376

 

 

 

2,098

 

Adjustments:

 

 

 

 

 

 

 

DGD’s capital investments attributable to the other joint

venture member

 

(40

)

 

 

(112

)

 

 

(120

)

 

 

(347

)

Capital expenditures of other VIEs

 

(2

)

 

 

(11

)

 

 

(4

)

 

 

(30

)

Capital investments attributable to Valero

$

352

 

 

$

479

 

 

$

1,252

 

 

$

1,721

 

 

 

 

 

 

 

 

 

Dividends per common share

$

1.02

 

 

$

0.98

 

 

$

3.06

 

 

$

2.94

 

 

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 nine months ended September 30, 2022 primarily related to the modification of the 2020 quotas.

 

(b)

Depreciation and amortization expense for the nine months ended September 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 nine months ended September 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 nine months ended September 30, 2023 related to the early retirement of $199 million aggregate principal amount of various series of our senior notes; and

 

 

 

 

 

°

a gain of $26 million in the three months ended September 30, 2022 and a net charge of $24 million in the nine months ended September 30, 2022 related to the early retirement of $1.25 billion and $2.65 billion, respectively, 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 nine months ended September 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
September 30,

 

Nine Months Ended
September 30,

     

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

     

DGD operating cash flow data

 

 

 

 

 

 

 

     

Net cash provided by (used in) operating activities

$

(28

)

 

$

512

 

 

$

487

 

 

$

661

 

     

Exclude: Changes in current assets and current

liabilities

 

(192

)

 

 

273

 

 

 

(408

)

 

 

73

 

     

Adjusted net cash provided by operating

activities

 

164

 

 

 

239

 

 

 

895

 

 

 

588

 

     

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

$

82

 

 

$

119

 

 

$

447

 

 

$

294

 

       

 

°

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.

 

Valero Contacts

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

Source: Valero Energy Corporation