- Reported net income attributable to Valero stockholders of $905
million, or $2.21 per share
- Reported adjusted net income attributable to Valero
stockholders of $944 million, or $2.31 per share
- Returned $545 million in cash to stockholders, with $401
million paid as dividends and $144 million of stock buybacks
- Reduced Valero’s long-term debt by $750 million in the first
quarter and by $2.0 billion in six months
- Accelerated the expected completion of the Diamond Green Diesel
project at Port Arthur (DGD 3) to the fourth quarter of 2022
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $905 million, or
$2.21 per share, for the first quarter of 2022, compared to a net
loss of $704 million, or $1.73 per share, for the first quarter of
2021. Excluding the adjustments shown in the accompanying earnings
release tables, first quarter 2022 adjusted net income attributable
to Valero stockholders was $944 million, or $2.31 per share,
compared to an adjusted net loss of $666 million, or $1.64 per
share, for the first quarter of 2021.
“We are pleased to report solid financial results for the first
quarter, led by a continued recovery in our refining segment,” said
Joe Gorder, Valero Chairman and Chief Executive Officer. “The
fundamentals that drove strong results in the first quarter,
particularly in March, continue to provide a positive backdrop for
refining margins.”
Refining
The Refining segment reported $1.45 billion of operating income
for the first quarter of 2022, compared to a $592 million operating
loss for the first quarter of 2021. First quarter 2022 adjusted
operating income was $1.47 billion, compared to an adjusted
operating loss of $506 million for the first quarter of 2021.
Refinery throughput volumes averaged 2.8 million barrels per day in
the first quarter of 2022, which was 390 thousand barrels per day
higher than the first quarter of 2021.
Renewable Diesel
The Renewable Diesel segment, which consists of the Diamond
Green Diesel (DGD) joint venture, reported $149 million of
operating income for the first quarter of 2022, compared to $203
million for the first quarter of 2021. Renewable diesel sales
volumes averaged 1.7 million gallons per day in the first quarter
of 2022, which was 871 thousand gallons per day higher than the
first quarter of 2021. The higher sales volumes in the first
quarter of 2022 were attributable to the fourth quarter 2021
startup of the DGD expansion project (DGD 2).
Ethanol
The Ethanol segment reported $1 million of operating income for
the first quarter of 2022, compared to a $56 million operating loss
for the first quarter of 2021. Ethanol production volumes averaged
4.0 million gallons per day in the first quarter of 2022, which was
483 thousand gallons per day higher than the first quarter of
2021.
Corporate and Other
General and administrative expenses were $205 million in the
first quarter of 2022, compared to $208 million in the first
quarter of 2021. The effective tax rate for the first quarter of
2022 was 21 percent.
Investing and Financing Activities
Net cash provided by operating activities was $588 million in
the first quarter of 2022. Included in this amount was a $722
million unfavorable impact from working capital and $85 million
associated with the other joint venture member’s share of DGD’s net
cash provided by operating activities, excluding changes in DGD’s
working capital. Excluding these items, adjusted net cash provided
by operating activities was $1.2 billion in the first quarter of
2022.
Capital investments totaled $843 million in the first quarter of
2022, of which $536 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 50 percent share of DGD and those related to
other variable interest entities, capital investments attributable
to Valero were $718 million.
Valero returned $545 million to stockholders, with $401 million
paid as dividends and $144 million of stock buybacks.
Valero continues to target an annual long-term total payout
ratio between 40 and 50 percent of adjusted net cash provided by
operating activities. Valero defines total payout ratio as the sum
of dividends and stock buybacks divided by net cash provided by
operating activities adjusted for changes in working capital and
DGD’s net cash provided by operating activities, excluding changes
in its working capital, attributable to the other joint venture
member’s ownership interest in DGD.
In the first quarter, Valero completed debt reduction and
refinancing transactions that reduced its long-term debt by $750
million. These debt reduction and refinancing transactions,
combined with debt reduction and refinancing transactions completed
in the third and fourth quarters of 2021, have reduced Valero’s
long-term debt by $2.0 billion.
Liquidity and Financial Position
Valero ended the first quarter of 2022 with $13.2 billion of
total debt and finance lease obligations and $2.6 billion of cash
and cash equivalents. The debt to capitalization ratio, net of cash
and cash equivalents, was 34 percent as of March 31, 2022.
Strategic Update
The DGD project located next to Valero’s Port Arthur refinery
(DGD 3), which is expected to have a renewable diesel production
capacity of 470 million gallons per year, is now expected to
commence operations in the fourth quarter of 2022, versus the prior
estimate of the first quarter of 2023. The total annual DGD
production capacity is expected to increase to approximately 1.2
billion gallons of renewable diesel and 50 million gallons of
renewable naphtha.
“We expect low-carbon fuel policies to continue to expand
globally and drive demand for low-carbon fuels,” said Gorder, “and
with that view, we are leveraging our operational and technical
expertise to steadily expand our competitive advantage.”
BlackRock and Navigator’s large-scale carbon sequestration
project is expected to begin startup activities in late 2024.
Valero is expected to be the anchor shipper with eight of Valero’s
ethanol plants connected to this system, producing a lower carbon
intensity ethanol product to be marketed in low-carbon fuel markets
that is expected to result in a higher product margin.
Refinery optimization projects that are expected to reduce cost
and improve margin capture are progressing on schedule. The Port
Arthur Coker project, which is expected to increase the refinery’s
utilization rate and improve turnaround efficiency, is still
expected to be completed in the first half of 2023.
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
We are a multinational manufacturer and marketer of
petroleum-based and low-carbon liquid transportation fuels and
petrochemical products, and we sell our products primarily in the
United States (U.S.), Canada, the United Kingdom (U.K.), Ireland,
and Latin America. We own 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 (BPD). We are a joint
venture member in Diamond Green Diesel Holdings LLC (DGD), which
owns a renewable diesel plant in Norco, Louisiana with a production
capacity of 700 million gallons per year, and we own 12 ethanol
plants located in the Mid-Continent region of the U.S. with a
combined production capacity of approximately 1.6 billion gallons
per year. We manage our operations through our Refining, Renewable
Diesel, and Ethanol segments. Please visit www.investorvalero.com
for more information.
Valero Contacts
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Senior Manager – Investor
Relations, 210-345-3331 Gautam Srivastava, Senior Manager –
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 tables
that state the company’s or management’s expectations or
predictions of the future are forward-looking statements intended
to be covered by the safe harbor provisions of the Securities Act
of 1933 and the Securities Exchange Act of 1934. The words
“believe,” “expect,” “should,” “estimates,” “intend,” “target,”
“will,” “plans,” “forecast,” and other similar expressions identify
forward-looking statements. Forward-looking statements in this
release and the accompanying tables include those relating to our
greenhouse gas emissions targets, expected timing of completion and
performance of projects, future market and industry conditions,
future operating and financial performance, and management of
future risks. It is important to note that actual results could
differ materially from those projected in such forward-looking
statements based on numerous factors, including those outside of
the company’s control, such as legislative or political changes or
developments, market dynamics, cyberattacks, weather events, and
other matters affecting our operations or the demand for our
products. These factors also include, but are not limited to, the
uncertainties that remain with respect to the Russia-Ukraine
conflict, the COVID-19 pandemic, variants of the COVID-19 virus,
governmental and societal responses thereto, including requirements
and mandates with respect to COVID-19 vaccines, vaccine
distribution and administration levels, and the adverse effects the
foregoing may have on our business or economic conditions
generally. 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 (loss)
attributable to Valero stockholders, adjusted earnings (loss) per
common share – assuming dilution, Refining margin, Renewable Diesel
margin, Ethanol margin, adjusted Refining operating income (loss),
adjusted Ethanol operating income (loss), adjusted net cash
provided by (used in) 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 U.S. GAAP measures. Note (d) 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
March 31,
2022
2021
Statement of income data
Revenues
$
38,542
$
20,806
Cost of sales:
Cost of materials and other (a)
34,949
18,992
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
1,379
1,656
Depreciation and amortization expense
595
566
Total cost of sales
36,923
21,214
Other operating expenses
19
38
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
205
208
Depreciation and amortization expense
11
12
Operating income (loss)
1,384
(666
)
Other income (expense), net (b)
(20
)
45
Interest and debt expense, net of
capitalized interest
(145
)
(149
)
Income (loss) before income tax expense
(benefit)
1,219
(770
)
Income tax expense (benefit)
252
(148
)
Net income (loss)
967
(622
)
Less: Net income attributable to
noncontrolling interests
62
82
Net income (loss) attributable to Valero
Energy Corporation stockholders
$
905
$
(704
)
Earnings (loss) per common
share
$
2.21
$
(1.73
)
Weighted-average common shares outstanding
(in millions)
408
407
Earnings (loss) per common share –
assuming dilution
$
2.21
$
(1.73
)
Weighted-average common shares outstanding
– assuming dilution (in millions)
408
407
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 March 31,
2022
Revenues:
Revenues from external customers
$
36,813
$
595
$
1,134
$
—
$
38,542
Intersegment revenues
4
386
127
(517
)
—
Total revenues
36,817
981
1,261
(517
)
38,542
Cost of sales:
Cost of materials and other
33,606
755
1,104
(516
)
34,949
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,193
51
135
—
1,379
Depreciation and amortization expense
549
26
20
—
595
Total cost of sales
35,348
832
1,259
(516
)
36,923
Other operating expenses
18
—
1
—
19
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
205
205
Depreciation and amortization expense
—
—
—
11
11
Operating income by segment
$
1,451
$
149
$
1
$
(217
)
$
1,384
Three months ended March 31,
2021
Revenues:
Revenues from external customers
$
19,469
$
352
$
985
$
—
$
20,806
Intersegment revenues
3
79
60
(142
)
—
Total revenues
19,472
431
1,045
(142
)
20,806
Cost of sales:
Cost of materials and other (a)
18,022
187
924
(141
)
18,992
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
1,471
29
156
—
1,656
Depreciation and amortization expense
533
12
21
—
566
Total cost of sales
20,026
228
1,101
(141
)
21,214
Other operating expenses
38
—
—
—
38
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
208
208
Depreciation and amortization expense
—
—
—
12
12
Operating income (loss) by segment
$
(592
)
$
203
$
(56
)
$
(221
)
$
(666
)
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
(d)
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
March 31,
2022
2021
Reconciliation of net income (loss)
attributable to Valero Energy Corporation stockholders to
adjusted net income (loss) attributable to Valero Energy
Corporation stockholders
Net income (loss) attributable to Valero
Energy Corporation
stockholders
$
905
$
(704
)
Adjustments:
Loss on early retirement of debt (b)
50
—
Income tax benefit related to loss on
early retirement of debt
(11
)
—
Loss on early retirement of debt, net of
taxes
39
—
Modification of renewable volume
obligation (RVO) (c)
—
48
Income tax expense related to modification
of RVO
—
(10
)
Modification of RVO, net of taxes
—
38
Total adjustments
39
38
Adjusted net income (loss) attributable to
Valero Energy Corporation stockholders
$
944
$
(666
)
Reconciliation of earnings (loss) per
common share – assuming dilution to adjusted earnings (loss)
per common share – assuming dilution
Earnings (loss) per common share –
assuming dilution
$
2.21
$
(1.73
)
Adjustments:
Loss on early retirement of debt (b)
0.10
—
Modification of RVO (c)
—
0.09
Total adjustments
0.10
0.09
Adjusted earnings (loss) per common share
– assuming dilution
$
2.31
$
(1.64
)
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2022
2021
Reconciliation of operating income
(loss) by segment to segment margin, and reconciliation of
operating income (loss) by segment to adjusted operating
income (loss) by segment
Refining segment
Refining operating income (loss)
$
1,451
$
(592
)
Adjustments:
Modification of RVO (c)
—
48
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
1,193
1,471
Depreciation and amortization expense
549
533
Other operating expenses
18
38
Refining margin
$
3,211
$
1,498
Refining operating income (loss)
$
1,451
$
(592
)
Adjustments:
Modification of RVO (c)
—
48
Other operating expenses
18
38
Adjusted Refining operating income
(loss)
$
1,469
$
(506
)
Renewable Diesel segment
Renewable Diesel operating income
$
149
$
203
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
51
29
Depreciation and amortization expense
26
12
Renewable Diesel margin
$
226
$
244
Ethanol segment
Ethanol operating income (loss)
$
1
$
(56
)
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
135
156
Depreciation and amortization expense
20
21
Other operating expenses
1
—
Ethanol margin
$
157
$
121
Ethanol operating income (loss)
$
1
$
(56
)
Other operating expenses
1
—
Adjusted Ethanol operating income
(loss)
$
2
$
(56
)
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2022
2021
Reconciliation of Refining segment
operating income (loss) to Refining margin (by region), and
reconciliation of Refining segment operating income (loss)
to adjusted Refining segment operating income (loss) (by
region) (e)
U.S. Gulf Coast region
Refining operating income (loss)
$
996
$
(508
)
Adjustments:
Modification of RVO (c)
—
35
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
655
994
Depreciation and amortization expense
332
332
Other operating expenses
18
31
Refining margin
$
2,001
$
884
Refining operating income (loss)
$
996
$
(508
)
Adjustments:
Modification of RVO (c)
—
35
Other operating expenses
18
31
Adjusted Refining operating income
(loss)
$
1,014
$
(442
)
U.S. Mid-Continent region
Refining operating income (loss)
$
142
$
(10
)
Adjustments:
Modification of RVO (c)
—
9
Operating expenses (excluding depreciation
and
amortization expense reflected below)
(a)
172
190
Depreciation and amortization expense
81
84
Other operating expenses
—
7
Refining margin
$
395
$
280
Refining operating income (loss)
$
142
$
(10
)
Adjustments:
Modification of RVO (c)
—
9
Other operating expenses
—
7
Adjusted Refining operating income
$
142
$
6
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
(d)
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
2022
2021
Reconciliation of Refining segment
operating income (loss) to Refining margin (by region), and
reconciliation of Refining segment operating income (loss)
to adjusted Refining segment operating income (loss) (by
region) (e) (continued)
North Atlantic region
Refining operating income
$
286
$
55
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
206
140
Depreciation and amortization expense
69
52
Refining margin
$
561
$
247
U.S. West Coast region
Refining operating income (loss)
$
27
$
(129
)
Adjustments:
Modification of RVO (c)
—
4
Operating expenses (excluding depreciation
and amortization expense reflected below)
160
147
Depreciation and amortization expense
67
65
Refining margin
$
254
$
87
Refining operating income (loss)
$
27
$
(129
)
Adjustment: Modification of RVO (c)
—
4
Adjusted Refining operating income
(loss)
$
27
$
(125
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
March 31,
2022
2021
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
326
354
Medium/light sour crude oil
373
275
Sweet crude oil
1,423
1,143
Residuals
226
192
Other feedstocks
101
102
Total feedstocks
2,449
2,066
Blendstocks and other
351
344
Total throughput volumes
2,800
2,410
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,392
1,191
Distillates
1,027
894
Other products (f)
401
352
Total yields
2,820
2,437
Operating statistics (a) (d)
(g)
Refining margin
$
3,211
$
1,498
Adjusted Refining operating income
(loss)
$
1,469
$
(506
)
Throughput volumes (thousand barrels per
day)
2,800
2,410
Refining margin per barrel of
throughput
$
12.74
$
6.91
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.73
6.78
Depreciation and amortization expense per
barrel of
throughput
2.18
2.46
Adjusted Refining operating income (loss)
per barrel of
throughput
$
5.83
$
(2.33
)
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
March 31,
2022
2021
Operating statistics (d) (g)
Renewable Diesel margin
$
226
$
244
Renewable Diesel operating income
$
149
$
203
Sales volumes (thousand gallons per
day)
1,738
867
Renewable Diesel margin per gallon of
sales
$
1.45
$
3.13
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of sales
0.33
0.38
Depreciation and amortization expense per
gallon of sales
0.16
0.14
Renewable Diesel operating income per
gallon of sales
$
0.96
$
2.61
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
ETHANOL SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
March 31,
2022
2021
Operating statistics (a) (d)
(g)
Ethanol margin
$
157
$
121
Adjusted Ethanol operating income
(loss)
$
2
$
(56
)
Production volumes (thousand gallons per
day)
4,045
3,562
Ethanol margin per gallon of
production
$
0.43
$
0.38
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of production
0.37
0.49
Depreciation and amortization expense per
gallon of production
0.06
0.06
Adjusted Ethanol operating income (loss)
per gallon of production
$
—
$
(0.17
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
March 31,
2022
2021
Operating statistics by region
(e)
U.S. Gulf Coast region (a) (d)
(g)
Refining margin
$
2,001
$
884
Adjusted refining operating income
(loss)
$
1,014
$
(442
)
Throughput volumes (thousand barrels per
day)
1,694
1,514
Refining margin per barrel of
throughput
$
13.13
$
6.48
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.30
7.29
Depreciation and amortization expense per
barrel of
throughput
2.18
2.44
Adjusted Refining operating income (loss)
per barrel of
throughput
$
6.65
$
(3.25
)
U.S. Mid-Continent region (a) (d)
(g)
Refining margin
$
395
$
280
Adjusted refining operating income
$
142
$
6
Throughput volumes (thousand barrels per
day)
420
385
Refining margin per barrel of
throughput
$
10.45
$
8.07
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.53
5.49
Depreciation and amortization expense per
barrel of
throughput
2.15
2.41
Adjusted Refining operating income per
barrel of
throughput
$
3.77
$
0.17
Three Months Ended
March 31,
2022
2021
Operating statistics by region (e)
(continued)
North Atlantic region (d) (g)
Refining margin
$
561
$
247
Refining operating income
$
286
$
55
Throughput volumes (thousand barrels per
day)
484
320
Refining margin per barrel of
throughput
$
12.87
$
8.57
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.73
4.87
Depreciation and amortization expense per
barrel of
throughput
1.57
1.78
Refining operating income per barrel of
throughput
$
6.57
$
1.92
U.S. West Coast region (d) (g)
Refining margin
$
254
$
87
Adjusted refining operating income
(loss)
$
27
$
(125
)
Throughput volumes (thousand barrels per
day)
202
191
Refining margin per barrel of
throughput
$
13.97
$
5.09
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
8.79
8.56
Depreciation and amortization expense per
barrel of
throughput
3.72
3.79
Adjusted Refining operating income (loss)
per barrel of
throughput
$
1.46
$
(7.26
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
March 31,
2022
2021
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
97.34
$
61.09
Brent less West Texas Intermediate (WTI)
crude oil
2.88
3.26
Brent less Alaska North Slope (ANS) crude
oil
1.73
0.33
Brent less Louisiana Light Sweet (LLS)
crude oil
0.57
1.11
Brent less Argus Sour Crude Index (ASCI)
crude oil
4.93
2.99
Brent less Maya crude oil
8.50
4.70
LLS crude oil
96.77
59.98
LLS less ASCI crude oil
4.36
1.88
LLS less Maya crude oil
7.93
3.59
WTI crude oil
94.46
57.84
Natural gas (dollars per million
British Thermal Units)
4.32
19.66
Products (dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB)
gasoline less Brent
15.67
10.12
Ultra-low-sulfur (ULS) diesel less
Brent
27.95
10.19
Propylene less Brent
(28.82
)
18.50
CBOB gasoline less LLS
16.24
11.23
ULS diesel less LLS
28.52
11.30
Propylene less LLS
(28.25
)
19.61
U.S. Mid-Continent:
CBOB gasoline less WTI
16.02
14.82
ULS diesel less WTI
27.27
17.21
North Atlantic:
CBOB gasoline less Brent
17.68
11.56
ULS diesel less Brent
32.47
11.89
U.S. West Coast:
California Reformulated Gasoline
Blendstock of
Oxygenate Blending (CARBOB) 87 gasoline
less ANS
28.46
14.56
California Air Resources Board (CARB)
diesel less ANS
32.27
14.14
CARBOB 87 gasoline less WTI
29.61
17.49
CARB diesel less WTI
33.42
17.07
Three Months Ended March
31,
2022
2021
Renewable Diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$
3.04
$
1.74
Biodiesel Renewable Identification Number
(RIN) (dollars per RIN)
1.43
1.18
California Low-Carbon Fuel Standard
(dollars per metric ton)
138.63
195.30
Chicago Board of Trade (CBOT) soybean oil
(dollars per pound)
0.68
0.48
Ethanol
CBOT corn (dollars per bushel)
6.70
5.39
New York Harbor ethanol (dollars per
gallon)
2.39
1.78
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
March 31,
December 31,
2022
2021
Balance sheet data
Current assets
$
23,313
$
21,165
Cash and cash equivalents included in
current assets
2,638
4,122
Inventories included in current assets
7,174
6,265
Current liabilities
19,785
16,851
Valero Energy Corporation stockholders’
equity
18,821
18,430
Debt and finance lease obligations:
Debt –
Current portion of debt (excluding
variable interest entities (VIEs))
$
300
$
300
Debt, less current portion of debt
(excluding VIEs)
10,053
10,820
Total debt (excluding VIEs)
10,353
11,120
Current portion of debt attributable to
VIEs
823
810
Debt, less current portion of debt
attributable to VIEs
19
20
Total debt attributable to VIEs
842
830
Total debt
11,195
11,950
Finance lease obligations –
Current portion of finance lease
obligations (excluding VIEs)
160
141
Finance lease obligations, less current
portion (excluding VIEs)
1,533
1,502
Total finance lease obligations (excluding
VIEs)
1,693
1,643
Current portion of finance lease
obligations attributable to VIEs
12
13
Finance lease obligations, less current
portion attributable to VIEs
261
264
Total finance lease obligations
attributable to VIEs
273
277
Total finance lease obligations
1,966
1,920
Total debt and finance lease
obligations
$
13,161
$
13,870
Three Months Ended March
31,
2022
2021
Reconciliation of net cash provided by
(used in) operating activities to adjusted net cash provided
by (used in) operating activities (d)
Net cash provided by (used in) operating
activities
$
588
$
(52
)
Exclude:
Changes in current assets and current
liabilities
(722
)
184
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
85
108
Adjusted net cash provided by (used in)
operating activities
$
1,225
$
(344
)
Dividends per common share
$
0.98
$
0.98
Three Months Ended March
31,
2022
2021
Reconciliation of capital investments
to capital investments attributable to Valero (d)
Capital expenditures (excluding VIEs)
$
152
$
160
Capital expenditures of VIEs:
DGD
219
153
Other VIEs
13
26
Deferred turnaround and catalyst cost
expenditures (excluding VIEs)
453
230
Deferred turnaround and catalyst cost
expenditures of DGD
6
1
Investments in nonconsolidated joint
ventures
—
12
Capital investments
843
582
Adjustments:
DGD’s capital investments attributable to
the other joint venture member
(112
)
(77
)
Capital expenditures of other VIEs
(13
)
(26
)
Capital investments attributable to
Valero
$
718
$
479
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
In mid-February 2021, many of our
refineries and plants were impacted to varying extents by the
severe cold, utility disruptions, and higher energy costs arising
out of Winter Storm Uri. The higher energy costs resulted from an
increase in the prices of natural gas and electricity that
significantly exceeded rates that we consider normal, such as the
average rates we incurred the month preceding the storm. As a
result, our operating loss for the three months ended March 31,
2021 includes estimated excess energy costs of $579 million ($1.15
per share).
The above-mentioned pre-tax estimated
excess energy charge is reflected in our statement of income line
items and attributable to our reportable segments for the three
months ended March 31, 2021 as follows (in millions):
Refining
Renewable
Diesel
Ethanol
Total
Cost of materials and other
$
47
$
—
$
—
$
47
Operating expenses (excluding depreciation
and amortization expense)
478
—
54
532
Total estimated excess energy costs
$
525
$
—
$
54
$
579
The estimated excess energy costs
attributable to our Refining segment for the three months ended
March 31, 2021 are associated with the Refining segment regions as
follows (in millions, except per barrel amounts):
U.S. Gulf Coast
U.S. Mid-
Continent
Other Regions
Combined
Refining
Segment
Cost of materials and other
$
45
$
2
$
—
$
47
Operating expenses (excluding
depreciation
and amortization expense)
437
38
3
478
Total estimated excess energy costs
$
482
$
40
$
3
$
525
Effect of estimated excess energy
costs
on operating statistics (g)
Refining margin per barrel of throughput
(d)
$
0.33
$
0.06
n/a
$
0.22
Operating expenses (excluding
depreciation
and amortization expense) per barrel
of
throughput
3.21
1.11
n/a
2.21
Adjusted Refining operating income
(loss)
per barrel of throughput (d)
$
3.54
$
1.17
n/a
$
2.43
The estimated excess energy costs
attributable to our Ethanol segment for the three months ended
March 31, 2021 affected that segment’s operating statistics of (i)
operating expenses (excluding depreciation and amortization
expenses) per gallon of production and (ii) adjusted operating
income (loss) per gallon of production by $0.16 (see note (d)
below).
(b)
“Other income (expense), net” for the
three months ended March 31, 2022 includes a charge of $50 million
from the early retirement of approximately $1.4 billion aggregate
principal amount of various series of our senior notes.
(c) Under the Renewable Fuel Standard program, the U.S.
Environmental Protection Agency (EPA) is required to set annual
quotas for the volume of renewable fuels that must be blended into
petroleum-based transportation fuels consumed in the U.S. by
obligated parties. The quotas are used to determine an obligated
party’s RVO. In December 2021, the EPA released a proposed rule
that, among other things, modified the volume standards for 2020
and, for the first time, established volume standards for 2021.
Because the existing volume standards for 2020 were established
under a currently enforceable rule, we will recognize the effect of
the modification in volume standards for 2020 in the period the
final rule is enacted. However, because volume standards had not
previously been established for 2021, we considered the new
information available in the proposed rule in determining the
estimated RVO for our Refining segment for the year ended December
31, 2021. As a result, we recognized in December 2021 a benefit
related to the modification of our RVO estimate of $205 million, of
which $48 million is attributable to the three months ended March
31, 2021. (d) 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 (loss) attributable to Valero Energy
Corporation stockholders is defined as net income (loss)
attributable to Valero Energy Corporation stockholders adjusted to
reflect the items noted below, along with their related income tax
effect. The income tax effect for the adjustments was calculated
using a combined federal and state statutory rate of 22.5 percent.
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.
– Loss on early retirement of debt –
Premiums and other expenses incurred in connection with the early
retirement of approximately $1.4 billion aggregate principal amount
of various series of our senior notes (see note (b)) are not
associated with the ongoing costs of our borrowing and financing
activities.
– Modification of RVO – The benefit
resulting from the modification of our RVO estimate that was
recognized by us in December 2021 is associated with the cost of
the RVO generated by our operations throughout 2021. Therefore, the
adjustment reflects the portion of the benefit that is associated
with the cost of the RVO generated by our operations during the
three months ended March 31, 2021. See note (c) for additional
details.
- Adjusted earnings (loss) per common share – assuming
dilution is defined as adjusted net income (loss) 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 (loss) excluding the modification of RVO adjustment (see
note (c)), 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 (loss) 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 (loss)is defined as
Refining segment operating income (loss) excluding the modification
of RVO adjustment (see note (c)) and other operating expenses. We
believe adjusted Refining operating income (loss) 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 (loss)is defined as
Ethanol segment operating income (loss) excluding other operating
expenses. We believe adjusted Ethanol operating income (loss) 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 50/50 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 renewable diesel. 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 March
31,
2022
2021
DGD operating cash flow data
Net cash provided by operating
activities
$
21
$
207
Exclude: Changes in current assets and
current liabilities
(149
)
(9
)
Adjusted net cash provided by operating
activities
170
216
Other joint venture member’s ownership
interest
50
%
50
%
DGD’s adjusted net cash provided by
operating activities attributable to
the other joint venture member’s ownership
interest in DGD
$
85
$
108
- Capital investments attributable to Valero is defined as
all capital expenditures, deferred turnaround and catalyst cost
expenditures, and investments in nonconsolidated joint ventures
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 our consolidated VIEs other
than DGD 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.
(e)
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.
(f)
Primarily includes petrochemicals, gas oils, No. 6 fuel oil,
petroleum coke, sulfur, and asphalt.
(g)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220425005988/en/
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Senior Manager – Investor
Relations, 210-345-3331 Gautam Srivastava, Senior Manager –
Investor Relations, 210-345-3992
Media: Lillian Riojas, Executive Director – Media Relations and
Communications, 210-345-5002
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