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     182  0 Kommentare Valero Energy Reports Third Quarter 2020 Results

    Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a net loss attributable to Valero stockholders of $464 million, or $1.14 per share, for the third quarter of 2020 compared to net income of $609 million, or $1.48 per share, for the third quarter of 2019. Excluding the adjustments shown in the accompanying earnings release tables, the adjusted net loss attributable to Valero stockholders was $472 million, or $1.16 per share, for the third quarter of 2020, compared to third quarter 2019 adjusted net income attributable to Valero stockholders of $642 million, or $1.55 per share. Third quarter 2020 adjusted results primarily exclude the benefit from an after-tax lower of cost or market, or LCM, inventory valuation adjustment of $250 million and an after-tax loss of $218 million for an expected LIFO liquidation.

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    The refining segment reported a $629 million operating loss for the third quarter of 2020 compared to operating income of $1.1 billion for the third quarter of 2019. Excluding the LCM inventory valuation adjustment, the expected LIFO liquidation adjustment, and other operating expenses, the third quarter 2020 adjusted operating loss was $575 million. Refinery throughput volumes averaged 2.5 million barrels per day in the third quarter of 2020, which was 428 thousand barrels per day lower than the third quarter of 2019.

    “As the global economy recovers, we are pleased to see a demand recovery for gasoline, diesel and jet fuel in the third quarter” said Joe Gorder, Valero Chairman and Chief Executive Officer. “Our unmatched execution, while being the lowest cost producer, and ample liquidity continue to position us well to manage a low margin environment.”

    Renewable Diesel

    The renewable diesel segment reported $184 million of operating income for the third quarter of 2020 compared to $65 million for the third quarter of 2019. After adjusting for the retroactive blender’s tax credit, renewable diesel operating income was $123 million for the third quarter of 2019. Renewable diesel sales volumes averaged 870 thousand gallons per day in the third quarter of 2020, an increase of 232 thousand gallons per day versus the third quarter of 2019. The third quarter of 2019 results and volumes were impacted by the planned downtime of the Diamond Green Diesel (DGD) plant for maintenance. DGD set a record for sales volumes in the third quarter of 2020.

    Ethanol

    The ethanol segment reported $22 million of operating income for the third quarter of 2020, compared to a $43 million operating loss for the third quarter of 2019. Third quarter 2020 adjusted operating income was $36 million. Ethanol production volumes averaged 3.8 million gallons per day in the third quarter of 2020, which was 206 thousand gallons per day lower than the third quarter of 2019. The increase in operating income was attributed primarily to higher margins resulting from lower corn prices.

    Corporate and Other

    General and administrative expenses were $186 million in the third quarter of 2020 compared to $217 million in the third quarter of 2019. The effective tax rate for the third quarter of 2020 was 47 percent, which was primarily impacted by an expected U.S. federal tax net operating loss that will be carried back to 2015 when the U.S. federal statutory tax rate was 35 percent.

    Investing and Financing Activities

    Capital investments totaled $517 million in the third quarter of 2020, of which $205 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to our partner’s 50 percent share of DGD and those related to other variable interest entities, capital investments attributable to Valero were $393 million.

    Net cash provided by operating activities was $165 million in the third quarter of 2020. Included in this amount was a $246 million favorable impact from working capital, as well as our joint venture partner’s share of DGD’s net cash provided by operating activities, excluding changes in its working capital. Excluding these items, adjusted net cash used by operating activities was $177 million.

    Valero returned $399 million to stockholders through dividends in the third quarter of 2020, resulting in a year-to-date total payout ratio of 165 percent of adjusted net cash provided by operating activities. The year-to-date total payout ratio is higher than our long-term target due to the adverse economic impact of COVID-19.

    Valero continues to target a 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 our joint venture partner’s ownership interest in DGD.

    “The guiding principles underpinning our capital allocation strategy remain unchanged,” said Gorder. “There has been absolutely no change in our strategy, which prioritizes our investment grade ratings, sustaining investments and honoring our dividend.”

    Liquidity and Financial Position

    Valero ended the third quarter of 2020 with $15.2 billion of total debt and finance lease obligations and $4.0 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 36 percent as of September 30, 2020.

    Strategic Update

    Capital investments attributable to Valero are forecasted at $2.0 billion per year in 2020 and 2021, of which approximately 60 percent is for sustaining the business and approximately 40 percent is for growth projects. Approximately 40 percent of Valero’s 2020 and 2021 growth capital is allocated to expanding the renewable diesel business.

    The new St. Charles Alkylation Unit, which is designed to convert low-value feedstocks into a premium alkylate product, is on track to be completed in the fourth quarter of this year. The Diamond Pipeline expansion and the Pembroke Cogen project are expected to be completed in 2021 and the Port Arthur Coker project is expected to be completed in 2023.

    Valero and its joint venture partner in DGD continue to pursue growth in the low-carbon renewable diesel business. The DGD plant expansion is still expected to be completed in 2021, and as previously announced, DGD continues to make progress on the advanced engineering and development cost review for a potential new 400 million gallons per day renewable diesel plant at Valero’s Port Arthur, Texas facility. If the project is approved, operations are expected to commence in 2024, increasing DGD’s production capacity to over 1.1 billion gallons annually.

    “We remain steadfast in the execution of our strategy, pursuing excellence in operations, investing in earnings growth with lower volatility and honoring our commitment to shareholder returns,” said Gorder.

    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 an international manufacturer and marketer of transportation fuels and petrochemical products. Valero is a Fortune 50 company based in San Antonio, Texas, and it operates 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 14 ethanol plants with a combined production capacity of approximately 1.73 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. Valero is also a joint venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. Approximately 7,000 outlets carry Valero’s brand names. Please visit www.valero.com for more information.

    Valero Contacts

    Investors:
    Homer Bhullar, Vice President – Investor Relations, 210-345-1982
    Eric Herbort, Senior Manager – Investor Relations, 210-345-3331
    Gautam Srivastava, 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 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,” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of the company’s control, such as delays in construction timing and other factors, including but not limited to the impacts of COVID-19. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission and available on Valero’s website at www.valero.com.

    COVID-19 Disclosure

    The global pandemic has significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use. As a result, there has also been a decline in the demand for, and thus also the market prices of, crude oil and certain of our products, particularly our refined petroleum products. Many uncertainties remain with respect to COVID-19, including its resulting economic effects and any future recovery, and we are unable to predict the ultimate economic impacts from COVID-19, how quickly national economies can recover once the pandemic subsides, or whether any recovery will ultimately experience a reversal or other setbacks. However, the adverse impact of the economic effects on us has been and will likely continue to be significant. We believe we have proactively addressed many of the known impacts of COVID-19 to the extent possible and will strive to continue to do so, but there can be no guarantee that these measures will be fully effective. For more information, see our quarterly reports on Form 10-Q and other reports filed with the Securities and Exchange Commission.

    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 renewable diesel operating income, adjusted ethanol operating income (loss), 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 U.S. GAAP measures. Note (g) 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,

     

    2020

     

    2019

     

    2020

     

    2019

    Statement of income data

     

     

     

     

     

     

     

    Revenues

    $

    15,809

     

     

    $

    27,249

     

     

    $

    48,308

     

     

    $

    80,445

     

    Cost of sales:

     

     

     

     

     

     

     

    Cost of materials and other (a) (b)

    14,801

     

     

    24,335

     

     

    43,832

     

     

    72,396

     

    Lower of cost or market (LCM) inventory valuation adjustment (c)

    (313)

     

     

     

     

    (19)

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    1,117

     

     

    1,239

     

     

    3,268

     

     

    3,629

     

    Depreciation and amortization expense (d)

    602

     

     

    556

     

     

    1,737

     

     

    1,645

     

    Total cost of sales

    16,207

     

     

    26,130

     

     

    48,818

     

     

    77,670

     

    Other operating expenses

    25

     

     

    10

     

     

    30

     

     

    14

     

    General and administrative expenses (excluding

    depreciation and amortization expense reflected below)

    186

     

     

    217

     

     

    532

     

     

    625

     

    Depreciation and amortization expense

    12

     

     

    11

     

     

    37

     

     

    39

     

    Operating income (loss)

    (621)

     

     

    881

     

     

    (1,109)

     

     

    2,097

     

    Other income, net (e)

    48

     

     

    34

     

     

    107

     

     

    68

     

    Interest and debt expense, net of capitalized interest

    (143)

     

     

    (111)

     

     

    (410)

     

     

    (335)

     

    Income (loss) before income tax expense (benefit)

    (716)

     

     

    804

     

     

    (1,412)

     

     

    1,830

     

    Income tax expense (benefit)

    (337)

     

     

    165

     

     

    (614)

     

     

    376

     

    Net income (loss)

    (379)

     

     

    639

     

     

    (798)

     

     

    1,454

     

    Less: Net income attributable to noncontrolling interests (b)

    85

     

     

    30

     

     

    264

     

     

    92

     

    Net income (loss) attributable to Valero Energy Corporation

    stockholders

    $

    (464)

     

     

    $

    609

     

     

    $

    (1,062)

     

     

    $

    1,362

     

     

     

     

     

     

     

     

     

    Earnings (loss) per common share

    $

    (1.14)

     

     

    $

    1.48

     

     

    $

    (2.62)

     

     

    $

    3.28

     

    Weighted-average common shares outstanding (in millions)

    407

     

     

    412

     

     

    407

     

     

    415

     

     

     

     

     

     

     

     

     

    Earnings (loss) per common share – assuming dilution

    $

    (1.14)

     

     

    $

    1.48

     

     

    $

    (2.62)

     

     

    $

    3.28

     

    Weighted-average common shares outstanding –

    assuming dilution (in millions) (f)

    407

     

     

    413

     

     

    407

     

     

    416

     

    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, 2020

     

     

     

     

     

     

     

     

     

    Revenues:

     

     

     

     

     

     

     

     

     

    Revenues from external customers

    $

    14,727

     

     

    $

    305

     

     

    $

    777

     

     

    $

     

     

    $

    15,809

     

    Intersegment revenues

    2

     

     

    40

     

     

    58

     

     

    (100)

     

     

     

    Total revenues

    14,729

     

     

    345

     

     

    835

     

     

    (100)

     

     

    15,809

     

    Cost of sales:

     

     

     

     

     

     

     

     

     

    Cost of materials and other (a) (b)

    14,103

     

     

    128

     

     

    670

     

     

    (100)

     

     

    14,801

     

    LCM inventory valuation adjustment (c)

    (296)

     

     

     

     

    (17)

     

     

     

     

    (313)

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    989

     

     

    23

     

     

    105

     

     

     

     

    1,117

     

    Depreciation and amortization expense (d)

    538

     

     

    10

     

     

    54

     

     

     

     

    602

     

    Total cost of sales

    15,334

     

     

    161

     

     

    812

     

     

    (100)

     

     

    16,207

     

    Other operating expenses

    24

     

     

     

     

    1

     

     

     

     

    25

     

    General and administrative expenses (excluding

    depreciation and amortization expense reflected

    below)

     

     

     

     

     

     

    186

     

     

    186

     

    Depreciation and amortization expense

     

     

     

     

     

     

    12

     

     

    12

     

    Operating income (loss) by segment

    $

    (629)

     

     

    $

    184

     

     

    $

    22

     

     

    $

    (198)

     

     

    $

    (621)

     

     

     

     

     

     

     

     

     

     

     

    Three months ended September 30, 2019

     

     

     

     

     

     

     

     

     

    Revenues:

     

     

     

     

     

     

     

     

     

    Revenues from external customers

    $

    26,145

     

     

    $

    212

     

     

    $

    891

     

     

    $

    1

     

     

    $

    27,249

     

    Intersegment revenues

    2

     

     

    50

     

     

    57

     

     

    (109)

     

     

     

    Total revenues

    26,147

     

     

    262

     

     

    948

     

     

    (108)

     

     

    27,249

     

    Cost of sales:

     

     

     

     

     

     

     

     

     

    Cost of materials and other

    23,432

     

     

    164

     

     

    847

     

     

    (108)

     

     

    24,335

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    1,100

     

     

    18

     

     

    121

     

     

     

     

    1,239

     

    Depreciation and amortization expense

    518

     

     

    15

     

     

    23

     

     

     

     

    556

     

    Total cost of sales

    25,050

     

     

    197

     

     

    991

     

     

    (108)

     

     

    26,130

     

    Other operating expenses

    10

     

     

     

     

     

     

     

     

    10

     

    General and administrative expenses (excluding

    depreciation and amortization expense reflected

    below)

     

     

     

     

     

     

    217

     

     

    217

     

    Depreciation and amortization expense

     

     

     

     

     

     

    11

     

     

    11

     

    Operating income (loss) by segment

    $

    1,087

     

     

    $

    65

     

     

    $

    (43)

     

     

    $

    (228)

     

     

    $

    881

     

     

    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, 2020

     

     

     

     

     

     

     

     

     

    Revenues:

     

     

     

     

     

     

     

     

     

    Revenues from external customers

    $

    45,327

     

     

    $

    850

     

     

    $

    2,131

     

     

    $

     

     

    $

    48,308

     

    Intersegment revenues

    6

     

     

    150

     

     

    160

     

     

    (316)

     

     

     

    Total revenues

    45,333

     

     

    1,000

     

     

    2,291

     

     

    (316)

     

     

    48,308

     

    Cost of sales:

     

     

     

     

     

     

     

     

     

    Cost of materials and other (a) (b)

    41,769

     

     

    393

     

     

    1,984

     

     

    (314)

     

     

    43,832

     

    LCM inventory valuation adjustment (c)

    (19)

     

     

     

     

     

     

     

     

    (19)

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    2,912

     

     

    63

     

     

    293

     

     

     

     

    3,268

     

    Depreciation and amortization expense (d)

    1,607

     

     

    33

     

     

    97

     

     

     

     

    1,737

     

    Total cost of sales

    46,269

     

     

    489

     

     

    2,374

     

     

    (314)

     

     

    48,818

     

    Other operating expenses

    29

     

     

     

     

    1

     

     

     

     

    30

     

    General and administrative expenses (excluding

    depreciation and amortization expense reflected

    below)

     

     

     

     

     

     

    532

     

     

    532

     

    Depreciation and amortization expense

     

     

     

     

     

     

    37

     

     

    37

     

    Operating income (loss) by segment

    $

    (965)

     

     

    $

    511

     

     

    $

    (84)

     

     

    $

    (571)

     

     

    $

    (1,109)

     

     

     

     

     

     

     

     

     

     

     

    Nine months ended September 30, 2019

     

     

     

     

     

     

     

     

     

    Revenues:

     

     

     

     

     

     

     

     

     

    Revenues from external customers

    $

    77,109

     

     

    $

    686

     

     

    $

    2,648

     

     

    $

    2

     

     

    $

    80,445

     

    Intersegment revenues

    12

     

     

    174

     

     

    162

     

     

    (348)

     

     

     

    Total revenues

    77,121

     

     

    860

     

     

    2,810

     

     

    (346)

     

     

    80,445

     

    Cost of sales:

     

     

     

     

     

     

     

     

     

    Cost of materials and other

    69,769

     

     

    577

     

     

    2,396

     

     

    (346)

     

     

    72,396

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    3,197

     

     

    54

     

     

    378

     

     

     

     

    3,629

     

    Depreciation and amortization expense

    1,539

     

     

    38

     

     

    68

     

     

     

     

    1,645

     

    Total cost of sales

    74,505

     

     

    669

     

     

    2,842

     

     

    (346)

     

     

    77,670

     

    Other operating expenses

    13

     

     

     

     

    1

     

     

     

     

    14

     

    General and administrative expenses (excluding

    depreciation and amortization expense reflected

    below)

     

     

     

     

     

     

    625

     

     

    625

     

    Depreciation and amortization expense

     

     

     

     

     

     

    39

     

     

    39

     

    Operating income (loss) by segment

    $

    2,603

     

     

    $

    191

     

     

    $

    (33)

     

     

    $

    (664)

     

     

    $

    2,097

     

    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 (g)

    (millions of dollars, except per share amounts)

    (unaudited)

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

     

    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

    $

    (464)

     

     

    $

    609

     

     

    $

    (1,062)

     

     

    $

    1,362

     

     

    Adjustments:

     

     

     

     

     

     

     

     

    Last-in, first-out (LIFO) liquidation adjustment (a)

    326

     

     

     

     

    326

     

     

     

     

    Income tax benefit related to the LIFO liquidation

    adjustment

    (108)

     

     

     

     

    (108)

     

     

     

     

    LIFO liquidation adjustment, net of taxes

    218

     

     

     

     

    218

     

     

     

     

    Change in estimated useful life (d)

    30

     

     

     

     

    30

     

     

     

     

    Income tax benefit related to the change in estimated

    useful life

    (6)

     

     

     

     

    (6)

     

     

     

     

    Change in estimated useful life, net of taxes

    24

     

     

     

     

    24

     

     

     

     

    LCM inventory valuation adjustment (c)

    (313)

     

     

     

     

    (19)

     

     

     

     

    Income tax expense related to the LCM inventory

    valuation adjustment

    63

     

     

     

     

    3

     

     

     

     

    LCM inventory valuation adjustment, net of taxes

    (250)

     

     

     

     

    (16)

     

     

     

     

    2019 blender’s tax credit attributable to Valero Energy

    Corporation stockholders (b)

     

     

    33

     

     

     

     

    112

     

     

    Income tax expense related to 2019 blender’s tax credit

     

     

     

     

     

     

    (3)

     

     

    2019 blender’s tax credit attributable to Valero Energy

    Corporation stockholders, net of taxes

     

     

    33

     

     

     

     

    109

     

     

    Loss on early redemption of debt (e)

     

     

     

     

     

     

    22

     

     

    Income tax benefit related to loss on early

    redemption of debt

     

     

     

     

     

     

    (5)

     

     

    Loss on early redemption of debt, net of taxes

     

     

     

     

     

     

    17

     

     

    Total adjustments

    (8)

     

     

    33

     

     

    226

     

     

    126

     

     

    Adjusted net income (loss) attributable to

    Valero Energy Corporation stockholders

    $

    (472)

     

     

    $

    642

     

     

    $

    (836)

     

     

    $

    1,488

     

     

     

     

     

     

     

     

     

     

     

    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 (f)

    $

    (1.14)

     

     

    $

    1.48

     

     

    $

    (2.62)

     

     

    $

    3.28

     

     

    Adjustments:

     

     

     

     

     

     

     

     

    LIFO liquidation adjustment (a)

    0.53

     

     

     

     

    0.53

     

     

     

     

    Change in estimated useful life (d)

    0.06

     

     

     

     

    0.06

     

     

     

     

    LCM inventory valuation adjustment (c)

    (0.61)

     

     

     

     

    (0.04)

     

     

     

     

    2019 blender’s tax credit attributable to Valero Energy

    Corporation stockholders (b)

     

     

    0.07

     

     

     

     

    0.26

     

     

    Loss on early redemption of debt (e)

     

     

     

     

     

     

    0.04

     

     

    Total adjustments

    (0.02)

     

     

    0.07

     

     

    0.55

     

     

    0.30

     

     

    Adjusted earnings (loss) per common share –

    assuming dilution (f)

    $

    (1.16)

     

     

    $

    1.55

     

     

    $

    (2.07)

     

     

    $

    3.58

     

     

    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 (g)

    (millions of dollars)

    (unaudited)

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    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)

    $

    (629)

     

     

    $

    1,087

     

     

    $

    (965)

     

     

    $

    2,603

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    4

     

     

     

     

    13

     

    LIFO liquidation adjustment (a)

    326

     

     

     

     

    326

     

     

     

    LCM inventory valuation adjustment (c)

    (296)

     

     

     

     

    (19)

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    989

     

     

    1,100

     

     

    2,912

     

     

    3,197

     

    Depreciation and amortization expense

    538

     

     

    518

     

     

    1,607

     

     

    1,539

     

    Other operating expenses

    24

     

     

    10

     

     

    29

     

     

    13

     

    Refining margin

    $

    952

     

     

    $

    2,719

     

     

    $

    3,890

     

     

    $

    7,365

     

     

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (629)

     

     

    $

    1,087

     

     

    $

    (965)

     

     

    $

    2,603

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    4

     

     

     

     

     

    13

     

    LIFO liquidation adjustment (a)

    326

     

     

     

     

    326

     

     

     

    LCM inventory valuation adjustment (c)

    (296)

     

     

     

     

    (19)

     

     

     

    Other operating expenses

    24

     

     

    10

     

     

    29

     

     

    13

     

    Adjusted refining operating income (loss)

    $

    (575)

     

     

    $

    1,101

     

     

    $

    (629)

     

     

    $

    2,629

     

     

     

     

     

     

     

     

     

    Renewable diesel segment

     

     

     

     

     

     

     

    Renewable diesel operating income

    $

    184

     

     

    $

    65

     

     

    $

    511

     

     

    $

    191

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    58

     

     

     

     

    198

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    23

     

     

    18

     

     

    63

     

     

    54

     

    Depreciation and amortization expense

    10

     

     

    15

     

     

    33

     

     

    38

     

    Renewable diesel margin

    $

    217

     

     

    $

    156

     

     

    $

    607

     

     

    $

    481

     

     

     

     

     

     

     

     

     

    Renewable diesel operating income

    $

    184

     

     

    $

    65

     

     

    $

    511

     

     

    $

    191

     

    Adjustment: 2019 blender’s tax credit (b)

     

     

    58

     

     

     

     

    198

     

    Adjusted renewable diesel operating income

    $

    184

     

     

    $

    123

     

     

    $

    511

     

     

    $

    389

     

     

     

     

     

     

     

     

     

    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 (g)

    (millions of dollars)

    (unaudited)

     

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    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 (continued)

     

     

     

     

     

     

     

    Ethanol segment

     

     

     

     

     

     

     

    Ethanol operating income (loss)

    $

    22

     

     

    $

    (43)

     

     

    $

    (84)

     

     

    $

    (33)

     

    Adjustments:

     

     

     

     

     

     

     

    LCM inventory valuation adjustment (c)

    (17)

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    105

     

     

    121

     

     

    293

     

     

    378

     

    Depreciation and amortization expense (d)

    54

     

     

    23

     

     

    97

     

     

    68

     

    Other operating expenses

    1

     

     

     

     

    1

     

     

    1

     

    Ethanol margin

    $

    165

     

     

    $

    101

     

     

    $

    307

     

     

    $

    414

     

     

     

     

     

     

     

     

     

    Ethanol operating income (loss)

    $

    22

     

     

    $

    (43)

     

     

    $

    (84)

     

     

    $

    (33)

     

    Adjustments:

     

     

     

     

     

     

     

    LCM inventory valuation adjustment (c)

    (17)

     

     

     

     

     

     

     

    Change in estimated useful life (d)

    30

     

     

     

     

    30

     

     

     

    Other operating expenses

    1

     

     

     

     

    1

     

     

    1

     

    Adjusted ethanol operating income (loss)

    $

    36

     

     

    $

    (43)

     

     

    $

    (53)

     

     

    $

    (32)

     

    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 (g)

    (millions of dollars)

    (unaudited)

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    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) (h)

     

     

     

     

     

     

     

    U.S. Gulf Coast region

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (653)

     

     

    $

    388

     

     

    $

    (703)

     

     

    $

    779

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    3

     

     

     

     

    9

     

    LIFO liquidation adjustment (a)

    200

     

     

     

     

    200

     

     

     

    LCM inventory valuation adjustment (c)

    (4)

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    556

     

     

    641

     

     

    1,649

     

     

    1,826

     

    Depreciation and amortization expense

    329

     

     

    326

     

     

    990

     

     

    954

     

    Other operating expenses

    18

     

     

    6

     

     

    20

     

     

    8

     

    Refining margin

    $

    446

     

     

    $

    1,364

     

     

    $

    2,156

     

     

    $

    3,576

     

     

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (653)

     

     

    $

    388

     

     

    $

    (703)

     

     

    $

    779

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    3

     

     

     

     

    9

     

    LIFO liquidation adjustment (a)

    200

     

     

     

     

    200

     

     

     

    LCM inventory valuation adjustment (c)

    (4)

     

     

     

     

     

     

     

    Other operating expenses

    18

     

     

    6

     

     

    20

     

     

    8

     

    Adjusted refining operating income (loss)

    $

    (439)

     

     

    $

    397

     

     

    $

    (483)

     

     

    $

    796

     

     

     

     

     

     

     

     

     

    U.S. Mid-Continent region

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (140)

     

     

    $

    333

     

     

    $

    (67)

     

     

    $

    991

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    1

     

     

     

     

    3

     

    LIFO liquidation adjustment (a)

    58

     

     

     

     

    58

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    153

     

     

    156

     

     

    465

     

     

    468

     

    Depreciation and amortization expense

    84

     

     

    77

     

     

    250

     

     

    226

     

    Other operating expenses

     

     

    2

     

     

     

     

    2

     

    Refining margin

    $

    155

     

     

    $

    569

     

     

    $

    706

     

     

    $

    1,690

     

     

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (140)

     

     

    $

    333

     

     

    $

    (67)

     

     

    $

    991

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

    1

     

     

     

     

    3

     

    LIFO liquidation adjustment (a)

    58

     

     

     

     

    58

     

     

     

    Other operating expenses

     

     

    2

     

     

     

     

    2

     

    Adjusted refining operating income (loss)

    $

    (82)

     

     

    $

    336

     

     

    $

    (9)

     

     

    $

    996

     

     

    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 (g)

    (millions of dollars)

    (unaudited)

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    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) (h)

    (continued)

     

     

     

     

     

     

     

    North Atlantic region

     

     

     

     

     

     

     

    Refining operating income

    $

    201

     

     

    $

    273

     

     

    $

    84

     

     

    $

    727

     

    Adjustments:

     

     

     

     

     

     

     

    LIFO liquidation adjustment (a)

    33

     

     

     

     

    33

     

     

     

    LCM inventory valuation adjustment (c)

    (236)

     

     

     

     

    (19)

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    130

     

     

    146

     

     

    383

     

     

    439

     

    Depreciation and amortization expense

    53

     

     

    52

     

     

    158

     

     

    160

     

    Other operating expenses

    5

     

     

    2

     

     

    8

     

     

    2

     

    Refining margin

    $

    186

     

     

    $

    473

     

     

    $

    647

     

     

    $

    1,328

     

     

     

     

     

     

     

     

     

    Refining operating income

    $

    201

     

     

    $

    273

     

     

    $

    84

     

     

    $

    727

     

    Adjustments:

     

     

     

     

     

     

     

    LIFO liquidation adjustment (a)

    33

     

     

     

     

    33

     

     

     

    LCM inventory valuation adjustment (c)

    (236)

     

     

     

     

    (19)

     

     

     

    Other operating expenses

    5

     

     

    2

     

     

    8

     

     

    2

     

    Adjusted refining operating income

    $

    3

     

     

    $

    275

     

     

    $

    106

     

     

    $

    729

     

     

     

     

     

     

     

     

     

    U.S. West Coast region

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (37)

     

     

    $

    93

     

     

    $

    (279)

     

     

    $

    106

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

     

     

     

     

    1

     

    LIFO liquidation adjustment (a)

    35

     

     

     

     

    35

     

     

     

    LCM inventory valuation adjustment (c)

    (56)

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below)

    150

     

     

    157

     

     

    415

     

     

    464

     

    Depreciation and amortization expense

    72

     

     

    63

     

     

    209

     

     

    199

     

    Other operating expenses

    1

     

     

     

     

    1

     

     

    1

     

    Refining margin

    $

    165

     

     

    $

    313

     

     

    $

    381

     

     

    $

    771

     

     

     

     

     

     

     

     

     

    Refining operating income (loss)

    $

    (37)

     

     

    $

    93

     

     

    $

    (279)

     

     

    $

    106

     

    Adjustments:

     

     

     

     

     

     

     

    2019 blender’s tax credit (b)

     

     

     

     

     

     

    1

     

    LIFO liquidation adjustment (a)

    35

     

     

     

     

    35

     

     

     

    LCM inventory valuation adjustment (c)

    (56)

     

     

     

     

     

     

     

    Other operating expenses

    1

     

     

     

     

    1

     

     

    1

     

    Adjusted refining operating income (loss)

    $

    (57)

     

     

    $

    93

     

     

    $

    (243)

     

     

    $

    108

     

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Throughput volumes (thousand barrels per day)

     

     

     

     

     

     

     

    Feedstocks:

     

     

     

     

     

     

     

    Heavy sour crude oil

    318

     

     

    418

     

     

    352

     

     

    416

     

    Medium/light sour crude oil

    346

     

     

    253

     

     

    357

     

     

    282

     

    Sweet crude oil

    1,252

     

     

    1,615

     

     

    1,240

     

     

    1,548

     

    Residuals

    219

     

     

    238

     

     

    208

     

     

    208

     

    Other feedstocks

    108

     

     

    132

     

     

    92

     

     

    152

     

    Total feedstocks

    2,243

     

     

    2,656

     

     

    2,249

     

     

    2,606

     

    Blendstocks and other

    283

     

     

    298

     

     

    308

     

     

    323

     

    Total throughput volumes

    2,526

     

     

    2,954

     

     

    2,557

     

     

    2,929

     

     

     

     

     

     

     

     

     

    Yields (thousand barrels per day)

     

     

     

     

     

     

     

    Gasolines and blendstocks

    1,273

     

     

    1,406

     

     

    1,217

     

     

    1,393

     

    Distillates

    914

     

     

    1,137

     

     

    931

     

     

    1,123

     

    Other products (i)

    360

     

     

    438

     

     

    424

     

     

    442

     

    Total yields

    2,547

     

     

    2,981

     

     

    2,572

     

     

    2,958

     

     

     

     

     

     

     

     

     

    Operating statistics (g) (j)

     

     

     

     

     

     

     

    Refining margin

    $

    952

     

     

    $

    2,719

     

     

    $

    3,890

     

     

    $

    7,365

     

    Adjusted refining operating income (loss)

    $

    (575)

     

     

    $

    1,101

     

     

    $

    (629)

     

     

    $

    2,629

     

    Throughput volumes (thousand barrels per day)

    2,526

     

     

    2,954

     

     

    2,557

     

     

    2,929

     

     

     

     

     

     

     

     

     

    Refining margin per barrel of throughput

    $

    4.10

     

     

    $

    10.00

     

     

    $

    5.55

     

     

    $

    9.21

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per barrel of

    throughput

    4.26

     

     

    4.05

     

     

    4.16

     

     

    4.00

     

    Depreciation and amortization expense per barrel of

    throughput

    2.32

     

     

    1.90

     

     

    2.29

     

     

    1.92

     

    Adjusted refining operating income (loss) per barrel of

    throughput

    $

    (2.48)

     

     

    $

    4.05

     

     

    $

    (0.90)

     

     

    $

    3.29

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Operating statistics (g) (j)

     

     

     

     

     

     

     

    Renewable diesel margin

    $

    217

     

     

    $

    156

     

     

    $

    607

     

     

    $

    481

     

    Adjusted renewable diesel operating income

    $

    184

     

     

    $

    123

     

     

    $

    511

     

     

    $

    389

     

    Sales volumes (thousand gallons per day)

    870

     

     

    638

     

     

    844

     

     

    732

     

     

     

     

     

     

     

     

     

    Renewable diesel margin per gallon of sales

    $

    2.72

     

     

    $

    2.64

     

     

    $

    2.63

     

     

    $

    2.40

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per gallon of sales

    0.29

     

     

    0.30

     

     

    0.27

     

     

    0.27

     

    Depreciation and amortization expense per gallon of sales

    0.13

     

     

    0.25

     

     

    0.15

     

     

    0.19

     

    Adjusted renewable diesel operating income per gallon

    of sales

    $

    2.30

     

     

    $

    2.09

     

     

    $

    2.21

     

     

    $

    1.94

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Operating statistics (g) (j)

     

     

     

     

     

     

     

    Ethanol margin

    $

    165

     

     

    $

    101

     

     

    $

    307

     

     

    $

    414

     

    Adjusted ethanol operating income (loss)

    $

    36

     

     

    $

    (43)

     

     

    $

    (53)

     

     

    $

    (32)

     

    Production volumes (thousand gallons per day)

    3,800

     

     

    4,006

     

     

    3,408

     

     

    4,251

     

     

     

     

     

     

     

     

     

    Ethanol margin per gallon of production

    $

    0.47

     

     

    $

    0.27

     

     

    $

    0.33

     

     

    $

    0.36

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per gallon of production

    0.30

     

     

    0.33

     

     

    0.31

     

     

    0.33

     

    Depreciation and amortization expense per gallon of production

    0.07

     

     

    0.06

     

     

    0.08

     

     

    0.06

     

    Adjusted ethanol operating income (loss) per gallon of production

    $

    0.10

     

     

    $

    (0.12)

     

     

    $

    (0.06)

     

     

    $

    (0.03)

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Operating statistics by region (h)

     

     

     

     

     

     

     

    U.S. Gulf Coast region (g) (j)

     

     

     

     

     

     

     

    Refining margin

    $

    446

     

     

    $

    1,364

     

     

    $

    2,156

     

     

    $

    3,576

     

    Adjusted refining operating income (loss)

    $

    (439)

     

     

    $

    397

     

     

    $

    (483)

     

     

    $

    796

     

    Throughput volumes (thousand barrels per day)

    1,448

     

     

    1,747

     

     

    1,500

     

     

    1,732

     

     

     

     

     

     

     

     

     

    Refining margin per barrel of throughput

    $

    3.35

     

     

    $

    8.48

     

     

    $

    5.24

     

     

    $

    7.56

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per barrel of

    throughput

    4.19

     

     

    3.99

     

     

    4.01

     

     

    3.86

     

    Depreciation and amortization expense per barrel of

    throughput

    2.47

     

     

    2.02

     

     

    2.41

     

     

    2.02

     

    Adjusted refining operating income (loss) per barrel of

    throughput

    $

    (3.31)

     

     

    $

    2.47

     

     

    $

    (1.18)

     

     

    $

    1.68

     

     

     

     

     

     

     

     

     

    U.S. Mid-Continent region (g) (j)

     

     

     

     

     

     

     

    Refining margin

    $

    155

     

     

    $

    569

     

     

    $

    706

     

     

    $

    1,690

     

    Adjusted refining operating income (loss)

    $

    (82)

     

     

    $

    336

     

     

    $

    (9)

     

     

    $

    996

     

    Throughput volumes (thousand barrels per day)

    417

     

     

    450

     

     

    404

     

     

    451

     

     

     

     

     

     

     

     

     

    Refining margin per barrel of throughput

    $

    4.05

     

     

    $

    13.75

     

     

    $

    6.38

     

     

    $

    13.72

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per barrel of

    throughput

    3.99

     

     

    3.79

     

     

    4.20

     

     

    3.80

     

    Depreciation and amortization expense per barrel of

    throughput

    2.19

     

     

    1.86

     

     

    2.26

     

     

    1.84

     

    Adjusted refining operating income (loss) per barrel of

    throughput

    $

    (2.13)

     

     

    $

    8.10

     

     

    $

    (0.08)

     

     

    $

    8.08

     

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Operating statistics by region (h) (continued)

     

     

     

     

     

     

     

    North Atlantic region (g) (j)

     

     

     

     

     

     

     

    Refining margin

    $

    186

     

     

    $

    473

     

     

    $

    647

     

     

    $

    1,328

     

    Adjusted refining operating income

    $

    3

     

     

    $

    275

     

     

    $

    106

     

     

    $

    729

     

    Throughput volumes (thousand barrels per day)

    408

     

     

    474

     

     

    412

     

     

    486

     

     

     

     

     

     

     

     

     

    Refining margin per barrel of throughput

    $

    4.96

     

     

    $

    10.84

     

     

    $

    5.73

     

     

    $

    10.01

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per barrel of

    throughput

    3.44

     

     

    3.33

     

     

    3.39

     

     

    3.31

     

    Depreciation and amortization expense per barrel of

    throughput

    1.43

     

     

    1.21

     

     

    1.40

     

     

    1.20

     

    Adjusted refining operating income per barrel of

    throughput

    $

    0.09

     

     

    $

    6.30

     

     

    $

    0.94

     

     

    $

    5.50

     

     

     

     

     

     

     

     

     

    U.S. West Coast region (g) (j)

     

     

     

     

     

     

     

    Refining margin

    $

    165

     

     

    $

    313

     

     

    $

    381

     

     

    $

    771

     

    Adjusted refining operating income (loss)

    $

    (57)

     

     

    $

    93

     

     

    $

    (243)

     

     

    $

    108

     

    Throughput volumes (thousand barrels per day)

    253

     

     

    283

     

     

    241

     

     

    260

     

     

     

     

     

     

     

     

     

    Refining margin per barrel of throughput

    $

    7.08

     

     

    $

    12.06

     

     

    $

    5.77

     

     

    $

    10.87

     

    Less:

     

     

     

     

     

     

     

    Operating expenses (excluding depreciation and

    amortization expense reflected below) per barrel of

    throughput

    6.44

     

     

    6.03

     

     

    6.29

     

     

    6.54

     

    Depreciation and amortization expense per barrel of

    throughput

    3.08

     

     

    2.43

     

     

    3.17

     

     

    2.80

     

    Adjusted refining operating income (loss) per barrel of

    throughput

    $

    (2.44)

     

     

    $

    3.60

     

     

    $

    (3.69)

     

     

    $

    1.53

     

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Refining

     

     

     

     

     

     

     

    Feedstocks (dollars per barrel)

     

     

     

     

     

     

     

    Brent crude oil

    $

    43.38

     

     

    $

    62.08

     

     

    $

    42.50

     

     

    $

    64.74

     

    Brent less West Texas Intermediate (WTI) crude oil

    2.47

     

     

    5.64

     

     

    4.27

     

     

    7.70

     

    Brent less Alaska North Slope (ANS) crude oil

    0.64

     

     

    (0.99)

     

     

    1.00

     

     

    (0.51)

     

    Brent less Louisiana Light Sweet (LLS) crude oil

    0.88

     

     

    1.46

     

     

    2.20

     

     

    1.40

     

    Brent less Argus Sour Crude Index (ASCI) crude oil

    1.71

     

     

    3.18

     

     

    3.62

     

     

    3.17

     

    Brent less Maya crude oil

    4.19

     

     

    5.45

     

     

    7.66

     

     

    5.57

     

    LLS crude oil

    42.50

     

     

    60.62

     

     

    40.30

     

     

    63.34

     

    LLS less ASCI crude oil

    0.83

     

     

    1.72

     

     

    1.42

     

     

    1.77

     

    LLS less Maya crude oil

    3.31

     

     

    3.99

     

     

    5.46

     

     

    4.17

     

    WTI crude oil

    40.91

     

     

    56.44

     

     

    38.23

     

     

    57.04

     

     

     

     

     

     

     

     

     

    Natural gas (dollars per million British Thermal Units)

    1.99

     

     

    2.28

     

     

    1.82

     

     

    2.53

     

     

     

     

     

     

     

     

     

    Products (dollars per barrel)

     

     

     

     

     

     

     

    U.S. Gulf Coast:

     

     

     

     

     

     

     

    Conventional Blendstock of Oxygenate Blending (CBOB)

    gasoline less Brent

    4.96

     

     

    6.82

     

     

    2.61

     

     

    4.57

     

    Ultra-low-sulfur (ULS) diesel less Brent

    5.19

     

     

    15.79

     

     

    7.11

     

     

    14.55

     

    Propylene less Brent

    (12.69)

     

     

    (19.36)

     

     

    (15.48)

     

     

    (21.57)

     

    CBOB gasoline less LLS

    5.84

     

     

    8.28

     

     

    4.81

     

     

    5.97

     

    ULS diesel less LLS

    6.07

     

     

    17.25

     

     

    9.31

     

     

    15.95

     

    Propylene less LLS

    (11.81)

     

     

    (17.90)

     

     

    (13.28)

     

     

    (20.17)

     

    U.S. Mid-Continent:

     

     

     

     

     

     

     

    CBOB gasoline less WTI

    8.17

     

     

    15.28

     

     

    7.35

     

     

    14.58

     

    ULS diesel less WTI

    8.54

     

     

    21.38

     

     

    12.41

     

     

    22.93

     

    North Atlantic:

     

     

     

     

     

     

     

    CBOB gasoline less Brent

    8.08

     

     

    10.11

     

     

    5.13

     

     

    7.16

     

    ULS diesel less Brent

    6.79

     

     

    17.28

     

     

    9.34

     

     

    16.49

     

    U.S. West Coast:

     

     

     

     

     

     

     

    California Reformulated Gasoline Blendstock of

    Oxygenate Blending (CARBOB) 87 gasoline less ANS

    13.19

     

     

    19.31

     

     

    10.15

     

     

    16.76

     

    California Air Resources Board (CARB) diesel less ANS

    9.34

     

     

    18.38

     

     

    12.31

     

     

    18.56

     

    CARBOB 87 gasoline less WTI

    15.02

     

     

    25.94

     

     

    13.42

     

     

    24.97

     

    CARB diesel less WTI

    11.17

     

     

    25.01

     

     

    15.58

     

     

    26.77

     

    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,

     

    2020

     

    2019

     

    2020

     

    2019

    Renewable diesel

     

     

     

     

     

     

     

    New York Mercantile Exchange ULS diesel

    (dollars per gallon)

    $

    1.20

     

     

    $

    1.90

     

     

    $

    1.24

     

     

    $

    1.94

     

    Biodiesel Renewable Identification Number (RIN)

    (dollars per RIN)

    0.67

     

     

    0.46

     

     

    0.56

     

     

    0.45

     

    California Low-Carbon Fuel Standard (dollars per metric ton)

    195.60

     

     

    198.24

     

     

    200.88

     

     

    193.74

     

    Chicago Board of Trade (CBOT) soybean oil (dollars per

    pound)

    0.32

     

     

    0.29

     

     

    0.30

     

     

    0.29

     

     

     

     

     

     

     

     

     

    Ethanol

     

     

     

     

     

     

     

    CBOT corn (dollars per bushel)

    3.40

     

     

    3.90

     

     

    3.46

     

     

    3.85

     

    New York Harbor ethanol (dollars per gallon)

    1.46

     

     

    1.53

     

     

    1.32

     

     

    1.50

     

    See Notes to Earnings Release Tables.

    VALERO ENERGY CORPORATION

    EARNINGS RELEASE TABLES

    OTHER FINANCIAL DATA

    (millions of dollars, except per share amounts)

    (unaudited)

     

    September 30,

     

    December 31,

     

    2020

     

    2019

    Balance sheet data

     

     

     

    Current assets

    $

    15,422

     

     

    $

    18,969

     

    Cash and cash equivalents included in current assets

    4,047

     

     

    2,583

     

    Inventories included in current assets

    5,357

     

     

    7,013

     

    Current liabilities

    8,122

     

     

    13,160

     

    Current portion of debt and finance lease obligations

    included in current liabilities

    636

     

     

    494

     

    Debt and finance lease obligations, less current portion

    14,577

     

     

    9,178

     

    Total debt and finance lease obligations

    15,213

     

     

    9,672

     

    Valero Energy Corporation stockholders’ equity

    19,223

     

     

    21,803

     

     

     

     

     

     

     

     

     

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    Reconciliation of net cash provided by operating

    activities to adjusted net cash provided by (used in)

    operating activities (g)

     

     

     

     

     

     

     

    Net cash provided by operating activities

    $

    165

     

     

    $

    1,429

     

     

    $

    852

     

     

    $

    3,823

     

    Exclude:

     

     

     

     

     

     

     

    Changes in current assets and current liabilities

    246

     

     

    315

     

     

    (232)

     

     

    728

     

    Diamond Green Diesel LLC’s (DGD) adjusted net cash

    provided by operating activities attributable to our joint venture partner’s ownership interest in DGD

    96

     

     

    40

     

     

    269

     

     

    114

     

    Adjusted net cash provided by (used in) operating

    activities

    $

    (177)

     

     

    $

    1,074

     

     

    $

    815

     

     

    $

    2,981

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    Dividends per common share

    $

    0.98

     

     

    $

    0.90

     

     

    $

    2.94

     

     

    $

    2.70

     

    See Notes to Earnings Release Tables.

    VALERO ENERGY CORPORATION

    EARNINGS RELEASE TABLES

    OTHER FINANCIAL DATA

    (millions of dollars)

    (unaudited)

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    Reconciliation of total capital investments to capital

    investments attributable to Valero (g)

     

     

     

     

     

     

     

    Capital expenditures (excluding variable interest entities

    (VIEs))

    $

    220

     

     

    $

    325

     

     

    $

    775

     

     

    $

    1,179

     

    Capital expenditures of VIEs:

     

     

     

     

     

     

     

    DGD

    134

     

     

    40

     

     

    311

     

     

    91

     

    Other VIEs

    53

     

     

    70

     

     

    196

     

     

    139

     

    Deferred turnaround and catalyst cost expenditures

    (excluding VIEs)

    92

     

     

    113

     

     

    529

     

     

    583

     

    Deferred turnaround and catalyst cost expenditures

    of DGD

    8

     

     

    15

     

     

    18

     

     

    16

     

    Investments in unconsolidated joint ventures

    10

     

     

    32

     

     

    39

     

     

    122

     

    Total capital investments

    517

     

     

    595

     

     

    1,868

     

     

    2,130

     

    Adjustments:

     

     

     

     

     

     

     

    DGD’s capital investments attributable to our joint

    venture partner

    (71)

     

     

    (28)

     

     

    (165)

     

     

    (54)

     

    Capital expenditures of other VIEs

    (53)

     

     

    (70)

     

     

    (196)

     

     

    (139)

     

    Capital investments attributable to Valero

    $

    393

     

     

    $

    497

     

     

    $

    1,507

     

     

    $

    1,937

     

     

     

     

     

     

     

     

     

    See Notes to Earnings Release Tables.

    VALERO ENERGY CORPORATION

    NOTES TO EARNINGS RELEASE TABLES

    (a)

    Cost of materials and other for the three and nine months ended September 30, 2020 includes a charge of $326 million for the impact of an expected liquidation of LIFO inventory layers attributable to our refining segment. Our inventory levels have decreased throughout the first nine months of 2020 due to lower demand for our products resulting from the negative economic impacts of COVID-19 on our business. Because these impacts are ongoing, we expect that our inventory levels at December 31, 2020 will remain below their December 31, 2019 levels.

     

    (b)

    Cost of materials and other for the three and nine months ended September 30, 2020 includes a benefit of $82 million and $237 million, respectively, related to the blender’s tax credit attributable to renewable diesel volumes blended during those periods. The legislation authorizing the credit through December 31, 2022 was passed and signed into law in December 2019, and that legislation also applied retroactively to volumes blended during 2019 (2019 blender’s tax credit). The entire 2019 blender’s tax credit was recognized by us in December 2019 because the law was enacted in that month, but the benefit attributable to volumes blended during the three and nine months ended September 30, 2019 was $62 million and $211 million, respectively.

     
    The above-mentioned pre-tax benefits are attributable to our reportable segments and stockholders as follows:

     

     

    Periods to which Blenders Tax Credit is Attributable

     

    Three Months Ended
    September 30,

     

    Nine Months Ended
    September 30,

     

    2020

     

    2019

     

    2020

     

    2019

    Reportable segments to which blenders

    tax credit is attributable

     

     

     

     

     

     

     

    Refining

    $

    2

     

     

    $

    4

     

     

    $

    6

     

     

    $

    13

     

    Renewable diesel

    80

     

     

    58

     

     

    231

     

     

    198

     

    Total

    $

    82

     

     

    $

    62

     

     

    $

    237

     

     

    $

    211

     

     

     

     

     

     

     

     

     

    Interests to which blenders tax credit is

    attributable

     

     

     

     

     

     

     

    Valero Energy Corporation stockholders

    $

    42

     

     

    $

    33

     

     

    $

    121

     

     

    $

    112

     

    Noncontrolling interest

    40

     

     

    29

     

     

    116

     

     

    99

     

    Total

    $

    82

     

     

    $

    62

     

     

    $

    237

     

     

    $

    211

     

    (c)

    The market value of our inventories accounted for under the LIFO method fell below their historical cost on an aggregate basis as of March 31, 2020. As a result, we recorded an LCM inventory valuation adjustment of $2.5 billion in March 2020. The market value of our LIFO inventories improved due to the subsequent recovery in market prices, which resulted in a reversal of $2.2 billion in the three months ended June 30, 2020 and the remaining amount in the three months ended September 30, 2020. Of the $313 million benefit recognized in the three months ended September 30, 2020, $296 million and $17 million is attributable to our refining and ethanol segments, respectively. The LCM inventory valuation adjustment for the nine months ended September 30, 2020 reflects a net benefit of $19 million due to the foreign currency translation effect of the portion of the LCM inventory valuation adjustment attributable to our international operations.

     

    (d)

    Depreciation and amortization expense for the three and nine months ended September 30, 2020 includes $30 million in accelerated depreciation related to a change in the estimated useful life of one of our ethanol plants.

     

    (e)

    “Other income, net” for the nine months ended September 30, 2019 includes a $22 million charge from the early redemption of $850 million of our 6.125 percent senior notes due February 1, 2020.

     

    (f)

    Common equivalent shares have been excluded from the computation of loss per common share — assuming dilution and adjusted loss per common share — assuming dilution for the three and nine months ended September 30, 2020, as the effect of including such shares would be antidilutive.

     

    (g)

    We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under U.S. GAAP and are considered to be non-GAAP measures.

     

    We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable U.S. GAAP measures, they provide improved comparability between periods 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 U.S. GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under U.S. GAAP. In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility.

     

    Non-GAAP measures are as follows:

     

    • Adjusted net income (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. 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.

     

    LIFO liquidation adjustment – Generally, the LIFO inventory valuation method provides for the matching of current costs with current revenues. However, a LIFO liquidation results in a portion of our current-year cost of sales being impacted by historical costs, which obscures our current-year financial performance. Therefore, we have excluded the historical cost impact from adjusted net income (loss) attributable to Valero Energy Corporation stockholders. See note (a) for additional details.

     

    Change in estimated useful life – The accelerated depreciation recognized as a result of a change in the estimated useful life of one of our ethanol plants (see note (d)) is not indicative of our ongoing operations.

     

    – LCM inventory valuation adjustment – The LCM inventory valuation adjustment, which is described in note (c), is the result of the market value of our inventories as of March 31, 2020 falling below their historical cost, with the decline in market value resulting from the decline in product market prices associated with the negative economic impacts from COVID-19. As market prices improved over the subsequent months, we reversed the writedown. The adjustment obscures our financial performance because it results in cost of sales reflecting something other than current costs; therefore, we have excluded the adjustment from adjusted net income (loss) attributable to Valero Energy Corporation stockholders.

     

    2019 blender’s tax credit attributable to Valero Energy Corporation stockholders – The 2019 blender’s tax credit was recognized by us in December 2019, but it is attributable to volumes blended throughout 2019. Therefore, the adjustment reflects the portion of the 2019 blender’s tax credit that is associated with volumes blended during the three and nine months ended September 30, 2019. See note (b) for additional details.

     

    Loss on early redemption of debt – The penalty and other expenses incurred in connection with the early redemption of our 6.125 percent senior notes due February 1, 2020 (see note (e)) are not associated with the ongoing costs of our borrowing and financing activities.

     

    • 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 (see note (f)).

     

    • Refining margin is defined as refining operating income (loss) adjusted to reflect the 2019 blender’s tax credit (see note (b)), and excluding the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation 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 operating income adjusted to reflect the 2019 blender’s tax credit (see note (b)), and 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 operating income (loss) excluding the LCM inventory valuation adjustment (see note (c)), 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) adjusted to reflect the 2019 blender’s tax credit (see note (b)), and excluding the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation 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 renewable diesel operating income is defined as renewable diesel segment operating income adjusted to reflect the 2019 blender’s tax credit (see note (b)). We believe this is an important measure of our renewable diesel 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 the LCM inventory valuation adjustment (see note (c)), the change in estimated useful life (see note (d)), and other operating expenses. We believe this is an important measure of our ethanol segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.

     

    • Adjusted net cash provided by operating activities is defined as net cash provided by (used in) 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 our joint venture partner’s ownership interest in DGD – We are a 50/50 joint venture partner in DGD and consolidate DGD’s financial statements; as a result, 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 partners 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 partner 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 our joint venture partner’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,

     

     

    2020

     

    2019

     

    2020

     

    2019

     

    DGD operating cash flow data

     

     

     

     

     

     

     

     

    Net cash provided by operating activities

    $

    194

     

     

    $

    68

     

     

    $

    877

     

     

    $

    228

     

     

    Exclude: changes in current assets and

    current liabilities

    1

     

     

    (12)

     

     

    339

     

     

     

     

    Adjusted net cash provided by

    operating activities

    193

     

     

    80

     

     

    538

     

     

    228

     

     

    Our partner’s ownership interest

    50%

     

    50%

     

    50%

     

    50%

     

    DGD’s adjusted net cash provided by

    operating activities attributable to our joint

    venture partner’s ownership interest in

    DGD

    $

    96

     

     

    $

    40

     

     

    $

    269

     

     

    $

    114

     

    • Capital investments attributable to Valero is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in unconsolidated joint venture presented in our consolidated statements of cash flows, excluding the portion of DGD’s capital investments attributable to our joint venture partner and all of the capital expenditures of other VIEs.

     

    DGD’s partners 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 partner, 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 other consolidated VIEs 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.

     

    (h)

    The refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid-Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries.

     

    (i)

    Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.

     

    (j)

    Valero uses certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

     

    All per barrel of throughput, 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.

     



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    Valero Energy Reports Third Quarter 2020 Results Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a net loss attributable to Valero stockholders of $464 million, or $1.14 per share, for the third quarter of 2020 compared to net income of $609 million, or $1.48 per share, for the …

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