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Valero Energy Reports Third Quarter 2021 Results

10/21/21
  • Reported net income attributable to Valero stockholders of $463 million, or $1.13 per share.
  • Reported adjusted net income attributable to Valero stockholders of $500 million, or $1.22 per share.
  • Returned $400 million in cash to stockholders through dividends.
  • Redeemed the total outstanding balance of $575 million Floating Rate Senior Notes due in 2023.
  • Completed the Diamond Green Diesel expansion project (DGD 2).
  • Completed and started up the new Pembroke Cogeneration Unit.

SAN ANTONIO--(BUSINESS WIRE)-- Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $463 million, or $1.13 per share, for the third quarter of 2021, compared to a net loss of $464 million, or $1.14 per share, for the third quarter of 2020. Excluding the adjustments shown in the accompanying earnings release tables, third quarter 2021 adjusted net income attributable to Valero stockholders was $500 million, or $1.22 per share, compared to an adjusted net loss attributable to Valero stockholders of $472 million, or $1.16 per share, for the third quarter of 2020.

Refining

The refining segment reported $835 million of operating income for the third quarter of 2021, compared to a $629 million operating loss for the third quarter of 2020. Third quarter 2021 adjusted operating income was $853 million, compared to an adjusted operating loss of $575 million for the third quarter of 2020. Refinery throughput volumes averaged 2.9 million barrels per day in the third quarter of 2021, which was 338 thousand barrels per day higher than the third quarter of 2020.

“We saw significant improvement in refining margins in the third quarter as economic activity and mobility continued to recover in key markets,” said Joe Gorder, Valero Chairman and Chief Executive Officer. “The continued improvement in earnings of our refining business, coupled with the ongoing expansion of our renewables businesses, should strengthen our competitive advantage and drive long-term shareholder returns.”

Renewable Diesel

The renewable diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $108 million of operating income for the third quarter of 2021, compared to $184 million for the third quarter of 2020. Renewable diesel sales volumes averaged 671 thousand gallons per day in the third quarter of 2021, which was 199 thousand gallons per day lower than the third quarter of 2020. The lower operating income and sales volumes in the third quarter of 2021 are primarily attributed to plant downtime due to Hurricane Ida.

Ethanol

The ethanol segment reported a $44 million operating loss for the third quarter of 2021, compared to $22 million of operating income for the third quarter of 2020. Excluding the adjustments shown in the accompanying earnings release tables, third quarter 2021 adjusted operating income was $4 million, compared to $36 million for the third quarter of 2020. Ethanol production volumes averaged 3.6 million gallons per day in the third quarter of 2021, which was 175 thousand gallons per day lower than the third quarter of 2020.

Corporate and Other

General and administrative expenses were $195 million in the third quarter of 2021, compared to $186 million in the third quarter of 2020. The effective tax rate for the third quarter of 2021 was 11 percent, which reflects the benefit from the portion of DGD’s net income that is not taxable to Valero.

Investing and Financing Activities

Net cash provided by operating activities was $1.4 billion in the third quarter of 2021. Included in this amount was a $379 million favorable impact from working capital and $59 million associated with our joint venture partner’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 $1.0 billion.

Capital investments totaled $585 million in the third quarter of 2021, of which $191 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 $392 million.

Valero returned $400 million to stockholders through dividends for a payout ratio of 40 percent of adjusted net cash provided by operating activities in the third quarter of 2021.

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.

Valero redeemed the entire outstanding principal amount of its $575 million Floating Rate Senior Notes due in 2023 at par value, plus accrued and unpaid interest on September 27, 2021.

Liquidity and Financial Position

Valero ended the third quarter of 2021 with $14.2 billion of total debt and finance lease obligations and $3.5 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 37 percent as of September 30, 2021.

Strategic Update

The Diamond Green Diesel expansion project at Valero’s St. Charles refinery (DGD 2), which increases renewable diesel production capacity by 400 million gallons per year, was completed in the third quarter and is in the process of starting up.

“We are excited to report that the Diamond Green Diesel expansion project at Valero’s St. Charles refinery was successfully completed on-budget and ahead of schedule,” said Gorder. “This is a testament to the strength of our engineering and operations teams, who got this accomplished despite Hurricane Ida related challenges.”

The new DGD plant at Valero’s Port Arthur refinery (DGD 3), which is expected to have a renewable diesel production capacity of 470 million gallons per year, is progressing well and is still expected to commence operations in the first half of 2023, increasing DGD’s total annual production capacity to approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha.

The large-scale carbon sequestration project with BlackRock and Navigator is also progressing on schedule. Navigator has received the necessary board approvals to proceed with the carbon capture pipeline system as a result of a successful binding open season. 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 Pembroke Cogeneration Unit, which is expected to provide an efficient and reliable source of electricity and steam, was completed and commissioned in the third quarter of 2021. 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 2023.

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

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 500 company based in San Antonio, Texas, and owns 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 12 ethanol plants with a combined production capacity of approximately 1.6 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 owns and operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel owns 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.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 COVID-19 pandemic, variants of the virus, governmental and societal responses thereto, including requirements and mandates with respect to 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 renewable diesel operating income, 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 (h) 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,

 

2021

 

2020

 

2021

 

2020

Statement of income data

 

 

 

 

 

 

 

Revenues

$

29,520

 

 

 

$

15,809

 

 

 

$

78,074

 

 

 

$

48,308

 

 

Cost of sales:

 

 

 

 

 

 

 

Cost of materials and other (a) (b)

26,624

 

 

 

14,801

 

 

 

70,865

 

 

 

43,832

 

 

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

 

 

 

(313

)

 

 

 

 

 

(19

)

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

1,348

 

 

 

1,117

 

 

 

4,218

 

 

 

3,268

 

 

Depreciation and amortization expense (d)

630

 

 

 

602

 

 

 

1,772

 

 

 

1,737

 

 

Total cost of sales

28,602

 

 

 

16,207

 

 

 

76,855

 

 

 

48,818

 

 

Other operating expenses

19

 

 

 

25

 

 

 

69

 

 

 

30

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected below)

195

 

 

 

186

 

 

 

579

 

 

 

532

 

 

Depreciation and amortization expense

11

 

 

 

12

 

 

 

35

 

 

 

37

 

 

Operating income (loss)

693

 

 

 

(621

)

 

 

536

 

 

 

(1,109

)

 

Other income, net (e)

32

 

 

 

48

 

 

 

179

 

 

 

107

 

 

Interest and debt expense, net of capitalized interest

(152

)

 

 

(143

)

 

 

(451

)

 

 

(410

)

 

Income (loss) before income tax expense (benefit)

573

 

 

 

(716

)

 

 

264

 

 

 

(1,412

)

 

Income tax expense (benefit) (f)

65

 

 

 

(337

)

 

 

86

 

 

 

(614

)

 

Net income (loss)

508

 

 

 

(379

)

 

 

178

 

 

 

(798

)

 

Less: Net income attributable to noncontrolling interests

45

 

 

 

85

 

 

 

257

 

 

 

264

 

 

Net income (loss) attributable to Valero Energy Corporation

stockholders

$

463

 

 

 

$

(464

)

 

 

$

(79

)

 

 

$

(1,062

)

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share

$

1.13

 

 

 

$

(1.14

)

 

 

$

(0.20

)

 

 

$

(2.62

)

 

Weighted-average common shares outstanding (in millions)

407

 

 

 

407

 

 

 

407

 

 

 

407

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share – assuming dilution

$

1.13

 

 

 

$

(1.14

)

 

 

$

(0.20

)

 

 

$

(2.62

)

 

Weighted-average common shares outstanding –

assuming dilution (in millions) (g)

408

 

 

 

407

 

 

 

407

 

 

 

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 September 30, 2021

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

27,989

 

 

 

$

342

 

 

$

1,189

 

 

 

$

 

 

 

$

29,520

 

 

Intersegment revenues

3

 

 

 

60

 

 

115

 

 

 

(178

)

 

 

 

 

Total revenues

27,992

 

 

 

402

 

 

1,304

 

 

 

(178

)

 

 

29,520

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

25,395

 

 

 

256

 

 

1,150

 

 

 

(177

)

 

 

26,624

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,195

 

 

 

26

 

 

128

 

 

 

(1

)

 

 

1,348

 

 

Depreciation and amortization expense (d)

549

 

 

 

11

 

 

70

 

 

 

 

 

 

630

 

 

Total cost of sales

27,139

 

 

 

293

 

 

1,348

 

 

 

(178

)

 

 

28,602

 

 

Other operating expenses

18

 

 

 

1

 

 

 

 

 

 

 

 

19

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

195

 

 

 

195

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

11

 

 

 

11

 

 

Operating income (loss) by segment

$

835

 

 

 

$

108

 

 

$

(44

)

 

 

$

(206

)

 

 

$

693

 

 

 

 

 

 

 

 

 

 

 

 

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 (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

)

 

 

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

Eiminations

 

Total

Nine months ended September 30, 2021

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

73,426

 

 

 

$

1,190

 

 

$

3,458

 

 

 

$

 

 

 

$

78,074

 

 

Intersegment revenues

7

 

 

 

215

 

 

259

 

 

 

(481

)

 

 

 

 

Total revenues

73,433

 

 

 

1,405

 

 

3,717

 

 

 

(481

)

 

 

78,074

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other (a)

67,417

 

 

 

724

 

 

3,204

 

 

 

(480

)

 

 

70,865

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

3,730

 

 

 

86

 

 

403

 

 

 

(1

)

 

 

4,218

 

 

Depreciation and amortization expense (d)

1,626

 

 

 

35

 

 

111

 

 

 

 

 

 

1,772

 

 

Total cost of sales

72,773

 

 

 

845

 

 

3,718

 

 

 

(481

)

 

 

76,855

 

 

Other operating expenses

68

 

 

 

1

 

 

 

 

 

 

 

 

69

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

579

 

 

 

579

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

35

 

 

 

35

 

 

Operating income (loss) by segment

$

592

 

 

 

$

559

 

 

$

(1

)

 

 

$

(614

)

 

 

$

536

 

 

 

 

 

 

 

 

 

 

 

 

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 (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

)

 

 

See Operating Highlights by Segment.
See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars, except per share amounts)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2021

 

2020

 

2021

 

2020

 

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

$

463

 

 

$

(464

)

 

 

$

(79

)

 

$

(1,062

)

 

Adjustments:

 

 

 

 

 

 

 

 

Gain on sale of MVP interest (e)

 

 

 

 

 

 

(62

)

 

 

 

 

Income tax expense related to gain on sale of MVP interest

 

 

 

 

 

 

14

 

 

 

 

 

Gain on sale of MVP interest, net of taxes

 

 

 

 

 

 

(48

)

 

 

 

 

Diamond Pipeline asset impairment (e)

 

 

 

 

 

 

24

 

 

 

 

 

Income tax benefit related to Diamond Pipeline asset

impairment

 

 

 

 

 

 

(5

)

 

 

 

 

Diamond Pipeline asset impairment, net of taxes

 

 

 

 

 

 

19

 

 

 

 

 

Changes in estimated useful lives (d)

48

 

 

 

30

 

 

 

48

 

 

 

30

 

 

Income tax benefit related to the changes in estimated

useful lives

(11

)

 

 

(6

)

 

 

(11

)

 

 

(6

)

 

Changes in estimated useful lives, net of taxes

37

 

 

 

24

 

 

 

37

 

 

 

24

 

 

Income tax expense related to changes in statutory tax rates (f)

 

 

 

 

 

 

64

 

 

 

 

 

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

 

 

 

326

 

 

 

 

 

 

326

 

 

Income tax benefit related to the LIFO liquidation adjustment

 

 

 

(108

)

 

 

 

 

 

(108

)

 

LIFO liquidation adjustment, net of taxes

 

 

 

218

 

 

 

 

 

 

218

 

 

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

)

 

Total adjustments

37

 

 

 

(8

)

 

 

72

 

 

 

226

 

 

Adjusted net income (loss) attributable to

Valero Energy Corporation stockholders

$

500

 

 

$

(472

)

 

 

$

(7

)

 

$

(836

)

 

 

 

 

 

 

 

 

 

 

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 (g)

$

1.13

 

 

$

(1.14

)

 

 

$

(0.20

)

 

$

(2.62

)

 

Adjustments:

 

 

 

 

 

 

 

 

Gain on sale of MVP interest (e)

 

 

 

 

 

 

(0.12

)

 

 

 

 

Diamond Pipeline asset impairment (e)

 

 

 

 

 

 

0.04

 

 

 

 

 

Changes in estimated useful lives (d)

0.09

 

 

 

0.06

 

 

 

0.09

 

 

 

0.06

 

 

Income tax expense related to changes in statutory tax rates (f)

 

 

 

 

 

 

0.16

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

 

0.53

 

 

 

 

 

 

0.53

 

 

LCM inventory valuation adjustment (c)

 

 

 

(0.61

)

 

 

 

 

 

(0.04

)

 

 

 

 

 

 

 

 

 

 

Total adjustments

0.09

 

 

 

(0.02

)

 

 

0.17

 

 

 

0.55

 

 

Adjusted earnings (loss) per common share –

assuming dilution (g)

$

1.22

 

 

$

(1.16

)

 

 

$

(0.03

)

 

$

(2.07

)

 

 
See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP (h)
(millions of dollars)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

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)

$

835

 

 

$

(629

)

 

 

$

592

 

 

$

(965

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

326

 

 

 

 

 

326

 

 

LCM inventory valuation adjustment (c)

 

 

(296

)

 

 

 

 

(19

)

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

1,195

 

 

989

 

 

 

3,730

 

 

2,912

 

 

Depreciation and amortization expense

549

 

 

538

 

 

 

1,626

 

 

1,607

 

 

Other operating expenses

18

 

 

24

 

 

 

68

 

 

29

 

 

Refining margin

$

2,597

 

 

$

952

 

 

 

$

6,016

 

 

$

3,890

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

835

 

 

$

(629

)

 

 

$

592

 

 

$

(965

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

326

 

 

 

 

 

326

 

 

LCM inventory valuation adjustment (c)

 

 

(296

)

 

 

 

 

(19

)

 

Other operating expenses

18

 

 

24

 

 

 

68

 

 

29

 

 

Adjusted refining operating income (loss)

$

853

 

 

$

(575

)

 

 

$

660

 

 

$

(629

)

 

 

 

 

 

 

 

 

 

Renewable diesel segment

 

 

 

 

 

 

 

Renewable diesel operating income

$

108

 

 

$

184

 

 

 

$

559

 

 

$

511

 

 

Adjustments:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

26

 

 

23

 

 

 

86

 

 

63

 

 

Depreciation and amortization expense

11

 

 

10

 

 

 

35

 

 

33

 

 

Other operating expenses

1

 

 

 

 

 

1

 

 

 

 

Renewable diesel margin

$

146

 

 

$

217

 

 

 

$

681

 

 

$

607

 

 

 

 

 

 

 

 

 

 

Renewable diesel operating income

$

108

 

 

$

184

 

 

 

$

559

 

 

$

511

 

 

Adjustment: Other operating expenses

1

 

 

 

 

 

1

 

 

 

 

Adjusted renewable diesel operating income

$

109

 

 

$

184

 

 

 

$

560

 

 

$

511

 

 

 

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP (h)
(millions of dollars)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

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)

$

(44

)

 

 

$

22

 

 

 

$

(1

)

 

 

$

(84

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (c)

 

 

 

(17

)

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

128

 

 

 

105

 

 

 

403

 

 

 

293

 

 

Depreciation and amortization expense (d)

70

 

 

 

54

 

 

 

111

 

 

 

97

 

 

Other operating expenses

 

 

 

1

 

 

 

 

 

 

1

 

 

Ethanol margin

$

154

 

 

 

$

165

 

 

 

$

513

 

 

 

$

307

 

 

 

 

 

 

 

 

 

 

Ethanol operating income (loss)

$

(44

)

 

 

$

22

 

 

 

$

(1

)

 

 

$

(84

)

 

Adjustments:

 

 

 

 

 

 

 

Changes in estimated useful lives (d)

48

 

 

 

30

 

 

 

48

 

 

 

30

 

 

LCM inventory valuation adjustment (c)

 

 

 

(17

)

 

 

 

 

 

 

 

Other operating expenses

 

 

 

1

 

 

 

 

 

 

1

 

 

Adjusted ethanol operating income (loss)

$

4

 

 

 

$

36

 

 

 

$

47

 

 

 

$

(53

)

 

 

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP (h)
(millions of dollars)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

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) (i)

 

 

 

 

 

 

 

U.S. Gulf Coast region

 

 

 

 

 

 

 

Refining operating income (loss)

$

341

 

 

$

(653

)

 

 

$

(8

)

 

 

$

(703

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

200

 

 

 

 

 

 

200

 

 

LCM inventory valuation adjustment (c)

 

 

(4

)

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

674

 

 

556

 

 

 

2,279

 

 

 

1,649

 

 

Depreciation and amortization expense

332

 

 

329

 

 

 

998

 

 

 

990

 

 

Other operating expenses

17

 

 

18

 

 

 

58

 

 

 

20

 

 

Refining margin

$

1,364

 

 

$

446

 

 

 

$

3,327

 

 

 

$

2,156

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

341

 

 

$

(653

)

 

 

$

(8

)

 

 

$

(703

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

200

 

 

 

 

 

 

200

 

 

LCM inventory valuation adjustment (c)

 

 

(4

)

 

 

 

 

 

 

 

Other operating expenses

17

 

 

18

 

 

 

58

 

 

 

20

 

 

Adjusted refining operating income (loss)

$

358

 

 

$

(439

)

 

 

$

50

 

 

 

$

(483

)

 

 

 

 

 

 

 

 

 

U.S. Mid-Continent region

 

 

 

 

 

 

 

Refining operating income (loss)

$

209

 

 

$

(140

)

 

 

$

322

 

 

 

$

(67

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

58

 

 

 

 

 

 

58

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

174

 

 

153

 

 

 

523

 

 

 

465

 

 

Depreciation and amortization expense

84

 

 

84

 

 

 

253

 

 

 

250

 

 

Other operating expenses

1

 

 

 

 

 

10

 

 

 

 

 

Refining margin

$

468

 

 

$

155

 

 

 

$

1,108

 

 

 

$

706

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

209

 

 

$

(140

)

 

 

$

322

 

 

 

$

(67

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

58

 

 

 

 

 

 

58

 

 

Other operating expenses

1

 

 

 

 

 

10

 

 

 

 

 

Adjusted refining operating income (loss)

$

210

 

 

$

(82

)

 

 

$

332

 

 

 

$

(9

)

 

 

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP (h)
(millions of dollars)
(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

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) (i) (continued)

 

 

 

 

 

 

 

North Atlantic region

 

 

 

 

 

 

 

Refining operating income

$

237

 

 

$

201

 

 

 

$

293

 

 

 

$

84

 

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

33

 

 

 

 

 

 

33

 

 

LCM inventory valuation adjustment (c)

 

 

(236

)

 

 

 

 

 

(19

)

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

186

 

 

130

 

 

 

476

 

 

 

383

 

 

Depreciation and amortization expense

67

 

 

53

 

 

 

179

 

 

 

158

 

 

Other operating expenses

 

 

5

 

 

 

 

 

 

8

 

 

Refining margin

$

490

 

 

$

186

 

 

 

$

948

 

 

 

$

647

 

 

 

 

 

 

 

 

 

 

Refining operating income

$

237

 

 

$

201

 

 

 

$

293

 

 

 

$

84

 

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

33

 

 

 

 

 

 

33

 

 

LCM inventory valuation adjustment (c)

 

 

(236

)

 

 

 

 

 

(19

)

 

Other operating expenses

 

 

5

 

 

 

 

 

 

8

 

 

Adjusted refining operating income

$

237

 

 

$

3

 

 

 

$

293

 

 

 

$

106

 

 

 

 

 

 

 

 

 

 

U.S. West Coast region

 

 

 

 

 

 

 

Refining operating income (loss)

$

48

 

 

$

(37

)

 

 

$

(15

)

 

 

$

(279

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

35

 

 

 

 

 

 

35

 

 

LCM inventory valuation adjustment (c)

 

 

(56

)

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

161

 

 

150

 

 

 

452

 

 

 

415

 

 

Depreciation and amortization expense

66

 

 

72

 

 

 

196

 

 

 

209

 

 

Other operating expenses

 

 

1

 

 

 

 

 

 

1

 

 

Refining margin

$

275

 

 

$

165

 

 

 

$

633

 

 

 

$

381

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

48

 

 

$

(37

)

 

 

$

(15

)

 

 

$

(279

)

 

Adjustments:

 

 

 

 

 

 

 

LIFO liquidation adjustment (b)

 

 

35

 

 

 

 

 

 

35

 

 

LCM inventory valuation adjustment (c)

 

 

(56

)

 

 

 

 

 

 

 

Other operating expenses

 

 

1

 

 

 

 

 

 

1

 

 

Adjusted refining operating income (loss)

$

48

 

 

$

(57

)

 

 

$

(15

)

 

 

$

(243

)

 

 

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,

 

2021

 

2020

 

2021

 

2020

Throughput volumes (thousand barrels per day)

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

Heavy sour crude oil

301

 

 

318

 

 

 

338

 

 

352

 

 

Medium/light sour crude oil

249

 

 

346

 

 

 

295

 

 

357

 

 

Sweet crude oil

1,601

 

 

1,252

 

 

 

1,390

 

 

1,240

 

 

Residuals

275

 

 

219

 

 

 

239

 

 

208

 

 

Other feedstocks

125

 

 

108

 

 

 

118

 

 

92

 

 

Total feedstocks

2,551

 

 

2,243

 

 

 

2,380

 

 

2,249

 

 

Blendstocks and other

313

 

 

283

 

 

 

325

 

 

308

 

 

Total throughput volumes

2,864

 

 

2,526

 

 

 

2,705

 

 

2,557

 

 

 

 

 

 

 

 

 

 

Yields (thousand barrels per day)

 

 

 

 

 

 

 

Gasolines and blendstocks

1,451

 

 

1,273

 

 

 

1,359

 

 

1,217

 

 

Distillates

1,055

 

 

914

 

 

 

995

 

 

931

 

 

Other products (j)

390

 

 

360

 

 

 

381

 

 

424

 

 

Total yields

2,896

 

 

2,547

 

 

 

2,735

 

 

2,572

 

 

 

 

 

 

 

 

 

 

Operating statistics (a) (h) (k)

 

 

 

 

 

 

 

Refining margin

$

2,597

 

 

$

952

 

 

 

$

6,016

 

 

$

3,890

 

 

Adjusted refining operating income (loss)

$

853

 

 

$

(575

)

 

 

$

660

 

 

$

(629

)

 

Throughput volumes (thousand barrels per day)

2,864

 

 

2,526

 

 

 

2,705

 

 

2,557

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

9.85

 

 

$

4.10

 

 

 

$

8.15

 

 

$

5.55

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.53

 

 

4.26

 

 

 

5.05

 

 

4.16

 

 

Depreciation and amortization expense per barrel of

throughput

2.08

 

 

2.32

 

 

 

2.21

 

 

2.29

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

3.24

 

 

$

(2.48

)

 

 

$

0.89

 

 

$

(0.90

)

 

 

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,

 

2021

 

2020

 

2021

 

2020

Operating statistics (h) (k)

 

 

 

 

 

 

 

Renewable diesel margin

$

146

 

 

$

217

 

 

$

681

 

 

$

607

 

Adjusted renewable diesel operating income

$

109

 

 

$

184

 

 

$

560

 

 

$

511

 

Sales volumes (thousand gallons per day)

671

 

 

870

 

 

819

 

 

844

 

 

 

 

 

 

 

 

 

Renewable diesel margin per gallon of sales

$

2.37

 

 

$

2.72

 

 

$

3.05

 

 

$

2.63

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of sales

0.42

 

 

0.29

 

 

0.39

 

 

0.27

 

Depreciation and amortization expense per gallon of sales

0.19

 

 

0.13

 

 

0.16

 

 

0.15

 

Adjusted renewable diesel operating income per gallon of sales

$

1.76

 

 

$

2.30

 

 

$

2.50

 

 

$

2.21

 

 

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,

 

2021

 

2020

 

2021

 

2020

Operating statistics (a) (h) (k)

 

 

 

 

 

 

 

Ethanol margin

$

154

 

 

 

$

165

 

 

 

$

513

 

 

 

$

307

 

 

Adjusted ethanol operating income (loss)

$

4

 

 

 

$

36

 

 

 

$

47

 

 

 

$

(53

)

 

Production volumes (thousand gallons per day)

3,625

 

 

 

3,800

 

 

 

3,797

 

 

 

3,408

 

 

 

 

 

 

 

 

 

 

Ethanol margin per gallon of production

$

0.46

 

 

 

$

0.47

 

 

 

$

0.50

 

 

 

$

0.33

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of production

0.38

 

 

 

0.30

 

 

 

0.39

 

 

 

0.31

 

 

Depreciation and amortization expense per gallon of production (d)

0.21

 

 

 

0.16

 

 

 

0.11

 

 

 

0.11

 

 

Changes in estimated useful lives per gallon of production (d)

(0.14

)

 

 

(0.09

)

 

 

(0.05

)

 

 

(0.03

)

 

Adjusted ethanol operating income (loss) per gallon of production

$

0.01

 

 

 

$

0.10

 

 

 

$

0.05

 

 

 

$

(0.06

)

 

 

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,

 

2021

 

2020

 

2021

 

2020

Operating statistics by region (i)

 

 

 

 

 

 

 

U.S. Gulf Coast region (a) (h) (k)

 

 

 

 

 

 

 

Refining margin

$

1,364

 

 

$

446

 

 

 

$

3,327

 

 

$

2,156

 

 

Adjusted refining operating income (loss)

$

358

 

 

$

(439

)

 

 

$

50

 

 

$

(483

)

 

Throughput volumes (thousand barrels per day)

1,649

 

 

1,448

 

 

 

1,632

 

 

1,500

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

8.99

 

 

$

3.35

 

 

 

$

7.47

 

 

$

5.24

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.44

 

 

4.19

 

 

 

5.12

 

 

4.01

 

 

Depreciation and amortization expense per barrel of

throughput

2.19

 

 

2.47

 

 

 

2.24

 

 

2.41

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

2.36

 

 

$

(3.31

)

 

 

$

0.11

 

 

$

(1.18

)

 

 

 

 

 

 

 

 

 

U.S. Mid-Continent region (a) (h) (k)

 

 

 

 

 

 

 

Refining margin

$

468

 

 

$

155

 

 

 

$

1,108

 

 

$

706

 

 

Adjusted refining operating income (loss)

$

210

 

 

$

(82

)

 

 

$

332

 

 

$

(9

)

 

Throughput volumes (thousand barrels per day)

465

 

 

417

 

 

 

442

 

 

404

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

10.94

 

 

$

4.05

 

 

 

$

9.18

 

 

$

6.38

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.07

 

 

3.99

 

 

 

4.33

 

 

4.20

 

 

Depreciation and amortization expense per barrel of

throughput

1.96

 

 

2.19

 

 

 

2.10

 

 

2.26

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

4.91

 

 

$

(2.13

)

 

 

$

2.75

 

 

$

(0.08

)

 

 

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

Operating statistics by region (i) (continued)

 

 

 

 

 

 

 

North Atlantic region (h) (k)

 

 

 

 

 

 

 

Refining margin

$

490

 

 

$

186

 

 

 

$

948

 

 

 

$

647

 

 

Adjusted refining operating income

$

237

 

 

$

3

 

 

 

$

293

 

 

 

$

106

 

 

Throughput volumes (thousand barrels per day)

480

 

 

408

 

 

 

386

 

 

 

412

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

11.10

 

 

$

4.96

 

 

 

$

9.00

 

 

 

$

5.73

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.21

 

 

3.44

 

 

 

4.53

 

 

 

3.39

 

 

Depreciation and amortization expense per barrel of

throughput

1.52

 

 

1.43

 

 

 

1.69

 

 

 

1.40

 

 

Adjusted refining operating income per barrel of

throughput

$

5.37

 

 

$

0.09

 

 

 

$

2.78

 

 

 

$

0.94

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Refining margin

$

275

 

 

$

165

 

 

 

$

633

 

 

 

$

381

 

 

Adjusted refining operating income (loss)

$

48

 

 

$

(57

)

 

 

$

(15

)

 

 

$

(243

)

 

Throughput volumes (thousand barrels per day)

270

 

 

253

 

 

 

245

 

 

 

241

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

11.05

 

 

$

7.08

 

 

 

$

9.47

 

 

 

$

5.77

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

6.48

 

 

6.44

 

 

 

6.76

 

 

 

6.29

 

 

Depreciation and amortization expense per barrel of

throughput

2.64

 

 

3.08

 

 

 

2.93

 

 

 

3.17

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

1.93

 

 

$

(2.44

)

 

 

$

(0.22

)

 

 

$

(3.69

)

 

 

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,

 

2021

 

2020

 

2021

 

2020

Refining

 

 

 

 

 

 

 

Feedstocks (dollars per barrel)

 

 

 

 

 

 

 

Brent crude oil

$

73.22

 

 

$

43.38

 

 

$

67.77

 

 

$

42.50

 

 

Brent less West Texas Intermediate (WTI) crude oil

2.64

 

 

2.47

 

 

2.94

 

 

4.27

 

 

Brent less Alaska North Slope (ANS) crude oil

0.49

 

 

0.64

 

 

0.46

 

 

1.00

 

 

Brent less Louisiana Light Sweet (LLS) crude oil

1.72

 

 

0.88

 

 

1.29

 

 

2.20

 

 

Brent less Argus Sour Crude Index (ASCI) crude oil

4.52

 

 

1.71

 

 

3.62

 

 

3.62

 

 

Brent less Maya crude oil

7.01

 

 

4.19

 

 

5.95

 

 

7.66

 

 

LLS crude oil

71.51

 

 

42.50

 

 

66.48

 

 

40.30

 

 

LLS less ASCI crude oil

2.81

 

 

0.83

 

 

2.33

 

 

1.42

 

 

LLS less Maya crude oil

5.30

 

 

3.31

 

 

4.66

 

 

5.46

 

 

WTI crude oil

70.58

 

 

40.91

 

 

64.84

 

 

38.23

 

 

 

 

 

 

 

 

 

 

Natural gas (dollars per million British Thermal Units)

4.25

 

 

1.99

 

 

8.95

 

 

1.82

 

 

 

 

 

 

 

 

 

 

Products (dollars per barrel)

 

 

 

 

 

 

 

U.S. Gulf Coast:

 

 

 

 

 

 

 

Conventional Blendstock of Oxygenate Blending (CBOB)

gasoline less Brent

16.90

 

 

4.96

 

 

13.82

 

 

2.61

 

 

Ultra-low-sulfur (ULS) diesel less Brent

14.15

 

 

5.19

 

 

12.44

 

 

7.11

 

 

Propylene less Brent

(5.21

)

 

(12.69

)

 

(2.37

)

 

(15.48

)

 

CBOB gasoline less LLS

18.61

 

 

5.84

 

 

15.11

 

 

4.81

 

 

ULS diesel less LLS

15.86

 

 

6.07

 

 

13.73

 

 

9.31

 

 

Propylene less LLS

(3.50

)

 

(11.81

)

 

(1.08

)

 

(13.28

)

 

U.S. Mid-Continent:

 

 

 

 

 

 

 

CBOB gasoline less WTI

20.84

 

 

8.17

 

 

18.53

 

 

7.35

 

 

ULS diesel less WTI

19.37

 

 

8.54

 

 

18.33

 

 

12.41

 

 

North Atlantic:

 

 

 

 

 

 

 

CBOB gasoline less Brent

20.82

 

 

8.08

 

 

16.58

 

 

5.13

 

 

ULS diesel less Brent

16.32

 

 

6.79

 

 

14.43

 

 

9.34

 

 

U.S. West Coast:

 

 

 

 

 

 

 

California Reformulated Gasoline Blendstock of

Oxygenate Blending (CARBOB) 87 gasoline less ANS

27.49

 

 

13.19

 

 

23.08

 

 

10.15

 

 

California Air Resources Board (CARB) diesel less ANS

18.55

 

 

9.34

 

 

15.99

 

 

12.31

 

 

CARBOB 87 gasoline less WTI

29.64

 

 

15.02

 

 

25.55

 

 

13.42

 

 

CARB diesel less WTI

20.70

 

 

11.17

 

 

18.47

 

 

15.58

 

 

 

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,

 

2021

 

2020

 

2021

 

2020

Renewable diesel

 

 

 

 

 

 

 

New York Mercantile Exchange ULS diesel

(dollars per gallon)

$

2.13

 

 

$

1.20

 

 

$

1.96

 

 

$

1.24

 

Biodiesel Renewable Identification Number (RIN)

(dollars per RIN)

1.60

 

 

0.67

 

 

1.49

 

 

0.56

 

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

175.75

 

 

195.60

 

 

185.29

 

 

200.88

 

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

pound)

0.62

 

 

0.32

 

 

0.58

 

 

0.30

 

 

 

 

 

 

 

 

 

Ethanol

 

 

 

 

 

 

 

CBOT corn (dollars per bushel)

5.58

 

 

3.40

 

 

5.85

 

 

3.46

 

New York Harbor ethanol (dollars per gallon)

2.37

 

 

1.46

 

 

2.18

 

 

1.32

 

 

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,
2021

 

December 31,
2020

Balance sheet data

 

 

 

Current assets

$

18,790

 

 

$

15,844

 

Cash and cash equivalents included in current assets

3,498

 

 

3,313

 

Inventories included in current assets

6,227

 

 

6,038

 

Current liabilities

14,313

 

 

9,283

 

Current portion of debt and finance lease obligations

included in current liabilities

1,162

 

 

723

 

Debt and finance lease obligations, less current portion

13,071

 

 

13,954

 

Total debt and finance lease obligations

14,233

 

 

14,677

 

Valero Energy Corporation stockholders’ equity

17,476

 

 

18,801

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

Reconciliation of net cash provided by operating activities to

adjusted net cash provided by operating activities (h)

 

 

 

 

 

 

 

Net cash provided by operating activities

$

1,449

 

 

$

165

 

 

 

$

3,405

 

 

$

852

 

 

Exclude:

 

 

 

 

 

 

 

Changes in current assets and current liabilities

379

 

 

246

 

 

 

1,630

 

 

(232

)

 

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

provided by operating activities attributable to our joint

venture partner’s ownership interest in DGD

59

 

 

96

 

 

 

299

 

 

269

 

 

Adjusted net cash provided by (used in) operating activities

$

1,011

 

 

$

(177

)

 

 

$

1,476

 

 

$

815

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

Dividends per common share

$

0.98

 

 

$

0.98

 

 

 

$

2.94

 

 

$

2.94

 

 

 

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,

 

2021

 

2020

 

2021

 

2020

Reconciliation of total capital investments to capital

investments attributable to Valero (h)

 

 

 

 

 

 

 

Capital expenditures (excluding variable interest entities

(VIEs))

$

107

 

 

 

$

220

 

 

 

$

368

 

 

 

$

775

 

 

Capital expenditures of VIEs:

 

 

 

 

 

 

 

DGD

332

 

 

 

134

 

 

 

730

 

 

 

311

 

 

Other VIEs

24

 

 

 

53

 

 

 

59

 

 

 

196

 

 

Deferred turnaround and catalyst cost expenditures

(excluding VIEs)

118

 

 

 

92

 

 

 

544

 

 

 

529

 

 

Deferred turnaround and catalyst cost expenditures

of DGD

5

 

 

 

8

 

 

 

6

 

 

 

18

 

 

Investments in unconsolidated joint ventures

(1

)

 

 

10

 

 

 

8

 

 

 

39

 

 

Total capital investments

585

 

 

 

517

 

 

 

1,715

 

 

 

1,868

 

 

Adjustments:

 

 

 

 

 

 

 

DGD’s capital investments attributable to our joint

venture partner

(169

)

 

 

(71

)

 

 

(368

)

 

 

(165

)

 

Capital expenditures of other VIEs

(24

)

 

 

(53

)

 

 

(59

)

 

 

(196

)

 

Capital investments attributable to Valero

$

392

 

 

 

$

393

 

 

 

$

1,288

 

 

 

$

1,507

 

 

 

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 income for the nine months ended September 30, 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 nine months ended September 30, 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 nine months ended September 30, 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 (k)

 

 

 

 

 

 

 

Refining margin per barrel of throughput (h)

$

0.10

 

 

$

0.02

 

 

n/a

 

$

0.06

 

Operating expenses (excluding depreciation

and amortization expense) per barrel of

throughput

0.98

 

 

0.31

 

 

n/a

 

0.65

 

Adjusted refining operating income (loss)

per barrel of throughput (h)

$

1.08

 

 

$

0.33

 

 

n/a

 

$

0.71

 

The estimated excess energy costs attributable to our ethanol segment for the nine months ended September 30, 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 per gallon of production by $0.05 (see note (h) below).

 

(b)

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 decreased throughout the first nine months of 2020 due to lower demand for our products resulting from the negative economic impacts of the COVID-19 pandemic on our business. Consequently, we expected our inventory levels at December 31, 2020 would remain below their December 31, 2019 levels.

 

 

(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 solely to the foreign currency translation effect of the portion of the LCM inventory valuation adjustments attributable to our international operations.

 

(d)

Depreciation and amortization expense for the three and nine months ended September 30, 2021 and 2020 includes accelerated depreciation of $48 million and $30 million, respectively, related to changes in the estimated useful lives of two of our ethanol plants.

 

 

(e)

On April 19, 2021, we sold a 24.99 percent membership interest in MVP Terminalling, LLC (MVP), an unconsolidated joint venture with a subsidiary of Magellan Midstream Partners, L.P., for $270 million. “Other income, net” for the nine months ended September 30, 2021 includes a gain on the sale of $62 million.

 

 

 

“Other income, net” for the nine months ended September 30, 2021 also includes a $24 million charge representing our portion of the asset impairment loss recognized by Diamond Pipeline LLC, an unconsolidated joint venture with a subsidiary of Plains All American Pipeline, L.P., resulting from the joint venture’s cancellation of its pipeline extension project.

 

 

(f)

Certain statutory tax rate changes were enacted during the second quarter of 2021 (primarily an increase in the U.K. rate from 19 percent to 25 percent effective in 2023), which resulted in the remeasurement of our deferred tax liabilities. Under U.S. generally accepted accounting principles (GAAP), we are required to recognize the effect of a change in tax law in the period of enactment. As a result, we recognized income tax expense of $64 million during the nine months ended September 30, 2021, which represents the net increase in our deferred tax liabilities resulting from the changes in the tax rates.

 

 

(g)

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 nine months ended September 30, 2021 and for the three and nine months ended September 30, 2020, as the effect of including such shares is antidilutive.

 

 

(h)

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. The income tax effect for the adjustments was calculated using a combined federal and state statutory rate for the U.S.-based adjustments of 22 percent and a local statutory income tax rate for foreign-based adjustments. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below.

 

Gain on sale of MVP interest – The gain on the sale of a 24.99 percent membership interest in MVP (see note (e)) is not indicative of our ongoing operations.

 

 

 

Diamond Pipeline asset impairment – The asset impairment loss related to the cancellation of a capital project associated with Diamond Pipeline LLC (see note (e)) is not indicative of our ongoing operations.

 

 

 

Changes in estimated useful lives – The accelerated depreciation recognized as a result of changes in the estimated useful lives of two of our ethanol plants (see note (d)) is not indicative of our ongoing operations.

 

 

 

Income tax expense related to changes in statutory tax rates – The income tax expense related to changes in certain statutory tax rates (see note (f)) is not indicative of income tax expense associated with the pre-tax results for the nine months ended September 30, 2021.

 

 

 

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 (b) for additional details.

 

 

 

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 crude oil and product market prices associated with the negative economic impacts from the COVID-19 pandemic. As market prices improved over the subsequent months, we reversed the writedown. The adjustment obscures our financial performance because it does not result from decisions made by us; therefore, we have excluded the adjustment from adjusted net income (loss) attributable to Valero Energy Corporation stockholders.

 

 

 

  • 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 (g)).

 

  • Refining margin is defined as refining segment operating income (loss) excluding the LIFO liquidation adjustment (see note (b)), 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 segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. 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 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) excluding the LIFO liquidation adjustment (see note (b)), 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 excluding other operating expenses. We believe adjusted renewable diesel operating income is an important measure of our renewable diesel segment’s operating and financial performance because it excludes an item that is not indicative of that segment’s core operating performance.

 

  • Adjusted ethanol operating income (loss) is defined as ethanol segment operating income (loss) excluding the changes in estimated useful lives (see note (d)), the LCM inventory valuation adjustment (see note (c)), and 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 our joint venture partner’s ownership interest in DGD – We are a 50/50 joint venture partner 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 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,

 

2021

 

2020

 

2021

 

2020

DGD operating cash flow data

 

 

 

 

 

 

 

Net cash provided by operating activities

$

175

 

 

$

194

 

 

$

638

 

 

$

877

 

Exclude: changes in current assets and

current liabilities

56

 

 

1

 

 

39

 

 

339

 

Adjusted net cash provided by

operating activities

119

 

 

193

 

 

599

 

 

538

 

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

$

59

 

 

$

96

 

 

$

299

 

 

$

269

 

 

  • Capital investments attributable to Valero is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in unconsolidated joint ventures 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 VIEs other than DGD.

    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 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.
 

(i)

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.

 

 

(j)

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

 

 

(k)

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.

 

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

Source: Valero Energy Corporation

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