VLO
$97.19
Valero Energy
($.43)
(.44%)
Earnings Details
3rd Quarter September 2019
Thursday, October 24, 2019 6:34:00 AM
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Summary

Valero Energy Beats

Valero Energy (VLO) reported 3rd Quarter September 2019 earnings of $1.48 per share on revenue of $27.2 billion. The consensus earnings estimate was $1.35 per share on revenue of $27.1 billion. The Earnings Whisper number was $1.42 per share. Revenue fell 11.7% compared to the same quarter a year ago.

Valero Energy Corp is a refining and marketing company. The Company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products as well as a slate of premium products.

Results
Reported Earnings
$1.48
Earnings Whisper
$1.42
Consensus Estimate
$1.35
Reported Revenue
$27.25 Bil
Revenue Estimate
$27.08 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Valero Energy Reports Third Quarter 2019 Results

  • Reported net income attributable to Valero stockholders of $609 million, or $1.48 per share.
  • Invested $525 million of capital and completed the Central Texas Pipelines and Terminals project.
  • Valero’s Diamond Green Diesel joint venture announced an advanced engineering and development cost review for a potential new renewable diesel plant at Valero’s refinery in Port Arthur, Texas.
  • Returned $679 million in cash to stockholders through dividends and stock buybacks.

SAN ANTONIO, Oct. 24, 2019 (GLOBE NEWSWIRE) -- Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $609 million, or $1.48 per share, for the third quarter of 2019 compared to $856 million, or $2.01 per share, for the third quarter of 2018. 

“We delivered another quarter of solid financial results despite challenging market conditions,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “Our simple strategy of striving to be the best operator in the business, investing to drive earnings growth with lower volatility and maintaining capital discipline with an uncompromising focus on shareholder returns has proven to be successful and positions us well for any market environment.”

Refining
The refining segment reported $1.1 billion of operating income for the third quarter of 2019 compared to $1.4 billion for the third quarter of 2018. The decrease was primarily driven by narrower crude oil discounts to Brent crude oil.

“Fourth quarter market conditions look favorable with improved gasoline and distillate cracks and wider discounts for medium and heavy sour crude oils,” Gorder said. “We expect to see continued product strength with inventories at lower levels and sour crude weakness resulting from the IMO low sulfur fuel oil mandate, which goes into effect on January 1, 2020.”

Refinery throughput capacity utilization was 94 percent, with throughput volumes averaging 2.95 million barrels per day in the third quarter of 2019. The company processed 190 thousand barrels per day of Canadian heavy crude oil and exported a total of 331 thousand barrels per day of gasoline and distillate during the third quarter of 2019.

Ethanol
The ethanol segment reported a $43 million operating loss for the third quarter of 2019, compared to $21 million of operating income for the third quarter of 2018. The decrease in operating income was attributed primarily to higher corn prices. Ethanol production volumes averaged 4.0 million gallons per day in the third quarter of 2019.

Renewable Diesel
The renewable diesel segment reported $65 million of operating income for the third quarter of 2019 compared to a $5 million operating loss for the third quarter of 2018. Renewable diesel sales volumes averaged 638 thousand gallons per day in the third quarter of 2019, an increase of 387 thousand gallons per day versus the third quarter of 2018. The third quarter of 2018 operating results and sales volumes were impacted by the planned downtime of the Diamond Green Diesel plant as part of completing an expansion project. 

Corporate and Other
General and administrative expenses were $217 million in the third quarter of 2019 compared to $209 million in the third quarter of 2018.  The effective tax rate for the third quarter of 2019 was 21 percent, compared to 24 percent for the third quarter of 2018.

Investing and Financing Activities
Capital investments totaled $525 million in the third quarter of 2019, of which $305 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance.

Valero returned $679 million to stockholders in the third quarter of 2019, of which $372 million was paid as dividends and $307 million was for the purchase of approximately 3.9 million shares of common stock, resulting in a total payout ratio of 61 percent of adjusted net cash provided by operating activities.

Net cash provided by operating activities was $1.4 billion in the third quarter of 2019. Included in this amount is a $315 million favorable impact from working capital. Excluding the change in working capital, adjusted net cash provided by operating activities was $1.1 billion.

Valero continues to target a total payout ratio between 40 and 50 percent of adjusted net cash provided by operating activities for 2019. 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.

Liquidity and Financial Position
Valero ended the third quarter of 2019 with $9.6 billion of total debt and $2.1 billion of cash and cash equivalents. The debt to capital ratio, net of $2 billion in cash, was 26 percent.

Strategic Update
The Central Texas Pipelines and Terminals project was successfully completed in the third quarter of 2019. This project reduces secondary costs and extends Valero’s supply chain from the Gulf Coast to a higher demand market to maximize product margins. Other projects, including the Pasadena terminal, St. Charles alkylation unit, and Pembroke cogeneration unit, remain on track to be complete in 2020. The company expects the Diamond Green Diesel expansion and Port Arthur Coker to be complete in 2021 and 2022, respectively.

In September, Valero and its joint venture partner announced that they have initiated an advanced engineering and development cost review for a new renewable diesel plant at Valero’s Port Arthur, Texas facility. If the project is approved, construction would begin in 2021, with expected operations commencing in 2024, which would result in Diamond Green Diesel production capacity increasing to over 1.1 billion gallons annually.

Valero continues to expect to invest approximately $2.5 billion of capital in both 2019 and 2020, of which approximately 60 percent is for sustaining the business and approximately 40 percent is for growth projects.

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 3.1 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 also is 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
Gautam Srivastava, Manager – Investor Relations, 210-345-3992
Tom Mahrer, Manager – Investor Relations, 210-345-1953

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.  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 on Valero’s website at www.valero.com

Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP).  These non-GAAP measures include adjusted net income attributable to Valero stockholders, adjusted earnings per common share – assuming dilution, refining margin, ethanol margin, renewable diesel margin, adjusted refining operating income, adjusted ethanol operating income, adjusted renewable diesel operating income, and adjusted net cash provided by operating activities.  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 (f) 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,
 2019 2018 2019 2018
Statement of income data       
Revenues$27,249  $30,849  $80,445  $88,303 
Cost of sales:       
Cost of materials and other (a)24,335  27,701  72,396  79,317 
Operating expenses (excluding depreciation and
amortization expense reflected below)
1,239  1,193  3,629  3,439 
Depreciation and amortization expense556  504  1,645  1,499 
Total cost of sales26,130  29,398  77,670  84,255 
Other operating expenses (b)10  10  14  41 
General and administrative expenses (excluding
depreciation and amortization expense reflected below) (c)
217  209  625  695 
Depreciation and amortization expense11  13  39  39 
Operating income881  1,219  2,097  3,273 
Other income, net (d)34  42  68  88 
Interest and debt expense, net of capitalized interest(111) (111) (335) (356)
Income before income tax expense804  1,150  1,830  3,005 
Income tax expense165  276  376  674 
Net income639  874  1,454  2,331 
Less: Net income attributable to noncontrolling interests (a)30  18  92  161 
Net income attributable to Valero Energy Corporation stockholders$609  $856  $1,362  $2,170 
        
Earnings per common share$1.48  $2.01  $3.28  $5.05 
Weighted-average common shares outstanding (in millions)412  425  415  428 
        
Earnings per common share – assuming dilution$1.48  $2.01  $3.28  $5.05 
Weighted-average common shares outstanding –
assuming dilution (in millions)
413  427  416  430 

See Notes to Earnings Release Tables.


VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
FINANCIAL HIGHLIGHTS BY SEGMENT (e)
(millions of dollars)
(unaudited)

 Refining Ethanol Renewable
Diesel
 Corporate
and
Eliminations
 Total
Three months ended September 30, 2019         
Revenues:         
Revenues from external customers$26,145  $891  $212  $1  $27,249 
Intersegment revenues2  57  50  (109)  
Total revenues26,147  948  262  (108) 27,249 
Cost of sales:         
Cost of materials and other23,432  847  164  (108) 24,335 
Operating expenses (excluding depreciation and
amortization expense reflected below)
1,100  121  18    1,239 
Depreciation and amortization expense518  23  15    556 
Total cost of sales25,050  991  197  (108) 26,130 
Other operating expenses (b)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  $(43) $65  $(228) $881 
          
Three months ended September 30, 2018         
Revenues:         
Revenues from external customers$29,894  $864  $90  $1  $30,849 
Intersegment revenues5  68  15  (88)  
Total revenues29,899  932  105  (87) 30,849 
Cost of sales:         
Cost of materials and other26,928  776  85  (88) 27,701 
Operating expenses (excluding depreciation and
amortization expense reflected below)
1,058  116  19    1,193 
Depreciation and amortization expense479  19  6    504 
Total cost of sales28,465  911  110  (88) 29,398 
Other operating expenses (b)10        10 
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
      209  209 
Depreciation and amortization expense      13  13 
Operating income (loss) by segment$1,424  $21  $(5) $(221) $1,219 

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


VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
FINANCIAL HIGHLIGHTS BY SEGMENT (e)
(millions of dollars)
(unaudited)

 Refining Ethanol Renewable
Diesel
 Corporate
and
Eliminations
 Total
Nine months ended September 30, 2019         
Revenues:         
Revenues from external customers$77,109  $2,648  $686  $2  $80,445 
Intersegment revenues12  162  174  (348)  
Total revenues77,121  2,810  860  (346) 80,445 
Cost of sales:         
Cost of materials and other69,769  2,396  577  (346) 72,396 
Operating expenses (excluding depreciation and
amortization expense reflected below)
3,197  378  54    3,629 
Depreciation and amortization expense1,539  68  38    1,645 
Total cost of sales74,505  2,842  669  (346) 77,670 
Other operating expenses (b)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  $(33) $191  $(664) $2,097 
          
Nine months ended September 30, 2018         
Revenues:         
Revenues from external customers$85,371  $2,625  $304  $3  $88,303 
Intersegment revenues20  156  103  (279)  
Total revenues85,391  2,781  407  (276) 88,303 
Cost of sales:         
Cost of materials and other (a)77,195  2,279  122  (279) 79,317 
Operating expenses (excluding depreciation and
amortization expense reflected below)
3,057  336  46    3,439 
Depreciation and amortization expense1,423  57  19    1,499 
Total cost of sales81,675  2,672  187  (279) 84,255 
Other operating expenses (b)41        41 
General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (c)
      695  695 
Depreciation and amortization expense      39  39 
Operating income by segment$3,675  $109  $220  $(731) $3,273 

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 (f)
(millions of dollars, except per share amounts)
(unaudited)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Reconciliation of net income attributable to Valero Energy
Corporation stockholders to adjusted net income
attributable to Valero Energy Corporation stockholders
       
Net income attributable to Valero Energy Corporation
stockholders
$609  $856  $1,362  $2,170 
Exclude adjustments:       
2017 blender’s tax credit attributable to Valero Energy
Corporation
stockholders (a)
      90 
Income tax expense related to 2017 blender’s tax credit      (11)
2017 blender’s tax credit attributable to Valero Energy
Corporation
stockholders, net of taxes
      79 
Texas City Refinery fire expenses      (14)
Income tax benefit related to Texas City Refinery
fire expenses
      3 
Texas City Refinery fire expenses, net of taxes      (11)
Environmental reserve adjustments (c)      (108)
Income tax benefit related to environmental reserve
adjustments
      24 
Environmental reserve adjustments, net of taxes      (84)
Loss on early redemption of debt (d)    (22) (38)
Income tax benefit related to loss on early
redemption of debt
    5  9 
Loss on early redemption of debt, net of taxes    (17) (29)
Total adjustments    (17) (45)
Adjusted net income attributable to
Valero Energy Corporation stockholders
$609  $856  $1,379  $2,215 
        
Reconciliation of earnings per common share – assuming
dilution to adjusted earnings per common share –
assuming dilution
       
Earnings per common share – assuming dilution$1.48  $2.01  $3.28  $5.05 
Exclude adjustments:       
2017 blender’s tax credit attributable to Valero Energy
Corporation
stockholders (a)
      0.18 
Texas City Refinery fire expenses      (0.03)
Environmental reserve adjustments (c)      (0.19)
Loss on early redemption of debt (d)    (0.04) (0.07)
Total adjustments    (0.04) (0.11)
Adjusted earnings per common share – assuming dilution$1.48  $2.01  $3.32  $5.16 

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 (f)
(millions of dollars)
(unaudited)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Reconciliation of operating income by segment to segment
margin, and reconciliation of operating income by
segment to adjusted operating income by segment
       
Refining segment (e)       
Refining operating income$1,087  $1,424  $2,603  $3,675 
Exclude:       
2017 blender’s tax credit (a)      10 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(1,100) (1,058) (3,197) (3,057)
Depreciation and amortization expense(518) (479) (1,539) (1,423)
Other operating expenses (b)(10) (10) (13) (41)
Refining margin$2,715  $2,971  $7,352  $8,186 
        
Refining operating income$1,087  $1,424  $2,603  $3,675 
Exclude:       
2017 blender’s tax credit (a)      10 
Other operating expenses (b)(10) (10) (13) (41)
Adjusted refining operating income$1,097  $1,434  $2,616  $3,706 
        
Ethanol segment       
Ethanol operating income (loss)$(43) $21  $(33) $109 
Exclude:       
Operating expenses (excluding depreciation and
amortization expense reflected below)
(121) (116) (378) (336)
Depreciation and amortization expense(23) (19) (68) (57)
Other operating expenses (b)    (1)  
Ethanol margin$101  $156  $414  $502 
        
Ethanol operating income (loss)$(43) $21  $(33) $109 
Exclude: Other operating expenses (b)    (1)  
Adjusted ethanol operating income (loss)$(43) $21  $(32) $109 
        
Renewable diesel segment (e)       
Renewable diesel operating income (loss)$65  $(5) $191  $220 
Exclude:       
2017 blender’s tax credit (a)      160 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(18) (19) (54) (46)
Depreciation and amortization expense(15) (6) (38) (19)
Renewable diesel margin$98  $20  $283  $125 
        
Renewable diesel operating income (loss)$65  $(5) $191  $220 
Exclude: 2017 blender’s tax credit (a)      160 
Adjusted renewable diesel operating income (loss)$65  $(5) $191  $60 

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 (f)
(millions of dollars)
(unaudited)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Reconciliation of refining segment operating income to
refining margin (by region), and reconciliation of
refining segment operating income to adjusted refining
segment operating income (by region) (g)
       
U.S. Gulf Coast region (e)       
Refining operating income$388  $664  $779  $1,829 
Exclude:       
2017 blender’s tax credit (a)      7 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(641) (583) (1,826) (1,710)
Depreciation and amortization expense(326) (296) (954) (865)
Other operating expenses (b)(6) (9) (8) (39)
Refining margin$1,361  $1,552  $3,567  $4,436 
        
Refining operating income$388  $664  $779  $1,829 
Exclude:       
2017 blender’s tax credit (a)      7 
Other operating expenses (b)(6) (9) (8) (39)
Adjusted refining operating income$394  $673  $787  $1,861 
        
U.S. Mid-Continent region (e)       
Refining operating income$333  $440  $991  $1,072 
Exclude:       
2017 blender’s tax credit (a)      2 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(156) (156) (468) (468)
Depreciation and amortization expense(77) (72) (226) (213)
Other operating expenses (b)(2)   (2)  
Refining margin$568  $668  $1,687  $1,751 
        
Refining operating income$333  $440  $991  $1,072 
Exclude:       
  2017 blender’s tax credit (a)      2 
Other operating expenses (b)(2)   (2)  
Adjusted refining operating income$335  $440  $993  $1,070 

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 (f)
(millions of dollars)
(unaudited)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Reconciliation of refining segment operating income to
refining margin (by region), and reconciliation of
refining segment operating income to adjusted refining
segment operating income (by region) (g) (continued)
       
North Atlantic region       
Refining operating income$273  $322  $727  $620 
Exclude:       
Operating expenses (excluding depreciation and
amortization expense reflected below)
(146) (149) (439) (432)
Depreciation and amortization expense(52) (52) (160) (167)
Other operating expenses (b)(2)   (2)  
Refining margin$473  $523  $1,328  $1,219 
        
Refining operating income$273  $322  $727  $620 
Exclude: other operating expenses (b)(2)    (2)  
Adjusted refining operating income$275  $322  $729  $620 
        
U.S. West Coast region       
Refining operating income (loss)$93  $(2) $106  $154 
Exclude:       
2017 blender’s tax credit (a)      1 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(157) (170) (464) (447)
Depreciation and amortization expense(63) (59) (199) (178)
Other operating expenses (b)  (1) (1) (2)
Refining margin$313  $228  $770  $780 
        
Refining operating income (loss)$93  $(2) $106  $154 
Exclude:       
2017 blender’s tax credit (a)      1 
Other operating expenses (b)  (1) (1) (2)
Adjusted refining operating income (loss)$93  $(1) $107  $155 

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,
 2019 2018 2019 2018
Throughput volumes (thousand barrels per day)       
Feedstocks:       
Heavy sour crude oil418  466  416  476 
Medium/light sour crude oil253  424  282  422 
Sweet crude oil1,615  1,527  1,548  1,392 
Residuals238  244  208  233 
Other feedstocks132  144  152  128 
Total feedstocks2,656  2,805  2,606  2,651 
Blendstocks and other298  295  323  326 
Total throughput volumes2,954  3,100  2,929  2,977 
        
Yields (thousand barrels per day)       
Gasolines and blendstocks1,406  1,478  1,393  1,429 
Distillates1,137  1,201  1,123  1,135 
Other products (h)438  460  442  451 
Total yields2,981  3,139  2,958  3,015 
        
Operating statistics (e) (f) (i)       
Refining margin$2,715  $2,971  $7,352  $8,186 
Adjusted refining operating income$1,097  $1,434  $2,616  $3,706 
Throughput volumes (thousand barrels per day)2,954  3,100  2,929  2,977 
        
Refining margin per barrel of throughput$9.99  $10.42  $9.19  $10.07 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
4.05  3.72  4.00  3.76 
Depreciation and amortization expense per barrel of
throughput
1.90  1.68  1.92  1.75 
Adjusted refining operating income per barrel of throughput$4.04  $5.02  $3.27  $4.56 

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,
 2019 2018 2019 2018
Operating statistics (f) (i)       
Ethanol margin$101  $156  $414  $502 
Adjusted ethanol operating income (loss)$(43) $21  $(32) $109 
Production volumes (thousand gallons per day)4,006  4,069  4,251  4,061 
        
Ethanol margin per gallon of production$0.27  $0.42  $0.36  $0.45 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per gallon of production
0.33  0.31  0.33  0.30 
Depreciation and amortization expense per gallon of production0.06  0.05  0.06  0.05 
Adjusted ethanol operating income (loss) per gallon of production$(0.12) $0.06  $(0.03) $0.10 

See Notes to Earnings Release Tables.


VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS (e)
(millions of dollars, except per gallon amounts)
(unaudited)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Operating statistics (f) (i)       
Renewable diesel margin$98  $20  $283  $125 
Adjusted renewable diesel operating income (loss)$65  $(5) $191  $60 
Sales volumes (thousand gallons per day)638  251  732  334 
        
Renewable diesel margin per gallon of sales$1.66  $0.88  $1.41  $1.37 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per gallon of sales
0.30  0.80  0.27  0.50 
Depreciation and amortization expense per gallon of sales0.25  0.28  0.19  0.21 
Adjusted renewable diesel operating income (loss) per gallon
of sales
$1.11  $(0.20) $0.95  $0.66 

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,
 2019 2018 2019 2018
Operating statistics by region (g)       
U.S. Gulf Coast region (e) (f) (i)       
Refining margin$1,361  $1,552  $3,567  $4,436 
Adjusted refining operating income$394  $673  $787  $1,861 
Throughput volumes (thousand barrels per day)1,747  1,834  1,732  1,764 
        
Refining margin per barrel of throughput$8.47  $9.20  $7.54  $9.22 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.99  3.46  3.86  3.55 
Depreciation and amortization expense per barrel of
throughput
2.02  1.75  2.02  1.81 
Adjusted refining operating income per barrel of throughput$2.46  $3.99  $1.66  $3.86 
        
U.S. Mid-Continent region (e) (f) (i)       
Refining margin$568  $668  $1,687  $1,751 
Adjusted refining operating income$335  $440  $993  $1,070 
Throughput volumes (thousand barrels per day)450  459  451  471 
        
Refining margin per barrel of throughput$13.73  $15.80  $13.70  $13.62 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.79  3.70  3.80  3.64 
Depreciation and amortization expense per barrel of
throughput
1.86  1.70  1.84  1.66 
Adjusted refining operating income per barrel of throughput$8.08  $10.40  $8.06  $8.32 

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,
 2019 2018 2019 2018
Operating statistics by region (g) (continued)       
North Atlantic region (f) (i)       
Refining margin$473  $523  $1,328  $1,219 
Adjusted refining operating income$275  $322  $729  $620 
Throughput volumes (thousand barrels per day)474  509  486  455 
        
Refining margin per barrel of throughput$10.84  $11.17  $10.01  $9.81 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.33  3.18  3.31  3.48 
Depreciation and amortization expense per barrel of
throughput
1.21  1.12  1.20  1.34 
Adjusted refining operating income per barrel of throughput$6.30  $6.87  $5.50  $4.99 
        
U.S. West Coast region (f) (i)       
Refining margin$313  $228  $770  $780 
Adjusted refining operating income (loss)$93  $(1) $107  $155 
Throughput volumes (thousand barrels per day)283  298  260  287 
        
Refining margin per barrel of throughput$12.04  $8.33  $10.84  $9.94 
Less:       
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
6.03  6.22  6.54  5.70 
Depreciation and amortization expense per barrel of
throughput
2.43  2.15  2.80  2.27 
Adjusted refining operating income (loss) per barrel of
throughput
$3.58  $(0.04) $1.50  $1.97 

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,
 2019 2018 2019 2018
Refining       
Feedstocks (dollars per barrel)       
Brent crude oil$62.08  $75.93  $64.74  $72.67 
Brent less West Texas Intermediate (WTI) crude oil5.64  6.23  7.70  5.81 
Brent less Alaska North Slope (ANS) crude oil(0.99) 0.38  (0.51) 0.47 
Brent less Louisiana Light Sweet (LLS) crude oil1.46  1.63  1.40  1.64 
Brent less Argus Sour Crude Index (ASCI) crude oil3.18  5.12  3.17  5.21 
Brent less Maya crude oil5.45  9.74  5.57  10.70 
LLS crude oil60.62  74.30  63.34  71.03 
LLS less ASCI crude oil1.72  3.49  1.77  3.57 
LLS less Maya crude oil3.99  8.11  4.17  9.06 
WTI crude oil56.44  69.70  57.04  66.86 
        
Natural gas (dollars per million British Thermal Units)2.28  2.96  2.53  3.01 
        
Products (dollars per barrel, unless otherwise noted)       
U.S. Gulf Coast:       
Conventional Blendstock of Oxygenate Blending (CBOB)
gasoline less Brent
6.82  7.08  4.57  7.28 
Ultra-low-sulfur (ULS) diesel less Brent15.79  13.91  14.55  13.72 
Propylene less Brent(19.36) 5.49  (21.57) (2.62)
CBOB gasoline less LLS8.28  8.71  5.97  8.92 
ULS diesel less LLS17.25  15.54  15.95  15.36 
Propylene less LLS(17.90) 7.12  (20.17) (0.98)
U.S. Mid-Continent:       
CBOB gasoline less WTI15.28  16.68  14.58  15.40 
ULS diesel less WTI21.38  22.77  22.93  21.54 
North Atlantic:       
CBOB gasoline less Brent10.11  10.43  7.16  9.89 
ULS diesel less Brent17.28  15.54  16.49  15.58 
U.S. West Coast:       
California Reformulated Gasoline Blendstock of
Oxygenate Blending (CARBOB) 87 gasoline less ANS
19.31  13.52  16.76  15.05 
California Air Resources Board (CARB) diesel less ANS18.38  17.85  18.56  17.94 
CARBOB 87 gasoline less WTI25.94  19.37  24.97  20.39 
CARB diesel less WTI25.01  23.70  26.77  23.28 

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,
 2019 2018 2019 2018
Ethanol       
Chicago Board of Trade (CBOT) corn (dollars per bushel)$3.90  $3.53  $3.85  $3.68 
New York Harbor ethanol (dollars per gallon)1.53  1.47  1.50  1.52 
        
Renewable diesel       
New York Mercantile Exchange ULS diesel
(dollars per gallon)
1.90  2.18  1.94  2.10 
Biodiesel Renewable Identification Number (RIN)
(dollars per RIN)
0.46  0.41  0.45  0.58 
California Low-Carbon Fuel Standard (dollars per metric ton)198.24  183.62  193.74  160.44 
CBOT soybean oil (dollars per pound)0.29  0.28  0.29  0.30 

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,
     2019 2018
Balance sheet data       
Current assets    $17,033  $17,675 
Cash and cash equivalents included in current assets 2,137  2,982 
Inventories included in current assets    6,376  6,532 
Current liabilities    12,130  10,724 
Current portion of debt and finance lease obligations included
in current liabilities
 402  238 
Debt and finance lease obligations, less current portion   9,170  8,871 
Total debt and finance lease obligations    9,572  9,109 
Valero Energy Corporation stockholders’ equity   21,107  21,667 
        
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Net cash provided by operating activities and adjusted
net cash provided by operating activities (f)
       
Net cash provided by operating activities$1,429  $496  $3,823  $2,693 
Exclude: changes in current assets and current liabilities315  (729) 728  (1,174)
Adjusted net cash provided by operating activities$1,114  $1,225  $3,095  $3,867 
        
Dividends per common share$0.90  $0.80  $2.70  $2.40 

See Notes to Earnings Release Tables.


VALERO ENERGY CORPORATION
NOTES TO EARNINGS RELEASE TABLES

(a) Cost of materials and other for the nine months ended September 30, 2018 includes a benefit of $170 million for the biodiesel blender’s tax credit attributable to volumes blended during 2017. The benefit was recognized in February 2018 because the U.S. legislation authorizing the credit was passed and signed into law in that month. Of the $170 million pre-tax benefit, $10 million and $160 million is included in our refining and renewable diesel segments, respectively, and consequently, $80 million is attributable to noncontrolling interest and $90 million is attributable to Valero Energy Corporation stockholders.

(b) Other operating expenses reflects expenses that are not associated with our cost of sales and primarily includes costs to repair, remediate, and restore our facilities to normal operations following a non-operating event such as a natural disaster or a major unplanned outage.

(c) General and administrative expenses (excluding depreciation and amortization expense) for the nine months ended September 30, 2018 includes a charge of $108 million for environmental reserve adjustments associated with certain non-operating sites.

(d) “Other income, net” for the nine months ended September 30, 2019 and 2018 includes a $22 million charge from the early redemption of $850 million of our 6.125 percent senior notes due February 1, 2020 and a $38 million charge from the early redemption of $750 million of our 9.375 percent senior notes due March 15, 2019, respectively.

(e) Effective January 1, 2019, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, we created a new reportable segment — renewable diesel. The results of the renewable diesel segment, which includes the operations of our consolidated joint venture, Diamond Green Diesel Holdings LLC, were transferred from the refining segment. Also effective January 1, 2019, we no longer have a VLP segment, and as a result, the operations previously included in the VLP segment are included in our refining segment. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

(f) 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 through the exclusion of 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 attributable to Valero Energy Corporation stockholders is defined as net income attributable to Valero Energy Corporation stockholders excluding the items noted below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion 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 excluded item is provided below.
    • 2017 blender’s tax credit attributable to Valero Energy Corporation stockholders - The blender’s tax credit is attributable to volumes blended during 2017 and is not related to 2018 activities, as described in note (a).
    • Texas City Refinery fire expenses - The costs incurred to respond to and assess the damage caused by the fire that occurred at the Texas City Refinery are specific to that event and are not ongoing costs incurred in our operations.
    • Environmental reserve adjustments - The environmental reserve adjustments are attributable to sites that were shut down by prior owners and subsequently acquired by us (referred to by us as non-operating sites) (see note (c)).
    • 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 and 9.375 percent senior notes due March 15, 2019 (see note (d)) are not associated with the ongoing costs of our borrowing and financing activities.
  • Adjusted earnings per common share – assuming dilution is defined as adjusted net income attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.
  • Refining margin is defined as refining operating income excluding the 2017 blender’s tax credit (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe refining margin is an important measure of our refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.
  • Ethanol margin is defined as ethanol operating income (loss) excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe ethanol margin is an important measure of our ethanol segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.
  • Renewable diesel margin is defined as renewable diesel operating income (loss) excluding the 2017 blender’s tax credit (see note (a)), 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.
  • Adjusted refining operating income is defined as refining segment operating income excluding the 2017 blender’s tax credit (see note (a)) and other operating expenses. We believe adjusted refining operating income is an important measure of our refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.
  • Adjusted ethanol operating income (loss) is defined as ethanol segment operating income (loss) excluding 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 renewable diesel operating income (loss) is defined as renewable diesel segment operating income (loss) excluding the 2017 blender’s tax credit (see note (a)). 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 net cash provided by operating activities is defined as net cash provided by operating activities excluding changes in current assets and current liabilities. 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.

(g) 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.

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

(i) 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 production, and per gallon of sales amounts are calculated by dividing the associated dollar amount by the throughput volumes, production volumes, and sales volumes for the period, as applicable.

Throughput volumes, production volumes, and sales volumes are calculated by multiplying throughput volumes per day, production volumes per day, and sales volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. We use throughput volumes, production volumes, and sales volumes for the refining segment, ethanol segment, and renewable diesel 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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Source: Valero Energy Corporation