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Valero Energy Reports Second Quarter 2021 Results

  • Reported net income attributable to Valero stockholders of $162 million, or $0.39 per share.
  • Reported adjusted net income attributable to Valero stockholders of $197 million, or $0.48 per share.
  • Returned $401 million in cash to stockholders through dividends.
  • Declared a regular quarterly cash dividend of $0.98 per share payable in the third quarter.
  • Advanced the expected completion of the Diamond Green Diesel project at Port Arthur (DGD 3) to the first half of 2023 versus the prior estimate of the second half of 2023.

Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $162 million, or $0.39 per share, for the second quarter of 2021, compared to $1.3 billion, or $3.07 per share, for the second quarter of 2020. Excluding the adjustments shown in the accompanying earnings release tables, second quarter 2021 adjusted net income attributable to Valero stockholders was $197 million, or $0.48 per share, compared to an adjusted net loss attributable to Valero stockholders of $504 million, or $1.25 per share, in the second quarter of 2020. Second quarter 2020 adjusted results exclude the benefit from an after-tax lower of cost or market, or LCM, inventory valuation adjustment of $1.8 billion.

Refining

The refining segment reported $349 million of operating income for the second quarter of 2021, compared to $1.8 billion for the second quarter of 2020. The second quarter 2021 adjusted operating income was $361 million, compared to an adjusted operating loss of $383 million in the second quarter of 2020, which excludes the LCM inventory valuation adjustment. Refinery throughput volumes averaged 2.8 million barrels per day in the second quarter of 2021, which was 514 thousand barrels per day higher than the second quarter of 2020.

“Our system’s flexibility and the team’s relentless focus on optimization in a weak, but otherwise improving, margin environment enabled us to deliver positive earnings in the second quarter,” said Joe Gorder, Valero Chairman and Chief Executive Officer. “More importantly, cash provided by operating activities more than covered our cash used in investing and financing activities for the quarter, even without the cash benefits from our receipt of the 2020 income tax refund and the proceeds from the sale of a portion of our interest in the Pasadena terminal.”

Renewable Diesel

The renewable diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $248 million of operating income for the second quarter of 2021, compared to $129 million for the second quarter of 2020. Renewable diesel sales volumes averaged 923 thousand gallons per day in the second quarter of 2021, which was 128 thousand gallons per day higher than the second quarter of 2020.

“Our renewable diesel segment continues to perform exceptionally well,” said Gorder. “The segment once again set records for renewable diesel operating income and sales volumes, highlighting DGD’s ability to process a wide range of discounted feedstocks, combined with Valero’s operational and technical expertise.”

Ethanol

The ethanol segment reported $99 million of operating income for the second quarter of 2021, compared to $91 million for the second quarter of 2020. Excluding the LCM inventory valuation adjustment, the second quarter 2020 adjusted operating loss was $20 million. Ethanol production volumes averaged 4.2 million gallons per day in the second quarter of 2021, which was 1.9 million gallons per day higher than the second quarter of 2020.

Corporate and Other

General and administrative expenses were $176 million in the second quarter of 2021, compared to $169 million in the second quarter of 2020. The effective tax rate for the second quarter of 2021 was 37 percent, which is higher than the second quarter of 2020 due to the remeasurement of our deferred tax liabilities primarily as a result of an increase in the U.K. statutory tax rate that will be effective in 2023.

Investing and Financing Activities

Capital investments totaled $548 million in the second quarter of 2021, of which $252 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 $417 million.

Net cash provided by operating activities was $2.0 billion in the second quarter of 2021. Included in this amount was a $1.1 billion favorable impact from working capital and $132 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 $809 million.

Valero returned $401 million to stockholders through dividends for a payout ratio of 50 percent of adjusted net cash provided by operating activities in the second 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.

Liquidity and Financial Position

Valero ended the second quarter of 2021 with $14.7 billion of total debt and finance lease obligations and $3.6 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 37 percent as of June 30, 2021.

Strategic Update

Valero continues to advance economic projects that lower the carbon intensity of its products. The large-scale carbon sequestration project with BlackRock and Navigator is moving ahead with strong interest from additional parties in the 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.

In addition, Valero and its joint venture partner continue to steadily expand DGD’s capacity to produce low-carbon intensity renewable diesel. The DGD plant expansion at St. Charles (DGD 2), which is expected to increase renewable diesel production capacity by 400 million gallons per year, remains on budget and is still on track to be completed and operational in the middle of the fourth quarter of 2021. The St. Charles expansion will also provide the capability to market 30 million gallons per year of renewable naphtha into low-carbon fuel markets. The new DGD plant at Port Arthur (DGD 3), which is expected to increase renewable diesel production capacity by 470 million gallons per year, is also progressing well and is now 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.

Refinery optimization projects that are expected to reduce cost and improve margin capture are progressing on schedule. The Pembroke Cogen project is on track to be completed in the third quarter of 2021 and the Port Arthur Coker project is 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 half of Valero’s 2021 growth capital is allocated to expanding the renewable diesel business.

“As demand for low-carbon fuels expands globally, we continue to expand our long-term competitive advantage through innovation in renewables,” said Gorder. “In addition to quadrupling our renewable diesel production capacity in the next couple of years, we are evaluating and developing other renewable fuels opportunities with carbon sequestration, renewable naphtha, sustainable aviation fuel, and renewable hydrogen.”

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 13 ethanol plants with a combined production capacity of approximately 1.7 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 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.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 delays in construction timing and other factors, including but not limited to the impacts of COVID-19. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual 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.

COVID-19 Disclosure

Some governmental authorities began lifting restrictions intended to prevent the spread of COVID-19 in the latter part of 2020 and this has continued throughout the first six months of 2021 as the distribution of vaccines has helped decrease rates of infection. These actions have contributed to increasing levels of individual movement and travel and a resulting increase in the demand for and market prices of our products. However, some governmental authorities continue to impose, or have recently reimposed, some level of restrictions due in part to new outbreaks, including those related to new variants of the COVID-19 virus. The ongoing distribution of vaccines may result in the continued lifting of restrictions globally and may be seen as a key factor contributing to the ongoing restoration of public confidence, and thus also to stimulating and increasing economic activity. However, the risk remains that vaccines may not be distributed widely on a timely basis, they may not be as effective against new variants of the virus, the distribution of some or all of the vaccines may be paused or withdrawn due to concerns with potential side effects, and/or the level of individuals’ willingness to receive a vaccine may not be as strong or as timely as needed. Based on these and other circumstances that cannot be predicted, the broader implications of the pandemic on our results of operations and financial position remain uncertain and may continue to be significant. We believe we have proactively responded to many of the known impacts of the pandemic on our business to the extent practicable and we strive to continue to do so, but there can be no assurance that these or other measures will be fully effective. For more information, see our annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission.

Use of Non-GAAP Financial Information

This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include adjusted net income (loss) attributable to Valero stockholders, adjusted earnings (loss) per common share – assuming dilution, refining margin, renewable diesel margin, ethanol margin, adjusted refining operating income (loss), adjusted ethanol operating income (loss), adjusted net cash provided by operating activities, and capital investments attributable to Valero. These non-GAAP financial measures have been included to help facilitate the comparison of operating results between periods. See the accompanying earnings release tables for a reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measures. Note (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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Statement of income data

 

 

 

 

 

 

 

Revenues

$

27,748

 

 

 

$

10,397

 

 

 

$

48,554

 

 

 

$

32,499

 

 

Cost of sales:

 

 

 

 

 

 

 

Cost of materials and other (a)

25,249

 

 

 

9,079

 

 

 

44,241

 

 

 

29,031

 

 

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

 

 

 

(2,248

)

 

 

 

 

 

294

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

1,214

 

 

 

1,027

 

 

 

2,870

 

 

 

2,151

 

 

Depreciation and amortization expense

576

 

 

 

566

 

 

 

1,142

 

 

 

1,135

 

 

Total cost of sales

27,039

 

 

 

8,424

 

 

 

48,253

 

 

 

32,611

 

 

Other operating expenses

12

 

 

 

3

 

 

 

50

 

 

 

5

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected below)

176

 

 

 

169

 

 

 

384

 

 

 

346

 

 

Depreciation and amortization expense

12

 

 

 

12

 

 

 

24

 

 

 

25

 

 

Operating income (loss)

509

 

 

 

1,789

 

 

 

(157

)

 

 

(488

)

 

Other income, net (c)

102

 

 

 

27

 

 

 

147

 

 

 

59

 

 

Interest and debt expense, net of capitalized interest

(150

)

 

 

(142

)

 

 

(299

)

 

 

(267

)

 

Income (loss) before income tax expense (benefit)

461

 

 

 

1,674

 

 

 

(309

)

 

 

(696

)

 

Income tax expense (benefit) (d)

169

 

 

 

339

 

 

 

21

 

 

 

(277

)

 

Net income (loss)

292

 

 

 

1,335

 

 

 

(330

)

 

 

(419

)

 

Less: Net income attributable to noncontrolling interests

130

 

 

 

82

 

 

 

212

 

 

 

179

 

 

Net income (loss) attributable to Valero Energy Corporation

stockholders

$

162

 

 

 

$

1,253

 

 

 

$

(542

)

 

 

$

(598

)

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share

$

0.39

 

 

 

$

3.07

 

 

 

$

(1.34

)

 

 

$

(1.48

)

 

Weighted-average common shares outstanding (in millions)

407

 

 

 

406

 

 

 

407

 

 

 

407

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share – assuming dilution

$

0.39

 

 

 

$

3.07

 

 

 

$

(1.34

)

 

 

$

(1.48

)

 

Weighted-average common shares outstanding –

assuming dilution (in millions) (e)

407

 

 

 

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 June 30, 2021

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

25,968

 

 

 

$

496

 

 

$

1,284

 

 

 

$

 

 

 

$

27,748

 

 

Intersegment revenues

1

 

 

 

76

 

 

84

 

 

 

(161

)

 

 

 

 

Total revenues

25,969

 

 

 

572

 

 

1,368

 

 

 

(161

)

 

 

27,748

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

24,000

 

 

 

281

 

 

1,130

 

 

 

(162

)

 

 

25,249

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,064

 

 

 

31

 

 

119

 

 

 

 

 

 

1,214

 

 

Depreciation and amortization expense

544

 

 

 

12

 

 

20

 

 

 

 

 

 

576

 

 

Total cost of sales

25,608

 

 

 

324

 

 

1,269

 

 

 

(162

)

 

 

27,039

 

 

Other operating expenses

12

 

 

 

 

 

 

 

 

 

 

 

12

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

176

 

 

 

176

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

12

 

 

 

12

 

 

Operating income by segment

$

349

 

 

 

$

248

 

 

$

99

 

 

 

$

(187

)

 

 

$

509

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2020

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

9,615

 

 

 

$

239

 

 

$

543

 

 

 

$

 

 

 

$

10,397

 

 

Intersegment revenues

2

 

 

 

57

 

 

38

 

 

 

(97

)

 

 

 

 

Total revenues

9,617

 

 

 

296

 

 

581

 

 

 

(97

)

 

 

10,397

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

8,539

 

 

 

135

 

 

501

 

 

 

(96

)

 

 

9,079

 

 

LCM inventory valuation adjustment (b)

(2,137

)

 

 

 

 

(111

)

 

 

 

 

 

(2,248

)

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

928

 

 

 

20

 

 

79

 

 

 

 

 

 

1,027

 

 

Depreciation and amortization expense

533

 

 

 

12

 

 

21

 

 

 

 

 

 

566

 

 

Total cost of sales

7,863

 

 

 

167

 

 

490

 

 

 

(96

)

 

 

8,424

 

 

Other operating expenses

3

 

 

 

 

 

 

 

 

 

 

 

3

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

169

 

 

 

169

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

12

 

 

 

12

 

 

Operating income by segment

$

1,751

 

 

 

$

129

 

 

$

91

 

 

 

$

(182

)

 

 

$

1,789

 

 

 

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

 

 

Refining

 

Renewable

Diesel

 

Ethanol

 

Corporate

and

Eliminations

 

Total

Six months ended June 30, 2021

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

45,437

 

 

 

$

848

 

 

$

2,269

 

 

 

$

 

 

 

$

48,554

 

 

Intersegment revenues

4

 

 

 

155

 

 

144

 

 

 

(303

)

 

 

 

 

Total revenues

45,441

 

 

 

1,003

 

 

2,413

 

 

 

(303

)

 

 

48,554

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other (a)

42,022

 

 

 

468

 

 

2,054

 

 

 

(303

)

 

 

44,241

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

2,535

 

 

 

60

 

 

275

 

 

 

 

 

 

2,870

 

 

Depreciation and amortization expense

1,077

 

 

 

24

 

 

41

 

 

 

 

 

 

1,142

 

 

Total cost of sales

45,634

 

 

 

552

 

 

2,370

 

 

 

(303

)

 

 

48,253

 

 

Other operating expenses

50

 

 

 

 

 

 

 

 

 

 

 

50

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

384

 

 

 

384

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

24

 

 

 

24

 

 

Operating income (loss) by segment

$

(243

)

 

 

$

451

 

 

$

43

 

 

 

$

(408

)

 

 

$

(157

)

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2020

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from external customers

$

30,600

 

 

 

$

545

 

 

$

1,354

 

 

 

$

 

 

 

$

32,499

 

 

Intersegment revenues

4

 

 

 

110

 

 

102

 

 

 

(216

)

 

 

 

 

Total revenues

30,604

 

 

 

655

 

 

1,456

 

 

 

(216

)

 

 

32,499

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

Cost of materials and other

27,666

 

 

 

265

 

 

1,314

 

 

 

(214

)

 

 

29,031

 

 

LCM inventory valuation adjustment (b)

277

 

 

 

 

 

17

 

 

 

 

 

 

294

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,923

 

 

 

40

 

 

188

 

 

 

 

 

 

2,151

 

 

Depreciation and amortization expense

1,069

 

 

 

23

 

 

43

 

 

 

 

 

 

1,135

 

 

Total cost of sales

30,935

 

 

 

328

 

 

1,562

 

 

 

(214

)

 

 

32,611

 

 

Other operating expenses

5

 

 

 

 

 

 

 

 

 

 

 

5

 

 

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

 

 

 

 

 

 

 

 

346

 

 

 

346

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

25

 

 

 

25

 

 

Operating income (loss) by segment

$

(336

)

 

 

$

327

 

 

$

(106

)

 

 

$

(373

)

 

 

$

(488

)

 

 

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

June 30,

 

Six Months Ended

June 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

$

162

 

 

 

$

1,253

 

 

 

$

(542

)

 

 

$

(598

)

 

Adjustments:

 

 

 

 

 

 

 

Gain on sale of MVP interest (c)

(62

)

 

 

 

 

 

(62

)

 

 

 

 

Income tax expense related to gain on sale of MVP interest

14

 

 

 

 

 

 

14

 

 

 

 

 

Gain on sale of MVP interest, net of taxes

(48

)

 

 

 

 

 

(48

)

 

 

 

 

Diamond Pipeline asset impairment (c)

24

 

 

 

 

 

 

24

 

 

 

 

 

Income tax benefit related to Diamond Pipeline asset

impairment

(5

)

 

 

 

 

 

(5

)

 

 

 

 

Diamond Pipeline asset impairment, net of taxes

19

 

 

 

 

 

 

19

 

 

 

 

 

Income tax expense related to change in statutory tax rates (d)

64

 

 

 

 

 

 

64

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

 

(2,248

)

 

 

 

 

 

294

 

 

Income tax expense (benefit) related to the LCM inventory

valuation adjustment

 

 

 

491

 

 

 

 

 

 

(60

)

 

LCM inventory valuation adjustment, net of taxes

 

 

 

(1,757

)

 

 

 

 

 

234

 

 

Total adjustments

35

 

 

 

(1,757

)

 

 

35

 

 

 

234

 

 

Adjusted net income (loss) attributable to

Valero Energy Corporation stockholders

$

197

 

 

 

$

(504

)

 

 

$

(507

)

 

 

$

(364

)

 

 

 

 

 

 

 

 

 

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 (e)

$

0.39

 

 

 

$

3.07

 

 

 

$

(1.34

)

 

 

$

(1.48

)

 

Adjustments:

 

 

 

 

 

 

 

Gain on sale of MVP interest (c)

(0.12

)

 

 

 

 

 

(0.12

)

 

 

 

 

Diamond Pipeline asset impairment (c)

0.05

 

 

 

 

 

 

0.05

 

 

 

 

 

Income tax expense related to change in statutory tax rates (d)

0.16

 

 

 

 

 

 

0.16

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

 

(4.32

)

 

 

 

 

 

0.58

 

 

Total adjustments

0.09

 

 

 

(4.32

)

 

 

0.09

 

 

 

0.58

 

 

Adjusted earnings (loss) per common share –

assuming dilution (e)

$

0.48

 

 

 

$

(1.25

)

 

 

$

(1.25

)

 

 

$

(0.90

)

 

 

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

June 30,

 

Six Months Ended

June 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)

$

349

 

 

$

1,751

 

 

 

$

(243

)

 

 

$

(336

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(2,137

)

 

 

 

 

 

277

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

1,064

 

 

928

 

 

 

2,535

 

 

 

1,923

 

 

Depreciation and amortization expense

544

 

 

533

 

 

 

1,077

 

 

 

1,069

 

 

Other operating expenses

12

 

 

3

 

 

 

50

 

 

 

5

 

 

Refining margin

$

1,969

 

 

$

1,078

 

 

 

$

3,419

 

 

 

$

2,938

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

349

 

 

$

1,751

 

 

 

$

(243

)

 

 

$

(336

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(2,137

)

 

 

 

 

 

277

 

 

Other operating expenses

12

 

 

3

 

 

 

50

 

 

 

5

 

 

Adjusted refining operating income (loss)

$

361

 

 

$

(383

)

 

 

$

(193

)

 

 

$

(54

)

 

 

 

 

 

 

 

 

 

Renewable diesel segment

 

 

 

 

 

 

 

Renewable diesel operating income

$

248

 

 

$

129

 

 

 

$

451

 

 

 

$

327

 

 

Adjustments:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

31

 

 

20

 

 

 

60

 

 

 

40

 

 

Depreciation and amortization expense

12

 

 

12

 

 

 

24

 

 

 

23

 

 

Renewable diesel margin

$

291

 

 

$

161

 

 

 

$

535

 

 

 

$

390

 

 

 

 

 

 

 

 

 

 

Ethanol segment

 

 

 

 

 

 

 

Ethanol operating income (loss)

$

99

 

 

$

91

 

 

 

$

43

 

 

 

$

(106

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(111

)

 

 

 

 

 

17

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

119

 

 

79

 

 

 

275

 

 

 

188

 

 

Depreciation and amortization expense

20

 

 

21

 

 

 

41

 

 

 

43

 

 

Ethanol margin

$

238

 

 

$

80

 

 

 

$

359

 

 

 

$

142

 

 

 

 

 

 

 

 

 

 

Ethanol operating income (loss)

$

99

 

 

$

91

 

 

 

$

43

 

 

 

$

(106

)

 

Adjustment: LCM inventory valuation adjustment (b)

 

 

(111

)

 

 

 

 

 

17

 

 

Adjusted ethanol operating income (loss)

$

99

 

 

$

(20

)

 

 

$

43

 

 

 

$

(89

)

 

 

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

June 30,

 

Six Months Ended

June 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) (g)

 

 

 

 

 

 

 

U.S. Gulf Coast region

 

 

 

 

 

 

 

Refining operating income (loss)

$

159

 

 

$

892

 

 

 

$

(349

)

 

 

$

(50

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(1,109

)

 

 

 

 

 

4

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

611

 

 

535

 

 

 

1,605

 

 

 

1,093

 

 

Depreciation and amortization expense

334

 

 

327

 

 

 

666

 

 

 

661

 

 

Other operating expenses

10

 

 

2

 

 

 

41

 

 

 

2

 

 

Refining margin

$

1,114

 

 

$

647

 

 

 

$

1,963

 

 

 

$

1,710

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

159

 

 

$

892

 

 

 

$

(349

)

 

 

$

(50

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(1,109

)

 

 

 

 

 

4

 

 

Other operating expenses

10

 

 

2

 

 

 

41

 

 

 

2

 

 

Adjusted refining operating income (loss)

$

169

 

 

$

(215

)

 

 

$

(308

)

 

 

$

(44

)

 

 

 

 

 

 

 

 

 

U.S. Mid-Continent region

 

 

 

 

 

 

 

Refining operating income

$

123

 

 

$

293

 

 

 

$

113

 

 

 

$

73

 

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(283

)

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) (a)

159

 

 

148

 

 

 

349

 

 

 

312

 

 

Depreciation and amortization expense

85

 

 

83

 

 

 

169

 

 

 

166

 

 

Other operating expenses

2

 

 

 

 

 

9

 

 

 

 

 

Refining margin

$

369

 

 

$

241

 

 

 

$

640

 

 

 

$

551

 

 

 

 

 

 

 

 

 

 

Refining operating income

$

123

 

 

$

293

 

 

 

$

113

 

 

 

$

73

 

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(283

)

 

 

 

 

 

 

 

Other operating expenses

2

 

 

 

 

 

9

 

 

 

 

 

Adjusted refining operating income

$

125

 

 

$

10

 

 

 

$

122

 

 

 

$

73

 

 

 

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

June 30,

 

Six Months Ended

June 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) (g) (continued)

 

 

 

 

 

 

 

North Atlantic region

 

 

 

 

 

 

 

Refining operating income (loss)

$

1

 

 

$

597

 

 

 

$

56

 

 

 

$

(117

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(657

)

 

 

 

 

 

217

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

151

 

 

112

 

 

 

291

 

 

 

253

 

 

Depreciation and amortization expense

59

 

 

52

 

 

 

111

 

 

 

105

 

 

Other operating expenses

 

 

1

 

 

 

 

 

 

3

 

 

Refining margin

$

211

 

 

$

105

 

 

 

$

458

 

 

 

$

461

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

1

 

 

$

597

 

 

 

$

56

 

 

 

$

(117

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(657

)

 

 

 

 

 

217

 

 

Other operating expenses

 

 

1

 

 

 

 

 

 

3

 

 

Adjusted refining operating income (loss)

$

1

 

 

$

(59

)

 

 

$

56

 

 

 

$

103

 

 

 

 

 

 

 

 

 

 

U.S. West Coast region

 

 

 

 

 

 

 

Refining operating income (loss)

$

66

 

 

$

(31

)

 

 

$

(63

)

 

 

$

(242

)

 

Adjustments:

 

 

 

 

 

 

 

LCM inventory valuation adjustment (b)

 

 

(88

)

 

 

 

 

 

56

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below)

143

 

 

133

 

 

 

290

 

 

 

265

 

 

Depreciation and amortization expense

66

 

 

71

 

 

 

131

 

 

 

137

 

 

Refining margin

$

275

 

 

$

85

 

 

 

$

358

 

 

 

$

216

 

 

 

 

 

 

 

 

 

 

Refining operating income (loss)

$

66

 

 

$

(31

)

 

 

$

(63

)

 

 

$

(242

)

 

Adjustment: LCM inventory valuation adjustment (b)

 

 

(88

)

 

 

 

 

 

56

 

 

Adjusted refining operating income (loss)

$

66

 

 

$

(119

)

 

 

$

(63

)

 

 

$

(186

)

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Throughput volumes (thousand barrels per day)

 

 

 

 

 

 

 

Feedstocks:

 

 

 

 

 

 

 

Heavy sour crude oil

389

 

 

378

 

 

 

372

 

 

 

369

 

 

Medium/light sour crude oil

330

 

 

385

 

 

 

303

 

 

 

363

 

 

Sweet crude oil

1,421

 

 

1,018

 

 

 

1,282

 

 

 

1,234

 

 

Residuals

249

 

 

169

 

 

 

221

 

 

 

202

 

 

Other feedstocks

126

 

 

69

 

 

 

114

 

 

 

85

 

 

Total feedstocks

2,515

 

 

2,019

 

 

 

2,292

 

 

 

2,253

 

 

Blendstocks and other

320

 

 

302

 

 

 

332

 

 

 

320

 

 

Total throughput volumes

2,835

 

 

2,321

 

 

 

2,624

 

 

 

2,573

 

 

 

 

 

 

 

 

 

 

Yields (thousand barrels per day)

 

 

 

 

 

 

 

Gasolines and blendstocks

1,432

 

 

1,061

 

 

 

1,312

 

 

 

1,189

 

 

Distillates

1,035

 

 

835

 

 

 

965

 

 

 

940

 

 

Other products (h)

401

 

 

434

 

 

 

377

 

 

 

456

 

 

Total yields

2,868

 

 

2,330

 

 

 

2,654

 

 

 

2,585

 

 

 

 

 

 

 

 

 

 

Operating statistics (a) (f) (i)

 

 

 

 

 

 

 

Refining margin

$

1,969

 

 

$

1,078

 

 

 

$

3,419

 

 

 

$

2,938

 

 

Adjusted refining operating income (loss)

$

361

 

 

$

(383

)

 

 

$

(193

)

 

 

$

(54

)

 

Throughput volumes (thousand barrels per day)

2,835

 

 

2,321

 

 

 

2,624

 

 

 

2,573

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

7.64

 

 

$

5.10

 

 

 

$

7.20

 

 

 

$

6.27

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.13

 

 

4.39

 

 

 

5.34

 

 

 

4.10

 

 

Depreciation and amortization expense per barrel of

throughput

2.11

 

 

2.53

 

 

 

2.27

 

 

 

2.28

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

1.40

 

 

$

(1.82

)

 

 

$

(0.41

)

 

 

$

(0.11

)

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Operating statistics (f) (i)

 

 

 

 

 

 

 

Renewable diesel margin

$

291

 

 

$

161

 

 

$

535

 

 

$

390

 

Renewable diesel operating income

$

248

 

 

$

129

 

 

$

451

 

 

$

327

 

Sales volumes (thousand gallons per day)

923

 

 

795

 

 

895

 

 

831

 

 

 

 

 

 

 

 

 

Renewable diesel margin per gallon of sales

$

3.46

 

 

$

2.22

 

 

$

3.30

 

 

$

2.58

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of sales

0.36

 

 

0.29

 

 

0.37

 

 

0.27

 

Depreciation and amortization expense per gallon of sales

0.15

 

 

0.15

 

 

0.15

 

 

0.15

 

Renewable diesel operating income per gallon of sales

$

2.95

 

 

$

1.78

 

 

$

2.78

 

 

$

2.16

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Operating statistics (a) (f) (i)

 

 

 

 

 

 

 

Ethanol margin

$

238

 

 

$

80

 

 

 

$

359

 

 

$

142

 

 

Adjusted ethanol operating income (loss)

$

99

 

 

$

(20

)

 

 

$

43

 

 

$

(89

)

 

Production volumes (thousand gallons per day)

4,203

 

 

2,316

 

 

 

3,884

 

 

3,210

 

 

 

 

 

 

 

 

 

 

Ethanol margin per gallon of production

$

0.62

 

 

$

0.38

 

 

 

$

0.51

 

 

$

0.24

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of production

0.31

 

 

0.38

 

 

 

0.39

 

 

0.32

 

 

Depreciation and amortization expense per gallon of production

0.05

 

 

0.10

 

 

 

0.06

 

 

0.07

 

 

Adjusted ethanol operating income (loss) per gallon of production

$

0.26

 

 

$

(0.10

)

 

 

$

0.06

 

 

$

(0.15

)

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Operating statistics by region (g)

 

 

 

 

 

 

 

U.S. Gulf Coast region (a) (f) (i)

 

 

 

 

 

 

 

Refining margin

$

1,114

 

 

$

647

 

 

 

$

1,963

 

 

 

$

1,710

 

 

Adjusted refining operating income (loss)

$

169

 

 

$

(215

)

 

 

$

(308

)

 

 

$

(44

)

 

Throughput volumes (thousand barrels per day)

1,731

 

 

1,385

 

 

 

1,623

 

 

 

1,527

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

7.07

 

 

$

5.13

 

 

 

$

6.68

 

 

 

$

6.15

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

3.88

 

 

4.23

 

 

 

5.46

 

 

 

3.93

 

 

Depreciation and amortization expense per barrel of

throughput

2.12

 

 

2.60

 

 

 

2.27

 

 

 

2.37

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

1.07

 

 

$

(1.70

)

 

 

$

(1.05

)

 

 

$

(0.15

)

 

 

 

 

 

 

 

 

 

U.S. Mid-Continent region (a) (f) (i)

 

 

 

 

 

 

 

Refining margin

$

369

 

 

$

241

 

 

 

$

640

 

 

 

$

551

 

 

Adjusted refining operating income

$

125

 

 

$

10

 

 

 

$

122

 

 

 

$

73

 

 

Throughput volumes (thousand barrels per day)

476

 

 

364

 

 

 

431

 

 

 

398

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

8.52

 

 

$

7.28

 

 

 

$

8.21

 

 

 

$

7.61

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

3.67

 

 

4.47

 

 

 

4.48

 

 

 

4.32

 

 

Depreciation and amortization expense per barrel of

throughput

1.98

 

 

2.51

 

 

 

2.17

 

 

 

2.29

 

 

Adjusted refining operating income per barrel of

throughput

$

2.87

 

 

$

0.30

 

 

 

$

1.56

 

 

 

$

1.00

 

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Operating statistics by region (g) (continued)

 

 

 

 

 

 

 

North Atlantic region (f) (i)

 

 

 

 

 

 

 

Refining margin

$

211

 

 

$

105

 

 

 

$

458

 

 

 

$

461

 

 

Adjusted refining operating income (loss)

$

1

 

 

$

(59

)

 

 

$

56

 

 

 

$

103

 

 

Throughput volumes (thousand barrels per day)

356

 

 

340

 

 

 

338

 

 

 

414

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

6.52

 

 

$

3.40

 

 

 

$

7.48

 

 

 

$

6.12

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.66

 

 

3.64

 

 

 

4.76

 

 

 

3.36

 

 

Depreciation and amortization expense per barrel of

throughput

1.85

 

 

1.67

 

 

 

1.81

 

 

 

1.39

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

0.01

 

 

$

(1.91

)

 

 

$

0.91

 

 

 

$

1.37

 

 

 

 

 

 

 

 

 

 

U.S. West Coast region (f) (i)

 

 

 

 

 

 

 

Refining margin

$

275

 

 

$

85

 

 

 

$

358

 

 

 

$

216

 

 

Adjusted refining operating income (loss)

$

66

 

 

$

(119

)

 

 

$

(63

)

 

 

$

(186

)

 

Throughput volumes (thousand barrels per day)

272

 

 

232

 

 

 

232

 

 

 

234

 

 

 

 

 

 

 

 

 

 

Refining margin per barrel of throughput

$

11.12

 

 

$

3.98

 

 

 

$

8.54

 

 

 

$

5.06

 

 

Less:

 

 

 

 

 

 

 

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

5.79

 

 

6.26

 

 

 

6.92

 

 

 

6.21

 

 

Depreciation and amortization expense per barrel of

throughput

2.63

 

 

3.37

 

 

 

3.11

 

 

 

3.22

 

 

Adjusted refining operating income (loss) per barrel of

throughput

$

2.70

 

 

$

(5.65

)

 

 

$

(1.49

)

 

 

$

(4.37

)

 

 

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Refining

 

 

 

 

 

 

 

Feedstocks (dollars per barrel)

 

 

 

 

 

 

 

Brent crude oil

$

69.00

 

 

 

$

33.22

 

 

 

$

65.05

 

 

 

$

42.06

 

 

Brent less West Texas Intermediate (WTI) crude oil

2.91

 

 

 

5.42

 

 

 

3.09

 

 

 

5.17

 

 

Brent less Alaska North Slope (ANS) crude oil

0.56

 

 

 

2.85

 

 

 

0.45

 

 

 

1.18

 

 

Brent less Louisiana Light Sweet (LLS) crude oil

1.05

 

 

 

2.95

 

 

 

1.08

 

 

 

2.85

 

 

Brent less Argus Sour Crude Index (ASCI) crude oil

3.34

 

 

 

4.14

 

 

 

3.17

 

 

 

4.58

 

 

Brent less Maya crude oil

6.13

 

 

 

9.05

 

 

 

5.42

 

 

 

9.40

 

 

LLS crude oil

67.95

 

 

 

30.27

 

 

 

63.97

 

 

 

39.21

 

 

LLS less ASCI crude oil

2.29

 

 

 

1.19

 

 

 

2.09

 

 

 

1.73

 

 

LLS less Maya crude oil

5.08

 

 

 

6.10

 

 

 

4.34

 

 

 

6.55

 

 

WTI crude oil

66.09

 

 

 

27.80

 

 

 

61.96

 

 

 

36.89

 

 

 

 

 

 

 

 

 

 

Natural gas (dollars per million British Thermal Units)

2.93

 

 

 

1.65

 

 

 

11.30

 

 

 

1.74

 

 

 

 

 

 

 

 

 

 

Products (dollars per barrel)

 

 

 

 

 

 

 

U.S. Gulf Coast:

 

 

 

 

 

 

 

Conventional Blendstock of Oxygenate Blending (CBOB)

gasoline less Brent

14.43

 

 

 

0.51

 

 

 

12.28

 

 

 

1.44

 

 

Ultra-low-sulfur (ULS) diesel less Brent

12.99

 

 

 

4.89

 

 

 

11.59

 

 

 

8.08

 

 

Propylene less Brent

(20.41

)

 

 

(12.71

)

 

 

(0.96

)

 

 

(16.88

)

 

CBOB gasoline less LLS

15.48

 

 

 

3.46

 

 

 

13.36

 

 

 

4.29

 

 

ULS diesel less LLS

14.04

 

 

 

7.84

 

 

 

12.67

 

 

 

10.93

 

 

Propylene less LLS

(19.36

)

 

 

(9.76

)

 

 

0.12

 

 

 

(14.03

)

 

U.S. Mid-Continent:

 

 

 

 

 

 

 

CBOB gasoline less WTI

19.93

 

 

 

6.19

 

 

 

17.38

 

 

 

6.94

 

 

ULS diesel less WTI

18.42

 

 

 

11.38

 

 

 

17.82

 

 

 

14.35

 

 

North Atlantic:

 

 

 

 

 

 

 

CBOB gasoline less Brent

17.37

 

 

 

3.03

 

 

 

14.47

 

 

 

3.66

 

 

ULS diesel less Brent

15.07

 

 

 

6.94

 

 

 

13.48

 

 

 

10.62

 

 

U.S. West Coast:

 

 

 

 

 

 

 

California Reformulated Gasoline Blendstock of

Oxygenate Blending (CARBOB) 87 gasoline less ANS

27.18

 

 

 

9.43

 

 

 

20.87

 

 

 

8.63

 

 

California Air Resources Board (CARB) diesel less ANS

15.28

 

 

 

10.36

 

 

 

14.71

 

 

 

13.79

 

 

CARBOB 87 gasoline less WTI

29.53

 

 

 

12.00

 

 

 

23.51

 

 

 

12.62

 

 

CARB diesel less WTI

17.63

 

 

 

12.93

 

 

 

17.35

 

 

 

17.78

 

 

 

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Renewable diesel

 

 

 

 

 

 

 

New York Mercantile Exchange ULS diesel

(dollars per gallon)

$

2.00

 

 

$

0.97

 

 

$

1.87

 

 

$

1.26

 

Biodiesel Renewable Identification Number (RIN)

(dollars per RIN)

1.71

 

 

0.54

 

 

1.44

 

 

0.50

 

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

184.82

 

 

201.01

 

 

190.06

 

 

203.52

 

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

pound)

0.63

 

 

0.27

 

 

0.56

 

 

0.29

 

 

 

 

 

 

 

 

 

Ethanol

 

 

 

 

 

 

 

CBOT corn (dollars per bushel)

6.58

 

 

3.23

 

 

5.98

 

 

3.49

 

New York Harbor ethanol (dollars per gallon)

2.38

 

 

1.17

 

 

2.08

 

 

1.25

 

 

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

 

 

June 30,

2021

 

December 31,

2020

Balance sheet data

 

 

 

Current assets

$

19,372

 

 

$

15,844

 

Cash and cash equivalents included in current assets

3,572

 

 

3,313

 

Inventories included in current assets

6,103

 

 

6,038

 

Current liabilities

14,214

 

 

9,283

 

Current portion of debt and finance lease obligations

included in current liabilities

1,044

 

 

723

 

Debt and finance lease obligations, less current portion

13,636

 

 

13,954

 

Total debt and finance lease obligations

14,680

 

 

14,677

 

Valero Energy Corporation stockholders’ equity

17,651

 

 

18,801

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Reconciliation of net cash used in operating activities to

adjusted net cash provided by operating activities (f)

 

 

 

 

 

 

 

Net cash provided by operating activities

$

2,008

 

 

$

736

 

 

$

1,956

 

 

$

687

 

 

Exclude:

 

 

 

 

 

 

 

Changes in current assets and current liabilities

1,067

 

 

629

 

 

1,251

 

 

(478

)

 

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

provided by operating activities attributable to our joint

venture partner’s ownership interest in DGD

132

 

 

69

 

 

240

 

 

173

 

 

Adjusted net cash provided by operating activities

$

809

 

 

$

38

 

 

$

465

 

 

$

992

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Dividends per common share

$

0.98

 

 

$

0.98

 

 

$

1.96

 

 

$

1.96

 

 

 

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Reconciliation of total capital investments to capital

investments attributable to Valero (f)

 

 

 

 

 

 

 

Capital expenditures (excluding variable interest entities

(VIEs))

$

101

 

 

 

$

256

 

 

 

$

261

 

 

 

$

555

 

 

Capital expenditures of VIEs:

 

 

 

 

 

 

 

DGD

245

 

 

 

103

 

 

 

398

 

 

 

177

 

 

Other VIEs

9

 

 

 

81

 

 

 

35

 

 

 

143

 

 

Deferred turnaround and catalyst cost expenditures

(excluding VIEs)

196

 

 

 

128

 

 

 

426

 

 

 

437

 

 

Deferred turnaround and catalyst cost expenditures

of DGD

 

 

 

6

 

 

 

1

 

 

 

10

 

 

Investments in unconsolidated joint ventures

(3

)

 

 

10

 

 

 

9

 

 

 

29

 

 

Total capital investments

548

 

 

 

584

 

 

 

1,130

 

 

 

1,351

 

 

Adjustments:

 

 

 

 

 

 

 

DGD’s capital investments attributable to our joint

venture partner

(122

)

 

 

(55

)

 

 

(199

)

 

 

(94

)

 

Capital expenditures of other VIEs

(9

)

 

 

(81

)

 

 

(35

)

 

 

(143

)

 

Capital investments attributable to Valero

$

417

 

 

 

$

448

 

 

 

$

896

 

 

 

$

1,114

 

 

 

See Notes to Earnings Release Tables.

 

VALERO ENERGY CORPORATION

NOTES TO EARNINGS RELEASE TABLES

 

(a)

In mid-February 2021, many of our refineries and plants were impacted to varying extents by the severe cold, utility disruptions, and higher energy costs arising out of Winter Storm Uri. The higher energy costs resulted from an increase in the prices of natural gas and electricity that significantly exceeded rates that we consider normal, such as the average rates we incurred the month preceding the storm. As a result, our operating loss for the six months ended June 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 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 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 (i)

 

 

 

 

 

 

 

Refining margin per barrel of throughput (f)

$

0.15

 

 

$

0.03

 

 

n/a

 

$

0.10

 

Operating expenses (excluding depreciation

and amortization expense) per barrel of

throughput

1.49

 

 

0.49

 

 

n/a

 

1.01

 

Adjusted refining operating income (loss)

per barrel of throughput (f)

$

1.64

 

 

$

0.52

 

 

n/a

 

$

1.11

 

 

The estimated excess energy costs attributable to our ethanol segment affected that segment’s operating statistics of operating expenses (excluding depreciation and amortization expenses) per gallon of production and adjusted operating loss per gallon of production by $0.08 (see note (f) below).

 

 

(b)

The market value of our inventories accounted for under the last-in, first-out (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 as of June 30, 2020 due to an increase in market prices, which resulted in a reversal of $2.2 billion of the $2.5 billion LCM adjustment recorded in the three months ended March 31, 2020. Consequently, our results of operations for the six months ended June 30, 2020 reflect a net LCM inventory valuation adjustment of $294 million.

 

 

 

Of the $2.2 billion benefit recognized in the three months ended June 30, 2020, $2.1 billion and $111 million is attributable to our refining and ethanol segments, respectively. Of the $294 million adjustment recognized in the six months ended June 30, 2020, $277 million and $17 million is attributable to our refining and ethanol segments, respectively.

 

 

(c)

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 three and six months ended June 30, 2021 includes a gain on the sale of $62 million.

 

 

 

“Other income, net” for the three and six months ended June 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.

 

 

(d)

During the three months ended June 30, 2021, a change in certain statutory tax rates (primarily an increase in the U.K. rate from 19 percent to 25 percent effective in 2023) 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 three and six months ended June 30, 2021, which represents the net increase in our deferred tax liabilities resulting from the change in the tax rates.

 

 

(e)

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 six months ended June 30, 2021 and 2020, as the effect of including such shares is antidilutive.

 

 

 

Common equivalent shares have also been excluded from the computation of adjusted loss per common share – assuming dilution for the three months ended June 30, 2020, as the effect of including such shares is antidilutive. Weighted-average shares outstanding – assuming dilution used to calculate adjusted loss per common share – assuming dilution is 406 million shares.

 

(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 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 (c)) 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 (c)) is not indicative of our ongoing operations.

 

 

 

Income tax expense related to change in statutory tax rates – The income tax expense related to a change in certain statutory tax rates (see note (d)) is not indicative of income tax expense associated with the pre-tax results for the three and six months ended June 30, 2021.

 

 

LCM inventory valuation adjustment – The LCM inventory valuation adjustment, which is described in note (b), is the result of the market value of our inventories as of June 30, 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. 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 (e)).

 

 

 

  • Refining margin is defined as refining segment operating income (loss) excluding the LCM inventory valuation adjustment (see note (b)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe refining margin is an important measure of our refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

 

 

 

  • Renewable diesel margin is defined as renewable diesel segment operating income excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense. We believe renewable diesel margin is an important measure of our renewable diesel segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

 

 

 

  • Ethanol margin is defined as ethanol segment operating income (loss) excluding the LCM inventory valuation adjustment (see note (b)), operating expenses (excluding depreciation and amortization expense), and depreciation and amortization expense. 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 LCM inventory valuation adjustment (see note (b)) and other operating expenses. We believe adjusted refining operating income (loss) is an important measure of our refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.
 

 

  • Adjusted ethanol operating income (loss) is defined as ethanol segment operating income (loss) excluding the LCM inventory valuation adjustment (see note (b)). We believe this is an important measure of our ethanol segment’s operating and financial performance because it excludes an item that is 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

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

DGD operating cash flow data

 

 

 

 

 

 

   

 

 

Net cash provided by operating activities

$

256

 

 

$

516

 

 

$

463

 

 

$

683

 

Exclude: changes in current assets and

current liabilities

(8

)

 

378

 

 

 

(17

)

 

338

 

Adjusted net cash provided by

operating activities

264

 

 

138

 

 

 

480

 

 

345

 

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

$

132

 

 

$

69

 

 

$

240

 

 

$

173

 

 

  • 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 other VIEs.

 

 

 

DGD’s partners use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each partner, only 50 percent of DGD’s capital investments should be attributed to our net share of total capital investments. We also exclude the capital expenditures of our other consolidated VIEs because we do not operate those VIEs. We believe capital investments attributable to Valero is an important measure because it more accurately reflects our capital investments.

 

 

(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 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.

 

Contacts

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

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