Valero Energy Corporation (NYSE:VLO) (“Valero”) today reported net
income attributable to Valero stockholders of $613 million, or
$1.33 per share, and adjusted net income attributable to Valero
stockholders of $571 million, or $1.24 per share, for the
third quarter of 2016 compared to net income attributable to Valero
stockholders of $1.4 billion, or $2.79 per share, for the
third quarter of 2015. Adjusted net income attributable to
Valero stockholders for the third quarter of 2016 excludes an
income tax benefit related to the disposition of the Aruba business
of $42 million, or $0.09 per share. Reconciliations of
actual to adjusted amounts are shown in the accompanying earnings
release tables.
“Our operations ran well and generated $863
million of cash during the quarter despite a challenging earnings
environment,” said Joe Gorder, Valero Chairman, President and Chief
Executive Officer. “Our team’s focus on safe, reliable,
low-cost operations allowed us to deliver solid performance while
executing major turnarounds at our Port Arthur and Ardmore
refineries.”
“We exported 329,000 barrels per day ('BPD') of
diesel and gasoline combined during the third quarter,” said
Gorder. “We were pleased to see strong refined product demand
continue during the quarter and we expect consumer demand to remain
healthy given low crude oil and refined product prices.”
RefiningThe refining segment
reported $990 million of operating income for the third quarter of
2016, compared to $2.3 billion of operating income for the third
quarter of 2015. The decline was primarily attributable to
weaker gasoline and distillate margins. Other factors
included narrower discounts for most sweet and sour crude oils
relative to the Brent benchmark and higher costs to meet our
biofuel blending obligations (primarily from the purchase of
RINs).
Biofuel blending costs were $198 million in the
third quarter of 2016, which was $104 million higher than the third
quarter of 2015. Valero continues to expect such costs to be
between $750 million and $850 million for 2016.
Valero’s refineries achieved 95 percent
throughput capacity utilization and averaged 2.9 million BPD of
throughput volume in the third quarter of 2016, in line with the
third quarter of 2015.
EthanolThe ethanol segment
reported $106 million of operating income for the third quarter of
2016, compared to $35 million of operating income for the
third quarter of 2015. The increase was primarily due to
lower corn prices. Ethanol production volumes averaged
3.8 million gallons per day in the third quarter of 2016,
which was consistent with the third quarter of 2015. Valero
expects ethanol demand to remain strong given high gasoline demand
in the U.S. and significant ethanol exports. Record high corn
production in the U.S. is also expected to keep corn prices low in
the near term.
Corporate and OtherGeneral and
administrative expenses were $192 million in the third quarter
of 2016 compared to $179 million in the third quarter of
2015. The effective tax rate of 18 percent in the third
quarter of 2016 was lower than expected primarily due to the tax
benefit on the disposition of the Aruba business noted earlier and
the favorable settlement of an income tax audit.
Investing and Financing
ActivitiesCapital investments totaled $453 million in
the third quarter of 2016. Valero paid $276 million in
dividends and purchased over 9.2 million shares of its common
stock for $502 million, resulting in total cash returned to
stockholders of $778 million in the third quarter of 2016.
Valero also completed a $1.25 billion public offering of 3.4
percent senior notes in the third quarter of 2016. In early
October, Valero repaid $950 million of senior notes due in
2017.
“In the third quarter, we continued to focus on
improving capital efficiency, investing in our business, and
growing Valero’s earnings power,” said Gorder. “Our team’s
efforts in these areas allowed us to greatly exceed our total
payout ratio target.”
Valero defines total payout ratio as the sum of
dividends plus stock buybacks divided by adjusted net income from
continuing operations attributable to Valero stockholders.
For the first nine months of 2016, Valero delivered a total payout
ratio of 148 percent.
Liquidity and Financial
PositionValero ended the third quarter of 2016 with
$9.0 billion of total debt and $5.9 billion of cash and
temporary cash investments, of which $35 million was held by
Valero Energy Partners LP (NYSE:VLP) (“VLP”). The debt to
capital ratio, net of $2.0 billion in cash, was
25 percent. On a pro forma basis giving effect to the
October debt redemption noted earlier, the debt to capital ratio
was 22 percent.
Strategic UpdateValero expects
2016 capital investments, including turnarounds, catalyst, and
joint venture investments, to be about $2.4 billion, which is
slightly lower than previous guidance.
In September, Valero achieved its stated drop
down target for 2016 with the sale of the previously announced
Meraux and Three Rivers Terminal Services Business to VLP.
“We were pleased to see continued growth in VLP
through drop downs and incremental organic projects at VLP,” said
Gorder. “Logistics investments are an important part of our
strategy to grow and optimize Valero’s supply chain.”
Also in September, the Board of Directors
approved an incremental $2.5 billion share repurchase
authorization, resulting in about $2.7 billion of repurchase
authority available.
Conference CallValero’s senior
management will hold a conference call at 11 a.m. ET today to
discuss this earnings release and to provide an update on
operations and strategy.
About ValeroValero Energy
Corporation, through its subsidiaries, is an international
manufacturer and marketer of transportation fuels, other
petrochemical products and power. Valero subsidiaries employ
approximately 10,000 people, and its assets include
15 petroleum refineries with a combined throughput capacity of
approximately 3 million barrels per day, 11 ethanol
plants with a combined production capacity of 1.4 billion
gallons per year, a 50-megawatt wind farm, and renewable diesel
production from a joint venture. Through subsidiaries, Valero owns
the general partner of Valero Energy Partners LP (NYSE:VLP), a
midstream master limited partnership. Approximately
7,500 outlets carry the Valero, Diamond Shamrock, Shamrock,
and Beacon brands in the United States; Ultramar in Canada; and
Texaco in the United Kingdom and Ireland. Valero is a Fortune
500 company based in San Antonio. Please visit
www.valero.com for more information.
Valero ContactsInvestors:John Locke, Vice
President – Investor Relations, 210-345-3077Karen Ngo, Manager –
Investor Relations, 210-345-4574
Media:Lillian Riojas, Director – Media Relations and
Communications, 210-345-5002
Safe-Harbor StatementStatements
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,” 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. 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 and quarterly
reports on Form 10-Q filed with the SEC and on Valero’s website at
www.valero.com, and VLP’s annual reports on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC and on VLP’s website at
www.valeroenergypartners.com.
Use of Non-GAAP Financial
InformationThis 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, adjusted operating income, and
gross margin. We have included these non-GAAP financial
measures to help facilitate the comparison of operating results
between periods. See the accompanying earnings release tables
for a reconciliation of these non-GAAP measures to their most
directly comparable U.S. GAAP measures. In note (c) to earnings
release tables, we disclose the reasons why we believe our use of
the non-GAAP financial measures provides useful information.
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS |
(Millions of Dollars, Except Share and
per Share Amounts) |
(Unaudited) |
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Statement of
income data |
|
|
|
|
|
|
|
|
|
Operating revenues |
|
$ |
19,649 |
|
|
$ |
22,579 |
|
|
$ |
54,947 |
|
|
$ |
69,027 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Cost of sales
(excluding the lower of cost or market inventory valuation
adjustment) |
|
17,033 |
|
|
18,677 |
|
|
47,660 |
|
|
58,234 |
|
Lower of cost or market
inventory valuation adjustment (a) |
|
— |
|
|
— |
|
|
(747 |
) |
|
— |
|
Operating expenses |
|
|
1,062 |
|
|
1,102 |
|
|
3,093 |
|
|
3,229 |
|
General and administrative
expenses |
|
|
192 |
|
|
179 |
|
|
507 |
|
|
504 |
|
Depreciation and amortization
expense |
|
|
470 |
|
|
482 |
|
|
1,426 |
|
|
1,348 |
|
Asset impairment loss (b) |
|
|
— |
|
|
— |
|
|
56 |
|
|
— |
|
Total costs and expenses |
|
|
18,757 |
|
|
20,440 |
|
|
51,995 |
|
|
63,315 |
|
Operating income |
|
|
892 |
|
|
2,139 |
|
|
2,952 |
|
|
5,712 |
|
Other income, net |
|
|
12 |
|
|
3 |
|
|
35 |
|
|
35 |
|
Interest and debt
expense, net of capitalized interest |
|
(115 |
) |
|
(112 |
) |
|
(334 |
) |
|
(326 |
) |
Income before income tax
expense |
|
|
789 |
|
|
2,030 |
|
|
2,653 |
|
|
5,421 |
|
Income tax expense (b) |
|
|
144 |
|
|
657 |
|
|
652 |
|
|
1,715 |
|
Net income |
|
|
645 |
|
|
1,373 |
|
|
2,001 |
|
|
3,706 |
|
Less: Net income (loss)
attributable to noncontrolling interests |
|
32 |
|
|
(4 |
) |
|
79 |
|
|
14 |
|
Net income attributable
to Valero Energy Corporation stockholders |
|
$ |
613 |
|
|
$ |
1,377 |
|
|
$ |
1,922 |
|
|
$ |
3,692 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share |
|
|
$ |
1.33 |
|
|
$ |
2.79 |
|
|
$ |
4.12 |
|
|
$ |
7.31 |
|
Weighted-average common
shares outstanding (in millions) |
|
458 |
|
|
491 |
|
|
465 |
|
|
503 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share –
assuming dilution |
|
|
$ |
1.33 |
|
|
$ |
2.79 |
|
|
$ |
4.12 |
|
|
$ |
7.30 |
|
Weighted-average common
shares outstanding – assuming dilution (in
millions) |
|
460 |
|
|
494 |
|
|
467 |
|
|
506 |
|
|
|
|
|
|
|
|
|
|
|
Dividends per common
share |
|
|
$ |
0.60 |
|
|
$ |
0.40 |
|
|
$ |
1.80 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(Millions of Dollars) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Operating
income |
|
|
|
|
|
|
|
|
Refining |
|
$ |
990 |
|
|
$ |
2,295 |
|
|
$ |
3,280 |
|
|
$ |
6,097 |
|
Ethanol |
|
106 |
|
|
35 |
|
|
214 |
|
|
155 |
|
Corporate |
|
(204 |
) |
|
(191 |
) |
|
(542 |
) |
|
(540 |
) |
Total |
|
$ |
892 |
|
|
$ |
2,139 |
|
|
$ |
2,952 |
|
|
$ |
5,712 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Refining |
|
$ |
955 |
|
|
$ |
986 |
|
|
$ |
2,788 |
|
|
$ |
2,885 |
|
Ethanol |
|
107 |
|
|
116 |
|
|
305 |
|
|
344 |
|
Total |
|
$ |
1,062 |
|
|
$ |
1,102 |
|
|
$ |
3,093 |
|
|
$ |
3,229 |
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization expense |
|
|
|
|
|
|
|
|
Refining |
|
$ |
441 |
|
|
$ |
455 |
|
|
$ |
1,343 |
|
|
$ |
1,280 |
|
Ethanol |
|
17 |
|
|
15 |
|
|
48 |
|
|
32 |
|
Corporate |
|
12 |
|
|
12 |
|
|
35 |
|
|
36 |
|
Total |
|
$ |
470 |
|
|
$ |
482 |
|
|
$ |
1,426 |
|
|
$ |
1,348 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP
(c) |
(Millions of Dollars, Except per Share
Amounts) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
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 |
|
$ |
613 |
|
|
$ |
1,377 |
|
|
$ |
1,922 |
|
|
$ |
3,692 |
|
Exclude adjustments: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
747 |
|
|
— |
|
Income tax expense related to the
lower of cost or market inventory valuation adjustment |
|
— |
|
|
— |
|
|
(168 |
) |
|
— |
|
Lower of cost or market inventory
valuation adjustment, net of taxes |
|
— |
|
|
— |
|
|
579 |
|
|
— |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
(56 |
) |
|
|
— |
|
Income tax benefit on Aruba
Disposition (b) |
|
42 |
|
|
— |
|
|
42 |
|
|
— |
|
Total adjustments |
|
42 |
|
|
— |
|
|
565 |
|
|
— |
|
Adjusted net income attributable to
Valero Energy Corporation stockholders |
|
$ |
571 |
|
|
$ |
1,377 |
|
|
$ |
1,357 |
|
|
$ |
3,692 |
|
|
|
|
|
|
|
|
|
|
Reconciliation
of earnings per common share – assuming
dilution to adjusted earnings per common share –
assuming dilution |
|
|
|
|
|
|
|
|
Earnings per common share –
assuming dilution |
|
$ |
1.33 |
|
|
$ |
2.79 |
|
|
$ |
4.12 |
|
|
$ |
7.30 |
|
Exclude adjustments: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment, net of taxes (a) |
|
— |
|
|
— |
|
|
1.24 |
|
|
— |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
(0.12 |
) |
|
— |
|
Income tax benefit on Aruba
Disposition (b) |
|
0.09 |
|
|
— |
|
|
0.09 |
|
|
— |
|
Total adjustments |
|
0.09 |
|
|
— |
|
|
1.21 |
|
|
— |
|
Adjusted earnings per common share
– assuming dilution |
|
$ |
1.24 |
|
|
$ |
2.79 |
|
|
$ |
2.91 |
|
|
$ |
7.30 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP
(c) |
(Millions of Dollars) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Reconciliation
of operating income to gross margin and
reconciliation of operating income to
adjusted operating income by
segment |
|
|
|
|
|
|
|
|
Refining
segment |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
990 |
|
|
$ |
2,295 |
|
|
$ |
3,280 |
|
|
$ |
6,097 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(697 |
) |
|
— |
|
Operating expenses |
|
955 |
|
|
986 |
|
|
2,788 |
|
|
2,885 |
|
Depreciation and amortization
expense |
|
441 |
|
|
455 |
|
|
1,343 |
|
|
1,280 |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
56 |
|
|
— |
|
Gross margin |
|
$ |
2,386 |
|
|
$ |
3,736 |
|
|
$ |
6,770 |
|
|
$ |
10,262 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
990 |
|
|
$ |
2,295 |
|
|
$ |
3,280 |
|
|
$ |
6,097 |
|
Exclude: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
697 |
|
|
— |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Adjusted operating income |
|
$ |
990 |
|
|
$ |
2,295 |
|
|
$ |
2,639 |
|
|
$ |
6,097 |
|
|
|
|
|
|
|
|
|
|
Ethanol
segment |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
106 |
|
|
$ |
35 |
|
|
$ |
214 |
|
|
$ |
155 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(50 |
) |
|
— |
|
Operating expenses |
|
107 |
|
|
116 |
|
|
305 |
|
|
344 |
|
Depreciation and amortization
expense |
|
17 |
|
|
15 |
|
|
48 |
|
|
32 |
|
Gross margin |
|
$ |
230 |
|
|
$ |
166 |
|
|
$ |
517 |
|
|
$ |
531 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
106 |
|
|
$ |
35 |
|
|
$ |
214 |
|
|
$ |
155 |
|
Exclude: Lower of cost or market
inventory valuation adjustment (a) |
|
— |
|
|
— |
|
|
50 |
|
|
— |
|
Adjusted operating income |
|
$ |
106 |
|
|
$ |
35 |
|
|
$ |
164 |
|
|
$ |
155 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP
(c) |
(Millions of Dollars) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Reconciliation
of operating income to gross margin and
reconciliation of operating income to
adjusted operating income by refining
segment region (d) |
|
|
|
|
|
|
|
|
U.S.
Gulf Coast region |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
576 |
|
|
$ |
1,038 |
|
|
$ |
1,515 |
|
|
$ |
2,996 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(37 |
) |
|
— |
|
Operating expenses |
|
536 |
|
|
559 |
|
|
1,595 |
|
|
1,612 |
|
Depreciation and amortization
expense |
|
268 |
|
|
272 |
|
|
798 |
|
|
757 |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
56 |
|
|
— |
|
Gross margin |
|
$ |
1,380 |
|
|
$ |
1,869 |
|
|
$ |
3,927 |
|
|
$ |
5,365 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
576 |
|
|
$ |
1,038 |
|
|
$ |
1,515 |
|
|
$ |
2,996 |
|
Exclude: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
37 |
|
|
— |
|
Asset impairment loss (b) |
|
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Adjusted operating income |
|
$ |
576 |
|
|
$ |
1,038 |
|
|
$ |
1,534 |
|
|
$ |
2,996 |
|
|
|
|
|
|
|
|
|
|
U.S.
Mid-Continent region |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
166 |
|
|
$ |
500 |
|
|
$ |
386 |
|
|
$ |
1,215 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(9 |
) |
|
— |
|
Operating expenses |
|
158 |
|
|
152 |
|
|
443 |
|
|
448 |
|
Depreciation and amortization
expense |
|
64 |
|
|
73 |
|
|
202 |
|
|
205 |
|
Gross margin |
|
$ |
388 |
|
|
$ |
725 |
|
|
$ |
1,022 |
|
|
$ |
1,868 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
166 |
|
|
$ |
500 |
|
|
$ |
386 |
|
|
$ |
1,215 |
|
Exclude: Lower of cost or market
inventory valuation adjustment (a) |
|
— |
|
|
— |
|
|
9 |
|
|
— |
|
Adjusted operating income |
|
$ |
166 |
|
|
$ |
500 |
|
|
$ |
377 |
|
|
$ |
1,215 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP
(c) |
(Millions of Dollars) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Reconciliation
of operating income to gross margin and
reconciliation of operating income to
adjusted operating income by refining
segment region (d) (continued) |
|
|
|
|
|
|
|
|
North
Atlantic region |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
179 |
|
|
$ |
415 |
|
|
$ |
1,148 |
|
|
$ |
1,167 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(646 |
) |
|
— |
|
Operating expenses |
|
119 |
|
|
128 |
|
|
363 |
|
|
387 |
|
Depreciation and amortization
expense |
|
50 |
|
|
53 |
|
|
152 |
|
|
157 |
|
Gross margin |
|
$ |
348 |
|
|
$ |
596 |
|
|
$ |
1,017 |
|
|
$ |
1,711 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
179 |
|
|
$ |
415 |
|
|
$ |
1,148 |
|
|
$ |
1,167 |
|
Exclude: Lower of cost or market
inventory valuation adjustment (a) |
|
— |
|
|
— |
|
|
646 |
|
|
— |
|
Adjusted operating income |
|
$ |
179 |
|
|
$ |
415 |
|
|
$ |
502 |
|
|
$ |
1,167 |
|
|
|
|
|
|
|
|
|
|
U.S.
West Coast region |
|
|
|
|
|
|
|
|
Operating income |
|
$ |
69 |
|
|
$ |
342 |
|
|
$ |
231 |
|
|
$ |
719 |
|
Add back: |
|
|
|
|
|
|
|
|
Lower of cost or market inventory
valuation adjustment (a) |
|
— |
|
|
— |
|
|
(5 |
) |
|
— |
|
Operating expenses |
|
142 |
|
|
147 |
|
|
387 |
|
|
438 |
|
Depreciation and amortization
expense |
|
59 |
|
|
57 |
|
|
191 |
|
|
161 |
|
Gross margin |
|
$ |
270 |
|
|
$ |
546 |
|
|
$ |
804 |
|
|
$ |
1,318 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
69 |
|
|
$ |
342 |
|
|
$ |
231 |
|
|
$ |
719 |
|
Exclude: Lower of cost or market
inventory valuation adjustment (a) |
|
— |
|
|
— |
|
|
5 |
|
|
— |
|
Adjusted operating income |
|
$ |
69 |
|
|
$ |
342 |
|
|
$ |
226 |
|
|
$ |
719 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(Millions of Dollars, Except per Barrel
Amounts) |
(Unaudited) |
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Throughput
volumes (thousand barrels per day) |
|
|
|
|
|
|
|
Feedstocks: |
|
|
|
|
|
|
|
Heavy sour crude oil |
394 |
|
|
398 |
|
|
401 |
|
|
425 |
|
Medium/light sour crude oil |
520 |
|
|
416 |
|
|
519 |
|
|
421 |
|
Sweet crude oil |
1,218 |
|
|
1,307 |
|
|
1,195 |
|
|
1,210 |
|
Residuals |
282 |
|
|
292 |
|
|
281 |
|
|
273 |
|
Other feedstocks |
166 |
|
|
119 |
|
|
157 |
|
|
142 |
|
Total feedstocks |
2,580 |
|
|
2,532 |
|
|
2,553 |
|
|
2,471 |
|
Blendstocks and other |
280 |
|
|
291 |
|
|
302 |
|
|
310 |
|
Total throughput volumes |
2,860 |
|
|
2,823 |
|
|
2,855 |
|
|
2,781 |
|
|
|
|
|
|
|
|
|
Yields
(thousand barrels per day) |
|
|
|
|
|
|
|
Gasolines and blendstocks |
1,401 |
|
|
1,386 |
|
|
1,396 |
|
|
1,357 |
|
Distillates |
1,078 |
|
|
1,065 |
|
|
1,072 |
|
|
1,060 |
|
Other products (e) |
426 |
|
|
406 |
|
|
425 |
|
|
402 |
|
Total yields |
2,905 |
|
|
2,857 |
|
|
2,893 |
|
|
2,819 |
|
|
|
|
|
|
|
|
|
Refining
segment operating statistics |
|
|
|
|
|
|
|
Gross margin (c) |
$ |
2,386 |
|
|
$ |
3,736 |
|
|
$ |
6,770 |
|
|
$ |
10,262 |
|
Adjusted operating income (c) |
$ |
990 |
|
|
$ |
2,295 |
|
|
$ |
2,639 |
|
|
$ |
6,097 |
|
Throughput volumes (thousand
barrels per day) |
2,860 |
|
|
2,823 |
|
|
2,855 |
|
|
2,781 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel
(f) |
$ |
9.07 |
|
|
$ |
14.38 |
|
|
$ |
8.65 |
|
|
$ |
13.52 |
|
Operating costs per barrel: |
|
|
|
|
|
|
|
Operating expenses |
3.63 |
|
|
3.80 |
|
|
3.56 |
|
|
3.80 |
|
Depreciation and amortization
expense |
1.68 |
|
|
1.75 |
|
|
1.72 |
|
|
1.69 |
|
Total operating costs per
barrel |
5.31 |
|
|
5.55 |
|
|
5.28 |
|
|
5.49 |
|
Adjusted operating income per
barrel (g) |
$ |
3.76 |
|
|
$ |
8.83 |
|
|
$ |
3.37 |
|
|
$ |
8.03 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
ETHANOL SEGMENT OPERATING
HIGHLIGHTS |
(Millions of Dollars, Except per Gallon
Amounts) |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Ethanol segment
operating statistics |
|
|
|
|
|
|
|
|
Gross margin (c) |
|
$ |
230 |
|
|
$ |
166 |
|
|
$ |
517 |
|
|
$ |
531 |
|
Adjusted operating income (c) |
|
$ |
106 |
|
|
$ |
35 |
|
|
$ |
164 |
|
|
$ |
155 |
|
Production volumes (thousand
gallons per day) |
|
3,815 |
|
|
3,853 |
|
|
3,794 |
|
|
3,808 |
|
|
|
|
|
|
|
|
|
|
Gross margin per gallon of
production (f) |
|
$ |
0.66 |
|
|
$ |
0.47 |
|
|
$ |
0.50 |
|
|
$ |
0.51 |
|
Operating costs per gallon of
production: |
|
|
|
|
|
|
|
|
Operating expenses |
|
0.31 |
|
|
0.33 |
|
|
0.29 |
|
|
0.33 |
|
Depreciation and amortization
expense |
|
0.05 |
|
|
0.04 |
|
|
0.05 |
|
|
0.03 |
|
Total operating costs per gallon of
production |
|
0.36 |
|
|
0.37 |
|
|
0.34 |
|
|
0.36 |
|
Adjusted operating income per
gallon of production (g) |
|
$ |
0.30 |
|
|
$ |
0.10 |
|
|
$ |
0.16 |
|
|
$ |
0.15 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(Millions of Dollars, Except per Barrel
Amounts) |
(Unaudited) |
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Refining
segment operating statistics by region (d) |
|
|
|
|
|
|
|
U.S. Gulf Coast
region |
|
|
|
|
|
|
|
Gross margin (c) |
$ |
1,380 |
|
|
$ |
1,869 |
|
|
$ |
3,927 |
|
|
$ |
5,365 |
|
Adjusted operating income (c) |
$ |
576 |
|
|
$ |
1,038 |
|
|
$ |
1,534 |
|
|
$ |
2,996 |
|
Throughput volumes (thousand
barrels per day) |
1,663 |
|
|
1,571 |
|
|
1,654 |
|
|
1,570 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel
(f) |
$ |
9.02 |
|
|
$ |
12.93 |
|
|
$ |
8.67 |
|
|
$ |
12.52 |
|
Operating costs per barrel: |
|
|
|
|
|
|
|
Operating expenses |
3.50 |
|
|
3.87 |
|
|
3.52 |
|
|
3.76 |
|
Depreciation and amortization
expense |
1.75 |
|
|
1.88 |
|
|
1.76 |
|
|
1.77 |
|
Total operating costs per
barrel |
5.25 |
|
|
5.75 |
|
|
5.28 |
|
|
5.53 |
|
Adjusted operating income per
barrel (g) |
$ |
3.77 |
|
|
$ |
7.18 |
|
|
$ |
3.39 |
|
|
$ |
6.99 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent
region |
|
|
|
|
|
|
|
Gross margin (c) |
$ |
388 |
|
|
$ |
725 |
|
|
$ |
1,022 |
|
|
$ |
1,868 |
|
Adjusted operating income (c) |
$ |
166 |
|
|
$ |
500 |
|
|
$ |
377 |
|
|
$ |
1,215 |
|
Throughput volumes (thousand
barrels per day) |
443 |
|
|
470 |
|
|
453 |
|
|
446 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel
(f) |
$ |
9.52 |
|
|
$ |
16.74 |
|
|
$ |
8.23 |
|
|
$ |
15.33 |
|
Operating costs per barrel: |
|
|
|
|
|
|
|
Operating expenses |
3.89 |
|
|
3.51 |
|
|
3.57 |
|
|
3.68 |
|
Depreciation and amortization
expense |
1.54 |
|
|
1.68 |
|
|
1.62 |
|
|
1.68 |
|
Total operating costs per
barrel |
5.43 |
|
|
5.19 |
|
|
5.19 |
|
|
5.36 |
|
Adjusted operating income per
barrel (g) |
$ |
4.09 |
|
|
$ |
11.55 |
|
|
$ |
3.04 |
|
|
$ |
9.97 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(Millions of Dollars, Except per Barrel
Amounts) |
(Unaudited) |
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Refining
segment operating statistics by region (d)
(continued) |
|
|
|
|
|
|
|
North Atlantic
region |
|
|
|
|
|
|
|
Gross margin (c) |
$ |
348 |
|
|
$ |
596 |
|
|
$ |
1,017 |
|
|
$ |
1,711 |
|
Adjusted operating income (c) |
$ |
179 |
|
|
$ |
415 |
|
|
$ |
502 |
|
|
$ |
1,167 |
|
Throughput volumes (thousand
barrels per day) |
489 |
|
|
507 |
|
|
482 |
|
|
492 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel
(f) |
$ |
7.74 |
|
|
$ |
12.78 |
|
|
$ |
7.69 |
|
|
$ |
12.74 |
|
Operating costs per barrel: |
|
|
|
|
|
|
|
Operating expenses |
2.65 |
|
|
2.76 |
|
|
2.75 |
|
|
2.88 |
|
Depreciation and amortization
expense |
1.12 |
|
|
1.13 |
|
|
1.15 |
|
|
1.17 |
|
Total operating costs per
barrel |
3.77 |
|
|
3.89 |
|
|
3.90 |
|
|
4.05 |
|
Adjusted operating income per
barrel (g) |
$ |
3.97 |
|
|
$ |
8.89 |
|
|
$ |
3.79 |
|
|
$ |
8.69 |
|
|
|
|
|
|
|
|
|
U.S. West Coast
region |
|
|
|
|
|
|
|
Gross margin (c) |
$ |
270 |
|
|
$ |
546 |
|
|
$ |
804 |
|
|
$ |
1,318 |
|
Adjusted operating income (c) |
$ |
69 |
|
|
$ |
342 |
|
|
$ |
226 |
|
|
$ |
719 |
|
Throughput volumes (thousand
barrels per day) |
265 |
|
|
275 |
|
|
266 |
|
|
273 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel
(f) |
$ |
11.02 |
|
|
$ |
21.61 |
|
|
$ |
11.04 |
|
|
$ |
17.70 |
|
Operating costs per barrel: |
|
|
|
|
|
|
|
Operating expenses |
5.78 |
|
|
5.79 |
|
|
5.31 |
|
|
5.88 |
|
Depreciation and amortization
expense |
2.43 |
|
|
2.28 |
|
|
2.63 |
|
|
2.17 |
|
Total operating costs per
barrel |
8.21 |
|
|
8.07 |
|
|
7.94 |
|
|
8.05 |
|
Adjusted operating income per
barrel (g) |
$ |
2.81 |
|
|
$ |
13.54 |
|
|
$ |
3.10 |
|
|
$ |
9.65 |
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
AVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS |
(Unaudited) |
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Feedstocks
(dollars per barrel) |
|
|
|
|
|
|
|
|
Brent crude oil |
|
$ |
46.91 |
|
|
$ |
51.13 |
|
|
$ |
43.00 |
|
|
$ |
56.59 |
|
Brent less West Texas Intermediate
(WTI) crude oil |
|
2.03 |
|
|
4.73 |
|
|
1.80 |
|
|
5.66 |
|
Brent less Alaska North Slope (ANS)
crude oil |
|
2.13 |
|
|
(0.31 |
) |
|
1.35 |
|
|
0.58 |
|
Brent less Louisiana Light Sweet
(LLS) crude oil (h) |
|
0.38 |
|
|
0.97 |
|
|
0.02 |
|
|
1.28 |
|
Brent less Argus Sour Crude Index
(ASCI) crude oil (i) |
|
5.16 |
|
|
5.93 |
|
|
5.18 |
|
|
5.51 |
|
Brent less Maya crude oil |
|
7.88 |
|
|
8.48 |
|
|
8.73 |
|
|
9.24 |
|
LLS crude oil (h) |
|
46.53 |
|
|
50.16 |
|
|
42.98 |
|
|
55.31 |
|
LLS less ASCI crude oil (h)
(i) |
|
4.78 |
|
|
4.96 |
|
|
5.16 |
|
|
4.23 |
|
LLS less Maya crude oil (h) |
|
7.50 |
|
|
7.51 |
|
|
8.71 |
|
|
7.96 |
|
WTI crude oil |
|
44.88 |
|
|
46.40 |
|
|
41.20 |
|
|
50.93 |
|
|
|
|
|
|
|
|
|
|
Natural gas
(dollars per million British Thermal Units) |
|
2.80 |
|
|
2.72 |
|
|
2.27 |
|
|
2.73 |
|
|
|
|
|
|
|
|
|
|
Products
(dollars per barrel, unless otherwise noted) |
|
|
|
|
|
|
|
|
U.S. Gulf Coast: |
|
|
|
|
|
|
|
|
CBOB gasoline less Brent |
|
9.69 |
|
|
12.40 |
|
|
9.54 |
|
|
10.95 |
|
Ultra-low-sulfur diesel less
Brent |
|
10.63 |
|
|
12.13 |
|
|
9.34 |
|
|
13.76 |
|
Propylene less Brent |
|
(2.76 |
) |
|
(13.85 |
) |
|
(5.65 |
) |
|
(3.95 |
) |
CBOB gasoline less LLS (h) |
|
10.07 |
|
|
13.37 |
|
|
9.56 |
|
|
12.23 |
|
Ultra-low-sulfur diesel less LLS
(h) |
|
11.01 |
|
|
13.10 |
|
|
9.36 |
|
|
15.04 |
|
Propylene less LLS (h) |
|
(2.38 |
) |
|
(12.88 |
) |
|
(5.63 |
) |
|
(2.67 |
) |
U.S. Mid-Continent: |
|
|
|
|
|
|
|
|
CBOB gasoline less WTI |
|
14.15 |
|
|
22.71 |
|
|
12.64 |
|
|
19.09 |
|
Ultra-low-sulfur diesel less
WTI |
|
15.36 |
|
|
20.36 |
|
|
12.70 |
|
|
20.36 |
|
North Atlantic: |
|
|
|
|
|
|
|
|
CBOB gasoline less Brent |
|
11.12 |
|
|
16.28 |
|
|
12.02 |
|
|
13.49 |
|
Ultra-low-sulfur diesel less
Brent |
|
11.52 |
|
|
14.54 |
|
|
10.74 |
|
|
17.59 |
|
U.S. West Coast: |
|
|
|
|
|
|
|
|
CARBOB 87 gasoline less ANS |
|
17.68 |
|
|
31.59 |
|
|
18.86 |
|
|
27.21 |
|
CARB diesel less ANS |
|
14.83 |
|
|
14.84 |
|
|
13.58 |
|
|
17.39 |
|
CARBOB 87 gasoline less WTI |
|
17.58 |
|
|
36.63 |
|
|
19.31 |
|
|
32.29 |
|
CARB diesel less WTI |
|
14.73 |
|
|
19.88 |
|
|
14.03 |
|
|
22.47 |
|
New York Harbor corn crush (dollars
per gallon) |
|
0.35 |
|
|
0.20 |
|
|
0.24 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
OTHER FINANCIAL DATA |
(Millions of Dollars) |
(Unaudited) |
|
|
|
|
|
|
|
September 30,2016 |
|
December 31,2015 |
Balance sheet
data |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
$ |
16,878 |
|
|
$ |
14,898 |
|
Cash and temporary cash
investments ($35 and $81, respectively, held by Valero Energy
Partners LP) included in current assets |
|
5,949 |
|
|
4,114 |
|
Inventories included in current
assets |
|
|
|
|
|
5,979 |
|
|
5,898 |
|
Current liabilities |
|
|
|
|
|
8,224 |
|
|
6,994 |
|
Current portion of debt
and capital lease obligations included in current liabilities |
|
1,064 |
|
|
127 |
|
Debt and capital lease
obligations, less current portion |
|
|
|
7,888 |
|
|
7,208 |
|
Total debt and capital lease
obligations |
|
|
|
|
|
8,952 |
|
|
7,335 |
|
Valero Energy Corporation
stockholders’ equity |
|
|
|
|
|
20,339 |
|
|
20,527 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Cash flow
data |
|
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
$ |
863 |
|
|
$ |
1,362 |
|
|
$ |
3,822 |
|
|
$ |
5,124 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Valero Energy
Partners LP |
|
|
|
|
|
|
|
|
Weighted-average limited partner units
outstanding (in millions) |
|
|
|
|
|
|
|
Common units - public (basic and
diluted) |
|
22 |
|
|
17 |
|
|
22 |
|
|
17 |
|
Common units - Valero (basic and
diluted) |
|
32 |
|
|
13 |
|
|
21 |
|
|
13 |
|
Subordinated units - Valero (basic
and diluted) |
|
13 |
|
|
29 |
|
|
23 |
|
|
29 |
|
Distributions
declared |
|
|
|
|
|
|
|
Limited partner units - public |
|
$ |
8 |
|
|
$ |
5 |
|
|
$ |
24 |
|
|
$ |
15 |
|
Limited partner units - Valero |
|
18 |
|
|
14 |
|
|
49 |
|
|
38 |
|
General partner units - Valero |
|
6 |
|
|
1 |
|
|
14 |
|
|
3 |
|
Total distribution declared |
|
$ |
32 |
|
|
$ |
20 |
|
|
$ |
87 |
|
|
$ |
56 |
|
|
See
Notes to Earnings Release Tables. |
|
(a) In accordance with United States (U.S.)
generally accepted accounting principles (GAAP), we are required to
state our inventories at the lower of cost or market. When the
market price of our inventory falls below cost, we record a lower
of cost or market inventory valuation adjustment to write down the
value to market. In subsequent periods, the value of our inventory
is reassessed and a lower of cost or market inventory valuation
adjustment is recorded to reflect the net change in the inventory
valuation reserve between periods. As of September 30, 2016,
the market price of our inventory was above cost; therefore, we did
not have a lower of cost or market inventory valuation reserve as
of that date. During the nine months ended September 30, 2016,
we recorded a change in our inventory valuation reserve that was
established on December 31, 2015, resulting in a noncash
benefit of $697 million and $50 million attributable to
our refining segment and ethanol segment, respectively.
(b) Effective October 1, 2016, we
(i) transferred ownership of all of our assets in Aruba, other
than certain hydrocarbon inventories and working capital, to
Refineria di Aruba N.V. (RDA), an entity wholly-owned by the
Government of Aruba (GOA), (ii) settled our obligations under
various agreements with the GOA, including agreements that required
us to dismantle our leasehold improvements under certain
conditions, and (iii) sold the working capital of our Aruba
operations, including hydrocarbon inventories, to the GOA, CITGO
Aruba Refining N.V. (CAR), and CITGO Petroleum Corporation
(together with CAR and certain other affiliates, collectively,
CITGO). We refer to this transaction as the “Aruba
Disposition.”
In June 2016, we recognized an asset impairment
loss of $56 million representing all of the remaining carrying
value of the long-lived assets of our crude oil and refined
products terminal and transshipment facility in Aruba
(collectively, the Aruba Terminal). We recognized the impairment
loss at that time because we concluded that it was more likely than
not that we would ultimately transfer ownership of these assets to
the GOA as a result of agreements entered into in June 2016 between
the GOA and CITGO for the GOA’s lease of those assets to CITGO.
In September 2016 and in connection with the
Aruba Disposition, our U.S. subsidiaries cancelled all outstanding
debt obligations owed to them by our Aruba subsidiaries, which
resulted in the recognition by us of an income tax benefit in the
U.S. of $42 million during the three and nine months ended
September 30, 2016. We had no income tax effect in Aruba from
the cancellation of debt or other effects of the Aruba Disposition
because of net operating loss carryforwards associated with our
operations in Aruba against which we had previously recorded a full
valuation allowance. There was no other significant effect to our
results of operations or cash flows from the Aruba Disposition
during the three and nine months ended September 30, 2016.
(c) 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 the utility of these
measures.
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 lower of cost or market inventory valuation adjustment, its
related income tax effect, the asset impairment loss, and the
income tax benefit on the Aruba Disposition.
- 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.
- Gross margin is defined as operating income
excluding the lower of cost or market inventory valuation
adjustment, operating expenses, depreciation and amortization
expense, and asset impairment loss.
- Adjusted operating income is defined as
operating income excluding the lower of cost or market inventory
valuation adjustment and asset impairment loss.
(d) The 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.
(e) Primarily includes petrochemicals, gas oils, No. 6 fuel
oil, petroleum coke, sulfur, and asphalt.
(f) Throughput margin per barrel represents
gross margin (defined in (c) above) for our refining segment or
refining regions divided by the respective throughput volumes.
Gross margin per gallon of production represents gross margin
(defined in (c) above) for our ethanol segment divided by
production volumes. Throughput and production volumes are
calculated by multiplying throughput and production volumes per day
(as provided in the accompanying tables) by the number of days in
the applicable period.
(g) Adjusted operating income per barrel
represents adjusted operating income (defined in (c) above) for our
refining segment or refining regions divided by the respective
throughput volumes. Adjusted operating income per gallon of
production represents adjusted operating income (defined in (c)
above) for our ethanol segment divided by production volumes.
Throughput and production volumes are calculated by multiplying
throughput and production volumes per day (as provided in the
accompanying tables) by the number of days in the applicable
period.
(h) Average market reference prices for LLS
crude oil, along with price differentials between the price of LLS
crude oil and other types of crude oils are reflected without
adjusting for the impact of the futures pricing for the
corresponding delivery month. Therefore, the prices reported
reflect the prompt month pricing only, without an adjustment for
futures pricing (known in industry as the Calendar Month Average
(CMA) “roll” adjustment). We previously had provided average market
reference prices that included the CMA “roll” adjustment.
Accordingly, the average market reference price for LLS crude oil
and price differentials for LLS crude oil for the three and nine
months ended September 30, 2015 have been adjusted to conform
to the current presentation.
(i) Average market reference price differentials
to Mars crude oil have been replaced by average market reference
price differentials to Argus Sour Crude Index (ASCI) crude oil.
Mars crude oil is one of the three grades of sour crude oil used to
create ASCI crude oil, and therefore, ASCI crude oil is a more
comprehensive price marker for medium sour crude oil. Accordingly,
the price differentials for ASCI crude oil for the three and nine
months ended September 30, 2015 are included to conform to the
current presentation.
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