Valero Energy Corporation (NYSE:VLO) (“Valero”) today reported net
income attributable to Valero stockholders of $367 million, or
$0.81 per share, for the fourth quarter of 2016 compared to $298
million, or $0.62 per share, for the fourth quarter of
2015. Excluding adjustments shown in the accompanying
earnings release tables, fourth quarter 2015 adjusted net income
attributable to Valero stockholders was $862 million, or $1.79
per share. For the year ended December 31, 2016, net income
attributable to Valero stockholders was $2.3 billion, or $4.94
per share, compared to $4.0 billion, or $7.99 per share, for
2015. Excluding adjustments shown in the accompanying
earnings release tables, adjusted net income attributable to Valero
stockholders was $1.7 billion, or $3.72 per share, for 2016
compared to $4.6 billion, or $9.24 per share, for 2015.
“Domestic refined product demand remained strong
and we exported 359,000 barrels per day of gasoline and diesel
combined during the fourth quarter,” said Joe Gorder, Valero
Chairman, President and Chief Executive Officer. “Looking
ahead, we expect an improving economy and relatively low crude oil
and refined product prices to support consumer demand growth.”
RefiningThe refining segment
reported $715 million of operating income for the fourth quarter of
2016, compared to $876 million for the fourth quarter of 2015.
Excluding adjustments shown in the accompanying earnings
release tables, adjusted operating income for the fourth quarter of
2015 was $1.5 billion. The decline in operating income in the
fourth quarter of 2016 when compared to the fourth quarter 2015
adjusted amount was due primarily to narrower discounts for most
sweet and sour crude oils relative to the Brent benchmark and
weaker gasoline margins in some regions. Another factor
contributing to the decrease was higher costs to meet our biofuel
blending obligations (primarily from the purchase of RINs).
Biofuel blending costs were $217 million in the
fourth quarter of 2016, which was $60 million higher than the
fourth quarter of 2015, and $749 million for 2016, which was
$309 million higher than 2015. The higher costs were due
primarily to higher RINs prices.
Valero’s refineries achieved 95 percent
throughput capacity utilization and averaged 2.9 million barrels
per day of throughput volume in the fourth quarter of 2016, which
was in line with the fourth quarter of 2015.
“Our refining team worked hard to ensure we
completed major turnarounds at our Port Arthur and Ardmore
refineries safely,” Gorder said.
EthanolThe ethanol segment
reported $126 million of operating income for the fourth quarter of
2016, compared to a loss of $13 million for the fourth quarter of
2015. Excluding the adjustment shown in the accompanying
earnings release tables, adjusted operating income for the fourth
quarter of 2015 was $37 million. The increase in operating
income in the fourth quarter of 2016 when compared to the fourth
quarter 2015 adjusted amount was due primarily to lower corn prices
and stronger ethanol prices. Ethanol production volumes
averaged 4.0 million gallons per day in the fourth quarter of
2016, which was 104,000 gallons per day higher than the fourth
quarter of 2015. Valero expects export demand for ethanol to
remain strong and domestic demand to improve with seasonal
increases in gasoline consumption. High domestic corn
production is also expected to keep corn prices low in the near
term.
Corporate and OtherGeneral and
administrative expenses were $208 million in the fourth
quarter of 2016 compared to $206 million in the fourth quarter
of 2015. The effective tax rate of 21 percent in the
fourth quarter of 2016 was lower than expected due to stronger than
projected earnings from international operations (relative to total
earnings) that have lower statutory tax rates and reductions in tax
position liabilities due to the lapse of statutes of
limitation.
Investing and Financing
ActivitiesCapital investments totaled $628 million in
the fourth quarter of 2016, of which $244 million was for
turnarounds and catalyst. For the year, capital investments
totaled $2.0 billion, consisting of $1.4 billion for sustaining the
business and $600 million for growth projects.
Valero paid $271 million in dividends and
purchased 2.7 million shares of its common stock for
$169 million, resulting in total cash returned to stockholders
of $440 million in the fourth quarter of 2016. In 2016,
Valero returned $2.4 billion to stockholders, or 142 percent of
adjusted net income attributable to Valero stockholders, consisting
of $1.1 billion in dividends and $1.3 billion in stock
buybacks. The company is targeting a total payout ratio of at
least 75 percent in 2017. 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.
“Our operations generated $998 million of cash
during the quarter despite a challenging and volatile earnings
environment,” Gorder said. “Our disciplined capital
allocation allowed us to meaningfully exceed our total payout ratio
target for 2016.”
On January 26, the company announced a 17
percent increase in its quarterly common stock dividend from $0.60
per share to $0.70 per share, payable on March 7, 2017, to holders
of record on February 15, 2017.
In December, Valero Energy Partners LP (NYSE:
VLP, “VLP”), a master limited partnership sponsored by Valero,
issued $500 million of 4.375 percent senior notes due 2026 and
used the proceeds to repay a substantial portion of its
indebtedness under its senior unsecured revolving credit
facility.
Liquidity and Financial
PositionValero ended the fourth quarter of 2016 with
$8.0 billion of total debt and $4.8 billion of cash and
temporary cash investments. The debt to capital ratio, net of
$2.0 billion in cash, was 23 percent.
Strategic UpdateValero expects
2017 capital investments to be about $2.7 billion, of which
$1.1 billion is for growth and $1.6 billion is for sustaining
projects.
On January 18, VLP announced the acquisition of
a 40 percent undivided interest in the Hewitt segment of Plains All
American Pipeline, L.P.’s Red River pipeline.
“This is VLP’s first third-party acquisition,”
said Gorder. “It provides incremental growth to VLP and it
fits perfectly with the strategy to optimize Valero’s supply
chain.”
Conference CallValero’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 ValeroValero Energy
Corporation, through its subsidiaries, is an international
manufacturer and marketer of transportation fuels, and other
petrochemical products. 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, 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,
210-345-3077Media: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 (d) to the earnings
release tables, we disclose the reasons why we believe our use of
these 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 Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Statement of
income data |
|
|
|
|
|
|
|
|
|
Operating revenues |
|
$ |
20,712 |
|
|
$ |
18,777 |
|
|
$ |
75,659 |
|
|
$ |
87,804 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Cost of sales (excluding the lower of cost or market inventory
valuation adjustment) |
|
18,302 |
|
|
15,627 |
|
|
65,962 |
|
|
73,861 |
|
Lower of
cost or market inventory valuation adjustment (a) |
|
|
— |
|
|
790 |
|
|
(747 |
) |
|
790 |
|
Operating
expenses |
|
|
1,114 |
|
|
1,014 |
|
|
4,207 |
|
|
4,243 |
|
General
and administrative expenses |
|
|
208 |
|
|
206 |
|
|
715 |
|
|
710 |
|
Depreciation and amortization expense |
|
|
468 |
|
|
494 |
|
|
1,894 |
|
|
1,842 |
|
Asset
impairment loss (b) |
|
|
— |
|
|
— |
|
|
56 |
|
|
— |
|
Total
costs and expenses |
|
|
20,092 |
|
|
18,131 |
|
|
72,087 |
|
|
81,446 |
|
Operating
income |
|
|
620 |
|
|
646 |
|
|
3,572 |
|
|
6,358 |
|
Other
income, net |
|
|
21 |
|
|
11 |
|
|
56 |
|
|
46 |
|
Interest
and debt expense, net of capitalized interest |
|
|
(112 |
) |
|
(107 |
) |
|
(446 |
) |
|
(433 |
) |
Income
before income tax expense |
|
|
529 |
|
|
550 |
|
|
3,182 |
|
|
5,971 |
|
Income
tax expense (b) (c) |
|
|
113 |
|
|
155 |
|
|
765 |
|
|
1,870 |
|
Net
income |
|
|
416 |
|
|
395 |
|
|
2,417 |
|
|
4,101 |
|
Less: Net income attributable to noncontrolling interests |
|
49 |
|
|
97 |
|
|
128 |
|
|
111 |
|
Net income attributable to Valero Energy Corporation
stockholders |
|
$ |
367 |
|
|
$ |
298 |
|
|
$ |
2,289 |
|
|
$ |
3,990 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
$ |
0.81 |
|
|
$ |
0.62 |
|
|
$ |
4.94 |
|
|
$ |
8.00 |
|
Weighted-average common shares outstanding (in millions) |
|
451 |
|
|
479 |
|
|
461 |
|
|
497 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share – assuming dilution |
|
|
$ |
0.81 |
|
|
$ |
0.62 |
|
|
$ |
4.94 |
|
|
$ |
7.99 |
|
Weighted-average common shares outstanding – assuming |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dilution (in millions) |
|
|
453 |
|
|
|
481 |
|
|
|
464 |
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share |
|
|
$ |
0.60 |
|
|
$ |
0.50 |
|
|
$ |
2.40 |
|
|
$ |
1.70 |
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
|
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(Millions of Dollars) |
(Unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Operating
income |
|
|
|
|
|
|
|
|
Refining |
|
$ |
715 |
|
|
$ |
876 |
|
|
$ |
3,995 |
|
|
$ |
6,973 |
|
Ethanol |
|
126 |
|
|
(13 |
) |
|
340 |
|
|
142 |
|
Corporate |
|
(221 |
) |
|
(217 |
) |
|
(763 |
) |
|
(757 |
) |
Total |
|
$ |
620 |
|
|
$ |
646 |
|
|
$ |
3,572 |
|
|
$ |
6,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining |
|
$ |
1,004 |
|
|
$ |
910 |
|
|
$ |
3,792 |
|
|
$ |
3,795 |
|
Ethanol |
|
110 |
|
|
104 |
|
|
415 |
|
|
448 |
|
Total |
|
$ |
1,114 |
|
|
$ |
1,014 |
|
|
$ |
4,207 |
|
|
$ |
4,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining |
|
$ |
437 |
|
|
$ |
465 |
|
|
$ |
1,780 |
|
|
$ |
1,745 |
|
Ethanol |
|
18 |
|
|
18 |
|
|
66 |
|
|
50 |
|
Corporate |
|
13 |
|
|
11 |
|
|
48 |
|
|
47 |
|
Total |
|
$ |
468 |
|
|
$ |
494 |
|
|
$ |
1,894 |
|
|
$ |
1,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (d) |
(Millions of Dollars, Except per Share
Amounts) |
(Unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
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 |
|
$ |
367 |
|
|
$ |
298 |
|
|
$ |
2,289 |
|
|
$ |
3,990 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(790 |
) |
|
747 |
|
|
(790 |
) |
Income
tax (expense) benefit related to the lower of cost or market
inventory valuation adjustment |
|
|
— |
|
|
|
166 |
|
|
|
(168 |
) |
|
|
166 |
|
Lower of
cost or market inventory valuation adjustment, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of
taxes |
|
— |
|
|
|
(624 |
) |
|
|
579 |
|
|
|
(624 |
) |
Asset
impairment loss (b) |
|
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Income
tax benefit on Aruba Disposition (b) |
|
— |
|
|
— |
|
|
42 |
|
|
— |
|
Blender’s
tax credit (e) |
|
— |
|
|
76 |
|
|
— |
|
|
— |
|
Income
tax expense related to the blender’s tax credit |
|
— |
|
|
(16 |
) |
|
— |
|
|
— |
|
Blender’s
tax credit, net of taxes |
|
— |
|
|
60 |
|
|
— |
|
|
— |
|
Total
adjustments |
|
— |
|
|
(564 |
) |
|
565 |
|
|
(624 |
) |
Adjusted
net income attributable to Valero Energy Corporation
stockholders |
|
$ |
367 |
|
|
$ |
862 |
|
|
$ |
1,724 |
|
|
$ |
4,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of earnings per common share – assuming |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dilution, to adjusted earnings per common share – assuming
dilution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share – assuming dilution |
|
$ |
0.81 |
|
|
$ |
0.62 |
|
|
$ |
4.94 |
|
|
$ |
7.99 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation adjustment, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of
taxes (a) |
|
|
— |
|
|
|
(1.30 |
) |
|
|
1.25 |
|
|
|
(1.25 |
) |
Asset
impairment loss (b) |
|
— |
|
|
— |
|
|
(0.12 |
) |
|
— |
|
Income
tax benefit on Aruba Disposition (b) |
|
— |
|
|
— |
|
|
0.09 |
|
|
— |
|
Blender’s
tax credit, net of taxes (e) |
|
— |
|
|
0.13 |
|
|
— |
|
|
— |
|
Total
adjustments |
|
— |
|
|
(1.17 |
) |
|
1.22 |
|
|
(1.25 |
) |
Adjusted
earnings per common share – assuming dilution |
|
$ |
0.81 |
|
|
$ |
1.79 |
|
|
$ |
3.72 |
|
|
$ |
9.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (d) |
(Millions of Dollars) |
(Unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
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 |
$ |
715 |
|
|
$ |
876 |
|
|
$ |
3,995 |
|
|
$ |
6,973 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
740 |
|
|
|
(697 |
) |
|
|
740 |
|
Operating
expenses |
1,004 |
|
|
910 |
|
|
3,792 |
|
|
3,795 |
|
Depreciation and amortization expense |
437 |
|
|
465 |
|
|
1,780 |
|
|
1,745 |
|
Asset
impairment loss (b) |
— |
|
|
— |
|
|
56 |
|
|
— |
|
Blender’s
tax credit (e) |
— |
|
|
(136 |
) |
|
— |
|
|
— |
|
Gross
margin |
$ |
2,156 |
|
|
$ |
2,855 |
|
|
$ |
8,926 |
|
|
$ |
13,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
715 |
|
|
$ |
876 |
|
|
$ |
3,995 |
|
|
$ |
6,973 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
(740 |
) |
|
|
697 |
|
|
|
(740 |
) |
Asset
impairment loss (b) |
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Blender’s
tax credit (e) |
— |
|
|
136 |
|
|
— |
|
|
— |
|
Adjusted
operating income |
$ |
715 |
|
|
$ |
1,480 |
|
|
$ |
3,354 |
|
|
$ |
7,713 |
|
|
|
|
|
|
|
|
|
Ethanol segment |
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
126 |
|
|
$ |
(13 |
) |
|
$ |
340 |
|
|
$ |
142 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
50 |
|
|
|
(50 |
) |
|
|
50 |
|
Operating
expenses |
110 |
|
|
104 |
|
|
415 |
|
|
448 |
|
Depreciation and amortization expense |
18 |
|
|
18 |
|
|
66 |
|
|
50 |
|
Gross
margin |
$ |
254 |
|
|
$ |
159 |
|
|
$ |
771 |
|
|
$ |
690 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
126 |
|
|
$ |
(13 |
) |
|
$ |
340 |
|
|
$ |
142 |
|
Exclude
adjustment: Lower of cost or market inventory valuation adjustment
(a) |
— |
|
|
(50 |
) |
|
50 |
|
|
(50 |
) |
Adjusted
operating income |
$ |
126 |
|
|
$ |
37 |
|
|
$ |
290 |
|
|
$ |
192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (d) |
(Millions of Dollars) |
(Unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Reconciliation
of operating income to gross margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and reconciliation of operating income to
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income by refining segment region
(f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Gulf Coast region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
444 |
|
|
$ |
949 |
|
|
$ |
1,959 |
|
|
$ |
3,945 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
33 |
|
|
|
(37 |
) |
|
|
33 |
|
Operating
expenses |
568 |
|
|
501 |
|
|
2,163 |
|
|
2,113 |
|
Depreciation and amortization expense |
272 |
|
|
279 |
|
|
1,070 |
|
|
1,036 |
|
Asset
impairment loss (b) |
— |
|
|
— |
|
|
56 |
|
|
— |
|
Blender’s
tax credit (e) |
— |
|
|
(131 |
) |
|
— |
|
|
— |
|
Gross
margin |
$ |
1,284 |
|
|
$ |
1,631 |
|
|
$ |
5,211 |
|
|
$ |
7,127 |
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
444 |
|
|
$ |
949 |
|
|
$ |
1,959 |
|
|
$ |
3,945 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
(33 |
) |
|
|
37 |
|
|
|
(33 |
) |
Asset
impairment loss (b) |
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Blender’s
tax credit (e) |
— |
|
|
131 |
|
|
— |
|
|
— |
|
Adjusted
operating income |
$ |
444 |
|
|
$ |
851 |
|
|
$ |
1,978 |
|
|
$ |
3,978 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region |
|
|
|
|
|
|
|
Operating
income |
$ |
70 |
|
|
$ |
210 |
|
|
$ |
456 |
|
|
$ |
1,425 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
9 |
|
|
|
(9 |
) |
|
|
9 |
|
Operating
expenses |
145 |
|
|
138 |
|
|
588 |
|
|
586 |
|
Depreciation and amortization expense |
66 |
|
|
73 |
|
|
268 |
|
|
278 |
|
Blender’s
tax credit (e) |
— |
|
|
(3 |
) |
|
— |
|
|
— |
|
Gross
margin |
$ |
281 |
|
|
$ |
427 |
|
|
$ |
1,303 |
|
|
$ |
2,298 |
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
70 |
|
|
$ |
210 |
|
|
$ |
456 |
|
|
$ |
1,425 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
(9 |
) |
|
|
9 |
|
|
|
(9 |
) |
Blender’s
tax credit (e) |
— |
|
|
3 |
|
|
— |
|
|
— |
|
Adjusted
operating income |
$ |
70 |
|
|
$ |
216 |
|
|
$ |
447 |
|
|
$ |
1,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (d) |
(Millions of Dollars) |
(Unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Reconciliation
of operating income to gross margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and reconciliation of operating income to
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income by refining segment region
(f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Atlantic region |
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
207 |
|
|
$ |
(414 |
) |
|
$ |
1,355 |
|
|
$ |
753 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
693 |
|
|
|
(646 |
) |
|
|
693 |
|
Operating
expenses |
138 |
|
|
134 |
|
|
501 |
|
|
521 |
|
Depreciation and amortization expense |
43 |
|
|
54 |
|
|
195 |
|
|
211 |
|
Gross
margin |
$ |
388 |
|
|
$ |
467 |
|
|
$ |
1,405 |
|
|
$ |
2,178 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
207 |
|
|
$ |
(414 |
) |
|
$ |
1,355 |
|
|
$ |
753 |
|
Exclude
adjustment: Lower of cost or market inventory valuation adjustment
(a) |
— |
|
|
(693 |
) |
|
646 |
|
|
(693 |
) |
Adjusted
operating income |
$ |
207 |
|
|
$ |
279 |
|
|
$ |
709 |
|
|
$ |
1,446 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
(6 |
) |
|
$ |
131 |
|
|
$ |
225 |
|
|
$ |
850 |
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
5 |
|
|
|
(5 |
) |
|
|
5 |
|
Operating
expenses |
153 |
|
|
137 |
|
|
540 |
|
|
575 |
|
Depreciation and amortization expense |
56 |
|
|
59 |
|
|
247 |
|
|
220 |
|
Blender’s
tax credit (e) |
— |
|
|
(2 |
) |
|
— |
|
|
— |
|
Gross
margin |
$ |
203 |
|
|
$ |
330 |
|
|
$ |
1,007 |
|
|
$ |
1,650 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
$ |
(6 |
) |
|
$ |
131 |
|
|
$ |
225 |
|
|
$ |
850 |
|
Exclude
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower of
cost or market inventory valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment (a) |
|
— |
|
|
|
(5 |
) |
|
|
5 |
|
|
|
(5 |
) |
Blender’s
tax credit (e) |
— |
|
|
2 |
|
|
— |
|
|
— |
|
Adjusted
operating income |
$ |
(6 |
) |
|
$ |
134 |
|
|
$ |
220 |
|
|
$ |
855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
Throughput
volumes (thousand barrels per day) |
|
|
|
|
|
|
|
Feedstocks: |
|
|
|
|
|
|
|
Heavy
sour crude oil |
|
382 |
|
|
475 |
|
|
396 |
|
|
438 |
Medium/light sour crude oil |
|
547 |
|
|
466 |
|
|
526 |
|
|
428 |
Sweet
crude oil |
|
1,184 |
|
|
1,184 |
|
|
1,193 |
|
|
1,208 |
Residuals |
|
243 |
|
|
277 |
|
|
272 |
|
|
274 |
Other
feedstocks |
|
138 |
|
|
136 |
|
|
152 |
|
|
140 |
Total
feedstocks |
|
2,494 |
|
|
2,538 |
|
|
2,539 |
|
|
2,488 |
Blendstocks and other |
|
359 |
|
|
316 |
|
|
316 |
|
|
311 |
Total
throughput volumes |
|
2,853 |
|
|
2,854 |
|
|
2,855 |
|
|
2,799 |
|
|
|
|
|
|
|
|
Yields
(thousand barrels per day) |
|
|
|
|
|
|
|
Gasolines
and blendstocks |
|
1,429 |
|
|
1,384 |
|
|
1,404 |
|
|
1,364 |
Distillates |
|
1,047 |
|
|
1,085 |
|
|
1,066 |
|
|
1,066 |
Other
products (g) |
|
412 |
|
|
427 |
|
|
421 |
|
|
408 |
Total
yields |
|
2,888 |
|
|
2,896 |
|
|
2,891 |
|
|
2,838 |
|
|
|
|
|
|
|
|
Refining
segment operating statistics |
|
|
|
|
|
|
|
Gross
margin (d) |
$ |
2,156 |
|
$ |
2,855 |
|
$ |
8,926 |
|
$ |
13,253 |
Adjusted
operating income (d) |
$ |
715 |
|
$ |
1,480 |
|
$ |
3,354 |
|
$ |
7,713 |
Throughput volumes (thousand barrels per day) |
|
2,853 |
|
|
2,854 |
|
|
2,855 |
|
|
2,799 |
|
|
|
|
|
|
|
|
Throughput margin per barrel (h) |
$ |
8.22 |
|
$ |
10.87 |
|
$ |
8.54 |
|
$ |
12.97 |
Operating
costs per barrel: |
|
|
|
|
|
|
|
Operating
expenses |
|
3.83 |
|
|
3.47 |
|
|
3.63 |
|
|
3.71 |
Depreciation and amortization expense |
|
1.67 |
|
|
1.76 |
|
|
1.70 |
|
|
1.71 |
Total
operating costs per barrel |
|
5.50 |
|
|
5.23 |
|
|
5.33 |
|
|
5.42 |
Adjusted
operating income per barrel (i) |
$ |
2.72 |
|
$ |
5.64 |
|
$ |
3.21 |
|
$ |
7.55 |
|
|
|
|
|
|
|
|
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 Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Ethanol segment
operating statistics |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin (d) |
|
$ |
254 |
|
$ |
159 |
|
$ |
771 |
|
$ |
690 |
Adjusted
operating income (d) |
|
$ |
126 |
|
$ |
37 |
|
$ |
290 |
|
$ |
192 |
Production volumes (thousand gallons per day) |
|
|
3,987 |
|
|
3,883 |
|
|
3,842 |
|
|
3,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin per gallon of production (h) |
|
$ |
0.69 |
|
$ |
0.45 |
|
$ |
0.55 |
|
$ |
0.49 |
Operating
costs per gallon of production: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
0.30 |
|
|
0.29 |
|
|
0.30 |
|
|
0.32 |
Depreciation and amortization expense |
|
|
0.05 |
|
|
0.05 |
|
|
0.04 |
|
|
0.03 |
Total
operating costs per gallon of production |
|
|
0.35 |
|
|
0.34 |
|
|
0.34 |
|
|
0.35 |
Adjusted
operating income per gallon of production (i) |
|
$ |
0.34 |
|
$ |
0.11 |
|
$ |
0.21 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Refining
segment operating statistics by region (f) |
|
|
|
|
|
|
|
U.S. Gulf Coast region |
|
|
|
|
|
|
|
Gross
margin (d) |
$ |
1,284 |
|
|
$ |
1,631 |
|
|
$ |
5,211 |
|
|
$ |
7,127 |
|
Adjusted
operating income (d) |
$ |
444 |
|
|
$ |
851 |
|
|
$ |
1,978 |
|
|
$ |
3,978 |
|
Throughput volumes (thousand barrels per day) |
1,653 |
|
|
1,657 |
|
|
1,653 |
|
|
1,592 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel (h) |
$ |
8.44 |
|
|
$ |
10.70 |
|
|
$ |
8.61 |
|
|
$ |
12.27 |
|
Operating
costs per barrel: |
|
|
|
|
|
|
|
Operating
expenses |
3.74 |
|
|
3.29 |
|
|
3.57 |
|
|
3.64 |
|
Depreciation and amortization expense |
1.78 |
|
|
1.83 |
|
|
1.77 |
|
|
1.78 |
|
Total
operating costs per barrel |
5.52 |
|
|
5.12 |
|
|
5.34 |
|
|
5.42 |
|
Adjusted
operating income per barrel (i) |
$ |
2.92 |
|
|
$ |
5.58 |
|
|
$ |
3.27 |
|
|
$ |
6.85 |
|
|
|
|
|
|
|
|
|
U.S. Mid-Continent region |
|
|
|
|
|
|
|
Gross
margin (d) |
$ |
281 |
|
|
$ |
427 |
|
|
$ |
1,303 |
|
|
$ |
2,298 |
|
Adjusted
operating income (d) |
$ |
70 |
|
|
$ |
216 |
|
|
$ |
447 |
|
|
$ |
1,434 |
|
Throughput volumes (thousand barrels per day) |
447 |
|
|
449 |
|
|
452 |
|
|
447 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel (h) |
$ |
6.85 |
|
|
$ |
10.34 |
|
|
$ |
7.89 |
|
|
$ |
14.09 |
|
Operating
costs per barrel: |
|
|
|
|
|
|
|
Operating
expenses |
3.54 |
|
|
3.34 |
|
|
3.56 |
|
|
3.59 |
|
Depreciation and amortization expense |
1.62 |
|
|
1.78 |
|
|
1.63 |
|
|
1.71 |
|
Total
operating costs per barrel |
5.16 |
|
|
5.12 |
|
|
5.19 |
|
|
5.30 |
|
Adjusted
operating income per barrel (i) |
$ |
1.69 |
|
|
$ |
5.22 |
|
|
$ |
2.70 |
|
|
$ |
8.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Refining
segment operating statistics by region (f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Atlantic region |
|
|
|
|
|
|
|
Gross
margin (d) |
$ |
388 |
|
|
$ |
467 |
|
|
$ |
1,405 |
|
|
$ |
2,178 |
|
Adjusted
operating income (d) |
$ |
207 |
|
|
$ |
279 |
|
|
$ |
709 |
|
|
$ |
1,446 |
|
Throughput volumes (thousand barrels per day) |
483 |
|
|
503 |
|
|
483 |
|
|
494 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel (h) |
$ |
8.75 |
|
|
$ |
10.09 |
|
|
$ |
7.95 |
|
|
$ |
12.06 |
|
Operating
costs per barrel: |
|
|
|
|
|
|
|
Operating
expenses |
3.10 |
|
|
2.89 |
|
|
2.84 |
|
|
2.88 |
|
Depreciation and amortization expense |
0.99 |
|
|
1.16 |
|
|
1.10 |
|
|
1.17 |
|
Total
operating costs per barrel |
4.09 |
|
|
4.05 |
|
|
3.94 |
|
|
4.05 |
|
Adjusted
operating income per barrel (i) |
$ |
4.66 |
|
|
$ |
6.04 |
|
|
$ |
4.01 |
|
|
$ |
8.01 |
|
|
|
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
|
|
|
Gross
margin (d) |
$ |
203 |
|
|
$ |
330 |
|
|
$ |
1,007 |
|
|
$ |
1,650 |
|
Adjusted
operating income (loss) (d) |
$ |
(6 |
) |
|
$ |
134 |
|
|
$ |
220 |
|
|
$ |
855 |
|
Throughput volumes (thousand barrels per day) |
270 |
|
|
245 |
|
|
267 |
|
|
266 |
|
|
|
|
|
|
|
|
|
Throughput margin per barrel (h) |
$ |
8.15 |
|
|
$ |
14.62 |
|
|
$ |
10.30 |
|
|
$ |
17.00 |
|
Operating
costs per barrel: |
|
|
|
|
|
|
|
Operating
expenses |
6.16 |
|
|
6.07 |
|
|
5.53 |
|
|
5.92 |
|
Depreciation and amortization expense |
2.20 |
|
|
2.58 |
|
|
2.52 |
|
|
2.26 |
|
Total
operating costs per barrel |
8.36 |
|
|
8.65 |
|
|
8.05 |
|
|
8.18 |
|
Adjusted
operating income (loss) per barrel (i) |
$ |
(0.21 |
) |
|
$ |
5.97 |
|
|
$ |
2.25 |
|
|
$ |
8.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
AVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS |
(Unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Feedstocks
(dollars per barrel) |
|
|
|
|
|
|
|
|
Brent
crude oil |
|
$ |
51.09 |
|
|
$ |
44.73 |
|
|
$ |
45.02 |
|
|
$ |
53.62 |
|
Brent
less West Texas Intermediate (WTI) crude oil |
|
1.91 |
|
|
2.67 |
|
|
1.83 |
|
|
4.91 |
|
Brent
less Alaska North Slope (ANS) crude oil |
|
0.96 |
|
|
0.94 |
|
|
1.25 |
|
|
0.67 |
|
Brent
less Louisiana Light Sweet (LLS) crude oil (j) |
|
0.56 |
|
|
1.23 |
|
|
0.15 |
|
|
1.26 |
|
Brent
less Argus Sour Crude Index (ASCI) crude oil (k) |
|
5.18 |
|
|
5.98 |
|
|
5.18 |
|
|
5.63 |
|
Brent
less Maya crude oil |
|
8.34 |
|
|
10.42 |
|
|
8.63 |
|
|
9.54 |
|
LLS crude
oil (j) |
|
50.53 |
|
|
43.50 |
|
|
44.87 |
|
|
52.36 |
|
LLS less
ASCI crude oil (j) (k) |
|
4.62 |
|
|
4.75 |
|
|
5.03 |
|
|
4.37 |
|
LLS less
Maya crude oil (j) |
|
7.78 |
|
|
9.19 |
|
|
8.48 |
|
|
8.28 |
|
WTI crude
oil |
|
49.18 |
|
|
42.06 |
|
|
43.19 |
|
|
48.71 |
|
|
|
|
|
|
|
|
|
|
Natural gas
(dollars per million British Thermal Units) |
|
3.03 |
|
|
2.12 |
|
|
2.46 |
|
|
2.58 |
|
|
|
|
|
|
|
|
|
|
Products
(dollars per barrel, unless otherwise noted) |
|
|
|
|
|
|
|
|
U.S. Gulf
Coast: |
|
|
|
|
|
|
|
|
CBOB
gasoline less Brent |
|
8.03 |
|
|
6.45 |
|
|
9.17 |
|
|
9.83 |
|
Ultra-low-sulfur diesel less Brent |
|
12.83 |
|
|
9.29 |
|
|
10.21 |
|
|
12.64 |
|
Propylene
less Brent |
|
(9.78 |
) |
|
(11.90 |
) |
|
(6.68 |
) |
|
(5.94 |
) |
CBOB
gasoline less LLS (j) |
|
8.59 |
|
|
7.68 |
|
|
9.32 |
|
|
11.09 |
|
Ultra-low-sulfur diesel less LLS (j) |
|
13.39 |
|
|
10.52 |
|
|
10.36 |
|
|
13.90 |
|
Propylene
less LLS (j) |
|
(9.22 |
) |
|
(10.67 |
) |
|
(6.53 |
) |
|
(4.68 |
) |
U.S.
Mid-Continent: |
|
|
|
|
|
|
|
|
CBOB
gasoline less WTI |
|
9.36 |
|
|
13.06 |
|
|
11.82 |
|
|
17.59 |
|
Ultra-low-sulfur diesel less WTI |
|
13.99 |
|
|
15.02 |
|
|
13.03 |
|
|
19.02 |
|
North
Atlantic: |
|
|
|
|
|
|
|
|
CBOB
gasoline less Brent |
|
11.89 |
|
|
10.95 |
|
|
11.99 |
|
|
12.85 |
|
Ultra-low-sulfur diesel less Brent |
|
14.04 |
|
|
11.44 |
|
|
11.57 |
|
|
16.05 |
|
U.S. West
Coast: |
|
|
|
|
|
|
|
|
CARBOB 87
gasoline less ANS |
|
11.56 |
|
|
20.60 |
|
|
17.04 |
|
|
25.56 |
|
CARB
diesel less ANS |
|
17.34 |
|
|
15.45 |
|
|
14.52 |
|
|
16.90 |
|
CARBOB 87
gasoline less WTI |
|
12.51 |
|
|
22.33 |
|
|
17.62 |
|
|
29.80 |
|
CARB
diesel less WTI |
|
18.29 |
|
|
17.18 |
|
|
15.10 |
|
|
21.14 |
|
New York
Harbor corn crush (dollars per gallon) |
|
0.47 |
|
|
0.23 |
|
|
0.30 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
OTHER FINANCIAL DATA |
(Millions of Dollars) |
(Unaudited) |
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
|
2016 |
|
2015 |
Balance sheet
data |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
$ |
16,800 |
|
|
$ |
14,898 |
|
Cash and temporary cash investments included in current
assets |
|
4,816 |
|
|
4,114 |
|
Inventories included in current assets |
|
|
|
|
|
5,709 |
|
|
5,898 |
|
Current
liabilities |
|
|
|
|
|
8,328 |
|
|
6,994 |
|
Current portion of debt and capital lease obligations included
in current liabilities |
|
115 |
|
|
127 |
|
Debt and capital lease obligations, less current portion |
|
|
|
7,886 |
|
|
7,208 |
|
Total
debt and capital lease obligations |
|
|
|
|
|
8,001 |
|
|
7,335 |
|
Valero
Energy Corporation stockholders’ equity |
|
|
|
|
|
20,024 |
|
|
20,527 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Cash flow data |
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
$ |
998 |
|
|
$ |
487 |
|
|
$ |
4,820 |
|
|
$ |
5,611 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Valero Energy Partners LP |
|
|
|
|
|
|
|
|
Weighted-average limited partner units
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
units - public (basic and diluted) |
|
22 |
|
|
19 |
|
|
22 |
|
|
18 |
|
Common
units - Valero (basic and diluted) |
|
46 |
|
|
15 |
|
|
27 |
|
|
14 |
|
Subordinated units - Valero (basic and diluted) |
|
— |
|
|
29 |
|
|
17 |
|
|
29 |
|
Distributions declared |
|
|
|
|
|
|
|
Limited
partner units - public |
|
$ |
8 |
|
|
$ |
7 |
|
|
$ |
32 |
|
|
$ |
22 |
|
Limited
partner units - Valero |
|
19 |
|
|
14 |
|
|
68 |
|
|
52 |
|
General
partner units - Valero |
|
8 |
|
|
2 |
|
|
22 |
|
|
5 |
|
Total
distribution declared |
|
$ |
35 |
|
|
$ |
23 |
|
|
$ |
122 |
|
|
$ |
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIESNOTES 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 December 31, 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 year ended December 31, 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. The three
months and year ended December 31, 2015 includes a lower of
cost or market inventory valuation adjustment that resulted in a
noncash charge of $740 million and $50 million
attributable to our refining segment and ethanol segment,
respectively. The noncash benefit for the year ended
December 31, 2016 differs from the noncash charge for the year
ended December 31, 2015 due to the foreign currency effect of
inventories held by our international operations.
(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. during the year ended December 31, 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 year ended December 31,
2016.
(c) The variation in the customary relationship between income
tax expense and income before income tax expense for all periods
presented is due primarily to the higher earnings in 2016 from our
international operations that are taxed at statutory rates that are
lower than in the U.S. In addition, for the year ended
December 31, 2016, the variation is due to the recognition of
an income tax benefit in the U.S. in connection with the Aruba
Disposition (see note (b) above).
(d) 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 and its
related income tax effect, the asset impairment loss, and the
income tax benefit on the Aruba Disposition. For the three months
ended December 31, 2015, adjusted net income attributable to
Valero Energy Corporation stockholders is further defined to
exclude the portion of the blender’s tax credit related to the
first nine months of 2015 (see (e) below).
- 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 the asset impairment loss. For the three months ended
December 31, 2015, gross margin is further defined to exclude
the portion of the blender’s tax credit related to the first nine
months of 2015 (see (e) below).
- Adjusted operating income is defined as
operating income excluding the lower of cost or market inventory
valuation adjustment, and the asset impairment loss. For the three
months ended December 31, 2015, adjusted operating income is
further defined to exclude the portion of the blender’s tax credit
related to the first nine months of 2015 (see (e) below).
(e) Cost of sales for the three months and year
ended December 31, 2015 reflects a benefit of
$174 million for biodiesel blender’s tax credits attributable
to volumes blended throughout the year. The annual benefit was
recorded during the three months ended December 31, 2015 (as
opposed to throughout the year as volumes were blended) because the
legislation authorizing the credit was not passed and signed into
law until December 2015. Of this annual amount, $136 million
relates to volumes blended during the first nine months of the
year, which includes $76 million attributable to Valero Energy
Corporation stockholders and $60 million attributable to
noncontrolling interests.
(f) 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.
(g) Primarily includes petrochemicals, gas oils, No. 6 fuel
oil, petroleum coke, sulfur, and asphalt.
(h) Throughput margin per barrel represents
gross margin (defined in (d) 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 (d) 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.
(i) Adjusted operating income per barrel
represents adjusted operating income (defined in (d) 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 (d)
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.
(j) 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 the 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
months and year ended December 31, 2015 have been adjusted to
conform to the current presentation.
(k) 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 months and
year ended December 31, 2015 are included to conform to the
current presentation.
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