EX-99.01 2 vloq22019earningsrelease.htm EXHIBIT 99.01 SECOND QUARTER 2019 EARNINGS RELEASE Exhibit
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Exhibit 99.01

Valero Energy Reports Second Quarter 2019 Results

Reported net income attributable to Valero stockholders of $612 million, or $1.47 per share, and adjusted net income attributable to Valero stockholders of $629 million, or $1.51 per share.
Invested $740 million of capital and successfully completed the Houston alkylation project.
Returned $588 million in cash to stockholders through dividends and stock buybacks.

SAN ANTONIO, July 25, 2019 – Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $612 million, or $1.47 per share, for the second quarter of 2019 compared to $845 million, or $1.96 per share, for the second quarter of 2018. Excluding adjustments shown in the accompanying earnings release tables, second quarter 2019 adjusted net income attributable to Valero stockholders was $629 million, or $1.51 per share, compared to second quarter 2018 adjusted net income attributable to Valero stockholders of $928 million, or $2.15 per share.

“We had solid operating performance while also completing major turnarounds at our Memphis, Houston and Benicia refineries in the second quarter,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “In addition, we successfully commissioned the new alkylation unit at the Houston refinery to improve our margin capture going forward.”

Refining
The refining segment reported $1.0 billion of operating income for the second quarter of 2019 compared to $1.4 billion for the second quarter of 2018. The decrease was primarily driven by narrower discounts for medium and heavy sour crude oils relative to Brent crude oil.

“We saw a strong rebound in gasoline cracks in all regions in the second quarter,” Gorder said. “We continue to optimize our system with domestic, Canadian and Latin American crudes, and we set a new record of over 190,000 barrels per day of Canadian heavy crude oil processed during the quarter.”


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Refinery throughput capacity utilization was 94 percent, with throughput volumes averaging 3.0 million barrels per day in the second quarter of 2019, which was 70,000 barrels per day higher than the second quarter of 2018. The company exported a total of 344,000 barrels per day of gasoline and distillate during the second quarter of 2019.

Ethanol
The ethanol segment reported $7 million of operating income for the second quarter of 2019 compared to $43 million for the second quarter of 2018. The decrease in operating income was attributed primarily to higher corn prices. Ethanol production volumes averaged 4.5 million gallons per day in the second quarter of 2019, an increase of 531,000 gallons per day versus the second quarter of 2018, which was largely due to added production from the three ethanol plants acquired in November 2018.

Renewable Diesel
The renewable diesel segment reported $77 million of operating income for the second quarter of 2019 compared to $30 million for the second quarter of 2018. Renewable diesel sales volumes averaged 769,000 gallons per day in the second quarter of 2019, an increase of 387,000 gallons per day versus the second quarter of 2018. The increases in operating income and sales volumes were attributed primarily to the expansion of the Diamond Green Diesel plant in the third quarter of 2018.

Corporate and Other
General and administrative expenses were $199 million in the second quarter of 2019 compared to $248 million in the second quarter of 2018. The decrease was mainly due to environmental reserve adjustments recorded in the second quarter of 2018. The effective tax rate for the second quarter of 2019 was 20 percent, compared to 22 percent for the second quarter of 2018.

Investing and Financing Activities
Capital investments totaled $740 million in the second quarter of 2019, of which $514 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance.

Valero returned $588 million to stockholders in the second quarter of 2019, of which $376 million was paid as dividends and $212 million was for the purchase of approximately 2.6 million shares


2


of common stock, resulting in a year-to-date return of $1.0 billion to stockholders and a total payout ratio of 50 percent of adjusted net cash provided by operating activities.

Net cash provided by operating activities was $1.5 billion in the second quarter of 2019. Included in this amount is a $283 million favorable impact from working capital. Excluding the change in working capital, adjusted net cash provided by operating activities was $1.2 billion.

Valero continues to target a total payout ratio between 40 and 50 percent of adjusted net cash provided by operating activities for 2019. Valero defines total payout ratio as the sum of dividends and stock buybacks divided by net cash provided by operating activities adjusted for changes in working capital.

Liquidity and Financial Position
Valero ended the second quarter of 2019 with $9.5 billion of total debt and $2.0 billion of cash and cash equivalents. The debt to capital ratio, net of $2.0 billion in cash, was 26 percent.

Strategic Update
The Houston alkylation unit was successfully commissioned in the second quarter of 2019. This project upgrades isobutane and refinery olefins into high value alkylate product. The Central Texas pipelines and terminals project is on target to be fully operational in the third quarter. Other projects, including the Pasadena terminal, St. Charles alkylation unit, and Pembroke cogeneration unit, remain on track to be complete in 2020. The Diamond Green Diesel expansion and Port Arthur Coker are expected to be complete in late 2021 and 2022, respectively.

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

Conference Call
Valero’s senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.



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About Valero
Valero Energy Corporation, through its subsidiaries (collectively, “Valero”), is an international manufacturer and marketer of transportation fuels and petrochemical products. Valero is a Fortune 50 company based in San Antonio, Texas, and it operates 15 petroleum refineries with a combined throughput capacity of approximately 3.1 million barrels per day and 14 ethanol plants with a combined production capacity of 1.73 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. Valero also is a joint venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. Approximately 7,000 outlets carry Valero’s brand names. Please visit www.valero.com for more information.

Valero Contacts
Investors:
Homer Bhullar, Vice President – Investor Relations, 210-345-1982
Gautam Srivastava, Manager – Investor Relations, 210-345-3992
Tom Mahrer, Manager – Investor Relations, 210-345-1953

Media:
Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Safe-Harbor Statement
Statements contained in this release that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” “intend,” “target,” “will,” “plans,” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of the company’s control, such as delays in construction timing and other factors. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K, quarterly reports on


4


Form 10-Q, and other reports filed with the Securities and Exchange Commission and on Valero’s website at www.valero.com.

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



5



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,
 
2019
 
2018
 
2019
 
2018
Statement of income data
 
 
 
 
 
 
 
Revenues
$
28,933

 
$
31,015

 
$
53,196

 
$
57,454

Cost of sales:
 
 
 
 
 
 
 
Cost of materials and other (a)
26,083

 
27,860

 
48,061

 
51,616

Operating expenses (excluding depreciation and
amortization expense reflected below)
1,175

 
1,110

 
2,390

 
2,246

Depreciation and amortization expense
552

 
510

 
1,089

 
995

Total cost of sales
27,810

 
29,480

 
51,540

 
54,857

Other operating expenses (b)
2

 
21

 
4

 
31

General and administrative expenses (excluding
depreciation and amortization expense reflected below) (c)
199

 
248

 
408

 
486

Depreciation and amortization expense
14

 
13

 
28

 
26

Operating income
908

 
1,253

 
1,216

 
2,054

Other income (expense), net (d)
12

 
(5
)
 
34

 
46

Interest and debt expense, net of capitalized interest
(112
)
 
(124
)
 
(224
)
 
(245
)
Income before income tax expense
808

 
1,124

 
1,026

 
1,855

Income tax expense
160

 
249

 
211

 
398

Net income
648

 
875

 
815

 
1,457

Less: Net income attributable to noncontrolling interests (a)
36

 
30

 
62

 
143

Net income attributable to Valero Energy Corporation stockholders
$
612

 
$
845

 
$
753

 
$
1,314

 
 
 
 
 
 
 
 
Earnings per common share
$
1.47

 
$
1.96

 
$
1.80

 
$
3.05

Weighted-average common shares outstanding (in millions)
415

 
429

 
416

 
430

 
 
 
 
 
 
 
 
Earnings per common share – assuming dilution
$
1.47

 
$
1.96

 
$
1.80

 
$
3.04

Weighted-average common shares outstanding –
assuming dilution (in millions)
417

 
431

 
417

 
432


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 1



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

 
Refining
 
Ethanol
 
Renewable
Diesel
 
Corporate
and
Eliminations
 
Total
Three months ended June 30, 2019
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
Revenues from external customers
$
27,746

 
$
964

 
$
222

 
$
1

 
$
28,933

Intersegment revenues
8

 
53

 
73

 
(134
)
 

Total revenues
27,754

 
1,017

 
295

 
(133
)
 
28,933

Cost of sales:
 
 
 
 
 
 
 
 
 
Cost of materials and other
25,172

 
855

 
189

 
(133
)
 
26,083

Operating expenses (excluding depreciation and
amortization expense reflected below)
1,026

 
132

 
17

 

 
1,175

Depreciation and amortization expense
518

 
22

 
12

 

 
552

Total cost of sales
26,716

 
1,009

 
218

 
(133
)
 
27,810

Other operating expenses
1

 
1

 

 

 
2

General and administrative expenses (excluding
depreciation and amortization expense reflected
below)

 

 

 
199

 
199

Depreciation and amortization expense

 

 

 
14

 
14

Operating income by segment
$
1,037

 
$
7

 
$
77

 
$
(213
)
 
$
908

 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2018
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
Revenues from external customers
$
30,024

 
$
884

 
$
106

 
$
1

 
$
31,015

Intersegment revenues
11

 
42

 
46

 
(99
)
 

Total revenues
30,035

 
926

 
152

 
(98
)
 
31,015

Cost of sales:
 
 
 
 
 
 
 
 
 
Cost of materials and other
27,103

 
754

 
102

 
(99
)
 
27,860

Operating expenses (excluding depreciation and
amortization expense reflected below)
988

 
109

 
13

 

 
1,110

Depreciation and amortization expense
483

 
20

 
7

 

 
510

Total cost of sales
28,574

 
883

 
122

 
(99
)
 
29,480

Other operating expenses (b)
21

 

 

 

 
21

General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (c)

 

 

 
248

 
248

Depreciation and amortization expense

 

 

 
13

 
13

Operating income by segment
$
1,440

 
$
43

 
$
30

 
$
(260
)
 
$
1,253


See Operating Highlights by Segment beginning on Table Page 8.
See Notes to Earnings Release Tables beginning on Table Page 16.



Table Page 2



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

 
Refining
 
Ethanol
 
Renewable
Diesel
 
Corporate
and
Eliminations
 
Total
Six months ended June 30, 2019
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
Revenues from external customers
$
50,964

 
$
1,757

 
$
474

 
$
1

 
$
53,196

Intersegment revenues
10

 
105

 
124

 
(239
)
 

Total revenues
50,974

 
1,862

 
598

 
(238
)
 
53,196

Cost of sales:
 
 
 
 
 
 
 
 
 
Cost of materials and other
46,337

 
1,549

 
413

 
(238
)
 
48,061

Operating expenses (excluding depreciation and
amortization expense reflected below)
2,097

 
257

 
36

 

 
2,390

Depreciation and amortization expense
1,021

 
45

 
23

 

 
1,089

Total cost of sales
49,455

 
1,851

 
472

 
(238
)
 
51,540

Other operating expenses
3

 
1

 

 

 
4

General and administrative expenses (excluding
depreciation and amortization expense reflected
below)

 

 

 
408

 
408

Depreciation and amortization expense

 

 

 
28

 
28

Operating income by segment
$
1,516

 
$
10

 
$
126

 
$
(436
)
 
$
1,216

 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2018
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
Revenues from external customers
$
55,477

 
$
1,761

 
$
214

 
$
2

 
$
57,454

Intersegment revenues
15

 
88

 
88

 
(191
)
 

Total revenues
55,492

 
1,849

 
302

 
(189
)
 
57,454

Cost of sales:
 
 
 
 
 
 
 
 
 
Cost of materials and other (a)
50,267

 
1,503

 
37

 
(191
)
 
51,616

Operating expenses (excluding depreciation and
amortization expense reflected below)
1,999

 
220

 
27

 

 
2,246

Depreciation and amortization expense
944

 
38

 
13

 

 
995

Total cost of sales
53,210

 
1,761

 
77

 
(191
)
 
54,857

Other operating expenses (b)
31

 

 

 

 
31

General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (c)

 

 

 
486

 
486

Depreciation and amortization expense

 

 

 
26

 
26

Operating income by segment
$
2,251

 
$
88

 
$
225

 
$
(510
)
 
$
2,054



See Operating Highlights by Segment beginning on Table Page 8.
See Notes to Earnings Release Tables beginning on Table Page 16.



Table Page 3



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,
 
2019
 
2018
 
2019
 
2018
Reconciliation of net income attributable to Valero Energy
Corporation stockholders to adjusted net income
attributable to Valero Energy Corporation stockholders
 
 
 
 
 
 
 
Net income attributable to Valero Energy Corporation
stockholders
$
612

 
$
845

 
$
753

 
$
1,314

Exclude adjustments:
 
 
 
 
 
 
 
2017 blender’s tax credit attributable to Valero Energy
Corporation stockholders (a)

 

 

 
90

Income tax expense related to 2017 blender’s tax credit

 

 

 
(11
)
2017 blender’s tax credit attributable to Valero Energy
Corporation stockholders, net of taxes

 

 

 
79

Texas City Refinery fire expenses (b)

 
(14
)
 

 
(14
)
Income tax benefit related to Texas City Refinery
fire expenses

 
3

 

 
3

Texas City Refinery fire expenses, net of taxes

 
(11
)
 

 
(11
)
Environmental reserve adjustments (c)

 
(56
)
 

 
(108
)
Income tax benefit related to environmental reserve
adjustments

 
13

 

 
24

Environmental reserve adjustments, net of taxes

 
(43
)
 

 
(84
)
Loss on early redemption of debt (d)
(22
)
 
(38
)
 
(22
)
 
(38
)
Income tax benefit related to loss on early
redemption of debt
5

 
9

 
5

 
9

Loss on early redemption of debt, net of taxes
(17
)
 
(29
)
 
(17
)
 
(29
)
Total adjustments
(17
)
 
(83
)
 
(17
)
 
(45
)
Adjusted net income attributable to
Valero Energy Corporation stockholders
$
629

 
$
928

 
$
770

 
$
1,359

 
 
 
 
 
 
 
 
Reconciliation of earnings per common share – assuming
dilution to adjusted earnings per common share –
assuming dilution
 
 
 
 
 
 
 
Earnings per common share – assuming dilution
$
1.47

 
$
1.96

 
$
1.80

 
$
3.04

Exclude adjustments:
 
 
 
 
 
 
 
2017 blender’s tax credit attributable to Valero Energy
Corporation stockholders (a)

 

 

 
0.18

Texas City Refinery fire expenses (b)

 
(0.02
)
 

 
(0.03
)
Environmental reserve adjustments (c)

 
(0.10
)
 

 
(0.19
)
Loss on early redemption of debt (d)
(0.04
)
 
(0.07
)
 
(0.04
)
 
(0.07
)
Total adjustments
(0.04
)
 
(0.19
)
 
(0.04
)
 
(0.11
)
Adjusted earnings per common share – assuming dilution
$
1.51

 
$
2.15

 
$
1.84

 
$
3.15


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 4



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,
 
2019
 
2018
 
2019
 
2018
Reconciliation of operating income by segment to segment
margin, and reconciliation of operating income by
segment to adjusted operating income by segment
 
 
 
 
 
 
 
Refining segment (e)
 
 
 
 
 
 
 
Refining operating income
$
1,037

 
$
1,440

 
$
1,516

 
$
2,251

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
10

Operating expenses (excluding depreciation and
amortization expense reflected below)
(1,026
)
 
(988
)
 
(2,097
)
 
(1,999
)
Depreciation and amortization expense
(518
)
 
(483
)
 
(1,021
)
 
(944
)
Other operating expenses (b)
(1
)
 
(21
)
 
(3
)
 
(31
)
Refining margin
$
2,582

 
$
2,932

 
$
4,637

 
$
5,215

 
 
 
 
 
 
 
 
Refining operating income
$
1,037

 
$
1,440

 
$
1,516

 
$
2,251

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
10

Other operating expenses (b)
(1
)
 
(21
)
 
(3
)
 
(31
)
Adjusted refining operating income
$
1,038

 
$
1,461

 
$
1,519

 
$
2,272

 
 
 
 
 
 
 
 
Ethanol segment
 
 
 
 
 
 
 
Ethanol operating income
$
7

 
$
43

 
$
10

 
$
88

Exclude:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(132
)
 
(109
)
 
(257
)
 
(220
)
Depreciation and amortization expense
(22
)
 
(20
)
 
(45
)
 
(38
)
Other operating expenses
(1
)
 

 
(1
)
 

Ethanol margin
$
162

 
$
172

 
$
313

 
$
346

 
 
 
 
 
 
 
 
Ethanol operating income
$
7

 
$
43

 
$
10

 
$
88

Exclude: Other operating expenses
(1
)
 

 
(1
)
 

Adjusted ethanol operating income
$
8

 
$
43

 
$
11

 
$
88

 
 
 
 
 
 
 
 
Renewable diesel segment (e)
 
 
 
 
 
 
 
Renewable diesel operating income
$
77

 
$
30

 
$
126

 
$
225

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
160

Operating expenses (excluding depreciation and
amortization expense reflected below)
(17
)
 
(13
)
 
(36
)
 
(27
)
Depreciation and amortization expense
(12
)
 
(7
)
 
(23
)
 
(13
)
Renewable diesel margin
$
106

 
$
50

 
$
185

 
$
105

 
 
 
 
 
 
 
 
Renewable diesel operating income
$
77

 
$
30

 
$
126

 
$
225

Exclude: 2017 blender’s tax credit (a)

 

 

 
160

Adjusted renewable diesel operating income
$
77

 
$
30

 
$
126

 
$
65


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 5



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,
 
2019
 
2018
 
2019
 
2018
Reconciliation of refining segment operating income to
refining margin (by region), and reconciliation of
refining segment operating income to adjusted refining
segment operating income (by region) (g)
 
 
 
 
 
 
 
U.S. Gulf Coast region (e)
 
 
 
 
 
 
 
Refining operating income
$
273

 
$
760

 
$
391

 
$
1,165

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
7

Operating expenses (excluding depreciation and
amortization expense reflected below)
(586
)
 
(559
)
 
(1,185
)
 
(1,127
)
Depreciation and amortization expense
(318
)
 
(292
)
 
(628
)
 
(569
)
Other operating expenses (b)
(1
)
 
(20
)
 
(2
)
 
(30
)
Refining margin
$
1,178

 
$
1,631

 
$
2,206

 
$
2,884

 
 
 
 
 
 
 
 
Refining operating income
$
273

 
$
760

 
$
391

 
$
1,165

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
7

Other operating expenses (b)
(1
)
 
(20
)
 
(2
)
 
(30
)
Adjusted refining operating income
$
274

 
$
780

 
$
393

 
$
1,188

 
 
 
 
 
 
 
 
U.S. Mid-Continent region (e)
 
 
 
 
 
 
 
Refining operating income
$
422

 
$
406

 
$
658

 
$
632

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
2

Operating expenses (excluding depreciation and
amortization expense reflected below)
(146
)
 
(156
)
 
(312
)
 
(312
)
Depreciation and amortization expense
(74
)
 
(71
)
 
(149
)
 
(141
)
Refining margin
$
642

 
$
633

 
$
1,119

 
$
1,083

 
 
 
 
 
 
 
 
Refining operating income
$
422

 
$
406

 
$
658

 
$
632

Exclude: 2017 blender’s tax credit (a)

 

 

 
2

Adjusted refining operating income
$
422

 
$
406

 
$
658

 
$
630


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 6



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,
 
2019
 
2018
 
2019
 
2018
Reconciliation of refining segment operating income to
refining margin (by region), and reconciliation of
refining segment operating income to adjusted refining
segment operating income (by region) (g) (continued)
 
 
 
 
 
 
 
North Atlantic region
 
 
 
 
 
 
 
Refining operating income
$
278

 
$
137

 
$
454

 
$
298

Exclude:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below)
(146
)
 
(138
)
 
(293
)
 
(283
)
Depreciation and amortization expense
(55
)
 
(62
)
 
(108
)
 
(115
)
Refining margin
$
479

 
$
337

 
$
855

 
$
696

 
 
 
 
 
 
 
 
U.S. West Coast region
 
 
 
 
 
 
 
Refining operating income
$
64

 
$
137

 
$
13

 
$
156

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
1

Operating expenses (excluding depreciation and
amortization expense reflected below)
(148
)
 
(135
)
 
(307
)
 
(277
)
Depreciation and amortization expense
(71
)
 
(58
)
 
(136
)
 
(119
)
Other operating expenses

 
(1
)
 
(1
)
 
(1
)
Refining margin
$
283

 
$
331

 
$
457

 
$
552

 
 
 
 
 
 
 
 
Refining operating income
$
64

 
$
137

 
$
13

 
$
156

Exclude:
 
 
 
 
 
 
 
2017 blender’s tax credit (a)

 

 

 
1

Other operating expenses

 
(1
)
 
(1
)
 
(1
)
Adjusted refining operating income
$
64

 
$
138

 
$
14

 
$
156


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 7



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,
 
2019
 
2018
 
2019
 
2018
Throughput volumes (thousand barrels per day)
 
 
 
 
 
 
 
Feedstocks:
 
 
 
 
 
 
 
Heavy sour crude oil
419

 
482

 
415

 
482

Medium/light sour crude oil
257

 
434

 
297

 
421

Sweet crude oil
1,550

 
1,303

 
1,513

 
1,323

Residuals
241

 
231

 
193

 
226

Other feedstocks
171

 
121

 
162

 
121

Total feedstocks
2,638

 
2,571

 
2,580

 
2,573

Blendstocks and other
330

 
327

 
337

 
342

Total throughput volumes
2,968

 
2,898

 
2,917

 
2,915

 
 
 
 
 
 
 
 
Yields (thousand barrels per day)
 
 
 
 
 
 
 
Gasolines and blendstocks
1,378

 
1,407

 
1,387

 
1,404

Distillates
1,141

 
1,096

 
1,115

 
1,102

Other products (h)
483

 
434

 
445

 
446

Total yields
3,002

 
2,937

 
2,947

 
2,952

 
 
 
 
 
 
 
 
Operating statistics (e) (f) (i)
 
 
 
 
 
 
 
Refining margin (from Table Page 5)
$
2,582

 
$
2,932

 
$
4,637

 
$
5,215

Adjusted refining operating income (from Table Page 5)
$
1,038

 
$
1,461

 
$
1,519

 
$
2,272

Throughput volumes (thousand barrels per day)
2,968

 
2,898

 
2,917

 
2,915

 
 
 
 
 
 
 
 
Refining margin per barrel of throughput
$
9.56

 
$
11.12

 
$
8.78

 
$
9.89

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.80

 
3.75

 
3.97

 
3.79

Depreciation and amortization expense per barrel of
throughput
1.92

 
1.83

 
1.93

 
1.79

Adjusted refining operating income per barrel of throughput
$
3.84

 
$
5.54

 
$
2.88

 
$
4.31


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 8



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,
 
2019
 
2018
 
2019
 
2018
Operating statistics (f) (i)
 
 
 
 
 
 
 
Ethanol margin (from Table Page 5)
$
162

 
$
172

 
$
313

 
$
346

Adjusted ethanol operating income (from Table Page 5)
$
8

 
$
43

 
$
11

 
$
88

Production volumes (thousand gallons per day)
4,533

 
4,002

 
4,376

 
4,057

 
 
 
 
 
 
 
 
Ethanol margin per gallon of production
$
0.39

 
$
0.47

 
$
0.40

 
$
0.47

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per gallon of production
0.32

 
0.30

 
0.32

 
0.30

Depreciation and amortization expense per gallon of production
0.05

 
0.05

 
0.07

 
0.05

Ethanol operating income per gallon of production
$
0.02

 
$
0.12

 
$
0.01

 
$
0.12


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 9



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


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Operating statistics (f) (i)
 
 
 
 
 
 
 
Renewable diesel margin (from Table Page 5)
$
106

 
$
50

 
$
185

 
$
105

Adjusted renewable diesel operating income
(from Table Page 5)
$
77

 
$
30

 
$
126

 
$
65

Sales volumes (thousand gallons per day)
769

 
382

 
780

 
377

 


 


 


 


Renewable diesel margin per gallon of sales
$
1.51

 
$
1.43

 
$
1.31

 
$
1.53

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per gallon of sales
0.25

 
0.37

 
0.26

 
0.40

Depreciation and amortization expense per gallon of sales
0.17

 
0.18

 
0.16

 
0.18

Adjusted renewable diesel operating income per gallon
of sales
$
1.09

 
$
0.88

 
$
0.89

 
$
0.95


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 10



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,
 
2019
 
2018
 
2019
 
2018
Operating statistics by region (g)
 
 
 
 
 
 
 
U.S. Gulf Coast region (e) (f) (i)
 
 
 
 
 
 
 
Refining margin (from Table Page 6)
$
1,178

 
$
1,631

 
$
2,206

 
$
2,884

Adjusted refining operating income (from Table Page 6)
$
274

 
$
780

 
$
393

 
$
1,188

Throughput volumes (thousand barrels per day)
1,779

 
1,729

 
1,725

 
1,728

 
 
 
 
 
 
 
 
Refining margin per barrel of throughput
$
7.28

 
$
10.37

 
$
7.07

 
$
9.23

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.63

 
3.56

 
3.80

 
3.61

Depreciation and amortization expense per barrel of
throughput
1.96

 
1.86

 
2.01

 
1.82

Adjusted refining operating income per barrel of throughput
$
1.69

 
$
4.95

 
$
1.26

 
$
3.80

 
 
 
 
 
 
 
 
U.S. Mid-Continent region (e) (f) (i)
 
 
 
 
 
 
 
Refining margin (from Table Page 6)
$
642

 
$
633

 
$
1,119

 
$
1,083

Adjusted refining operating income (from Table Page 6)
$
422

 
$
406

 
$
658

 
$
630

Throughput volumes (thousand barrels per day)
462

 
473

 
452

 
477

 
 
 
 
 
 
 
 
Refining margin per barrel of throughput
$
15.24

 
$
14.69

 
$
13.68

 
$
12.55

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.45

 
3.60

 
3.81

 
3.61

Depreciation and amortization expense per barrel of
throughput
1.76

 
1.64

 
1.82

 
1.63

Adjusted refining operating income per barrel of throughput
$
10.03

 
$
9.45

 
$
8.05

 
$
7.31


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 11



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,
 
2019
 
2018
 
2019
 
2018
Operating statistics by region (g) (continued)
 
 
 
 
 
 
 
North Atlantic region (f) (i)
 
 
 
 
 
 
 
Refining margin (from Table Page 7)
$
479

 
$
337

 
$
855

 
$
696

Refining operating income (from Table Page 7)
$
278

 
$
137

 
$
454

 
$
298

Throughput volumes (thousand barrels per day)
493

 
398

 
491

 
428

 
 
 
 
 
 
 
 
Refining margin per barrel of throughput
$
10.69

 
$
9.33

 
$
9.61

 
$
8.99

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
3.26

 
3.81

 
3.30

 
3.66

Depreciation and amortization expense per barrel of
throughput
1.23

 
1.70

 
1.20

 
1.47

Refining operating income per barrel of throughput
$
6.20

 
$
3.82

 
$
5.11

 
$
3.86

 
 
 
 
 
 
 
 
U.S. West Coast region (f) (i)
 
 
 
 
 
 
 
Refining margin (from Table Page 7)
$
283

 
$
331

 
$
457

 
$
552

Adjusted refining operating income (from Table Page 7)
$
64

 
$
138

 
$
14

 
$
156

Throughput volumes (thousand barrels per day)
234

 
298

 
249

 
282

 
 
 
 
 
 
 
 
Refining margin per barrel of throughput
$
13.30

 
$
12.20

 
$
10.15

 
$
10.80

Less:
 
 
 
 
 
 
 
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput
6.97

 
4.96

 
6.83

 
5.42

Depreciation and amortization expense per barrel of
throughput
3.32

 
2.17

 
3.02

 
2.33

Adjusted refining operating income per barrel of throughput
$
3.01

 
$
5.07

 
$
0.30

 
$
3.05


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 12



VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS
(unaudited)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Refining
 
 
 
 
 
 
 
Feedstocks (dollars per barrel)
 
 
 
 
 
 
 
Brent crude oil
$
68.33

 
$
74.93

 
$
66.08

 
$
71.05

Brent less West Texas Intermediate (WTI) crude oil
8.53

 
6.93

 
8.73

 
5.61

Brent less Alaska North Slope (ANS) crude oil
0.15

 
0.83

 
(0.27
)
 
0.52

Brent less Louisiana Light Sweet (LLS) crude oil
1.30

 
1.93

 
1.38

 
1.66

Brent less Argus Sour Crude Index (ASCI) crude oil
3.44

 
5.63

 
3.17

 
5.26

Brent less Maya crude oil
6.23

 
12.90

 
5.64

 
11.18

LLS crude oil
67.03

 
73.00

 
64.70

 
69.39

LLS less ASCI crude oil
2.14

 
3.70

 
1.79

 
3.60

LLS less Maya crude oil
4.93

 
10.97

 
4.26

 
9.52

WTI crude oil
59.80

 
68.00

 
57.35

 
65.44

 
 
 
 
 
 
 
 
Natural gas (dollars per million British Thermal Units)
2.46

 
2.89

 
2.66

 
3.04

 
 
 
 
 
 
 
 
Products (dollars per barrel, unless otherwise noted)
 
 
 
 
 
 
 
U.S. Gulf Coast:
 
 
 
 
 
 
 
Conventional Blendstock of Oxygenate Blending (CBOB)
gasoline less Brent
6.72

 
7.47

 
3.44

 
7.38

Ultra-low-sulfur (ULS) diesel less Brent
12.88

 
13.46

 
13.94

 
13.62

Propylene less Brent
(24.70
)
 
(6.54
)
 
(22.67
)
 
(6.68
)
CBOB gasoline less LLS
8.02

 
9.40

 
4.82

 
9.04

ULS diesel less LLS
14.18

 
15.39

 
15.32

 
15.28

Propylene less LLS
(23.40
)
 
(4.61
)
 
(21.29
)
 
(5.02
)
U.S. Mid-Continent:

 

 
 
 
 
CBOB gasoline less WTI
18.76

 
16.05

 
14.23

 
14.76

ULS diesel less WTI
22.51

 
22.02

 
23.70

 
20.93

North Atlantic:

 

 
 
 
 
CBOB gasoline less Brent
10.11

 
10.37

 
5.68

 
9.63

ULS diesel less Brent
14.76

 
15.25

 
16.10

 
15.60

U.S. West Coast:
 
 
 
 
 
 
 
California Reformulated Gasoline Blendstock of
Oxygenate Blending (CARBOB) 87 gasoline less ANS
23.24

 
18.36

 
15.49

 
15.82

California Air Resources Board (CARB) diesel less ANS
21.10

 
18.70

 
18.65

 
17.99

CARBOB 87 gasoline less WTI
31.62

 
24.46

 
24.49

 
20.91

CARB diesel less WTI
29.48

 
24.80

 
27.65

 
23.08


See Notes to Earnings Release Tables beginning on Table Page 16.



Table Page 13



VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS
(unaudited)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Ethanol
 
 
 
 
 
 
 
New York Harbor (NYH) corn crush (dollars per gallon)
$
0.12

 
$
0.17

 
$
0.11

 
$
0.18

Chicago Board of Trade (CBOT) corn (dollars per bushel)
3.91

 
3.83

 
3.82

 
3.75

NYH ethanol (dollars per gallon)
1.54

 
1.56

 
1.49

 
1.54

 
 
 
 
 
 
 
 
Renewable diesel
 
 
 
 
 
 
 
New York Mercantile Exchange ULS diesel
(dollars per gallon)
1.98

 
2.15

 
1.96

 
2.07

Biodiesel Renewable Identification Number (RIN)
(dollars per RIN)
0.38

 
0.53

 
0.44

 
0.66

California Low-Carbon Fuel Standard (dollars per metric ton)
188.77

 
161.57

 
191.49

 
148.85

CBOT soybean oil (dollars per pound)
0.28

 
0.31

 
0.29

 
0.32


See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 14



VALERO ENERGY CORPORATION
EARNINGS RELEASE TABLES
OTHER FINANCIAL DATA
(millions of dollars, except per share amounts)
(unaudited)

 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
2019
 
2018
Balance sheet data
 
 
 
 
 
 
 
Current assets
 
 
 
 
$
17,811

 
$
17,675

Cash and cash equivalents included in current assets
 
2,033

 
2,982

Inventories included in current assets
 
 
 
 
6,281

 
6,532

Current liabilities
 
 
 
 
12,548

 
10,724

Current portion of debt and finance lease obligations included
in current liabilities
 
323

 
238

Debt and finance lease obligations, less current portion
 
 
 
9,167

 
8,871

Total debt and finance lease obligations
 
 
 
 
9,490

 
9,109

Valero Energy Corporation stockholders’ equity
 
 
 
21,345

 
21,667

 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net cash provided by operating activities and adjusted
net cash provided by operating activities (f)
 
 
 
 
 
 
 
Net cash provided by operating activities
$
1,517

 
$
2,059

 
$
2,394

 
$
2,197

Exclude: changes in current assets and current liabilities
283

 
581

 
413

 
(445
)
Adjusted net cash provided by operating activities
$
1,234

 
$
1,478

 
$
1,981

 
$
2,642

 
 
 
 
 
 
 
 
Dividends per common share
$
0.90

 
$
0.80

 
$
1.80

 
$
1.60



See Notes to Earnings Release Tables beginning on Table Page 16.


Table Page 15





VALERO ENERGY CORPORATION
NOTES TO EARNINGS RELEASE TABLES


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

(b)
Other operating expenses for the three and six months ended June 30, 2018 includes $14 million of costs to respond to and assess the damage caused by a fire in the alkylation unit at our Texas City Refinery on April 19, 2018. In addition, other operating expenses for the three and six months ended June 30, 2018 includes repair costs incurred at certain of our refineries due to damage associated with inclement weather events in 2018 and Hurricane Harvey in 2017.

(c)
General and administrative expenses (excluding depreciation and amortization expense) for the three and six months ended June 30, 2018 includes a charge of $56 million and $108 million, respectively, for environmental reserve adjustments associated with certain non-operating sites.

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

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

(f)
We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under U.S. GAAP and are considered to be non-GAAP measures.

We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable U.S. GAAP measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable U.S. GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under U.S. GAAP. In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility.

Non-GAAP measures are as follows:

Adjusted net income attributable to Valero Energy Corporation stockholders is defined as net income attributable to Valero Energy Corporation stockholders excluding the items noted below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each excluded item is provided below.
2017 blender’s tax credit attributable to Valero Energy Corporation stockholders - The blender’s tax credit is attributable to volumes blended during 2017 and is not related to 2018 activities, as described in note (a).
Texas City Refinery fire expenses - The costs incurred to respond to and assess the damage caused by the fire that occurred at the Texas City Refinery (see note (b)) are specific to that event and are not ongoing costs incurred in our operations.
Environmental reserve adjustments - The environmental reserve adjustments are attributable to sites that were shut down by prior owners and subsequently acquired by us (referred to by us as non-operating sites) (see note (c)).


Table Page 16





VALERO ENERGY CORPORATION
NOTES TO EARNINGS RELEASE TABLES (Continued)


Loss on early redemption of debt - The penalty and other expenses incurred in connection with the early redemption of our 6.125 percent senior notes due February 1, 2020 and 9.375 percent senior notes due March 15, 2019 (see note (d)) are not associated with the ongoing costs of our borrowing and financing activities.

Adjusted earnings per common share – assuming dilution is defined as adjusted net income attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.
Refining margin is defined as refining operating income excluding the 2017 blender’s tax credit (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe refining margin is an important measure of our refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.
Ethanol margin is defined as ethanol operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe ethanol margin is an important measure of our ethanol segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.
Renewable diesel margin is defined as renewable diesel operating income excluding the 2017 blender’s tax credit (see note (a)), operating expenses (excluding depreciation and amortization expense), and depreciation and amortization expense. We believe renewable diesel margin is an important measure of our renewable diesel segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.
Adjusted refining operating income is defined as refining segment operating income excluding the 2017 blender’s tax credit (see note (a)) and other operating expenses. We believe adjusted refining operating income is an important measure of our refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.
Adjusted ethanol operating income is defined as ethanol segment operating income excluding other operating expenses. We believe this is an important measure of our ethanol segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.
Adjusted renewable diesel operating income is defined as renewable diesel segment operating income excluding the 2017 blender’s tax credit (see note (a)). We believe this is an important measure of our renewable diesel segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.
Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding changes in current assets and current liabilities. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities.

(g)
The refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid-Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries.

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

(i)
Valero uses certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

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

Throughput volumes, production volumes, and sales volumes are calculated by multiplying throughput volumes per day, production volumes per day, and sales volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. We use throughput volumes, production volumes, and sales volumes for the refining segment, ethanol segment, and renewable diesel segment, respectively, due to their general use by others who operate facilities similar to those included in our segments. We believe the use of such volumes results in per unit amounts that are most representative of the product margins generated and the operating costs incurred as a result of our operation of those facilities.



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