VALERO ENERGY CORPTX
For the period ended Jun 30, 2024. Filed Jul 25, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 25, 2024
VLO$346.45-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-25.
0001035002-24-000022
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0001035002-24-000051
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 172 previous paragraphs and 215 current paragraphs.
112 unchanged; 52 reworded; 34 added; 8 removed; 0 previous and 17 current paragraphs rearranged.
Tables are not compared: 18 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Second Quarter Results
Current report
While our operating income decreased by $1.5 billion in the second quarter of 2024 compared to the second quarter of 2023, adjusted operating income also decreased by $1.5 billion primarily due to the following:
Current report
•Refining segment. Refining segment adjusted operating income decreased by $1.2 billion primarily due to lower gasoline and distillate (primarily diesel) margins and a decline in crude oil differentials.
Current report
•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $328 million primarily due to a lower product prices (primarily renewable diesel) and a decrease in sales volumes, partially offset by lower feedstock costs.
Current report
•Ethanol segment. Ethanol segment adjusted operating income decreased by $25 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices.
Current report
First Six Months Results
Current report
While our operating income decreased by $3.9 billion in the first six months of 2024 compared to the first six months of 2023, adjusted operating income also decreased by $3.9 billion primarily due to the following:
Current report
•Refining segment. Refining segment adjusted operating income decreased by $3.5 billion primarily due to lower margins for gasoline, distillate (primarily diesel), and other products; a decline in crude oil differentials; and a decrease in throughput volumes.
Current report
•Renewable Diesel segment. Renewable Diesel operating income decreased by $343 million primarily due to lower product prices (primarily renewable diesel), partially offset by lower feedstock costs.
Current report
•Ethanol segment. Ethanol segment adjusted operating income decreased by $25 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices and an increase in production volumes.
Current report
While revenues decreased by $19 million in the second quarter of 2024 compared to the second quarter of 2023, cost of sales increased by $1.5 billion primarily due to increases in crude oil and other feedstock costs. These changes resulted in a $1.5 billion decrease in operating income, from $2.8 billion in the second quarter of 2023 to $1.2 billion in the second quarter of 2024.
Current report
Net income attributable to noncontrolling interests decreased by $132 million in the second quarter of 2024 compared to the second quarter of 2023 primarily due to lower earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 6 of Condensed Notes to
Current report
Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis beginning on page 47.
Current report
Renewable Diesel segment operating income decreased by $328 million in the second quarter of 2024 compared to the second quarter of 2023 primarily due to a decrease in Renewable Diesel segment margin of $349 million.
Current report
•A decrease in sales volumes of 908,000 gallons per day had an unfavorable impact of approximately $132 million. The decrease in sales volumes was primarily due to planned maintenance activities during the second quarter of 2024.
Current report
The decrease in Ethanol segment margin was primarily due to the following:
Current report
Total Company, Corporate, and Other
Current report
Adjusted operating income also decreased by $3.9 billion, from $6.8 billion in the first six months of 2023 to $2.9 billion in the first six months of 2024. The components of this $3.9 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Current report
Income tax expense decreased by $845 million in the first six months of 2024 compared to the first six months of 2023 primarily as a result of lower income before income tax expense.
Current report
Net income attributable to noncontrolling interests decreased by $126 million in the first six months of 2024 compared to the first six months of 2023 primarily due to lower earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 6 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis beginning on page 54.
Current report
Refining Segment Results
Current report
The following table includes selected financial and operating data of our Refining segment for the first six months of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Refining segment operating income decreased by $3.5 billion in the first six months of 2024 compared to the first six months of 2023. Refining segment adjusted operating income, which excludes the adjustment in the table in note (c), also decreased by $3.5 billion in the first six months of 2024 compared to the first six months of 2023 primarily due to a decrease in Refining segment margin of $3.5 billion.
Current report
•A decrease in margins for other products had an unfavorable impact of approximately $215 million.
Current report
Renewable Diesel Segment Results
Current report
The following table includes selected financial and operating data of our Renewable Diesel segment for the first six months of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Renewable Diesel segment operating income decreased by $343 million in the first six months of 2024 compared to the first six months of 2023 primarily due to a decrease in Renewable Diesel segment margin of $353 million.
Current report
Ethanol Segment Results
Current report
The following table includes selected financial and operating data of our Ethanol segment for the first six months of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Ethanol segment operating income decreased by $51 million in the first six months of 2024 compared to the first six months of 2023; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table innote (c), decreased by $25 million in the first six months of 2024 compared to the first six months of 2023 primarily due to a decrease in Ethanol segment margin of $22 million.
Current report
The decrease in Ethanol segment margin was primarily due to the following:
Current report
•A decrease in ethanol prices had an unfavorable impact of approximately $503 million.
Current report
•A decrease in prices for the co-products that we produce, primarily DDGs and inedible DCOs, had an unfavorable impact of approximately $159 million.
Current report
•A decrease in corn prices had a favorable impact of approximately $626 million.
Removed paragraphs (8)
Previous report
First Quarter Results
Previous report
While our operating income decreased by $2.4 billion in the first quarter of 2024 compared to the first quarter of 2023, adjusted operating income decreased by $2.3 billion primarily due to a $2.3 billion decrease in Refining segment adjusted operating income. This decrease in Refining segment adjusted operating income was primarily due to lower gasoline and distillate (primarily diesel) margins, a decline in crude oil and other feedstock differentials, and a decrease in throughput volumes, partially offset by lower operating expenses (excluding depreciation and amortization expense).
Previous report
•Refining segment margin decreased by $2.4 billion in the first quarter of 2024 compared to the first quarter of 2023.
Previous report
◦A decline in other feedstock differentials had an unfavorable impact of approximately $131 million.
Previous report
•Refining segment operating expenses (excluding depreciation and amortization expense) decreased by $77 million primarily due to a decrease in energy costs (primarily natural gas).
Previous report
Renewable Diesel segment operating income decreased by $15 million in the first quarter of 2024 compared to the first quarter of 2023 due to a decrease in Renewable Diesel segment margin of $4 million and a net increase in operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense of $11 million.
Previous report
•An increase in sales volumes of 741,000 gallons per day had a favorable impact of approximately $120 million. The higher sales volumes were due to the impact of additional volumes from the DGD Port Arthur plant, which started up in the fourth quarter of 2022 and was in the process of ramping up production rates in the first quarter of 2023.
Previous report
The increase in Ethanol segment margin was primarily due to the following:
Reworded paragraphs (52)
Previous wording
This Form 10-Q, including without limitation our disclosures below under “OVERVIEW AND OUTLOOK,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “ambition,” “could,” “would,” “should,” “may,” “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” and similar expressions.
Current wording
This Form 10-Q, including without limitation our disclosures below under “OVERVIEW AND OUTLOOK,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “ambition,” “could,” “would,” “should,” “may,” “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” “evaluate,” and similar expressions.
Previous wording
•expectations regarding environmental, tax, and other regulatory matters, including SBx 1-2 and the matters discussed under “PART II, ITEM 1. LEGAL PROCEEDINGS,” the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated effect thereof on our business, financial condition, results of operations, and liquidity;
Current wording
•expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in Note 2 of Condensed Notes to Consolidated Financial Statements and under “PART II, ITEM 1. LEGAL PROCEEDINGS,” the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated effect thereof on our business, financial condition, results of operations, and liquidity;
Previous wording
We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty. In addition, we based many of these forward-looking statements on assumptions about future events, the ultimate outcomes of which we cannot predict with certainty and which may prove to be inaccurate. Accordingly, actual performance or results may differ materially from the future performance or results that we have expressed, suggested, or forecast in the forward-looking statements. Differences between actual performance or results and any future performance or results expressed, suggested, or forecast in these forward-looking statements could result from a variety of factors, including the following:
Current wording
We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, current and potential counterparties, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty. In addition, we based many of these forward-looking statements on assumptions about future events, the ultimate outcomes of which we cannot predict with certainty and which may prove to be inaccurate. Accordingly, actual performance or results may differ materially from the future performance or results that we have expressed, suggested, or forecast in the forward-looking statements. Differences between actual performance or results and any future performance or results expressed, suggested, or forecast in these forward-looking statements could result from a variety of factors, including the following:
Previous wording
Our results for the first quarter of 2024 were favorably impacted by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained. This global supply and demand imbalance contributed to strong refining margins for the first quarter of 2024.
Current wording
Our results for the second quarter and first six months of 2024 were favorably impacted by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained. This global supply and demand imbalance contributed to strong refining margins for the first six months of 2024.
Previous wording
The strong demand for our products and continued strength in refining margins were the primary contributors to us reporting $1.2 billion of net income attributable to Valero stockholders for the first quarter of 2024. Our operating results, including operating results by segment, are described in the following summary under “First Quarter Results,” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 34.
Current wording
The strong demand for our products and continued strength in refining margins were the primary contributors to us reporting $880 million and $2.1 billion of net income attributable to Valero stockholders for the second quarter of 2024 and the first six months of 2024, respectively. Our operating results, including operating results by segment, are described in the following summary under “Second Quarter Results” and “First Six Months Results,” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 42.
Previous wording
Our operations generated $1.8 billion of cash during the first quarter of 2024. This cash, along with cash on hand, was used to make $661 million of capital investments in our business and return $1.4 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we reduced our outstanding debt during the first quarter of 2024 through the repayment of the $167 million outstanding principal balance of our 1.200 percent Senior Notes that matured on March 15, 2024. As a result of this and other activity, our cash and cash equivalents decreased by $507 million, from $5.4 billion as of December 31, 2023 to $4.9 billion as of March 31, 2024. We had $10.0 billion in liquidity as of March 31, 2024. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 43.
Current wording
Our operations generated $4.3 billion of cash during the first six months of 2024. This cash, along with cash on hand, was used to make $1.1 billion of capital investments in our business and return $2.8 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we reduced our outstanding debt during the first six months of 2024 through the repayment of the $167 million outstanding principal balance of our 1.200 percent Senior Notes that matured in March 2024. As a result of this and other activity, our cash, cash equivalents, and restricted cash decreased by $10 million during the first six months of 2024 to $5.4 billion as of June 30, 2024. We had $10.1 billion in liquidity as of June 30, 2024. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 58.
Previous wording
For the first quarter of 2024, we reported net income attributable to Valero stockholders of $1.2 billion compared to $3.1 billion for the first quarter of 2023. The decrease of $1.8 billion was primarily due to a decrease in operating income of $2.4 billion, partially offset by a decrease in income tax expense of $527 million. The details of our operating income and adjusted operating income by segment and in total are reflected on the following page (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (c) beginning on page 41.
Current wording
For the first six months of 2024, we reported net income attributable to Valero stockholders of $2.1 billion compared to $5.0 billion for the first six months of 2023. The decrease of $2.9 billion was primarily due to a decrease in operating income of $3.9 billion, partially offset by a decrease in income tax expense of $845 million. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (c) beginning on page 56.
Previous wording
Many uncertainties remain with respect to the supply and demand balances in petroleum-based products market worldwide. While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Condensed Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the second quarter of 2024.
Current wording
Many uncertainties remain with respect to the supply and demand balances in petroleum-based products market worldwide. While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Condensed Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the third quarter of 2024.
Previous wording
•Combined light product (gasoline, diesel, and jet fuel) inventories in the U.S. and Europe remain below historical levels reflecting tight petroleum-based product balances, which should support continued high utilization of refining capacity.
Current wording
•Combined light product (gasoline, diesel, and jet fuel) inventories in the U.S. and Europe remain below historical levels reflecting tight petroleum-based product balances.
Previous wording
•Crude oil differentials have increased, consistent with typical seasonal patterns; however, continued sour crude oil production cuts by OPEC+ suppliers, the start-up of the Trans Mountain Pipeline expansion, and the return to high utilization of refining capacity following industry-wide refinery maintenance activity in the first quarter of 2024 may lead to a decline in such differentials. In addition, potential sanctions adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil differentials.
Current wording
•Crude oil differentials are expected to remain relatively stable as increased availability of sour crude oils from Latin America are expected to offset the impact of extended production cuts by OPEC+ suppliers and the start-up of the Trans Mountain Pipeline extension. However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil differentials.
Previous wording
The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (c) beginning on page 41, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 40 through 43.
Current wording
The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (c) beginning on page 56, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 55 through 58.
Previous wording
The following table includes selected financial data for the total company, corporate, and other for the first quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current wording
The following table includes selected financial data for the total company, corporate, and other for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Previous wording
Adjusted operating income decreased by $2.3 billion, from $4.1 billion in the first quarter of 2023 to $1.7 billion in the first quarter of 2024. The components of this $2.3 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Current wording
Adjusted operating income also decreased by $1.5 billion, from $2.8 billion in the second quarter of 2023 to $1.2 billion in the second quarter of 2024. The components of this $1.5 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Previous wording
Income tax expense decreased by $527 million in the first quarter of 2024 compared to the first quarter of 2023 primarily as a result of a decrease in income before income tax expense.
Current wording
Income tax expense decreased by $318 million in the second quarter of 2024 compared to the second quarter of 2023 primarily as a result of a decrease in income before income tax expense.
Previous wording
The following table includes selected financial and operating data of our Refining segment for the first quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current wording
The following table includes selected financial and operating data of our Refining segment for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Previous wording
Refining segment operating income decreased by $2.3 billion in the first quarter of 2024 compared to the first quarter of 2023. Refining segment adjusted operating income, which excludes the adjustment in the table in note (c), also decreased by $2.3 billion in the first quarter of 2024 compared to the first quarter of 2023. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.
Current wording
Refining segment operating income decreased by $1.2 billion in the second quarter of 2024 compared to the second quarter of 2023. Refining segment adjusted operating income, which excludes the adjustment in the table in note (c), also decreased by $1.2 billion in the second quarter of 2024 compared to the second quarter of 2023 primarily due to a decrease in Refining segment margin of $1.2 billion.
Previous wording
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 36 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 44 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
◦A decrease in gasoline margins had an unfavorable impact of approximately $577 million.
Current wording
•A decrease in gasoline margins had an unfavorable impact of approximately $684 million.
Previous wording
◦A decline in crude oil differentials had an unfavorable impact of approximately $275 million.
Current wording
•A decline in crude oil differentials had an unfavorable impact of approximately $235 million.
Previous wording
◦A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $705 million.
Current wording
•A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $195 million.
Previous wording
The following table includes selected financial and operating data of our Renewable Diesel segment for the first quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current wording
The following table includes selected financial and operating data of our Renewable Diesel segment for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Previous wording
Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 37 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 45 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
•A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $900 million.
Current wording
•A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $413 million.
Previous wording
•A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $779 million.
Current wording
•A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $214 million.
Previous wording
The following table includes selected financial and operating data of our Ethanol segment for the first quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current wording
The following table includes selected financial and operating data of our Ethanol segment for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Previous wording
Ethanol segment operating income decreased by $29 million in the first quarter of 2024 compared to the first quarter of 2023; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (c), was the same for the first quarter of 2024 and the first quarter of 2023. While there was an increase in Ethanol segment margin of $6 million, it was offset by a net increase in operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense of $6 million.
Current wording
Ethanol segment operating income decreased by $22 million in the second quarter of 2024 compared to the second quarter of 2023; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (c), decreased by $25 million in the second quarter of 2024 compared to the second quarter of 2023 primarily due to a decrease in Ethanol segment margin of $28 million.
Previous wording
Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 37 reflects market reference prices that we believe impacted our Ethanol segment margin in the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 45 reflects market reference prices that we believe impacted our Ethanol segment margin in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
•Lower ethanol prices had an unfavorable impact of approximately $240 million.
Current wording
•A decrease in ethanol prices had an unfavorable impact of approximately $259 million.
Previous wording
•Lower prices for the co-products that we produce, primarily dry distillers grains and inedible distillers corn oils, had an unfavorable impact of approximately $78 million.
Current wording
•A decrease in prices for the co-products that we produce, primarily dry distillers grains (DDGs) and inedible DCOs, had an unfavorable impact of approximately $81 million.
Previous wording
•Lower corn prices had a favorable impact of approximately $314 million.
Current wording
•A decrease in corn prices had a favorable impact of approximately $311 million.
Previous wording
Revenues decreased by $4.7 billion in the first quarter of 2024 compared to the first quarter of 2023 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenues was partially offset by a decrease in cost of sales of $2.4 billion primarily due to decreases in crude oil and other feedstock costs. These changes resulted in a $2.4 billion decrease in operating income, from $4.0 billion in the first quarter of 2023 to $1.7 billion in the first quarter of 2024.
Current wording
Revenues decreased by $4.7 billion in the first six months of 2024 compared to the first six months of 2023 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenues was partially offset by a decrease in cost of sales of $833 million primarily due to decreases in crude oil and other feedstock costs. These changes resulted in a $3.9 billion decrease in operating income, from $6.8 billion in the first six months of 2023 to $2.9 billion in the first six months of 2024.
Previous wording
◦A decrease in throughput volumes of 170,000 barrels per day had an unfavorable impact of approximately $218 million.
Current wording
•A decrease in throughput volumes of 65,000 barrels per day had an unfavorable impact of approximately $148 million.
Previous wording
•An increase in production volumes of 283,000 gallons per day had a favorable impact of approximately $10 million.
Current wording
•An increase in production volumes of 156,000 gallons per day had a favorable impact of approximately $14 million.
Previous wording
The following notes relate to references on pages 34 through 40.
Current wording
The following notes relate to references on pages 42 through 55.
Previous wording
(a)“Other income, net” includes a net gain of $11 million in the three months ended March 31, 2023 related to the early retirement of $199 million aggregate principal amount of various series of our senior notes.
Current wording
(a)“Other income, net” includes a net gain of $11 million in the six months ended June 30, 2023 related to the early retirement of $199 million aggregate principal amount of various series of our senior notes.
Previous wording
(b)Excludes $205 million of cash and cash equivalents related to the consolidated VIEs that is for their use only.
Current wording
(b)Excludes $416 million of cash and cash equivalents related to the consolidated VIEs that is for their use only.
Previous wording
Cash Flows for the Three Months Ended March 31, 2024
Current wording
Cash Flows for the Six Months Ended June 30, 2024
Previous wording
In the first quarter of 2024, we used the $1.8 billion of cash generated by our operations, $1.4 billion in debt borrowings, and $507 million of cash on hand to make $637 million of investments in our business, repay $1.7 billion of debt and finance lease obligations, and return $1.4 billion to our stockholders through purchases of our common stock for treasury and dividend payments. The debt borrowings and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.
Current wording
In the first six months of 2024, we used the $4.3 billion of cash generated by our operations, $3.1 billion in debt borrowings, and $10 million of cash on hand to make $1.0 billion of investments in our business, repay $3.6 billion of debt and finance lease obligations, and return $2.8 billion to our stockholders through purchases of our common stock for treasury and dividend payments. The debt borrowings and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.
Previous wording
As previously noted, our operations generated $3.2 billion of cash in the first quarter of 2023, driven primarily by net income of $3.1 billion and noncash charges to income of $558 million, partially offset by an unfavorable change in working capital of $534 million. Noncash charges primarily included $660 million of depreciation and amortization expense and $54 million of deferred income tax expense. Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 10 of Condensed Notes to Consolidated Financial Statements. In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income.
Current wording
As previously noted, our operations generated $4.3 billion of cash in the first six months of 2024, driven primarily by net income of $2.3 billion, noncash charges to income of $1.4 billion, and a positive change in working capital of $629 million. Noncash charges primarily included $1.4 billion of depreciation and amortization expense. Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 10 of Condensed Notes to Consolidated Financial Statements. In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income.
Previous wording
Our investing activities of $637 million primarily consisted of $661 million in capital investments, as defined on the following page under “Capital Investments,” of which $78 million related to capital investments made by DGD.
Current wording
Our investing activities of $1.0 billion primarily consisted of $1.1 billion in capital investments, as defined on the following page under “Capital Investments,” of which $193 million related to capital investments made by DGD.
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Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
For the second quarter of 2024, we reported net income attributable to Valero stockholders of $880 million compared to $1.9 billion for the second quarter of 2023. The decrease of $1.1 billion was primarily due to a decrease in operating income of $1.5 billion, partially offset by a decrease in income tax expense of $318 million. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (c) beginning on page 56.
Current report — wording carried from elsewhere
Financial Highlights by Segment and Total Company
Current report — wording carried from elsewhere
Financial Highlights by Segment and Total Company (continued)
Current report — wording carried from elsewhere
Average Market Reference Prices and Differentials
Current report — wording carried from elsewhere
Average Market Reference Prices and Differentials (continued)
Current report — wording carried from elsewhere
The following table includes selected financial data for the total company, corporate, and other for the first six months of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report — wording carried from elsewhere
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 51 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first six months of 2024 compared to the first six months of 2023.
Current report — wording carried from elsewhere
The decrease in Refining segment margin was primarily due to the following:
Current report — wording carried from elsewhere
•A decrease in gasoline margins had an unfavorable impact of approximately $1.3 billion.
Current report — wording carried from elsewhere
•A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $904 million.
Current report — wording carried from elsewhere
•A decline in crude oil differentials had an unfavorable impact of approximately $510 million.
Current report — wording carried from elsewhere
Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 52 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first six months of 2024 compared to the first six months of 2023.
Current report — wording carried from elsewhere
The decrease in Renewable Diesel segment margin was primarily due to the following:
Current report — wording carried from elsewhere
•A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $1.2 billion.
Current report — wording carried from elsewhere
•A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $852 million.
Current report — wording carried from elsewhere
Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 52 reflects market reference prices that we believe impacted our Ethanol segment margin in the first six months of 2024 compared to the first six months of 2023.
Current report — wording carried from elsewhere
We are a 50 percent joint venture member in DGD and consolidate its financial statements, and DGD’s operations compose our Renewable Diesel segment. As a result, all of DGD’s net cash provided by operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities. DGD’s members use DGD’s operating cash flow (excluding changes in its current