Summary
Valero Energy Corporation's 2016 10-K filing reveals a challenging year for the refining segment, with adjusted operating income decreasing significantly due to lower refining margins on gasoline and distillates, and reduced discounts on certain crude oil feedstocks. This was partially offset by improved performance in the ethanol segment, driven by lower corn prices and higher ethanol margins. Despite the decline in profitability compared to 2015, the company maintained a strong operational footprint with 15 refineries and 11 ethanol plants, processing approximately 2.9 million barrels per day of feedstocks across its refining system. Financially, Valero generated substantial operating cash flow, though it was lower than the prior year. The company continued to invest in its assets, repay debt, and return capital to shareholders through dividends and share repurchases. Management highlighted the impact of volatile refining margins and feedstock costs as key factors influencing results, alongside regulatory environments and global economic conditions. The company's outlook suggests continued pressure on margins in the near term.
Financial Highlights
52 data points| Revenue | $75.66B |
| Cost of Revenue | $71.31B |
| Gross Profit | $4.35B |
| Operating Expenses | $72.09B |
| Operating Income | $3.53B |
| Interest Expense | $446.00M |
| Net Income | $2.29B |
| EPS (Basic) | $4.94 |
| EPS (Diluted) | $4.94 |
| Shares Outstanding (Basic) | 461.00M |
| Shares Outstanding (Diluted) | 464.00M |
Key Highlights
- 1Valero operates 15 refineries with a combined throughput capacity of approximately 3.1 million barrels per day, spread across the U.S., Canada, and the U.K.
- 2The company also owns 11 ethanol plants with a capacity of approximately 1.4 billion gallons per year.
- 3Refining segment adjusted operating income saw a significant year-over-year decrease of $4.4 billion, primarily due to lower refining margins and reduced crude oil discounts.
- 4The ethanol segment experienced an increase in adjusted operating income of $98 million, driven by lower corn prices and higher ethanol margins.
- 5Total operating revenues decreased by approximately 14% in 2016 compared to 2015, largely due to lower product prices and feedstock costs.
- 6Valero's stock price showed strong performance over the five-year period from 2011 to 2016, outperforming the S&P 500 and its peer group.
- 7The company returned significant capital to shareholders through dividends and share repurchases, totaling $1.1 billion and $1.3 billion respectively in 2016.