01—Abstract
Summary
Summary of the 10-K filed February 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Valero Energy Corporation (VLO) reported a significant recovery in 2021 compared to the pandemic-affected 2020, driven by increased demand and market prices for its refined petroleum products.
The company achieved a net income of $930 milliona, a substantial improvement from a net loss in the prior year. This recovery was bolstered by strong performance across all segments, particularly Refining, which saw a significant increase in margins and throughput volumes. The company continues to invest in its low-carbon fuels business, specifically renewable diesel, with expansions to its Diamond Green Diesel (DGD) plant underway.
Valero also highlighted its robust liquidity position with $9.3 billionb in total liquidity as of December 31, 2021, and successful debt reduction efforts throughout the year. Despite facing challenges like Winter Storm Uri and Hurricane Ida, Valero demonstrated operational resilience and a commitment to returning capital to shareholders through dividends.
02—Key points
Key Highlights
- Valero Energy Corporation returned to profitability in 2021, reporting a net income of $930 million, a significant turnaround from a net loss in 2020.
- Refining segment margins and throughput volumes saw substantial increases, contributing significantly to the improved financial performance.
- The Renewable Diesel segment, through its joint venture DGD, experienced growth in sales volumes and margins, with ongoing expansions to increase production capacity.
- The company generated $5.9 billion in operating cash flow in 2021, enabling it to fund $2.5 billion in capital investments and return $1.6 billion to stockholders via dividends.
- Valero successfully reduced its long-term debt by $1.3 billion during 2021 through debt reduction and refinancing transactions.
- Total liquidity stood strong at $9.3 billion as of December 31, 2021, providing ample financial flexibility.
- The company demonstrated resilience by navigating events like Winter Storm Uri and Hurricane Ida, which caused temporary disruptions but had a manageable impact on overall results.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Valero Energy kept $0.01.
- Revenue$113.98B100.0%
- Cost of revenue−$110.85B97.3%
- Gross profit$3.13B2.7%
- Operating costs−$999.0M0.9%
- Operating income$2.13B1.9%
- Interest, other & tax−$1.20B1.1%
- Net income$930.0M0.8%
Where FY2021 revenue went
$113.98B- Cost of revenue: $110.85B, 97% of revenue
- Net income: $930.0M, 0.8% of revenue
- Operating costs: $999.0M, 0.9% of revenue
- Interest, other & tax: $1.20B, 1.1% of revenue
Kept 0.8% as net incomeNet income $930.0M · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 22, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $113.98B$64.91B | +75.6% |
| Cost of Revenue | $110.85B$65.65B | +68.8% |
| Gross Profit | $3.13B-$740.00M | +522.8% |
| Operating Income | $2.13B-$1.58B | +234.9% |
| Interest Expense | $603.00M$563.00M | +7.1% |
| Net Income | $930.00M-$1.42B | +165.4% |
| EPS (Basic) | $2.27$-3.50 | +164.9% |
| EPS (Diluted) | $2.27$-3.50 | +164.9% |
| Shares Outstanding (Basic) | 407.00M407.00M | 0.0% |
| Shares Outstanding (Diluted) | 407.00M407.00M | 0.0% |
05—Questions
Frequently Asked Questions
How did Valero's financial performance in 2021 compare to 2020?
Valero experienced a significant recovery in 2021, reporting a net income of $930 million compared to a net loss of $1.4 billion in 2020. This improvement was driven by higher demand and market prices for its products, particularly in the refining segment, and increased production volumes in its renewable diesel and ethanol businesses.
What is Valero's strategy regarding low-carbon fuels?
Valero is actively expanding its low-carbon fuels business, particularly renewable diesel, through its joint venture, Diamond Green Diesel (DGD). The company completed an expansion of its existing plant and is constructing a second plant, increasing its total renewable diesel production capacity significantly. This aligns with government policies and market demand for lower-carbon transportation fuels.
What was Valero's financial health and capital allocation in 2021?
Valero ended 2021 with strong liquidity of $9.3 billion. The company generated substantial operating cash flow, which was used for capital investments, including growth in its low-carbon fuels business, and to return capital to shareholders through dividends. Valero also focused on debt reduction, repaying $1.3 billion of long-term debt during the year.
06—Continue