10-KPeriod: FY2022

VALERO ENERGY CORP/TX Annual Report, Year Ended Dec 31, 2022

Filed February 23, 2023For Securities:VLO

Summary

Valero Energy Corporation (VLO) reported a strong financial performance for the fiscal year ended December 31, 2022, driven by favorable market conditions including recovering demand and constrained supply in petroleum-based transportation fuels, leading to increased refining margins. The company generated $11.5 billion in net income attributable to stockholders, a significant increase from the prior year. Valero utilized its substantial operational cash flow to invest in its business, repay debt, and return capital to shareholders through share repurchases and dividends. The company's strategic focus on low-carbon fuels, including renewable diesel and ethanol, continues to be a growth area, supported by government regulations and incentives. While facing ongoing market volatility and regulatory complexities, Valero's diversified operations and strategic investments position it to navigate the evolving energy landscape. The company highlighted robust performance across its segments, with the Refining segment being the primary driver of profitability due to improved gasoline and distillate margins and higher throughput volumes. The Renewable Diesel segment also showed increased profitability driven by higher sales volumes and prices, though partially offset by increased feedstock costs. The Ethanol segment experienced a decrease in profitability due to higher corn prices and operating expenses. Valero also maintained a strong liquidity position and continued to manage its debt effectively.

Financial Highlights

49 data points
Beta

Revenue

$176.38B

9.5% Gross Margin

Net Income

$11.53B

6.5% Net Margin

EPS (Diluted)

$29.04

Total Assets

$60.98B

Cash & Equivalents

$4.86B

Free Cash Flow

$12.57B

Financial Statements
Beta
Revenue$176.38B
Cost of Revenue$159.59B
Gross Profit$16.80B
Operating Income$15.69B
Interest Expense$562.00M
Net Income$11.53B
EPS (Basic)$29.05
EPS (Diluted)$29.04
Shares Outstanding (Basic)395.00M
Shares Outstanding (Diluted)396.00M

Key Highlights

  • 1Net income attributable to stockholders significantly increased to $11.5 billion for the fiscal year 2022, compared to $930 million in 2021, driven by strong refining margins.
  • 2The company generated $12.6 billion in operating cash flow, which was used for $2.7 billion in capital investments, $6.1 billion in returns to stockholders (share repurchases and dividends), and $2.7 billion in debt reduction.
  • 3Valero completed the expansion of its renewable diesel capacity to approximately 1.2 billion gallons per year with the commissioning of its second renewable diesel plant.
  • 4The company's strategic focus on low-carbon fuels, including renewable diesel and ethanol, continues with significant investments and anticipation of future growth driven by regulatory tailwinds.
  • 5Refining segment margins saw substantial improvement, with distillate margins increasing by approximately $11.8 billion and gasoline margins by $2.4 billion.
  • 6The company continued its active share repurchase program, authorizing an additional $2.5 billion in share repurchases, reflecting confidence in its financial position and commitment to returning value to shareholders.
  • 7Valero maintains a strong liquidity position with $10.1 billion in total liquidity as of December 31, 2022.

Frequently Asked Questions

Valero Energy Corporation reported a significant increase in net income attributable to stockholders, reaching $11.5 billion for the year ended December 31, 2022, a substantial improvement from $930 million in 2021. This strong performance was primarily driven by higher refining margins, particularly for distillates and gasoline, and increased throughput volumes, benefiting from a recovery in demand and constrained supply in the petroleum-based transportation fuels market.

Valero is strategically investing in its low-carbon fuels business. The company's renewable diesel segment, through its joint venture Diamond Green Diesel (DGD), has expanded its production capacity to approximately 1.2 billion gallons per year. Valero also owns 12 ethanol plants with a combined capacity of 1.6 billion gallons per year. The company has invested over $5 billion in its low-carbon fuels businesses to date and is evaluating further opportunities, including a new project to produce Sustainable Aviation Fuel (SAF).

Government regulations, such as the Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS), have created opportunities for Valero's low-carbon fuels businesses by driving demand for renewable diesel and ethanol. While these regulations can add costs to the refining business, they also create value for Valero's renewable products. The company is actively managing compliance with these complex and evolving programs.

Valero demonstrates a strong commitment to returning capital to shareholders. In 2022, the company returned $6.1 billion to stockholders through share repurchases and dividend payments. Furthermore, Valero's Board authorized additional share repurchases, indicating continued confidence in the company's financial strength and a strategy to enhance shareholder value.