01—Abstract
Summary
Summary of the 10-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
Valero Energy Corporation (VLO) reported strong financial performance for the year ended December 31, 2023, with net income attributable to stockholders of $8.8 billiona.
This was driven by sustained worldwide demand for petroleum-based transportation fuels and constrained supply, leading to robust refining margins. The company generated $9.2 billionb in operating cash flow, which was strategically deployed towards capital investments, returning $6.6 billion to stockholders via share repurchases and dividends, and reducing outstanding debt. Valero continues to diversify its business with significant investments in its Renewable Diesel and Ethanol segments.
The Renewable Diesel segment saw an increase in operating income due to lower feedstock costs and higher sales volumes, despite lower product prices. The Ethanol segment also experienced an increase in operating income, benefiting from lower corn prices, higher production volumes, and reduced operating expenses. The company maintains a strong liquidity position with $10.5 billionc in liquidity as of December 31, 2023.
02—Key points
Key Highlights
- Valero reported a net income of $8.8 billion for the year ended December 31, 2023, a decrease from $11.5 billion in 2022, primarily due to lower refining margins.
- Operating cash flow was strong at $9.2 billion, supporting significant capital investments of $1.9 billion and $6.6 billion returned to stockholders through dividends and share repurchases.
- The Refining segment experienced a decrease in segment margin, largely attributed to lower distillate and gasoline margins, although this was partially offset by higher crude oil discounts.
- The Renewable Diesel segment's operating income increased by $78 million, driven by lower feedstock costs and higher sales volumes, with the new Port Arthur plant contributing to increased capacity.
- The Ethanol segment showed substantial improvement with a $443 million increase in operating income, attributed to lower corn prices and higher production volumes.
- The company ended 2023 with strong liquidity, reporting $10.5 billion in total liquidity, and announced a new $2.5 billion share repurchase authorization.
- Valero continues to invest in its low-carbon fuels strategy, with $5.4 billion invested in renewable diesel and ethanol businesses as of December 31, 2023, including progress on its Sustainable Aviation Fuel (SAF) project.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Valero Energy kept $0.06.
- Revenue$144.77B100.0%
- Cost of revenue−$131.83B91.1%
- Gross profit$12.93B8.9%
- Operating costs−$1.07B0.7%
- Operating income$11.86B8.2%
- Interest, other & tax−$3.02B2.1%
- Net income$8.84B6.1%
Where FY2023 revenue went
$144.77B- Cost of revenue: $131.83B, 91% of revenue
- Net income: $8.84B, 6.1% of revenue
- Operating costs: $1.07B, 0.7% of revenue
- Interest, other & tax: $3.02B, 2.1% of revenue
Kept 6.1% as net incomeNet income $8.84B · 6.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 22, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $144.77B$176.38B | −17.9% |
| Cost of Revenue | $131.83B$159.59B | −17.4% |
| Gross Profit | $12.93B$16.80B | −23.0% |
| Operating Income | $11.86B$15.69B | −24.4% |
| Interest Expense | $592.00M$562.00M | +5.3% |
| Net Income | $8.84B$11.53B | −23.4% |
| EPS (Basic) | $24.93$29.05 | −14.2% |
| EPS (Diluted) | $24.92$29.04 | −14.2% |
| Shares Outstanding (Basic) | 353.00M395.00M | −10.6% |
| Shares Outstanding (Diluted) | 353.00M396.00M | −10.9% |
05—Questions
Frequently Asked Questions
What was Valero's financial performance in 2023?
For the year ended December 31, 2023, Valero reported a net income attributable to stockholders of $8.8 billion. This performance was driven by strong refining margins due to high demand and constrained supply, and continued growth in its Renewable Diesel and Ethanol segments. The company generated $9.2 billion in operating cash flow and returned $6.6 billion to stockholders through dividends and share repurchases.
How did Valero's different business segments perform?
Valero's Refining segment saw a decrease in operating income compared to 2022, primarily due to lower gasoline and distillate margins, although higher crude oil discounts provided some offset. The Renewable Diesel segment's operating income increased, benefiting from lower feedstock costs and higher sales volumes from its Port Arthur plant. The Ethanol segment also performed well, with a significant increase in operating income driven by lower corn prices and higher production volumes.
What is Valero's strategy regarding low-carbon fuels?
Valero is actively investing in and growing its low-carbon fuels businesses, specifically renewable diesel and ethanol. The company has invested $5.4 billion in these segments and is focused on opportunities to further lower the carbon intensity of its products. A key development is the progress on its Sustainable Aviation Fuel (SAF) project, which is expected to make Valero one of the largest SAF manufacturers globally upon completion in 2025.
What is Valero's capital allocation strategy?
Valero's capital allocation strategy focuses on reinvesting in its business, returning capital to shareholders, and maintaining a strong balance sheet. In 2023, the company made $1.9 billion in capital investments, returned $6.6 billion to stockholders through dividends and share repurchases, and paid down debt. Valero also has ongoing share repurchase programs, with $2.2 billion remaining under its September 2023 program and a new $2.5 billion authorization announced in February 2024.
06—Continue