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Valero Energy Corporation Stock Price: Quote, Forecast, Splits & News (VLO)

Perplexity Finance

Company Profile

Valero Energy Corporation Price & Performance (VLO)

Stock Performance

Updated Apr 25, 8:00 PM UTC

Valero Energy Corporation

$113.87USD

+$0.51 (+0.45%)

After Hours

-$1.86 (-1.63%)

Open

$112.35

Market Cap

$35.81B

Year High

$168.85

High

$114.32

P/E Ratio

38.9

Year Low

$99.00

Low

$112.00

Dividend Yield

3.81%

Volume

2.87M

Latest News

Regulatory Pressures Prompt Valero to Close Benicia Refinery by 2026
Valero Energy announced it will permanently close its Benicia refinery in California by April 2026, citing high operational costs and stringent state regulations. The move follows a $1.1 billion writedown on California assets and signals further potential closures, with the Los Angeles refinery also under review for strategic alternatives.12
Earnings Miss and Impairments Drive Valero to Q1 Net Loss
Apr 24, 2025
Valero Energy posted a $595 million net loss for Q1 2025, missing analyst forecasts by a wide margin. The results were dragged down by a major asset impairment and lower refining margins. Despite surpassing revenue expectations, the company’s share price slipped as investor concerns mounted over continued profitability.34
Analysts Remain Cautious Despite Valero’s Dividend Hike and Revenue Beat
Apr 24, 2025
Valero’s recent quarterly results included a dividend increase and revenue outpacing estimates, but analysts have trimmed earnings forecasts amid margin pressures and refinery writedowns. The stock, trading closer to its 52-week low, is rated a moderate buy, with future prospects hinging on improved market conditions and operational adjustments.56

What's Happening

Peers

Earnings

Report Date

Apr 24, 2025

Reported Revenue

30.3B

Beat +5.21%

Avg 1d Change

2.64%

Report Period

Q1 2025

Reported EPS

0.89

Beat +116.91%

Implied Move 1d

3.17%

Transcript

11m 33s

In summary, it says that statements in the press release and on this conference call that state the company's or management's expectations or predictions of the future are forward looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations including those we've described in our earnings release and filings with the SEC. Now, I'll turn the call over to Lane for opening remarks.

12m 3s

Thank you, Homer, good morning, everyone.

12m 6s

I am pleased to report that we delivered positive results for the first quarter to despite heavy maintenance activity across our refining system and a tough margin environment in the renewable diesel segment. This is a credit to the strength and discipline of our operations optimization and commercial teams.

12m 23s

Refining margins improved through the quarter with U. S. Light product demand slightly higher than last year and product inventories below the same period last year. On the financial side, we continue to honor our commitment to shareholder returns with a strong payout ratio of 73% in the first quarter And in January, our Board approved a 6% increase to the quarterly cash dividend further demonstrating our strong financial position. We continue to progress the SEC unit optimization project at St. Charles that will enable the refinery to increase the yield high value products including high octane alkylate. The project is estimated to cost $230,000,000 as expected to start up in 2026. And we are pursuing other short cycle high return optimization projects around our existing refining assets. Looking ahead, we expect tight product supply and demand balances and low product inventories support refining fundamentals ahead of the driving season. Longer term product demand is expected to exceed supply as there are limited announced capacity additions beyond 2025. In closing, we remain focused on the things that we can control. Pursuing excellence in operations, deploying capital with an uncompromising focus on return, and honoring our commitment to stockholder returns. Our commitment remains underpinned by a strong balance sheet that provides us plenty of operational and financial flexibility.

13m 45s

So with that, Homer, I'll hand the call back to you.

13m 50s

Thanks, Lane. For the first quarter of twenty twenty five, we incurred a net loss attributable to Valero stockholders of $595,000,000 or $1.9 per share compared to net income of $1,200,000,000 or $3.75 per share for the first quarter of twenty twenty four. Excluding the $1,100,000,000 pretax or $877,000,000 after tax asset impairment loss related to the West Coast assets adjusted net income attributable to Valero stockholders was $282,000,000 or $0.89 per share for the first quarter of twenty twenty five compared to $1,300,000,000 or $3.84 per share for the first quarter of twenty twenty four. The refining segment reported an operating loss of $530,000,000 for the first quarter of twenty twenty five compared to operating income of $1,700,000,000 for the first quarter of twenty twenty four. Adjusted operating income was $6.00 $5,000,000 for the first quarter of twenty twenty five compared to $1,800,000,000 for the first quarter of twenty twenty four. Refining throughput volumes in the first quarter of twenty twenty five averaged 2,800,000 barrels per day or 89% throughput capacity utilization. Refining cash operating expenses were $5.07 per barrel in the first quarter of twenty twenty five. The renewable diesel segment reported an operating loss of $141,000,000 for the first quarter of twenty twenty five compared to operating income of $190,000,000 for the first quarter of twenty twenty four.

15m 22s

Renewable diesel sales volumes averaged 2,400,000 gallons per day in the first quarter twenty twenty five. The Ethanol segment reported $20,000,000 of operating income for the first quarter twenty twenty five compared to $10,000,000 for the first quarter of twenty twenty four. Adjusted operating income was $39,000,000 for the first quarter of twenty twenty four. Ethanol production volumes averaged 4,500,000 gallons per day in the first quarter of twenty twenty five. For the first quarter of twenty twenty five, G and A expenses were $261,000,000 net interest expense was 137,000,000 depreciation and amortization expense was $691,000,000 and income tax benefit was $265,000,000 Net cash provided by operating activities was $952,000,000 in the quarter of twenty twenty five. Included in this amount was 157,000,000 favorable change in working capital and $67,000,000 of adjusted net cash used in operating activities associated with the other joint venture member share of DGD. Excluding these items, adjusted net cash provided by operating activities was $862,000,000 in the first quarter of twenty twenty five. Regarding investing activities, we made $660,000,000 of capital investments in the first quarter of twenty twenty five, of which $582,000,000 was for sustaining the business, including costs for turnarounds, [indiscernible] and regulatory compliance and the balance was for growing the business.

16m 54s

Excluding capital investments attributable to the other joint venture member share of DGD and other variable interest entities, capital investments attributable to Valero were $611,000,000 in the first quarter twenty twenty five. Moving to financing activities, we returned $633,000,000 to our stockholders in the first quarter of twenty twenty five of which $356,000,000 was paid as dividends and $277,000,000 was for the purchase of approximately 2,100,000.0 shares of common stock resulting in a payout ratio of 73% for the quarter. On January 16, we announced a 6% increase to the quarterly cash dividend on common stock from 107 to $1.13 per share delivering on our commitment of a growing dividend. With respect to our balance sheet, we issued $650,000,000 aggregate principal amount of 5.15% senior notes due 02/1930 in February and repaid the outstanding principal balances of $189,000,000 3.65% senior notes that matured in March and $251,000,000 of 2.85% senior notes that matured in April. Ended the quarter with $8,500,000,000 of total debt dollars 2,300,000,000.0 of total finance lease obligations $4,600,000,000 of cash and cash equivalents. The debt to capitalization ratio net of cash and cash equivalents was 19% as of 03/31/2025. And we ended the quarter well capitalized with 5,300,000,000.0 of available liquidity excluding cash.

18m 30s

Turning to guidance, we still expect capital investments attributable to Valero for 2025 to be approximately $2,000,000,000 which includes expenditures for turnarounds, catalysts, regulatory compliance and joint venture investments. About $1,600,000,000 of that is allocated to sustaining the business and the balance to growth. For modeling our second quarter operations, we expect refining throughput volumes to fall within the following ranges. Gulf Coast at 1,750,000 to 1,800,000 barrels per day Mid Continent at three eighty five million to four and five thousand barrels per day, West Coast at two and forty thousand to 260,000 barrels per day and North Atlantic at 320,000 to 340,000 barrels per day. We expect refining cash operating expenses in the second quarter to be approximately $5.15 per barrel. With respect to the renewable diesel segment, we now expect sales volumes to be approximately 1,100,000,000 gallons in 2025 reflecting lower production volumes due to economics. Operating expenses in 2025 should be $0.53 per gallon which includes $0.24 per gallon for non cash costs such as depreciation and amortization. Our ethanol segment is expected to produce 4,600,000 gallons per day in the second quarter, Operating expenses should average $0.41 per gallon which includes $05 per gallon for non cash costs such as depreciation zero and amortization.

20m 7s

For the second quarter, net interest expense should be about 135,000,000 Total depreciation and amortization expense in the second quarter should be approximately $780,000,000 which includes $100,000,000 of incremental depreciation expense related to our plan to cease refining operations at our Benicia refinery by the April 2026. We expect this incremental amount related to the Benicia refinery to be included in D and A for the next four quarters resulting in a quarterly earnings impact of approximately $0.25 per share based on current shares outstanding. For 2025, we still expect G and A expenses to be approximately $985,000,000 That concludes our opening remarks. Before we open the call to questions, please limit each turn in the Q and A to two questions. If you have more than two questions, please rejoin the queue as time permits to ensure other callers have time to ask their questions.

21m 11s

Thank you. We will now be conducting a question and answer session. Our first questions come from the line of Manav Gupta with UBS. Please proceed with your Good morning, guys. Very resilient earnings in a tough macro. I have two questions for Gary. I'll ask them upfront in the interest of time.

21m 54s

So Gary, there's a lot of chatter around here on tariffs and recessions and whatever. But what are you seeing in terms of the market dynamics, supply demand out there, for refined products? And the second one is, can you talk a little bit about the crude differentials and the quality discounts everything which is going around OPEC probably raising volumes, land is shutting down. And probably tariffs. So if you could address those two questions. Thank you.

22m 20s

Yes. Good morning, Manav. This is Gary. Happy to address that and show kind of talk about what we're seeing on the commercial side of the business. Sales through our wholesale system were down in the first quarter a few percent from typical historic levels. Our product exports were up year over year, but down versus fourth quarter levels.

22m 39s

None of this is really a reflection of demand, just more due to the heavy refinery maintenance we had during the quarter. If you look at the seven day average trends to our wholesale system, we're back to just below that 1,000,000 barrel a day level. We're showing a 1% year over year increase in gasoline sales and a 6% year over year increase in diesel volumes. Diesel sales have really been supported by higher agricultural demand as we started planting season in the Mid Continent. If you look at the DOE demand data for total light products, it indicates a year over year increase in total light product demand in the neighborhood of 300,000 barrels a day which we believe is pretty accurate. It looks to us like the DOE is under reporting gasoline demand a little If you look at the ethanol blending data, it would indicate gasoline demand flat to slightly up from last year. Jet demand year to date slightly up. And then a really nice bump in diesel demand driven largely by the cold temperatures we experienced early in the year. Globally, I think we've seen stronger life product demand as well and more than was expected.

23m 41s

The consultants data varies greatly here, but if you take an average of the data, it would show a year over year increase in total light product demand of around 1,000,000 barrels a day, which we think is pretty close Our data shows we had about 640,000 barrels a day in new refining capacity come online during the quarter, but then we had two refineries shut down with a combined capacity of 410,000 barrels a day.

24m 4s

So total light product demand globally up 1,000,000 barrels a day. 30,000 barrels a day of net refinery capacity additions and then a little lower refinery utilizations due to turnaround. So you combine all that and you would expect to see some inventory draws, which is what we've seen Total light product inventories drawn back to the point where once again below the five year average range, currently 36,000,000 barrels below the five year average, 8,000,000 barrels below where we were last year at this time. Gasoline inventory is drawn down to the bottom part of the five year average range. Jet inventories now below the five year average levels, diesel inventories well below five year average range, below last year. And now approaching the historically low levels we saw in 2022 and 2023. As we head into driving season, gasoline fundamentals look constructive. Gasoline inventory toward the bottom of the five year average range, demand at or slightly above last year, West Coast gasoline is at a twelve year low for this time of year. Unemployment remains low, which historically translates into good gasoline demand. Then the strength in European gasoline is really keeping their barrels in Europe versus the normal Transatlantic export flow into New York Harbor.

25m 18s

Additionally, that strength in European gasoline is opening up more exports for U. S. Gulf Coast refineries into Latin America. Diesel looks very strong. We had good demand early in the year due to cold weather. We've seen imports as well as domestic production of renewable and biodiesel fall off, which has created incremental demand for refinery produced diesel. Despite the fact that we're at or near record lows on total diesel inventory in The U. S, that we've seen in 2022 and 2023, the yard to ship on Explorer from The U. S. Gulf Coast to the Mid Continent Continent is open due to the strong agricultural demand. The arb to ship on Colonial to New York Harbor is open. The arb to ship from The U. S. Gulf Coast to Europe is open and the arb to ship to Latin America is open. So when you look at record low inventories and still have open arbs to ship product domestically and globally from The U. S. Gulf Coast, I think that speaks well for diesel, not just domestically, but also globally. VGO remains fairly expensive indicating tightness in that market which likely says FCCs and hydrocrackers have to compete for incremental VGO barrels.

26m 24s

So again, the fundamentals look very strong and if and have exceeded our expectations so far for the year. I think when you go through all this data, it's actually surprising we don't see stronger refinery margins. Based on the strong fundamentals, I'd say refinery margins are under [indiscernible] I think right now, it's the uncertainty around the economy People have made assumptions about what happens with the economy and its impact on demand for our products. And those assumptions are really driving the market right now. Thus far, the economy looks like it's been fairly resistant, but we'll have to see. All of you guys probably have better insight to that than what I do. Turning to the crude differentials. It's been hard to really have clarity on what's going to happen with the crude differentials in the quarter. A lot of the discussions on tariffs and sanctions have certainly made that hard to see where the direction that's going. I think when you look at bullish factors, certainly the Lyondell refinery shutting down in The U. S. Gulf Coast put 200,000 to 250,000 barrels a day of additional heavy sour barrels on the market. We saw a record Canadian production in the first quarter and it looks like Canadian production continues to ramp up.

27m 35s

And then we've had the announcement of 500,000 barrels of a day additional OPEC plus production. News yesterday was that maybe even higher than the 500,000 barrels a day. Offsetting that somewhat, we continue to see Mexican production decline a little. And then the potential for sanctions impacting Iranian and Venezuelan production But you combine all that and I think the likelihood is that you see more medium and heavy sour barrels on the market, which speaks well to the differentials moving forward. I don't think there's much room for them to come in any because medium and heavy sours are already trading at economic parity light sweet. And in fact, we're seeing economic signals approaching the point where you would back off a heavy feedstocks and even spare coking capacity.

28m 20s

Thank you so much.

28m 23s

Thank you. Our next question has come from the line of Roger Read with Wells Fargo. Please proceed with your questions.

28m 31s

Yes. Thank you. Good morning.

28m 33s

Good morning, Roger.

28m 34s

I'd like to morning, everybody. Just to come back on the guidance just to for the second quarter, a little light relative to what I was anticipating a little, I guess you could even say a little light relative to a year ago. Is this a function of maintenance? Because it seems to run a little counter to the explanation you were just offering there Gary.

29m 1s

Hey Roger, this is Yes, it is maintenance and you can see it in a couple of the particular regions North Atlantic and Mid Con, you can see those quite a bit lower and that's all maintenance driven the Gulf Coast and the West Coast, where most of the maintenance is complete, we're getting those kind of back to what you would typically see for throughput.

29m 22s

Okay. And then Homer, I think this is just to clarify with you. When we talked about maintenance before, you've pointed out there can be a difference between crude unit maintenance and downstream maintenance. So presuming the guidance is crude unit maintenance, are we looking at the ability to run some of the downstream units? Or should we take this at face value on volumes?

29m 48s

Roger, it's Greg again. It is when you see those big throughput impacts, that tends to tell you that's front end of the plant that's shutting down. May try to run some downstream stuff but really depends on being able to get feedstocks into some of those particular markets You think about the Mid Continent in particular, it's hard to bring other feedstocks in when you've got the front end of the plants down. So you probably don't see as much of that in those regions, North as well as you would see in like the Gulf Coast.

30m 18s

Great. That would have been my interpretation as well. Okay. Thank you. I'll turn it back Thank you. Our next questions come from the line of Ryan Todd with Piper Sandler. Please proceed with your questions. Great. Thanks.

30m 35s

Can you walk through the decision to close the Peninsula refinery? Why now? What's changed? And how should we think about the future risk to or the environment for the Wilmington refinery?

30m 49s

Hey, Ryan, it's Lane. So when you think about about the West Coast, California has been pursuing policies to move away from fossil fuels for really for the past twenty years and the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America. And so if you sort of think about what's happened on the West Coast since COVID, had several refineries closed, you have another one closed this year. So then you start thinking about our asset base and we're looking at the difficulty and all that. So Venetia operates in the more difficult part of California with respect to the regulatory and enforcement side of this. And then on top of that, Venetia costs considerably more to maintain versus Wilmington.

31m 42s

Okay.

31m 44s

And then maybe shifting to renewable diesel markets.

31m 52s

Can you maybe walk through where we are on the I mean, markets are to reach a new equilibrium under the new PTC regime. Can you maybe walk through where you think we are on the path to normalization? The timing to get there and then maybe within that I know you booked some 45z credits in the first quarter. How much should we expect to see you book? Should we expect to see that improve going forward from here? So I guess maybe just some thoughts on how that market normalizes and maybe improves over the course of the year?

32m 31s

Yes. This is Eric. As you look at the first quarter, one thing that we should be clear about is that we had catalyst changes on DGD-one and DGD-two. So you had a pretty significant volume impact in the first quarter. That reduced a lot of the margin opportunity for the segment. But as you said, we got PTC guidance in January and in February, we pivoted both operations and our contracts with customers in order to begin capturing the PTC. So we didn't get a complete capture in the first quarter. We did get capture on NAFTA and SAF. But only about half of the RD was able to be captured because it took us a little while to get those contracts and operations shifted over. Going forward, we see should get 100% of eligible credits on PTC for all three of those product lines. Now there are a lot of feedstock eligibility issues. So it's not 100 of our full volume. It will be 100% of the eligible feedstocks. And so as that market is figuring out where the net balance is going to be between tariffs PTC eligibility and just call it flat price. We still see the market moving around there.

33m 44s

But going forward, we think we've got that solved.

33m 47s

So as I said before, if you look at the shift from the $1 Blender's Tax Credit to this CI based PTC, everyone knew there was going to be a drop in profitability going from the previous program to the current program. For PTC on waste oils, which are still the most favorite feedstocks, that's $0.05 0 to $0.60 a gallon on domestic, primarily domestic feedstocks. Foreign feedstocks into SAF still count, but foreign feedstock into RD do not.

34m 19s

And so we have kind of a unique position there that as you look at your product allocations and your feedstocks, have to take all of that into account. The backdrop the other backdrop you have here is we've seen a big drop in domestic production as Gary mentioned. In his comments on the macro. You've also seen a big drop in foreign imports. So the overall D4 RIN production has dropped pretty significantly. Combine that with this conversation that a lot of trade groups have gone to the EPA and asked for an increase of the RIN obligation beginning in twenty twenty six twenty twenty seven into 5,250,000,000 gallons for D4 RINs. See you have a drop in production plus this anticipated increase in obligation, there is some potential tailwind out there in the future at some point. If that gets proposed to the EPA, and the EPA approves that probably sometime in the third or fourth quarter of this year. So you've got a little bit of upside potential there. The other one that's that may be more recent or sooner to be revealed is the California LCFS program, those obligations that were pushed off initially have been resubmitted to the OAL for approval.

35m 34s

So in the next thirty days or so, we should hear from California on whether or not they're going to increase their LCFS obligation by 9%. Going back to Jan one that should put another potential increase of LCFS prices on the horizon. So hard to predict what California will do on that, but that is the timeframe for when we should get an answer yes or no on LCFS modifications. So if you look at all of this and think about, okay, how does this all net out? We have seen the D4 RIN move. The LCFS price has not. On the D4 RIN, the increase is not enough to offset in the veg oil space. It only gets $0.10 to $0.20 a gallon on the PTC. You need RINs, you still need RINs to go up another 40 or $0 in order to offset that $0.80 loss that veg oil is seeing, which is why you're seeing a big drop in domestic BD production So as the market tries to figure this out, the D4 RIN has to move up substantially Whether that driver is a continued drop in production or imports, and or this anticipated increase beginning in the 2026 obligation that's going to set what the overall volume looks like in terms of performance versus overall obligation.

36m 53s

So it looks like in 2Q, we're starting to see some of this potentially improve. I think it's still more of the upside looks more like a back half of the year for the RD segment. And then I think for our platform specifically, which still the most advantaged platform when it comes to CI market market access and just overall ability to demonstrate compliance into all these different programs. We still see we'll capture PTC and we'll be the ones that can optimize between the feedstocks that are most desired into these compliance programs and then whether or not they're covered by the PTC.

37m 36s

Great. Thanks for all the detail.

37m 40s

Thank you. Our next questions come from the line of Theresa Chen with Barclays. Please proceed with your questions.

37m 47s

Hi, Eric. Just to follow-up on that last question. So it sounds like the drop in production and imports is structural absent the recovery in deforebrynds and maybe more to come on that front. From a supply and competitive landscape, perspective, do you see some of that supply creeping back over time? Or how does this settle out as the market tries to find equilibrium?

38m 15s

I think if you look at maybe I'll put it in context of this RIN obligation. At the current 3,300,000,000 gallons, versus what we've seen in the last couple of years, the RD and BD segments production capacity could far exceed that RIN obligation. And so what was really keeping a lot of that volume flowing was the BTC. And so when you take the BTC out, then suddenly as we've always said the BTC is what kept the marginal producer operating. So we see a lot of those and this is public. There's a lot of announcements of BD and RD operations that are either slowing down or or taking a pause in operations. And so everyone is looking to see when that marginal producer will come back into market because right now there's not an incentive for them to run. Particularly any kind of veg oil based BD or RD. So if you see the obligation increase, or you see the RIN Bank tighten to the point where we are physically short. I think this year we are still long in the D4 market, but it is starting to tighten and you can kind of see this in the D4, D6 RIN spread which is sometimes reaching point $10 a gallon on the differential there.

39m 38s

So there's some anticipation and recognition of this. I think as that continues through the year, if you see RIN prices react, like I said, it's got to be $0.40 or $0.50 move from what it's already moved. So we've seen D4 RINs go from the 60s up until the 90s sometimes over $1 that is still not enough to incentivize the BD producer that used to get a dollar. And so how that will rationalize is, I think everyone will and there's no question from an ag standpoint, the farmers want to run their their BD units and their soybean oil. Otherwise, you're going to see soybean oil continue to get stranded from a fuel market. So I think it's really waiting to see if that RIN is going to move to offset the loss of the transition from the BTC To The PTC. I Think That's The Only Way You're To See Incremental Production Come On The Back Half Of The Year.

40m 34s

That's Helpful. Thank You. And On Mexico within the refining segment, would you be able to provide an update on your suspension from the registry of importers What led to this and what is the path forward from here?

40m 49s

Yes, Theresa, this is Gary. If you haven't heard, I'm happy to announce that we have had our import permit reinstated. Go through a little of the history on On April 9, we were notified by Mexico's Tax Administration Service that our import permit was being temporarily suspended We were told at the time that customs in Mexico had some as a result of an investigation that they had done that we weren't privy to. Since we began our operations in Mexico, we maintained a policy of full cooperation with all the authorities there implemented rigorous traceability and security controls throughout the supply chain. So it was disappointing to us that our permit was suspended While at any prior notification or opportunity to clarify and the timing of all this right before the Easter holiday was especially bad. Nevertheless, once we had the opportunity to reach out to the stakeholders and countries, sit down and go through all the records and data with customs in Mexico. The custom authority recognized that Valero was in full compliance of our import reporting and tax obligations and we were quickly exonerated of any wrongdoing. So although this is all unfortunate and created significant supply disruption for our customers, It is part of an effort in Mexico to limit the importation of illegal fuel, which is an effort we very much applaud and will positively impact our business down there going forward.

42m 15s

Thank you.

42m 18s

Our next question comes from the line of Neil Mehta with Goldman Sachs. Please proceed with your questions.

42m 24s

Good morning, Lane team.

42m 28s

You guys have done a great job of continuing to return cash to and you've talked about cash balances of $4,000,000,000 to $5,000,000,000 and I think you're at $4,600,000,000 right now. So just talk about in the period of macro uncertainty, how are you thinking about taking advantage of the balance sheet to shrink the share count?

42m 52s

Hey, Neil, it's Omar. Yes, you're right. Mean, obviously, the strength of our balance sheet and our current cash position, we have plenty of flexibility and we continue to lean into buybacks with excess free cash flow going to shareholder returns. In fact, as you can as I'm sure you're aware, we've drawn down excess cash the last three quarters as we've guided to. And hopefully, this quarter demonstrates the resilience of the portfolio even in the low margin environment. So I think looking forward, assuming the balance sheet is strong as it is now and like we've said in the past where our CapEx and dividend are covered, that commitment to shareholder returns should remain a floor and any sort of excess free cash flow will continue to go towards share buybacks.

43m 37s

Okay. Thank you. And then the follow-up Gary to your comments about just inventories. For diesel, in particular, distillate, it looks really tight. Relative to the margins. So can you speak specifically to that product as you think about the distillate pool? How you're thinking about the outlook for J. T. As it feeds into that? A lot of moving pieces in diesel, but it feels like it's ground zero for the refining debate.

44m

Yes, I agree. Again, kind of of the things I pointed out, I mean, it's kind of amazing when you're close to historic lows on diesel inventory in The United States and yet we have open arms to export to Latin America and Europe. It tells you both those regions are very short diesel as well. On jet, we saw very strong nominations the first part of the year. You're starting see some of the airlines talk about weaker jet demand moving forward. We haven't seen signs of that yet. Historically though, when people start to switch and not take not take flights for their summer vacation plans, it translates into higher gasoline demand.

44m 43s

Thank you. Our next questions come from the line of John Royall with JPMorgan. Please proceed with your questions.

44m 50s

Hi, good morning. Thanks for taking my question. So my first question is a follow-up on your 2Q guide. Wayne mentioned operational flexibility in his opener. Should we think about throughputs as as relatively locked in sitting at the April? Or could we see some economic adjustments if this downside demand case were to materialize and reflect more in spot cracks?

45m 14s

John, it's Greg. I would tell you that how we see the quarter shaping up as we look at it now. Obviously, as we always do, we evaluate market conditions and adjust our plans accordingly. But I think if you think about what Gary just shared kind of the macro view, it'd be hard to imagine in this short term period this next few months that we would see ourselves moving to some kind of a lower throughput on an economic basis. So I think you can probably say this is where we expect to be and if things improve market wise, we're obviously going to continue to maximize throughput, maximize margin to capture as much value as we can.

45m 51s

Yes. So really our lower guidance is a function of maintenance, not some outlook. We think there's lower demand in the future. Yes, absolutely. And maybe just on that, we always talk about doing a maintenance in the the first quarter. Again, you think about the regions we're talking about, the Mid Continent and the North Atlantic, those aren't regions that really lend themselves from from a weather perspective to doing a lot of work early in the year. You kind of wait you've got a little better weather, take less risk from that standpoint. So that's why you see a bit more work in the second quarter than you might typically see out of us And you don't see a lot in the Gulf Coast where we tend to do that in the first quarter.

46m 28s

That's very helpful. Thank you. And then my follow-up is just another one on Venetia and forgive me if I'm over analyzing this, but just reading the wording on the press release, it struck us as maybe not 100% definitive in terms of the plan. So maybe my question is, is the door open for the state or the city to make any changes or concessions that could cause you to think differently about your plans for Benicia? And do you expect that will be some sort of discussion there?

47m

Yes. This is Rich Wallace. Let me try to answer that. I mean just to be clear, our current intent is to close the refinery and obviously there's there's been some initial concern from the state leadership and we've already had meetings with with the CEC and we're working with them to minimize the impacts that would would result from the loss of the refinery. I do think there's a genuine interest in California to avoid the closure, but it's also a really very complex regulatory and policy driven environment that we're dealing with. And so if you understand that challenge and how significant it is, I think you need to factor that in. But yes, we were we are having discussions with the state. But our intent right now is to close the refinery.

47m 48s

Very clear. Thank you.

47m 51s

Thank you. Our next questions come from the line of Doug Leggate Wolfe Research. Please proceed with your questions.

47m 58s

Thanks. Good morning, everyone. Liam, I'm sorry to pound on the West Coast but I also have a question on that, if you don't mind. The press release, you well, sorry, I feel like it's been hammered pretty heavily this morning already, but in the press release, you did mention that you also had Impaired Wilmington I think that was the implication of the language Can you talk about what the prognosis is for Wilmington as part of this overall debate over the viability future viability of the West Coast assets. Now I've got a follow-up on the same topic please.

48m 34s

Well, I'll start. I'll let Homer start to explain the impairment process, but and then I'll add to it.

48m 40s

So go ahead. Yes, Doug, the impairment so obviously we performed an impairment asset on both of these assets based on the continued evaluation of strategic alternatives, right, which remains But and based on the analysis, we obviously concluded that the current book value of the refinery was not recoverable. And so therefore, we revised it down to reflect the fair value of the assets. Which resulted in an impairment loss as you cited both for Venetia and for Wilmington. In terms of the overall impairment, it was 1,130,000,000.00 of which about $900,000,000 was for Venetia, $9.00 1,000,000 and Wilmington was $230,000,000 Okay. That's helpful. So my guys is is really to think about implications going forward. And I don't know the extent to what you can share, but obviously presumably these are free cash flow negative, otherwise you wouldn't be taking the impairment. You can give some idea of what the implications are for your capital spending going forward. When Benicia does go offline and whether Wilmington is still free cash flow positive? And I'll leave it there. Thanks.

49m 53s

Doug, this is Greg. I'll take a shot at answering that the best I can. Others might jump in. But yes, so we don't tend to talk about refinery by refinery performance. But I think it's probably fair to say on the West Coast, if you look back over the last ten years, Venetia was generally higher operating expense, lower EBITDA, higher capital and then as a result, obviously lower cash flow compared to Wilmington. So I'm not sure we'll break it down any more detail than that, but that would give you some sense for for how those perform relative to each other. And then I think it's been mentioned, when you have a large turnaround in front of you, which is a large cash outlay, And you think about how the facility has performed looking back, While that's no guarantee of the future, it does give you some sensors that cause you to pause as the whether or not this is the time to take different action, which is what you see us doing.

50m 51s

Great. That's very helpful guys. Thanks so much. I'll take the rest offline.

50m 57s

Thank you. Our next questions come from the line of Paul Cheng with Scotiabank. Please proceed with your questions. Hey guys, good morning.

51m 6s

Have to apologize because I want to ask slightly different angle on where we can Wembley King.

51m 13s

Can you tell us that when was the last major turnaround that you did? At Wellington?

51m 25s

Let me go back and look. The biggest one is the SEC. Okay. We just did it last Yes.

51m 29s

Just here just recently we did the FCC unit Paul, if that's what you're looking for. Yes.

51m 37s

So I mean, should we assume that as result at least for the next two or three years, you do not have any major outlay that you were expected for Remington? In other words, then whatever decision that you're going to make is probably going to be posed two or three years.

51m 55s

Hey, Paul, nice try, but unfortunately we can't comment on our future turnaround plans.

52m 2s

Okay. That's fair. Second question on [indiscernible] Maybe this is for Eric. What's your production in the second quarter based on the current margin for Sandd? And also that what's the current [indiscernible] in plan for the second unit FID?

52m 26s

Yes. So second quarter, I would say we are still not in a max SAF mode. If you look at Europe, which the mandate there is still one of the primary outlets for SAF, We see HBO over SAF and the Arcus quote. So our last barrel economics are still looking at some barrels are more economic to put into an RD product into Europe. So but overall, we see growing interest in SAF. We see actually some growing interest in the voluntary markets. With some companies that are remaining committed to their carbon reduction commitments. So we do see that SAF is continuing to grow and the contracts are continuing to grow. In terms of when we would look at a second unit, I think we still have to see how this market develops through the rest of this year. We see in The U. S, there's interest in The U. S. And like I said, particularly some of these corporations that are maybe looking to buy direct rather than through an airline. But until we see demand exceed our capacity, and we get some certainty on an outlook in terms of policy, maybe going back to the LCFS and RIN comments I made earlier, It's hard we have the engineering done to do the same project at St.

53m 45s

Charles. But right now, I think we'll have to we'd have to wait and really see how this market develops before we did any further commitment from from a certainty standpoint.

53m 55s

Can you help us understand the economic? Because I thought with the PTC you get a dollar per gallon for Zeth. And so that should help to really move up the economic and assume you get some premium for selling set comparing to Audi. So you think that even in today's economic and with the PTC, there's still not sufficient for you to try to max out the set comparing to Audi So that is correct. The PTC is not adequate by itself to justify the project. The other thing to keep in mind is when you are allocating, so if you have a unit that makes 50% RD, 50% SAF, you can't allocate all the feedstocks to one product. You have to allocate based on your product mix coming off the tower. And so what you see is given say a domestic feedstock, you have you'll get fifty percent of PTC on your SAF product and then 50% of your PTC on your RD product. You can't allocate 100% to SAF. So because of that split and the fact that half of the products you make gets a lower PTC, you have to look to SAF to carry more of the work in order to justify the project And as I said before, the PTC is much lower compared to the BTC.

55m 24s

And that is reducing the overall RD margin. So if you think about if RD was breakeven and SAF was positive, then the SAF market has to be even stronger in order to meet your your minimum 25% return whereas before both products were positive. And so really what we're looking for is you've got to see the RD market become more attractive. And then I think you still have to see the SAP demand exceed our current capability before we would commit to a further project. But yes, on paper, it looks like it should work. But I think you've got to see the market actually create a pull before we would commit to doing that project.

56m 9s

Okay.

56m 9s

Thank you.

56m 12s

Thanks, Paul.

56m 13s

Thank you. Our next question comes from the line of Joe Lache with Morgan Stanley. Please proceed with your questions.

56m 21s

Great. Thanks. Good morning and thanks for taking my questions.

56m 23s

So I was hoping to get your perspective on PADD V going forward with One Refinery closing this year, Venetia closing early next year. California is going become more even more reliant on imports.

56m 35s

This result in just a more volatile and probably higher margins to pull sufficient imports in the West Or how do see it playing out?

56m 43s

Yes, this is Gary. Our view has been California will be potentially be short gasoline for several years with periods of higher import needs during turnarounds and unplanned outages. Diesel, the market looks well supplied. But the tighter supply demand balances will likely cause more volatility in the market. When unplanned refinery outages occur. However, from what we've seen so far, these tend to be fairly short lived and only last until waterborne barrels can make way into the market.

57m 14s

Great.

57m 14s

That makes sense. And then shifting gears, I wanted to ask about the ethanol segment. While margins are still challenged, traffic came in a bit better than we had expected. Could you just talk to the latest dynamics for that segment and outlook going forward for this year?

57m 28s

Yes, this is Eric. I think it's interesting We're about where we were last year If you look at the dynamics of this current outlook, going to have a record planting for corn. Brazil has a record crop that is in the ground. We expect corn prices flat corn prices to be at or below where they are from last year. Natural gas is cheap. So from a feedstock standpoint, ethanol looks advantaged. Obviously, it follows a lot of gasoline demand. We're the largest exporter of ethanol. So we saw record exports in the first quarter. But I think it's going to be a question of do you see the the gasoline demand that Gary mentioned earlier? And if so, then I think ethanol will look stronger in the certainly in the second and third quarter. But right now, I'd say we're kind of right around mid cycle. Last year was right around mid cycle. So I'd say ethanol looks like sort of a mid cycle year from an outlook standpoint. But from our operation plan, I mean, we'll be at max production given these economics.

58m 39s

Great. Thanks for taking my questions.

58m 43s

Thank you. Our next questions come from the line of Jason Gabelman with Cowen. Please proceed with your questions.

58m 51s

Yes. Hey, morning. Thanks for taking my questions. The first one is related to natural gas dynamics and it's a two parter In The U. S, you see natural gas prices move higher impacting your operating expense. I wonder if you're doing anything on the ground to mitigate that expense? And then conversely, in Europe, given you have an asset there as natural gas prices are moving lower, are you seeing the ability for that region to run its secondary units at higher rates and add more product to the market? Thanks.

59m 36s

Hey, Jason, it's Greg. So I'll start in The U. S. You've seen a lot of volatility in the natural gas market and it's been regional as well. Lot of that has been both expectations and actual performance of some of these LNG facilities You've had a fair amount of transportation and logistics disruptions as well. So with that volatility, we've been a bit cautious to try to go out and do anything on a forward basis and have stuck to buy in gas on a kind of ratable as needed basis. And the big question there still remains to be the LNG market and how that materializes in terms of actual liftings out of The U. S. Again, as you know, some of that depends on that LNG is pointed. And some of the economic factors that will drive that. In Pembroke, the only thing I could really say about that is where natural gas prices are currently for our operation they aren't causing us to really change our mode of operation They're in a place where we're going to run the way we typically run maximizing throughput, maximizing production The only thing we ever look at there is maybe shifting fuel sources between natural gas and different NGLs that might prove to be a bit more economic.

1h 49s

But that's a fairly typical optimization we do on a regular basis.

1h 56s

Okay.

1h 58s

I think most of my other questions were answered. So I'll leave it there.

1h 1m

Thanks.

1h 1m 2s

Thanks.

1h 1m 4s

Thank you. Our next questions come from the line of Jean Ann Salisbury with Bank of America. Please proceed with your questions.

1h 1m 11s

Hi, good morning. Can you talk about what you expect for the one time overall cash impact that you expect from closing Venetia between the land value, selling down inventory and then just closure cash costs And is Venetia a good proxy for the exit cost of a U. S. Refinery?

1h 1m 29s

Yes. So you might have seen in our eight ks, we disclosed what the AR for the asset was going to be. Yes. Yes. So I mean, I think that's the number.

1h 1m 44s

Well, guess, I also have placement of inventory, right? That's a part of the Yes. From a cash flow standpoint, that's how it should be. Yes. This is Jason. You'll get the cash for the M and inventory fairly quickly. The other cash will be expended. That's represented by the ARO for series of years. Several years after the closure.

1h 2m 7s

As we undertake cleanup and dismantling and things like that and any realization of real estate related proceeds is several years out too.

1h 2m 18s

Okay.

1h 2m 19s

Thank you. And then as a LPG tariffs on U. S. LPG have kind of gone into effect in China. Do you see this materially impacting feedstock costs or just naphtha or light ends pricing if it continues?

1h 2m 36s

Jean, this is Greg. Yes, I'll start. Gary may have something to add. At this point, we haven't seen it have much of a disruption on overall trade flows and market prices here in The U. S. So I think it will remain to be seen whether starts to develop as the year progresses.

1h 2m 52s

Yes. I think the combination of what's happening in China and [indiscernible] NAFTA is still flowing to Venezuela as diluent, but that will kind of come to an end at the May. At that timeframe, it's likely that you could see naphtha get a little weaker.

1h 3m 11s

Okay, great. That's all for me. Thank you. Thank you.

1h 3m 16s

Our final questions will come from the line of Matthew Blair with Tudor Pickering Holt and Company. Please proceed with your questions.

1h 3m 23s

Great. Thanks and good morning. You provided some helpful commentary on the biofuel regulatory front in regards to things like the RVO and the California Low Carbon Fuel Standard I wanted to get your take. Do you see momentum building for Nationwide E15? And if so, could you talk about how that might affect your business?

1h 3m 45s

Yes. This is Eric. I think there's a little bit of a mess in the Midwest right now. Where the seven governors asked for E15 without the one pound waiver.

1h 3m 56s

And then realized within short within weeks of converting to summer grade, that creates a lot of complexity in terms of the supply into the Midwest. That they then asked the EPA to grant a twenty day emergency waiver again for the one pound waiver for both E10 and E15. So I don't think you see a lot of positive support for that supply chain completely shifting to E15, but there's still a lot of complexity at the retail level, at the consumer level's willingness to switch. So now that all being said, in a lot of those Midwest states we're watching, we do see some incremental E15. It's not substantial growth in those sales, but we are seeing some incremental sales of E15. I think nationally, we're still far away from that becoming a reality or even a proposal The governors did ask for that, but but I doubt EPA is going to do that from a blanket standpoint for the entire U. S. The other thing I would say just from a fundamental standpoint, The U. S. Ethanol production is slightly long into an export that we mostly perform. But there is not enough ethanol in The U. S. To go to E15.

1h 5m 19s

I think we've done the math and you can get to a max of about E12.

1h 5m 23s

So if there was some kind of mandate to go to E15, you would be short in The U. S. And would require probably in the short term some import of ethanol from from likely Brazil. So you look at all of that from a policy standpoint, I think you'll see you'll continue to see Midwest states push for E15. They are getting some traction there, but that commercial growth is very slow and I don't see that going beyond the Midwest states anytime soon. Great. Thank you. And then on the refining side, do you think it's reasonable to assume a quarter over quarter improvement in capture for the second quarter as you roll off the maintenance from the first quarter Or are there other considerations that we should take into account?

1h 6m 12s

Hey, this is Greg. You know how this goes. There's lots of factors that will have an impact on capture the secondary products market structure on the crude side. So it's hard to say where things go. A couple of things that tend to be fairly structural on a seasonal basis. As we pull butane out of the gasoline pool, as we move into the summer, that tends to be against us on capture. So that's one thing to watch. And then other than that, it's hard to say this early in the quarter where things would go. As far as maintenance goes, to the extent that our outages have a larger impact on throughput, probably says they'll have less of an impact on capture rate. So we'll have lower throughput but you'll see the margin will move kind of in concert with that.

1h 7m 5s

Great. Thanks for your comments.

1h 7m 9s

Thank you. We have reached the end of our question and answer I would now like to hand the floor back over to Homer Buller for closing comments.

1h 7m 16s

Thanks, Daryl, and appreciate everyone joining us today. Obviously, feel free to contact the IR team if you have any additional questions. Thanks everyone and have a great day.

1h 7m 26s

Ladies and gentlemen, thank you. This does conclude today's teleconference. We appreciate your You may disconnect your lines at this time. Enjoy the rest of your day.

Key Insights

Valero reported a Q1 2025 net loss attributable to stockholders of $595 million ($1.90 per share), primarily due to a $1.1 billion pretax asset impairment related to West Coast assets; adjusted net income was $282 million ($0.89 per share), down from $1.3 billion ($3.84 per share) in Q1 2024.
Refining segment saw an operating loss of $530 million (adjusted operating income of $605 million) on throughput volumes averaging 2.8 million barrels per day (89% utilization); renewable diesel and ethanol segments also faced margin pressures, with renewable diesel reporting an operating loss of $141 million.
The company maintained a strong shareholder return focus, with a 73% payout ratio in Q1 and a 6% increase in the quarterly dividend to $1.13 per share; $633 million was returned to shareholders through dividends and buybacks.
Forward guidance for 2025 includes $2 billion in capital investments ($1.6 billion sustaining, remainder for growth), Q2 refining throughput guidance by region, and expectations for continued tight product supply/demand balances supporting refining fundamentals into the driving season.
Valero announced the planned closure of its Benicia refinery due to California's challenging regulatory environment and higher costs, with ongoing discussions with state officials; Wilmington refinery also impaired but remains operational, while the company expects to capture full PTC credits in renewable diesel going forward and sees potential regulatory tailwinds for biofuels later in the year.

Recent Transcripts

Valero posted an adjusted Q1 profit despite heavy maintenance, asset impairments, and a challenging margin environment.

Valero delivered strong shareholder returns and operational records amid a weak margin environment.

Operational Excellence

Record crude/ethanol volumes

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$65B	$114B	$176B	$145B	$130B
Cost of Revenue	$66B	$111B	$160B	$132B	$125B
Gross Profit	-$788M	$3.1B	$17B	$13B	$4.8B
Gross Profit %	-1.2%	2.7%	9.5%	8.9%	3.7%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$65B

$114B

$176B

$145B

$130B

Cost of Revenue

$66B

$111B

$160B

$132B

$125B

Gross Profit

-$788M

$3.1B

$17B

$13B

$4.8B

Gross Profit %

-1.2%

2.7%

9.5%

8.9%

3.7%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	-$1.1B	$1.3B	$12B	$9.1B	$3B
Dep. & Amort.	$2.4B	$2.4B	$2.5B	$2.7B	$2.8B
Def. Tax	$158M	-$126M	$50M	$103M	-$87M
Stock Comp.	$80M	$88M	$103M	$0	$0
Chg. in WC	$343M	-$323M	-$210M	-$2.7B	$0

2020

2021

2022

2023

2024

Net Income

-$1.1B

$1.3B

$12B

$9.1B

$3B

Dep. & Amort.

$2.4B

$2.5B

$2.7B

$2.8B

Def. Tax

$158M

-$126M

$50M

$103M

-$87M

Stock Comp.

$80M

$88M

$103M

Chg. in WC

$343M

-$323M

-$210M

-$2.7B

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$3.3B	$4.1B	$4.9B	$5.4B	$4.7B
ST Investments	$0	$0	$0	$0	$0
Cash & ST Inv.	$3.3B	$4.1B	$4.9B	$5.4B	$4.7B
Receivables	$6.1B	$10B	$12B	$13B	$11B
Inventory	$6B	$6.3B	$6.8B	$7.6B	$7.8B

2020

2021

2022

2023

2024

Cash

$3.3B

$4.1B

$4.9B

$5.4B

$4.7B

ST Investments

Cash & ST Inv.

$3.3B

$4.1B

$4.9B

$5.4B

$4.7B

Receivables

$6.1B

$10B

$12B

$13B

$11B

Inventory

$6B

$6.3B

$6.8B

$7.6B

$7.8B

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Earnings

Report Date

Apr 24, 2025

Reported Revenue

30.3B

Beat +5.21%

Avg 1d Change

2.64%

Report Period

Q1 2025

Reported EPS

0.89

Beat +116.91%

Implied Move 1d

3.17%

Transcript

11m 33s

12m 3s

Thank you, Homer, good morning, everyone.

12m 6s

12m 23s

13m 45s

So with that, Homer, I'll hand the call back to you.

13m 50s

15m 22s

16m 54s

18m 30s

20m 7s

21m 11s

21m 54s

22m 20s

22m 39s

23m 41s

24m 4s

25m 18s

26m 24s

27m 35s

28m 20s

Thank you so much.

28m 23s

Thank you. Our next question has come from the line of Roger Read with Wells Fargo. Please proceed with your questions.

28m 31s

Yes. Thank you. Good morning.

28m 33s

Good morning, Roger.

28m 34s

29m 1s

29m 22s

29m 48s

30m 18s

30m 35s

Can you walk through the decision to close the Peninsula refinery? Why now? What's changed? And how should we think about the future risk to or the environment for the Wilmington refinery?

30m 49s

31m 42s

Okay.

31m 44s

And then maybe shifting to renewable diesel markets.

31m 52s

32m 31s

33m 44s

But going forward, we think we've got that solved.

33m 47s

34m 19s

35m 34s

36m 53s

37m 36s

Great. Thanks for all the detail.

37m 40s

Thank you. Our next questions come from the line of Theresa Chen with Barclays. Please proceed with your questions.

37m 47s

38m 15s

39m 38s

40m 34s

40m 49s

42m 15s

Thank you.

42m 18s

Our next question comes from the line of Neil Mehta with Goldman Sachs. Please proceed with your questions.

42m 24s

Good morning, Lane team.

42m 28s

42m 52s

43m 37s

44m

44m 43s

Thank you. Our next questions come from the line of John Royall with JPMorgan. Please proceed with your questions.

44m 50s

45m 14s

45m 51s

46m 28s

47m

47m 48s

Very clear. Thank you.

47m 51s

Thank you. Our next questions come from the line of Doug Leggate Wolfe Research. Please proceed with your questions.

47m 58s

48m 34s

Well, I'll start. I'll let Homer start to explain the impairment process, but and then I'll add to it.

48m 40s

49m 53s

50m 51s

Great. That's very helpful guys. Thanks so much. I'll take the rest offline.

50m 57s

Thank you. Our next questions come from the line of Paul Cheng with Scotiabank. Please proceed with your questions. Hey guys, good morning.

51m 6s

Have to apologize because I want to ask slightly different angle on where we can Wembley King.

51m 13s

Can you tell us that when was the last major turnaround that you did? At Wellington?

51m 25s

Let me go back and look. The biggest one is the SEC. Okay. We just did it last Yes.

51m 29s

Just here just recently we did the FCC unit Paul, if that's what you're looking for. Yes.

51m 37s

51m 55s

Hey, Paul, nice try, but unfortunately we can't comment on our future turnaround plans.

52m 2s

52m 26s

53m 45s

Charles. But right now, I think we'll have to we'd have to wait and really see how this market develops before we did any further commitment from from a certainty standpoint.

53m 55s

55m 24s

56m 9s

Okay.

56m 9s

Thank you.

56m 12s

Thanks, Paul.

56m 13s

Thank you. Our next question comes from the line of Joe Lache with Morgan Stanley. Please proceed with your questions.

56m 21s

Great. Thanks. Good morning and thanks for taking my questions.

56m 23s

So I was hoping to get your perspective on PADD V going forward with One Refinery closing this year, Venetia closing early next year. California is going become more even more reliant on imports.

56m 35s

This result in just a more volatile and probably higher margins to pull sufficient imports in the West Or how do see it playing out?

56m 43s

57m 14s

Great.

57m 14s

57m 28s

58m 39s

Great. Thanks for taking my questions.

58m 43s

Thank you. Our next questions come from the line of Jason Gabelman with Cowen. Please proceed with your questions.

58m 51s

59m 36s

1h 49s

But that's a fairly typical optimization we do on a regular basis.

1h 56s

Okay.

1h 58s

I think most of my other questions were answered. So I'll leave it there.

1h 1m

Thanks.

1h 1m 2s

Thanks.

1h 1m 4s

Thank you. Our next questions come from the line of Jean Ann Salisbury with Bank of America. Please proceed with your questions.

1h 1m 11s

1h 1m 29s

Yes. So you might have seen in our eight ks, we disclosed what the AR for the asset was going to be. Yes. Yes. So I mean, I think that's the number.

1h 1m 44s

1h 2m 7s

As we undertake cleanup and dismantling and things like that and any realization of real estate related proceeds is several years out too.

1h 2m 18s

Okay.

1h 2m 19s

Thank you. And then as a LPG tariffs on U. S. LPG have kind of gone into effect in China. Do you see this materially impacting feedstock costs or just naphtha or light ends pricing if it continues?

1h 2m 36s

1h 2m 52s

1h 3m 11s

Okay, great. That's all for me. Thank you. Thank you.

1h 3m 16s

Our final questions will come from the line of Matthew Blair with Tudor Pickering Holt and Company. Please proceed with your questions.

1h 3m 23s

1h 3m 45s

Yes. This is Eric. I think there's a little bit of a mess in the Midwest right now. Where the seven governors asked for E15 without the one pound waiver.

1h 3m 56s

1h 5m 19s

I think we've done the math and you can get to a max of about E12.

1h 5m 23s

1h 6m 12s

1h 7m 5s

Great. Thanks for your comments.

1h 7m 9s

Thank you. We have reached the end of our question and answer I would now like to hand the floor back over to Homer Buller for closing comments.

1h 7m 16s

Thanks, Daryl, and appreciate everyone joining us today. Obviously, feel free to contact the IR team if you have any additional questions. Thanks everyone and have a great day.

1h 7m 26s

Ladies and gentlemen, thank you. This does conclude today's teleconference. We appreciate your You may disconnect your lines at this time. Enjoy the rest of your day.

Key Insights

Valero reported a Q1 2025 net loss attributable to stockholders of $595 million ($1.90 per share), primarily due to a $1.1 billion pretax asset impairment related to West Coast assets; adjusted net income was $282 million ($0.89 per share), down from $1.3 billion ($3.84 per share) in Q1 2024.
Refining segment saw an operating loss of $530 million (adjusted operating income of $605 million) on throughput volumes averaging 2.8 million barrels per day (89% utilization); renewable diesel and ethanol segments also faced margin pressures, with renewable diesel reporting an operating loss of $141 million.
The company maintained a strong shareholder return focus, with a 73% payout ratio in Q1 and a 6% increase in the quarterly dividend to $1.13 per share; $633 million was returned to shareholders through dividends and buybacks.
Forward guidance for 2025 includes $2 billion in capital investments ($1.6 billion sustaining, remainder for growth), Q2 refining throughput guidance by region, and expectations for continued tight product supply/demand balances supporting refining fundamentals into the driving season.
Valero announced the planned closure of its Benicia refinery due to California's challenging regulatory environment and higher costs, with ongoing discussions with state officials; Wilmington refinery also impaired but remains operational, while the company expects to capture full PTC credits in renewable diesel going forward and sees potential regulatory tailwinds for biofuels later in the year.

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