Valero(VLO) - 2025 Q1 - Quarterly Report

Financial Performance - Valero reported a net loss attributable to stockholders of $595 million for Q1 2025, a decrease of$1.8 billion compared to a net income of $1.2 billion in Q1 2024[107]. - The operating income decreased by$2.6 billion, partially offset by a decrease in income tax expense of $618 million[109]. - Total revenues for Q1 2025 were$30.258 billion, down from $31.759 billion in Q1 2024, representing a decrease of approximately 4.7$1.5 billion in Q1 2025 to $30.258 billion from$31.759 billion in Q1 2024, primarily due to lower product prices in the Refining segment[121]. - Operating income fell by $2.579 billion, resulting in an operating loss of$900 million in Q1 2025 compared to an operating income of $1.679 billion in Q1 2024[121]. - Adjusted operating income decreased by$1.478 billion, from $1.713 billion in Q1 2024 to$235 million in Q1 2025[122]. - The effective tax rate increased to 29% in Q1 2025 from 21% in Q1 2024, primarily due to lower income before tax[123]. Segment Performance - The company's total operating income decreased by $2.6 billion in Q1 2025 compared to Q1 2024, with adjusted operating income down by$1.5 billion[110]. - The refining segment's adjusted operating income fell by $1.1 billion due to lower gasoline and distillate margins, a decline in crude oil differentials, and higher operating expenses[111]. - Renewable Diesel segment's operating income decreased by$331 million primarily due to reduced sales volumes and increased feedstock costs[111]. - Ethanol segment's adjusted operating income decreased by $19 million, impacted by higher corn prices and increased operating expenses, despite higher ethanol prices[111]. - Refining segment operating income decreased by$2.275 billion, resulting in an operating loss of $530 million in Q1 2025 compared to an operating income of$1.745 billion in Q1 2024[127]. - Renewable Diesel segment operating income decreased by $331 million, resulting in an operating loss of$141 million in Q1 2025 compared to an operating income of $190 million in Q1 2024[130]. - Ethanol operating income increased to$20 million in Q1 2025 from $10 million in Q1 2024, but adjusted operating income decreased by$19 million[135]. Cash Flow and Liquidity - Cash generated from operations during Q1 2025 was $952 million, with$660 million allocated to capital investments[108]. - As of March 31, 2025, Valero had $4.8 billion in cash, cash equivalents, and restricted cash, with total liquidity of$9.7 billion[108]. - Total liquidity as of March 31, 2025, was $9,747 million, consisting of$4,449 million in cash and cash equivalents and $5,298 million in available capacity from committed facilities[148]. - Cash flows from operating activities in Q1 2025 were$952 million, down from $1,846 million in Q1 2024, while cash used in investing activities was$(635) million[153]. - Capital investments for Q1 2025 totaled $660 million, slightly down from$661 million in Q1 2024, with capital investments attributable to Valero at $611 million compared to$619 million[167]. Debt and Financing - Valero issued $650 million of 5.150$650 million of 5.150% Senior Notes due February 15, 2030, with proceeds used for debt repayment and general corporate purposes[150]. - The company has a total fixed-rate debt of $8,558 million with an average interest rate of 4.9$46 million with an average interest rate of 8.2%[178]. - A 10% increase or decrease in floating interest rates would not have a material effect on the company's results of operations[177]. Market and Operational Risks - The company is focused on managing risks associated with geopolitical tensions and regulatory changes affecting the industry[98]. - The company is exposed to market risks related to commodity price volatility and foreign currency exchange rates, with no material changes reported since the last annual report[180]. - Environmental regulations are becoming more complex and stringent, potentially increasing future costs and expenditures for the company[173]. - The company’s operations are subject to extensive environmental regulations, which may impact operational costs[173]. Future Outlook - Valero's future outlook includes expectations regarding refining segment margins and feedstock costs[96]. - Gasoline and diesel demand have exceeded pre-pandemic levels and are expected to follow typical seasonal patterns[113]. - The company anticipates that crude oil differentials will remain stable, but geopolitical factors may introduce volatility[113]. - Renewable diesel demand is expected to remain consistent with current levels, while ethanol demand is projected to follow typical seasonal patterns[113]. Asset Impairment - The company recognized an asset impairment loss of $1.1 billion ($877 million after taxes) related to operations in California[106]. - The company recognized a combined asset impairment loss of $1.1 billion in Q1 2025 due to the evaluation of assets at the Benicia and Wilmington refineries[138].