Valero Energy Reports 2020 Fourth Quarter and Full Year Results and Declares Regular Cash Dividend on Common Stock

Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a net loss attributable to Valero stockholders of $359 million, or $0.88 per share, for the fourth quarter of 2020, compared to net income of $1.1 billion, or $2.58 per share, for the fourth quarter of 2019. Excluding the adjustments shown in the accompanying earnings release tables, the adjusted net loss attributable to Valero stockholders was $429 million, or $1.06 per share, for the fourth quarter of 2020, compared to fourth quarter 2019 adjusted net income attributable to Valero stockholders of $873 million, or $2.13 per share. Fourth quarter 2020 adjusted results exclude the after-tax benefit from a LIFO liquidation adjustment of $70 million.

For the year ended December 31, 2020, the net loss attributable to Valero stockholders was $1.4 billion, or $3.50 per share, compared to net income of $2.4 billion, or $5.84 per share, in 2019. Excluding the adjustments shown in the accompanying earnings release tables, the adjusted net loss attributable to Valero stockholders was $1.3 billion, or $3.12 per share, for 2020, compared to adjusted net income attributable to Valero stockholders of $2.4 billion, or $5.70 per share, in 2019.

“We expect to see continued improvement in product demand with widespread vaccine distribution around the world,” said Joe Gorder, Valero Chairman and Chief Executive Officer. “We also expect a faster recovery in refining margins with the continued shutdowns and conversions of uncompetitive refineries.”

Refining

The refining segment reported a $377 million operating loss for the fourth quarter of 2020, compared to operating income of $1.4 billion for the fourth quarter of 2019. Excluding a LIFO liquidation adjustment and other operating expenses, the fourth quarter 2020 adjusted operating loss was $476 million. Refinery throughput volumes averaged 2.6 million barrels per day in the fourth quarter of 2020, which was 468 thousand barrels per day lower than the fourth quarter of 2019.

Operationally, the refining segment achieved record employee safety performance, process safety and environmental performance in 2020. “Despite the pandemic-induced financial challenges, our commitment to safety and environmental stewardship never wavered,” said Gorder.

Renewable Diesel

The renewable diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $127 million of operating income for the fourth quarter of 2020, compared to $541 million for the fourth quarter of 2019. After adjusting for the retroactive blender’s tax credit in 2019, adjusted renewable diesel operating income was $187 million for the fourth quarter of 2019. Renewable diesel sales volumes averaged 618 thousand gallons per day in the fourth quarter of 2020, a decrease of 226 thousand gallons per day versus the fourth quarter of 2019 due to the effect of planned maintenance in the fourth quarter of 2020. The renewable diesel segment set a record for annual sales volumes of 787 thousand gallons per day in 2020. As a result of continuous process improvement and optimization, the capacity of the existing St. Charles renewable diesel plant (DGD 1) has increased from 275 million gallons per year to 290 million gallons per year.

Ethanol

The ethanol segment reported $15 million of operating income for the fourth quarter of 2020, compared to $36 million for the fourth quarter of 2019. Fourth quarter 2020 adjusted operating income was $17 million. Ethanol production volumes averaged 4.1 million gallons per day in the fourth quarter of 2020, which was 197 thousand gallons per day lower than the fourth quarter of 2019. The decrease in operating income was attributed primarily to lower margins resulting from higher corn prices and lower ethanol prices.

Corporate and Other

General and administrative expenses were $224 million in the fourth quarter of 2020, compared to $243 million in the fourth quarter of 2019. For 2020, general and administrative expenses of $756 million were $112 million lower than 2019. The effective tax rate for 2020 was 45 percent, which was primarily the result of the carryback of our U.S. federal tax net operating loss to 2015 when the U.S. federal statutory tax rate was 35 percent.

Investing and Financing Activities

Capital investments totaled $622 million in the fourth