Financial Data and Key Metrics Changes - For Q3 2025, net income attributable to Valero stockholders was $1.1 billion or $3.53 per share, compared to $364 million or $1.14 per share for Q3 2024, reflecting a significant increase [8] - Adjusted net income for Q3 2025 was $1.1 billion or $3.66 per share, up from $371 million or $1.16 per share in Q3 2024 [8] - Refining segment reported operating income of $1.6 billion for Q3 2025, compared to $565 million in Q3 2024 [8] - Net cash provided by operating activities was $1.9 billion in Q3 2025, with adjusted net cash provided being $1.6 billion [10] Business Line Data and Key Metrics Changes - Refining throughput volumes averaged 3.1 million barrels per day in Q3 2025, with a utilization rate of 97% [8] - The renewable diesel segment reported an operating loss of $28 million in Q3 2025, down from an operating income of $35 million in Q3 2024 [9] - The ethanol segment achieved $183 million of operating income in Q3 2025, compared to $153 million in Q3 2024, with production volumes averaging 4.6 million gallons per day [9] Market Data and Key Metrics Changes - Refining margins remained strong due to global demand and low inventory levels, despite high utilization rates [5] - Quality differentials for medium and heavy sour crudes have widened, with WCS trading at a 12% discount to Brent and Maya at a 14% discount [20] - Diesel demand in the U.S. was reported to be up 8% year-over-year in Valero's system, with overall diesel demand showing a 2% increase according to DOE data [51] Company Strategy and Development Direction - The company is progressing on the FCC unit optimization project at St. Charles Refinery, a $230 million initiative expected to enhance high-value product yields [6] - Valero plans to continue returning excess free cash flow to shareholders through stock buybacks, maintaining a payout ratio of 78% for Q3 2025 [11][33] - The company anticipates refining fundamentals to remain supported by low inventories and supply tightness, with limited capacity additions beyond 2025 [7] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about refining fundamentals remaining strong due to low inventories and geopolitical disruptions affecting supply [5][7] - The outlook for the ethanol segment remains positive due to strong domestic and export demand, supported by a record corn crop [40] - Management noted that the renewable diesel segment is expected to return to positive EBITDA, aided by lower fat prices and rationalization in the biodiesel market [42] Other Important Information - The company ended Q3 2025 with $8.4 billion in total debt and $4.8 billion in cash and cash equivalents, resulting in a debt-to-capitalization ratio of 18% [12] - Capital investments for 2025 are expected to be approximately $1.9 billion, with a significant portion allocated to sustaining the business [12] Q&A Session Summary Question: Insights on heavy crude differentials and availability - Management expressed disappointment in the impact of TMX on West Coast crude values, noting that most barrels are flowing to the Far East, and quality differentials have widened significantly [20][21] Question: Global capacity additions and reliability - Management indicated that while there are expected capacity additions, many new facilities may not reach nameplate capacity, leading to tighter supply-demand balances [26] Question: Impact of global outages on product markets - Management noted strong export demand and the inability to restock inventories in the U.S., which is keeping domestic markets tight [30] Question: Capital returns and stock buybacks - Management confirmed that excess free cash flow will continue to be directed towards share buybacks, maintaining a disciplined approach to capital returns [33] Question: Crude on the water and its destination - Management noted that most barrels are flowing to Asia, with increased Iraqi barrels expected in the U.S. market [39] Question: Performance of non-refining businesses - Ethanol is performing well due to strong demand and favorable conditions, while Diamond Green Diesel is returning to profitability [40][42] Question: Domestic gasoline demand trends - Management reported flat to slightly down gasoline demand year-over-year, with good export demand and stable fundamentals [50] Question: Technology advancements in operations - Management discussed the use of AI and robotics to improve operational efficiency and maintenance scheduling [56][86]

Financial Data and Key Metrics Changes - For Q3 2025, net income attributable to Valero stockholders was $1.1 billion or $3.53 per share, compared to $364 million or $1.14 per share for Q3 2024, reflecting a significant increase [6][8] - Adjusted net income for Q3 2025 was $1.1 billion or $3.66 per share, up from $371 million or $1.16 per share in Q3 2024 [6][8] - Refining segment operating income rose to $1.6 billion in Q3 2025 from $565 million in Q3 2024 [6][8] - Net cash provided by operating activities was $1.9 billion in Q3 2025, with adjusted net cash provided being $1.6 billion [9][10] Business Line Data and Key Metrics Changes - Refining throughput volumes averaged 3.1 million barrels per day with a utilization rate of 97% in Q3 2025 [7][8] - The renewable diesel segment reported an operating loss of $28 million in Q3 2025, down from an operating income of $35 million in Q3 2024 [8] - The ethanol segment achieved $183 million in operating income for Q3 2025, compared to $153 million in Q3 2024, with production volumes averaging 4.6 million gallons per day [8][9] Market Data and Key Metrics Changes - Refining margins remained strong due to global demand and low inventory levels, despite high utilization rates [4][5] - Quality differentials for heavy sour crudes widened, with WCS trading at a 12% discount to Brent and Maya at a 14% discount [18][20] - Diesel demand in the U.S. saw an 8% year-over-year increase in Q3 2025, driven by agricultural demand [45] Company Strategy and Development Direction - The company is progressing on the FCC unit optimization project at the St. Charles Refinery, a $230 million investment expected to begin operations in the second half of 2026 [5] - The company plans to maintain strong shareholder returns, having returned $1.3 billion to stockholders in Q3 2025 through dividends and stock buybacks [10][11] - Future refining fundamentals are expected to remain supported by low inventories and supply tightness, with limited capacity additions beyond 2025 [5][11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about refining fundamentals remaining strong due to low inventories and geopolitical disruptions affecting supply [4][5] - The company anticipates that crude differentials will widen with increased OPEC+ and Canadian production [5] - Management noted that the market is reacting to potential Russian sanctions, which could impact supply dynamics and product cracks positively [21] Other Important Information - The company ended Q3 2025 with $8.4 billion in total debt and $4.8 billion in cash and cash equivalents, resulting in a debt-to-capitalization ratio of 18% [10][11] - Capital investments for 2025 are expected to be approximately $1.9 billion, with a focus on sustaining and growing the business [11][12] Q&A Session Summary Question: Insights on heavy crude differentials and TMX barrels - Management noted disappointment in TMX's impact on West Coast crude values, with heavy sour discounts widening significantly [18][20] Question: Global product markets and outages - Management highlighted strong export demand and the inability to restock inventories in the U.S., which is keeping domestic markets tight [26] Question: Capital returns and buybacks - Management confirmed that excess free cash flow will continue to be directed towards share buybacks, maintaining a strong capital discipline [28] Question: Crude on the water and its destination - Management indicated that most crude is flowing to Asia, with increased Iraqi barrels expected in the U.S. market [35] Question: DGD performance and profitability outlook - Management reported improved profitability for Diamond Green Diesel due to lower feedstock prices and strong SAF benefits, but noted uncertainties regarding future RVO impacts [95]