Financial Data and Key Metrics Changes - For Q2 2025, net income attributable to Valero stockholders was $714 million or $2.28 per share, down from $880 million or $2.71 per share in Q2 2024 [8] - Refining segment reported operating income of $1.3 billion for Q2 2025, compared to $1.2 billion in Q2 2024 [9] - Net cash provided by operating activities was $936 million in Q2 2025, with adjusted net cash provided by operating activities at $1.3 billion [11] Business Line Data and Key Metrics Changes - Refining throughput volumes averaged 2.9 million barrels per day in Q2 2025, with a capacity utilization of 92% [9] - Renewable diesel segment reported an operating loss of $79 million in Q2 2025, compared to operating income of $112 million in Q2 2024 [10] - Ethanol segment reported operating income of $54 million in Q2 2025, down from $105 million in Q2 2024 [10] Market Data and Key Metrics Changes - Diesel sales volumes were up approximately 10% year-over-year, while gasoline sales remained flat compared to last year [5] - U.S. diesel inventories and days of supply were at their lowest level for July in almost 30 years [5] - The company expects refining throughput volumes in Q3 2025 to range from 1.76 million to 1.81 million barrels per day in the Gulf Coast region [14] Company Strategy and Development Direction - The company is progressing with FCC unit optimization projects at St. Charles, expected to cost $230 million and start up in 2026 [6] - Valero remains committed to maintaining operational excellence and has a strong balance sheet providing financial flexibility [7] - The company anticipates limited capacity additions beyond 2025, which may support refining fundamentals [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding refining fundamentals due to planned refinery closures and limited capacity additions [6] - The company expects sour crude oil differentials to widen as OPEC plus and Canada increase production in the latter half of the year [7] - Management noted that while gasoline demand is expected to remain flat, distillate demand is anticipated to pick up due to seasonal factors [21] Other Important Information - The company returned $695 million to stockholders in Q2 2025, with a payout ratio of 52% [12] - Total debt at the end of Q2 2025 was $8.4 billion, with available liquidity of $5.3 billion excluding cash [12][13] - The company expects capital investments for 2025 to be approximately $2 billion, with $1.6 billion allocated to sustaining the business [13] Q&A Session Summary Question: How is refined product demand trending across your footprint? - Management indicated that refining fundamentals remain supportive, with gasoline demand relatively flat and diesel sales trending about 3% above last year's level [18][19] Question: What is your outlook for light-heavy differentials? - Management expects improvements in differentials as OPEC unwinds production cuts and Canadian production continues to grow [26][28] Question: What's your outlook for net capacity additions for the remaining part of this year and for 2026? - Management noted limited new capacity coming online, primarily geared towards petrochemical production rather than transportation fuels [32][34] Question: Can you discuss the sustainability of capital returns and share buybacks? - Management confirmed a commitment to return 40% to 50% of adjusted cash flow to shareholders and will use excess free cash flow for share buybacks [41][42] Question: What is the path back to mid-cycle for DGD? - Management highlighted the importance of EPA decisions on RINs and market dynamics, indicating a positive long-term outlook for DGD [45][48] Question: Can you explain the strong throughput in U.S. refining this year? - Management attributed high throughput to strong operational performance and favorable weather conditions, with expectations for below-average turnarounds in Q3 [83][88]

Financial Data and Key Metrics Changes - Combined adjusted EBITDA for Q2 2025 was $249.5 million, down from $273.6 million in Q2 2024, while year-to-date combined adjusted EBITDA totaled $445.3 million compared to $553.7 million for the same period in 2024 [13][14] - Total net sales in Q2 2025 were $1.48 billion, slightly up from $1.46 billion in Q2 2024, with raw material volume remaining nearly unchanged at approximately 3.74 million metric tons [14] - Gross margins improved to 23.3% in Q2 2025 from 22.5% in Q2 2024, with year-to-date gross margins at 23% compared to 21.9% in the first half of 2024 [14][16] Business Line Data and Key Metrics Changes - In the Feed Ingredients segment, total net sales increased to $936.5 million in Q2 2025 from $934.1 million in Q2 2024, with gross margins improving to 22.9% from 21% [15][16] - The Food segment saw total sales rise to $386.1 million in Q2 2025 from $378.8 million in Q2 2024, with gross margins unchanged at 26.9% [17] - The Fuel segment's sales for Q2 2025 were $158.8 million, up from $142.3 million in Q2 2024, but the share of DGD EBITDA dropped to $42.6 million from $76.6 million year-over-year [19][20] Market Data and Key Metrics Changes - The regulatory environment has shown signs of improvement, particularly in the Feed segment, which is expected to enhance performance into 2026 [6] - Tariff volatility and increased domestic oilseed crush have pressured protein prices, especially in Asia, but rising fat prices are expected to support the Feed segment [7][11] - The renewable fuel environment remains challenging, with DGD facing near-term pressure but expected to benefit from policy support in the long term [11][12] Company Strategy and Development Direction - The company announced the formation of NexTata, a joint venture focused on health and wellness, aligning with its strategy to diversify into high-margin markets [6] - The company is focused on operational discipline and strategic timing to position itself for improved margins in the future [12] - The outlook for the core ingredients platform remains strong, with expectations for sequential improvement driven by rising fat prices [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core ingredients business, anticipating a more constructive market environment ahead [24][25] - The company expects full-year combined adjusted EBITDA in the range of $1.05 billion to $1.1 billion, reflecting optimism about market recovery [26] - Management acknowledged challenges in the renewable fuel sector but highlighted the potential for margin recovery as policy rules clarify [12][24] Other Important Information - The company successfully refinanced its Eurobond and replaced its revolving credit facility, enhancing financial flexibility [21][22] - Total debt net of cash decreased to $3.89 billion as of June 28, 2025, from $3.97 billion at the end of 2024, lowering the leverage ratio to 3.34 times [22] - The effective tax rate for Q2 2025 was 22.2%, slightly above the federal statutory rate, with expectations for a full-year effective tax rate around 15% [23] Q&A Session Summary Question: Discussion on policy benefits for domestic renewable diesel - Management noted that evolving domestic markets are expected to reduce reliance on imported raw materials, benefiting U.S. fat pricing and production [28][30] Question: Outlook for LCFS prices - Management indicated that carbon prices are moving positively, with expectations for further increases in the coming years [34] Question: Impact of lower UCO pricing - Management explained that pricing dynamics in a rising market can lead to temporary impacts on margins, but they expect improvements as prices stabilize [37][41] Question: Opportunities for DGD outside California - Management confirmed that while California is a significant market, they also export renewable diesel to Europe and other states, with demand growing globally [48][50] Question: Expectations for SREs - Management expressed uncertainty regarding the timing and impact of SREs but indicated that they expect an announcement soon [51][55] Question: CapEx plans and capital allocation - Management emphasized a commitment to maintaining capital discipline, with plans to keep CapEx below $400 million for the year while focusing on debt reduction [102][104]

Financial Data and Key Metrics Changes - The company reported an adjusted net loss of $3.09 per share and an adjusted EBITDA loss of $258.8 million for the first quarter [20][21] - Cash flow used in operations for the quarter was $661.4 million, which included a working capital headwind of approximately $330 million [23] - The company ended the quarter with approximately $469 million in cash and $1.77 billion of net debt, with a net debt to capitalization ratio of 29% [24][25] Business Line Data and Key Metrics Changes - The Martinez refinery has restarted a number of unaffected units, operating in a limited configuration of 85,000 to 105,000 barrels per day [7][9] - The company is producing limited quantities of finished gasoline and jet fuel for California markets and intermediates for further processing at Torrance [8][10] - The company expects to generate over $200 million of annualized run rate sustainable cost savings by year-end 2025 through its refining business improvement program [17] Market Data and Key Metrics Changes - Gasoline stocks are below the five-year average, and distillate stocks are at the bottom of the range, indicating improving fundamentals as the driving season approaches [10] - The company anticipates that the reintroduction of incremental OPEC plus barrels will benefit its operations as tight differentials begin to loosen [11] Company Strategy and Development Direction - The company announced the sale of its Knoxville and Philadelphia terminal assets for $175 million, expected to close in the second half of the year [12] - The company is focused on controlling aspects of its business to position itself for future market cycles, emphasizing safe, reliable, and efficient operations [12][19] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is tumultuous, but demand is resilient and showing signs of strength [6][10] - The company is optimistic about the long-term demand growth exceeding net refining capacity additions, creating a constructive setup for the global refining environment [11] - Management expressed confidence in the liquidity position and plans to reduce inventory and leverage insurance proceeds to bolster financial stability [25][90] Other Important Information - The company received a first installment of $250 million from its insurance program, expected to be received in the second quarter [9][20] - The company has a revised total capital budget for 2025 in the range of $750 million to $775 million, excluding costs related to the Martinez rebuild [18] Q&A Session Summary Question: Update on Martinez repair process and timeline - Management indicated no change in the timeline for repairs, with long lead items ordered and execution dependent on equipment arrival [32] Question: Integration of product movement from Martinez to Torrance - Management confirmed that the integration is currently happening, with Torrance fully operational [33] Question: Concerns regarding RINs and renewable diesel market - Management highlighted the instability in the RIN market and its potential impact on gasoline prices and refining capacity [36][40] Question: Outlook on crude quality discounts and OPEC's impact - Management expects OPEC's actions to widen differentials, positively impacting the company's operations [47][48] Question: California's regulatory environment for refiners - Management noted a recognition of the importance of in-state refining and the need for a level playing field in regulations [52][55] Question: Net debt trajectory and financing needs - Management stated that they do not anticipate needing additional financing at this time, focusing on maintaining a resilient balance sheet [59] Question: Operating costs in California for Q2 - Management did not provide specific numbers for California operating costs but indicated that it would be difficult to dissect due to various factors [70][71] Question: Examples of unexpected opportunities in the RBI program - Management reported that energy and turnaround performance have shown significant opportunities, aligning with initial expectations [74] Question: Working capital headwinds and liquidity confidence - Management acknowledged working capital headwinds but expressed confidence in liquidity levels and ongoing initiatives to stabilize operations [89][90]

Financial Data and Key Metrics Changes - The company reported an adjusted net loss of $3.09 per share and an adjusted EBITDA loss of $258.8 million for Q1 2025, excluding special items related to the Martinez incident [21][22] - Cash flow used in operations for the quarter was $661.4 million, impacted by a working capital headwind of approximately $330 million [24] - The company ended the quarter with approximately $469 million in cash and $1.77 billion of net debt, with a net debt to capitalization ratio of 29% [25] Business Line Data and Key Metrics Changes - The Martinez refinery has restarted several units, operating in a limited configuration of 85,000 to 105,000 barrels per day, supplying limited quantities of finished gasoline and jet fuel [6][7] - The company expects to receive an insurance payment of $250 million related to the Martinez incident, which will aid in recovery efforts [21][22] Market Data and Key Metrics Changes - Gasoline stocks are reported to be below the five-year average, while distillate stocks are at the bottom of the range, indicating improving market fundamentals [8] - The company anticipates that the reintroduction of incremental OPEC plus barrels will benefit its operations as differentials for preferred heavy and sour feedstocks begin to loosen [10][11] Company Strategy and Development Direction - The company announced the sale of its Knoxville and Philadelphia terminal assets for $175 million as part of its strategy to optimize its asset portfolio [12] - The company is focused on generating over $200 million in annualized run rate sustainable cost savings by the end of 2025 through its refining business improvement program [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for refined products, noting that the fundamentals are improving as the driving season approaches [7][8] - The company is preparing for potential challenges in the market, including the impact of tariffs and regulatory changes in California, while emphasizing the importance of maintaining a competitive business environment [54][112] Other Important Information - The company has initiated a cost savings program that has generated over 500 ideas, focusing on various operational areas to enhance efficiency [16] - The revised total capital budget for 2025 is now in the range of $750 million to $775 million, excluding costs related to the Martinez rebuild [19] Q&A Session Summary Question: Update on Martinez repairs and timeline - Management indicated that long lead items have been ordered, and there is no change in the timeline for repairs at this point [35] Question: Status of product movement from Martinez to Torrance - The integration of product movement is currently happening, with Torrance fully operational [36] Question: Concerns regarding renewable diesel and RINs - Management highlighted the instability in the current market, with D4 RIN prices surging due to various factors, including tariffs and supply issues [39][41] Question: Outlook on crude quality discounts and OPEC's impact - Management expects that OPEC's actions will lead to widening differentials, positively impacting the company's operations [50] Question: California's regulatory environment and refinery closures - Management noted a recognition of the importance of in-state refining and the need for a level playing field for market participants [55][112] Question: Net debt trajectory and financing needs - The company does not anticipate needing additional financing at this time, focusing on maintaining a strong balance sheet [63] Question: Operating costs in California for Q2 - Management did not provide specific numbers for California operating costs but indicated ongoing efforts to manage expenses [73] Question: Examples of unexpected opportunities in the RBI program - Management reported that energy and turnaround performance have shown significant opportunities, aligning with initial expectations [78]

Financial Data and Key Metrics Changes - For the first quarter of 2025, the company reported a consolidated net loss of $105 million and a loss per share of $1.22, with EBITDA also reflecting a loss of $61 million [5][13] - Adjusted EBITDA for the quarter was $24 million, while adjusted loss per share was $0.58 [13] - The negative mark to market impact on outstanding RFS obligations was $112 million, with a favorable inventory valuation impact of $24 million [13] Business Line Data and Key Metrics Changes - In the Petroleum segment, total throughput for Q1 2025 was approximately 125,000 barrels per day, with a light product yield of 95% [5][6] - Adjusted EBITDA for the Petroleum segment was a loss of $30 million, driven by reduced throughput volumes due to planned and unplanned downtime [13] - The Renewables segment achieved an adjusted EBITDA of $3 million, an improvement from a negative $5 million in the prior year, primarily due to higher throughput volumes and increased RIN prices [11][14] - The Fertilizer segment reported an adjusted EBITDA of $53 million, supported by higher UAN sales volumes and ammonia sales prices [14] Market Data and Key Metrics Changes - Group 3 2-1-1 benchmark cracks averaged $17.65 per barrel in Q1 2025, down from $19.55 per barrel in the same period last year [6] - Average RIN prices were approximately $0.84, an increase of over 25% from the previous year [6] - Days of gasoline supply were reported to be 12% below the five-year average, while diesel supply was 17% below [19] Company Strategy and Development Direction - The company plans to ramp up refinery operations to full rates over the second quarter of 2025, with no additional turnarounds planned until 2027 [6][17] - The company is focusing on reducing debt and restoring balance sheet leverage ratios while looking for ways to improve capture and reduce costs [25] - The company is optimistic about the potential for increased jet fuel production, which is not subject to RVO, thereby reducing annual RIN obligations [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that refining market conditions began to improve in Q1 2025, driven by a heavy spring maintenance season and refinery closures [18] - The company expressed confidence in recovering strong margins post-turnaround, despite challenges faced during the Coffeyville turnaround [46][47] - Management highlighted the importance of government support for renewable businesses, indicating a cautious approach to further investments in renewables without assurance of stable credits [56] Other Important Information - The company ended Q1 2025 with a consolidated cash balance of $695 million and total liquidity of approximately $894 million [16] - Significant cash uses included $94 million for capital and turnaround spending, and $113 million for working capital, primarily associated with inventory buildup during the turnaround [16] Q&A Session Summary Question: Understanding refining macro and demand resilience - Management indicated that days of supply have shrunk, suggesting a correcting supply-demand balance, with expectations for summer demand to influence gasoline and diesel markets [28] Question: RVO and SRE implications - Management believes decoupling D4 from D6 is important and criticized the government's handling of RFS, emphasizing the need for lower RIN prices to benefit consumers [31][32][33] Question: Renewable diesel EBITDA expectations - Management noted that RIN prices and feedstock costs are favorable, but emphasized the need for clarity on PTC rules before making further investments [36][37] Question: Jet expansion at Coffeyville - Management expressed confidence in securing contracts with major airlines as existing contracts expire, indicating a positive outlook for jet fuel demand [52] Question: Insider activity at the company - Management refrained from commenting on insider activity, suggesting inquiries should be directed to the individuals involved [80]

Financial Data and Key Metrics Changes - The company reported a consolidated net loss of $105 million for Q1 2025, with a loss per share of $1.22 and an EBITDA loss of $61 million [6][15] - Adjusted EBITDA for the quarter was $24 million, with an adjusted loss per share of $0.58 [15] - The negative mark to market impact on outstanding RFS obligations was $112 million, while there was a favorable inventory valuation impact of $24 million [15] Business Line Data and Key Metrics Changes - In the Petroleum segment, total throughput was approximately 125,000 barrels per day, with a light product yield of 95% [6] - Adjusted EBITDA for the Petroleum segment was a loss of $30 million, driven by reduced throughput volumes and lower product cracks [15] - The Renewables segment achieved an adjusted EBITDA of $3 million, an improvement from a negative $5 million in the prior year [15] - The Fertilizer segment reported an adjusted EBITDA of $53 million, driven by higher UAN sales volumes and ammonia sales prices [15] Market Data and Key Metrics Changes - Group 3 2-1-1 benchmark cracks averaged $17.65 per barrel in Q1 2025, down from $19.55 per barrel in the same period last year [8] - Average RIN prices were approximately $0.84, an increase of over 25% from the previous year [8] - Nitrogen fertilizer prices were higher for ammonia and slightly lower for UAN compared to Q1 2024 [13] Company Strategy and Development Direction - The company plans no additional turnarounds in the Refining segment for 2025 and 2026, with the next planned turnaround at Wynnewood scheduled for 2027 [8] - The company is focusing on increasing distillate yield and jet fuel production, with projects underway to enhance capacity [24] - The company aims to reduce debt and restore balance sheet leverage ratios while looking for ways to improve capture and reduce costs [28] Management's Comments on Operating Environment and Future Outlook - Management noted that refining market conditions began to improve due to a heavy spring maintenance season and refinery closures [20] - The company expressed optimism about the demand for refined products, despite potential recession concerns [31] - Management highlighted the importance of government support for renewable businesses and the need for clarity on credits before making further investments [60] Other Important Information - The company ended Q1 2025 with a consolidated cash balance of $695 million and total liquidity of approximately $894 million [18] - Significant cash uses included $94 million for capital and turnaround spending and $113 million for working capital [18] Q&A Session Summary Question: Understanding refining macro and demand - Management indicated that days of supply have shrunk, suggesting a correction in the supply-demand balance, with expectations for improved gasoline demand in the summer [31] Question: RVO and SRE implications - Management believes decoupling D4 and D6 is important and criticized the government's handling of the RFS, emphasizing the need for lower RIN prices to benefit consumers [34][36] Question: Renewable diesel EBITDA and future expectations - Management noted that RIN prices and feedstock costs are critical for maintaining positive EBITDA in the renewable segment, with ongoing uncertainty regarding the PTC [40][41] Question: Industry consolidation and economies of scale - Management agreed that economies of scale are essential for survival and acknowledged potential for further consolidation in the refining sector [45] Question: Update on Coffeyville turnaround - Management acknowledged challenges during the Coffeyville turnaround but expressed confidence in recovering strong margins moving forward [52] Question: Jet fuel expansion and customer contracts - Management is optimistic about securing contracts with major airlines as existing contracts come up for renewal [57] Question: Assurance for renewable investments - Management emphasized the need for stable government support and clarity on credits before committing to new renewable projects [60]