VALERO ENERGY CORP/TX Q3 FY2025 earnings call

• Refinery throughput utilization was 97%, with Gulf Coast and North Atlantic regions setting new all-time highs for throughput. - Ethanol segment achieved record production. - Progress on FCC unit optimization project at St. Charles refinery, expected to begin operations in H2 2026. - Refining margins supported by strong global demand and low inventories despite high utilization rates. - Supply constraints from refinery rationalizations, delayed new facilities, and geopolitical disruptions.

Refining Segment: Reported $1.6 billion of operating income for Q3 2025 vs. $565 million in Q3 2024. Throughput volumes averaged 3.1 million barrels per day (97% utilization). Adjusted operating income was $1.7 billion. Renewable Diesel Segment: Reported an operating loss of $28 million in Q3 2025 vs. operating income of $35 million in Q3 2024. Sales volumes averaged 2.7 million gallons per day. Ethanol Segment: Reported $183 million of operating income in Q3 2025 vs. $153 million in Q3 2024. Production volumes averaged 4.6 million gallons per day, achieving record production.

• Expect capital investments attributable to Valero for 2025 to be approximately $1.9 billion. - For Q4, Refining throughput volumes: Gulf Coast 1.78–1.83 million bbl/day, Mid-Continent 420,000–440,000 bbl/day, West Coast 240,000–260,000 bbl/day, North Atlantic 485,000–505,000 bbl/day. - Renewable Diesel sales volumes expected ~258 million gallons in Q4. - Ethanol production expected 4.6 million gallons per day in Q4. - Net interest expense expected ~$135 million in Q4.

• Geopolitical disruptions, including potential impact of Russian sanctions on crude differentials. - Volatility in freight costs affecting export arbs. - Uncertainty around policy changes like RVO and PTC impacting Renewable Diesel profitability.

Q: Insights on crude differentials and availability into 2026 A: Gary Simmons discussed widening quality differentials, TMX impact, OPEC production, and Russian sanctions effects.

Q: Capital returns and buybacks A: Homer Bhullar stated excess free cash flow is directed to share buybacks.

Q: Crude on water and Iraq's role A: Gary Simmons mentioned more Rocky barrels, including Basra and Kirkuk, flowing to the U.S. market.

Q: PADD III and PADD II assets and product pipelines A: Gary Simmons discussed not participating in new pipelines and impact on Gulf Coast margins.

Q: Throughput performance sustainability and cash flow A: Lane Riggs and Greg Bram talked about reliability improvements and transitory cash flow items