SAN ANTONIO, Oct. 28, 2015 /PRNewswire/ -- Valero Energy Corporation (NYSE: VLO, "Valero") today reported net income from continuing operations attributable to Valero stockholders of $1.4 billion, or $2.79 per share, in the third quarter of 2015 compared to $1.1 billion, or $2.00 per share, in the third quarter of 2014.

Valero also reported that its Board of Directors approved a 25 percent increase in the regular quarterly cash dividend on common stock from $0.40 per share to $0.50 per share, effective with the quarterly dividend payable on December 17, 2015 to holders of record at the close of business on November 23, 2015. The increase in the dividend raises the company's annualized cash dividend to $2.00 per share.

"So far this year, we've invested $1.7 billion into our business, increased our dividend over 80 percent, and more than doubled our buyback total," said Joe Gorder, Valero Chairman, President and Chief Executive Officer. "We had solid operations and made great strides on strategic investments including the crude unit projects at Corpus Christi and Houston."

The company expects the Corpus Christi and Houston crude units to be completed in the fourth quarter of 2015, and the first half of 2016, respectively.

Refining
The refining segment generated third quarter 2015 operating income of $2.3 billion compared to $1.7 billion in the third quarter of 2014. The $631 million increase in operating income primarily resulted from a $2.57 increase in throughput margin per barrel from $11.81 in the third quarter of 2014 to $14.38 in the third quarter of 2015, driven mainly by stronger gasoline and other product margins. Partially offsetting these factors were lower distillate margins and discounts for most sweet and sour crude oils relative to Brent crude oil.

Third quarter 2015 refining throughput volumes averaged 2.8 million barrels per day, which was in line with the third quarter of 2014. Valero's refineries operated at 96 percent throughput capacity utilization in the third quarter of 2015. The company delivered export volumes of 330 thousand barrels per day, a record for a third quarter.

"With strong product margins and healthy demand, we delivered solid results this quarter," said Gorder. "We are seeing good seasonal demand for our products in the fourth quarter."

Ethanol
The ethanol segment generated third quarter 2015 operating income of $35 million compared to $198 million in the third quarter of 2014. The $163 million decrease in operating income was mainly due to lower gross margin per gallon driven primarily by a decline in ethanol prices. Average ethanol production volumes were 3.9 million gallons per day in the third quarter of 2015, an increase of 297,000 gallons per day versus the third quarter of 2014, primarily due to incremental production volumes from the Mount Vernon plant, which was acquired in 2014 and began operating in August 2014.

Corporate and Other
General and administrative expenses totaled $179 million in the third quarter of 2015 compared to $180 million in the third quarter of 2014. The effective tax rate was 32.4 percent in the third quarter of 2015.

Capital Allocation
Capital spending was $467 million in the third quarter of 2015, of which $109 million was for turnarounds and catalyst.

Valero returned a total of $1.3 billion in cash to stockholders in the third quarter of 2015, of which $199 million was paid in dividends and $1.1 billion was used to purchase 17.2 million shares of Valero common stock. Year to date, dividends and stock buybacks totaled $2.7 billion.

Valero is on target to reach a payout ratio of 75 percent for 2015, with a year-to-date ratio of 73 percent. The company defines total payout ratio as the sum of dividends plus stock buybacks divided by net income from continuing operations attributable to Valero stockholders.

Liquidity and Financial Position
Valero ended the third quarter of 2015 with $7.4 billion in total debt and $5.3 billion of cash and temporary cash investments, of which $51 million was held by Valero Energy Partners LP ("VLP"). Valero's debt-to-capital ratio, net of $2 billion in cash, was approximately 20 percent.

Strategic Update
With the drop-down transaction that occurred on October 1, 2015, Valero has completed a total of $1.14 billion of drop-down transactions to VLP in 2015, exceeding its $1 billion goal for the year. This latest drop down puts VLP on track to increase its quarterly distribution to the level needed to achieve the top tier of incentive distributions to the general partner (Valero) by early 2016. The company remains committed to growing VLP through drop-down transactions with an estimated $1 billion of potentially MLP-eligible EBITDA related to existing assets.

"We continue to fuel VLP's growth through drop-down transactions with supportive financing arrangements that benefit both parties," said Gorder.

Capital expenditures are expected to be within prior guidance of approximately $2.65 billion for 2015 and consistent with prior guidance for 2016 at approximately $2.4 billion. These estimates exclude the St. Charles methanol project that remains under evaluation.

Conference Call
Valero's senior management will hold a conference call at 11 a.m. ET today to discuss this earnings release and to provide an update on company operations and strategy.

About Valero
Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Valero subsidiaries employ approximately 10,000 people, and its assets include 15 petroleum refineries with a combined throughput capacity of approximately 2.9 million barrels per day, 11 ethanol plants with a combined production capacity of 1.3 billion gallons per year, a 50-megawatt wind farm, and renewable diesel production from a joint venture. Through subsidiaries, Valero owns the general partner of Valero Energy Partners LP (NYSE: VLP), a midstream master limited partnership. Approximately 7,400 outlets carry the Valero, Diamond Shamrock, Shamrock, and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland. Valero is a Fortune 500 company based in San Antonio. Please visit www.valero.com for more information.

Valero Contacts
Investors:
John Locke, Vice President - Investor Relations, 210-345-3077
Karen Ngo, Manager - Investor Relations, 210-345-4574

Media:
Bill Day, Vice President - Communications, 210-345-2928

To download our investor relations mobile app, which offers access to SEC filings, press releases, quotes, and upcoming events, please visit Apple's iTunes App Store for your iPhone and iPad or Google's Play Store for your Android mobile device.

Safe-Harbor Statement
Statements contained in this release that state the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "believe," "expect," "should," "estimates," "intend," and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero's annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the SEC and on Valero's website at www.valero.com, and VLP's annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the SEC and on VLP's website at www.valeroenergypartners.com.


                                                                VALERO ENERGY CORPORATION AND SUBSIDIARIES

                                                                             EARNINGS RELEASE
                                                (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)

                                                                                (Unaudited)


                                           Three Months Ended                                    Nine Months Ended

                                           September 30,                                     September 30,
                                           -------------                                     -------------

                                         2015                    2014                      2015                    2014
                                         ----                    ----                      ----                    ----

    Statement of Income Data:

    Operating revenues                           $22,579                                          $34,408                    $69,027  $102,985
                                                 -------                                          -------                    -------  --------

    Costs and expenses:

      Cost of sales                    18,677                              31,023                               58,234         93,820

      Operating expenses:

        Refining                          986                                 987                                2,885          2,926

        Ethanol                           116                                 118                                  344            358

      General and administrative
       expenses                           179                                 180                                  504            510

      Depreciation and amortization
       expense                            482                                 430                                1,348          1,265

       Total costs and expenses        20,440                              32,738                               63,315         98,879
                                       ------                              ------                               ------         ------

      Operating income                  2,139                               1,670                                5,712          4,106

    Other income, net                       3                                  11                                   35             38

    Interest and debt expense, net of
     capitalized interest               (112)                               (98)                               (326)         (296)
                                         ----                                 ---

    Income from continuing operations
     before income tax expense          2,030                               1,583                                5,421          3,848

    Income tax expense                    657                                 521                                1,715          1,293
                                          ---                                 ---                                -----          -----

    Income from continuing operations   1,373                               1,062                                3,706          2,555

    Loss from discontinued operations       -                                  -                                   -          (64)
                                          ---                                ---

    Net income                          1,373                               1,062                                3,706          2,491

       Less: Net income (loss)
        attributable to noncontrolling
        interests                         (4)                                  3                                   14             16
                                                                                                                 ---            ---

    Net income attributable to Valero
     Energy Corporation stockholders              $1,377                                           $1,059                     $3,692    $2,475
                                                  ======                                           ======                     ======    ======

    Net income attributable to Valero
     Energy Corporation stockholders:

      Continuing operations                       $1,377                                           $1,059                     $3,692    $2,539

      Discontinued operations               -                                  -                                   -          (64)

       Total                                      $1,377                                           $1,059                     $3,692    $2,475
                                                  ======                                           ======                     ======    ======

    Earnings per common share:

      Continuing operations                        $2.79                                            $2.01                      $7.31     $4.78

      Discontinued operations               -                                  -                                   -        (0.12)
                                                                                                                 ---         -----

       Total                                       $2.79                                            $2.01                      $7.31     $4.66
                                                   =====                                            =====                      =====     =====

      Weighted-average common shares
       outstanding (in millions)          491                                 526                                  503            529

    Earnings per common share -
     assuming dilution:

      Continuing operations                        $2.79                                            $2.00                      $7.30     $4.76

      Discontinued operations               -                                  -                                   -        (0.12)
                                                                                                                 ---         -----

       Total                                       $2.79                                            $2.00                      $7.30     $4.64
                                                   =====                                            =====                      =====     =====

      Weighted-average common shares
       outstanding -assuming dilution
       (in millions)                      494                                 530                                  506            533


    Dividends per common share                    $0.400                                           $0.275                     $1.200    $0.775


                                                              See Notes to Earnings Release.


                                                                   VALERO ENERGY CORPORATION AND SUBSIDIARIES

                                                                                EARNINGS RELEASE

                                                  (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)

                                                                                  (Unaudited)


                                                  Three Months Ended                              Nine Months Ended

                                                   September 30,                              September 30,
                                                   -------------                              -------------

                                                 2015                   2014                      2015                   2014
                                                 ----                   ----                      ----                   ----

    Operating income by business segment:

      Refining                                           $2,295                                          $1,664                $6,097  $4,023

      Ethanol                                      35                                198                                 155       628

      Corporate                                 (191)                             (192)                              (540)    (545)

       Total                                             $2,139                                          $1,670                $5,712  $4,106
                                                         ======                                          ======                ======  ======

    Depreciation and amortization expense by
     business segment:

      Refining                                             $455                                            $406                $1,280  $1,194

      Ethanol                                      15                                 12                                  32        36

      Corporate                                    12                                 12                                  36        35

       Total                                               $482                                            $430                $1,348  $1,265
                                                           ====                                            ====                ======  ======

    Operating highlights:

      Refining:

       Throughput margin per barrel                      $14.38                                          $11.81                $13.52  $10.86
                                                         ------                                          ------                ------  ------

       Operating costs per barrel:

        Operating expenses                       3.80                               3.81                                3.80      3.90

        Depreciation and amortization expense    1.75                               1.57                                1.69      1.59
                                                 ----                               ----

         Total operating costs per barrel        5.55                               5.38                                5.49      5.49

       Operating income per barrel                        $8.83                                           $6.43                 $8.03   $5.37
                                                          =====                                           =====                 =====   =====

       Throughput volumes (thousand barrels per
        day):

      Feedstocks:

       Heavy sour crude oil                       398                                473                                 425       460

       Medium/light sour crude oil                416                                465                                 421       482

       Sweet crude oil                          1,307                              1,208                               1,210     1,119

       Residuals                                  292                                237                                 273       225

       Other feedstocks                           119                                123                                 142       134
                                                  ---                                ---                                 ---       ---

        Total feedstocks                        2,532                              2,506                               2,471     2,420

       Blendstocks and other                      291                                308                                 310       326

        Total throughput volumes                2,823                              2,814                               2,781     2,746
                                                =====                              =====                               =====     =====

        Yields (thousand barrels per day):

        Gasolines and blendstocks               1,386                              1,338                               1,357     1,317

        Distillates                             1,065                              1,087                               1,060     1,049

        Other products (a)                        406                                420                                 402       413

         Total yields                           2,857                              2,845                               2,819     2,779
                                                =====                              =====                               =====     =====


                                                                 See Notes to Earnings Release.




                                                              VALERO ENERGY CORPORATION AND SUBSIDIARIES

                                                                           EARNINGS RELEASE

                                              (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)

                                                                              (Unaudited)


                                                   Three Months Ended                        Nine Months Ended

                                                   September 30,                         September 30,
                                                   -------------                         -------------

                                                  2015                 2014                   2015                 2014
                                                  ----                 ----                   ----                 ----

    Refining operating highlights by
     region (b):

    U.S. Gulf Coast:

      Operating income                                    $1,038                                       $927               $2,996  $2,470

      Throughput volumes (thousand barrels
       per day)                                  1,571                          1,613                            1,570      1,589

      Throughput margin per barrel                        $12.93                                     $11.47               $12.52  $11.00
                                                          ------                                     ------               ------  ------

      Operating costs per barrel:

       Operating expenses                         3.87                           3.63                             3.76       3.69

       Depreciation and amortization expense      1.88                           1.59                             1.77       1.61
                                                  ----                           ----

         Total operating costs per barrel         5.75                           5.22                             5.53       5.30

       Operating income per barrel                         $7.18                                      $6.25                $6.99   $5.70
                                                           =====                                      =====                =====   =====

    U.S. Mid-Continent:

      Operating income                                      $500                                       $470               $1,215    $950

      Throughput volumes (thousand barrels
       per day)                                    470                            469                              446        431

      Throughput margin per barrel                        $16.74                                     $16.24               $15.33  $13.76
                                                          ------                                     ------               ------  ------

      Operating costs per barrel:

      Operating expenses                          3.51                           3.80                             3.68       4.03

      Depreciation and amortization expense       1.68                           1.56                             1.68       1.66
                                                  ----                           ----

        Total operating costs per barrel          5.19                           5.36                             5.36       5.69

      Operating income per barrel                         $11.55                                     $10.88                $9.97   $8.07
                                                          ======                                     ======                =====   =====

    North Atlantic:

      Operating income                                      $415                                       $239               $1,167    $582

      Throughput volumes (thousand barrels
       per day)                                    507                            467                              492        466

      Throughput margin per barrel                        $12.78                                     $10.02               $12.74   $9.10
                                                          ------                                     ------               ------   -----

      Operating costs per barrel:

       Operating expenses                         2.76                           3.29                             2.88       3.40

       Depreciation and amortization expense      1.13                           1.17                             1.17       1.13
                                                  ----                           ----

         Total operating costs per barrel         3.89                           4.46                             4.05       4.53

       Operating income per barrel                         $8.89                                      $5.56                $8.69   $4.57
                                                           =====                                      =====                =====   =====

    U.S. West Coast:

       Operating income                                     $342                                        $28                 $719     $21

       Throughput volumes (thousand barrels
        per day)                                   275                            265                              273        260

       Throughput margin per barrel                       $21.61                                      $9.14               $17.70   $8.38
                                                          ------                                      -----               ------   -----

       Operating costs per barrel:

        Operating expenses                        5.79                           5.84                             5.88       5.91

        Depreciation and amortization expense     2.28                           2.14                             2.17       2.17
                                                  ----                           ----

          Total operating costs per barrel        8.07                           7.98                             8.05       8.08

       Operating income per barrel                        $13.54                                      $1.16                $9.65   $0.30
                                                          ======                                      =====                =====   =====


                                                            See Notes to Earnings Release.




                                                                VALERO ENERGY CORPORATION AND SUBSIDIARIES

                                                                             EARNINGS RELEASE

                                                (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)

                                                                                (Unaudited)


                                           Three Months Ended                              Nine Months Ended

                                            September 30,                              September 30,
                                            -------------                              -------------

                                          2015                   2014                      2015                    2014
                                          ----                   ----                      ----                    ----

    Average market reference prices
     and differentials:

     Feedstocks (dollars per barrel):

      Brent crude oil                             $51.13                                          $103.28                   $56.59  $106.97

      Brent less West Texas
       Intermediate (WTI) crude oil       4.73                               5.78                                 5.66         7.21

      Brent less Alaska North Slope
       (ANS) crude oil                  (0.31)                              1.77                                 0.58         1.44

      Brent less Louisiana Light Sweet
       (LLS) crude oil                    1.94                               3.07                                 2.43         3.12

      Brent less Mars crude oil           6.82                               6.73                                 6.40         7.12

      Brent less Maya crude oil           8.48                              12.45                                 9.24        14.95

      LLS crude oil                      49.19                             100.21                                54.16       103.85

       LLS less Mars crude oil            4.88                               3.66                                 3.97         4.00

       LLS less Maya crude oil            6.54                               9.38                                 6.81        11.83

      WTI crude oil                      46.40                              97.50                                50.93        99.76


    Natural gas (dollars per million
     British Thermal Units)               2.72                               3.96                                 2.73         4.58


    Products (dollars per barrel,
     unless otherwise noted):

      U.S. Gulf Coast:

       CBOB gasoline less Brent          12.40                               6.04                                10.95         5.05

       Ultra-low-sulfur diesel less
        Brent                            12.13                              13.92                                13.76        13.96

       Propylene less Brent            (13.85)                              3.39                               (3.95)        0.34

       CBOB gasoline less LLS            14.34                               9.11                                13.38         8.17

       Ultra-low-sulfur diesel less
        LLS                              14.07                              16.99                                16.19        17.08

       Propylene less LLS              (11.91)                              6.46                               (1.52)        3.46

      U.S. Mid-Continent:

       CBOB gasoline less WTI            22.71                              13.96                                19.09        14.35

       Ultra-low-sulfur diesel less
        WTI                              20.36                              21.73                                20.36        22.86

      North Atlantic:

       CBOB gasoline less Brent          16.28                              11.57                                13.49         9.55

       Ultra-low-sulfur diesel less
        Brent                            14.54                              15.20                                17.59        17.33

      U.S. West Coast:

       CARBOB 87 gasoline less ANS       31.59                              17.48                                27.21        15.80

       CARB diesel less ANS              14.84                              20.19                                17.39        18.26

       CARBOB 87 gasoline less WTI       36.63                              21.49                                32.29        21.57

       CARB diesel less WTI              19.88                              24.20                                22.47        24.03

      New York Harbor corn crush
       (dollars per gallon)               0.20                               0.81                                 0.22         0.90


                                                              See Notes to Earnings Release.




                                                                          VALERO ENERGY CORPORATION AND SUBSIDIARIES

                                                                                       EARNINGS RELEASE

                                                          (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)

                                                                                          (Unaudited)


                                                           Three Months Ended                               Nine Months Ended

                                                             September 30,                                 September 30,
                                                             -------------                                 -------------

                                                           2015                 2014                       2015                      2014
                                                           ----                 ----                       ----                      ----

    Ethanol:

    Operating income                                                  $35                                           $198                       $155          $628

    Production (thousand gallons
     per day)                                             3,853                          3,556                                     3,808       3,311

    Gross margin per gallon of
     production                                                     $0.47                                          $1.00                      $0.51         $1.13
                                                                    -----                                          -----                      -----         -----

    Operating costs per gallon of
     production:

      Operating expenses                                   0.33                           0.36                                      0.33        0.40

      Depreciation and amortization
       expense                                             0.04                           0.04                                      0.03        0.04
                                                           ----                           ----

       Total operating costs per
        gallon of production                               0.37                           0.40                                      0.36        0.44
                                                                                         ----

    Operating income per gallon of
     production                                                     $0.10                                          $0.60                      $0.15         $0.69
                                                                    =====                                          =====                      =====         =====


                                                                                                September 30,             December 31,

                                                                                                         2015                      2014
                                                                                                         ----                      ----

    Balance Sheet Data:

    Current assets                                                $16,827                                        $16,614

    Cash and temporary cash investments, including $51 and $237, respectively, held by Valero Energy Partners LP,
     included in current assets                                                                                                            5,301      3,689

    Inventories included in current assets                                                                                                 6,557      6,623

    Replacement cost (market value) of LIFO inventories in excess of LIFO carrying amounts                                                 1,018        857

    Current liabilities                                                                                                                    8,289      9,980

    Current portion of debt and capital lease obligations included in current liabilities                                                    129        606

    Debt and capital lease obligations, less current portion                                                                               7,252      5,780

    Total debt and capital lease obligations                                                                                               7,381      6,386

    Valero Energy Corporation stockholders' equity                                                                                        21,321     20,677


                                                          Three Months Ended                             Nine Months Ended

                                                             September 30,                                 September 30,
                                                             -------------                                 -------------

                                                           2015                 2014                       2015                      2014
                                                           ----                 ----                       ----                      ----

    Valero Energy Partners LP:

    Weighted-average limited partner units
     outstanding:

      Common units -public (basic
       and diluted)                                          17                             17                                        17          17

      Common units -Valero (basic
       and diluted)                                          13                             12                                        13          12

      Subordinated units -Valero
       (basic and diluted)                                   29                             29                                        29          29

    Distributions declared:

      Limited partner units -public                                    $5                                             $4                        $15           $12

      Limited partner units -Valero                          14                              9                                        38          27

      General partner units -Valero                           1                              1                                         3           1
                                                            ---                            ---                                       ---         ---

        Total distribution declared                                   $20                                            $14                        $56           $40
                                                                      ===                                            ===                        ===           ===


                                                                              See Notes to Earnings Release.

          VALERO ENERGY CORPORATION AND SUBSIDIARIES

                   NOTES TO EARNINGS RELEASE


    (a)              Primarily includes petrochemicals, gas
                     oils, No. 6 fuel oil, petroleum coke,
                     sulfur, and asphalt.

    (b)              The regions reflected herein contain
                     the following refineries: U.S. Gulf
                     Coast- Corpus Christi East, Corpus
                     Christi West, Houston, Meraux, Port
                     Arthur, St. Charles, Texas City, and
                     Three Rivers Refineries; U.S. Mid-
                     Continent- Ardmore, McKee,  and
                     Memphis Refineries; North Atlantic-
                     Pembroke and Quebec City Refineries;
                     and U.S. West Coast- Benicia and
                     Wilmington Refineries.

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SOURCE Valero Energy Corporation