Valero Energy Corporation

Greetings and welcome to the Bolero Energy Corp third quarter 2023 earnings call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Homer Bollar, Vice President, Investor Relations and Finance, Thank you. Please go ahead.

Good morning, everyone, and welcome to Valero Energy Corporation's third quarter 2023 earnings conference call. With me today are Lane Riggs, our CEO and President, Jason Frazier, our Executive Vice President and CFO, Gary Simmons, our Executive Vice President and COO, and several other members of Valero's senior management team. If you have not received the earnings release and would like a copy, you can find one on our website at InvestorVolero.com. Also attached to the earnings release are tables that provide additional financial information on our business segments and reconciliations and disclosures for adjusted financial metrics mentioned on this call. If you have any questions after reviewing these tables, please feel free to contact our investor relations team after the call. I would now like to direct your attention to the forward-looking statement disclaimer contained in the press release. In summary, it says that statements in the press release and on this conference call 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 under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we've described in our earnings release and filings of the SEC. Now I'll turn the call over to Lane for opening remarks.

Thank you, Homer, and good morning, everyone. We are pleased to report strong financial results for the third quarter. In fact, we set a record for third quarter earnings per share. Funding margins were supported by strong product demand against the backdrop of low product inventories, which remained at five-year lows despite high refinery utilization rates globally. The strength in demand was evident in our U.S. wholesale system, which matched the second quarter record of over one million barrels per day of sales volume. Our refineries operated well and achieved 95 percent throughput capacity utilization in the third quarter. which is a testament to our team's continued focus on operational excellence. We continue to prioritize strategic projects that enhance the earnings capability of our business and expand our long-term competitive advantage. The DGD Sustainable Aviation Fuel, or SAF, project at Port Arthur remains on schedule and is expected to be complete in 2025. Once complete, we expect the Port Arthur plant to have the optionality to upgrade up to 50% of its current 470 million gallon annual renewable diesel production capacity at SAF. The project is estimated to cost $315 million, with half of that attributable to Bolero. With the completion of this project, Diamond Green Diesel is expected to become one of the largest manufacturers of SAF in the world. On the financial side, we honored our commitment to shareholder returns with a payout ratio of 68% of adjusted net cash provided by operating activities through dividends and share repurchases in the third quarter. And we ended the third quarter with a net debt to capitalization ratio of 17%. In closing, while there are broader factors that may drive volatility in the market, we remain focused on things we can control. This includes operating our assets efficiently in a safe, reliable, and environmentally responsible manner, maintaining capital discipline by adhering to a minimum return threshold for growth projects, and honoring our commitment to shareholder returns. With that, Homer, I'll hand the call back to you.