Valero Energy Corporation

Greetings and welcome to the Valero Energy Corp First Quarter 2024 Earnings Conference. 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 first quarter 2024 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 InvestorValero.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 with the SEC. Now I'll turn the call over to Lane for opening remarks.

Thank you, Homer, and good morning, everyone. We were pleased to report strong financial results for the first quarter despite heavy planned maintenance across our refining system. Our team's ability to optimize and maximize throughput while undertaking maintenance activities illustrates the benefits from our longstanding commitment to safe and reliable operations. Refining margins remain supported by tight product balances with supply constrained by seasonally heavy refining turnarounds and geopolitical events. Product demand was strong across our wholesale system, with diesel demand higher and gasoline demand about the same as last year. We continue to execute strategic projects and enhance earnings capability of our business and expand our long-term competitive advantage. DGD, Sustainable Aviation Fuel, or SAF, project at Port Arthur is progressing ahead of schedule and is now expected to be operational in the fourth quarter of 2024. With the completion of this project, Diamond Green Diesel is expected to become one of the largest manufacturers of SAF in the world. In addition, we are pursuing shorter cash cycle projects that optimize and capitalize on opportunities to improve margins around our existing refining assets. These projects are focused on increasing feedstock flexibility, optimizing the value of our product mix, and maximizing utilization of existing conversion capacity. On the financial side, We were paid the $167 million outstanding principal amount of our 1.2% senior notes that matured on March 15th. And in January, we increased the quarterly cash dividend on our common stock from $1.02 per share to $1.07 per share. Looking ahead, we expect refining margins to remain supported by tight product balances and seasonably low product inventories ahead of the driving season. Longer term, product demand is expected to exceed supply even with the startup of new refineries this year and the limited announced capacity additions beyond 2025. In closing, we remain focused on things that have been a hallmark of our strategy, maintaining operating excellence, executing our projects well, discipline around our capital investments, and our commitments to shareholder returns. So with that, Homer, I'll hand the call back to you.