Valero Energy Corporation

Greetings and welcome to the Valero Energy Corp. first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A 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 Buller, VP of Investor Relations and Finance. Thank you. You may begin.

Good morning, everyone, and welcome to Valero Energy Corporation's first quarter 2025 earnings conference call. With me today are Lane Riggs, our chairman, CEO, and president, Jason Frazier, our executive vice president and CFO, Gary Simmons, our executive vice president and COO, Rich Walsh, our executive vice president and general counsel, 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. I am pleased to report that we delivered positive results for the first quarter despite heavy maintenance activity across our refining system in a tough margin environment in the renewable diesel segment. This is a credit to the strength and discipline of our operations, optimization, and commercial teams. We're finding margins improved through the quarter with U.S.-like product demand slightly higher than last year and product inventories below the same period last year. On the financial side, we continue to honor our commitment to shareholder returns with a strong payout ratio of 73% in the first quarter. And in January, our board approved a 6% increase to the quarterly cash dividend, further demonstrating our strong financial position. We continue to progress the SEC Unit Optimization Project at St. Charles that will enable the refinery to increase the yield of high-value products, including high-octane alkaloids. The project is estimated to cost $230 million and is expected to start up in 2026. And we are pursuing other short-cycle, high-return optimization projects around our existing refining assets. Looking ahead, we expect tight product supply and demand balances and low product inventories support refining fundamentals ahead of the driving season. Longer term, product demand is expected to exceed supply as there are limited announced capacity additions beyond 2025. In closing, we remain focused on the things that we can control, pursuing excellence in operations, deploying capital with an uncompromising focus on return, and honoring our commitment to stockholder returns. Our commitment remains underpinned by a strong balance sheet that provides us plenty of operational and financial flexibility. So with that, Homer, I'll hand the call back to you.