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February 2016 Investor Presentation – Valero Energy Corporation

Valero Energy Corporation · Feb 23, 2016 · 31 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. February 2016 Investor Presentation – Valero Energy Corporation – slide 1
    Investor Presentation February 2016
  2. February 2016 Investor Presentation – Valero Energy Corporation – slide 2
    Who We Are Operator of One of North Americas Worlds Largest Wholesale Fuels Liquids-Focused Largest Renewable Independent Refiner Marketer Logistics Assets Fuels Producers 15 refineries, General partner and Volumes distributed…
  3. February 2016 Investor Presentation – Valero Energy Corporation – slide 3
    Strong U.S. Gulf Coast and Mid-Continent Presence Refineries and ethanol plants are in advantaged locations See slide 20 for capacities 4
  4. February 2016 Investor Presentation – Valero Energy Corporation – slide 4
    Current Macro Environment SUPPLY DEMAND 1 3 Forecasted world GDP growth Abundant global supply of crude oil and natural gas 4 Demand response to lower 2 product prices North American logistics build out adds efficiency and…
  5. February 2016 Investor Presentation – Valero Energy Corporation – slide 5
    Safety and Reliability are Imperative for Profitability Personnel Safety Tier 1 Process Safety Process Safety Event 1.60 Total Recordable Incident Employees Contractors 0.19 0.97 Industry Rate (TRIR) 0.75…
  6. February 2016 Investor Presentation – Valero Energy Corporation – slide 6
    Peer Leading Refinery Complexity and Lowest Cost Operator Drives Profitability Nelson Complexity Index 2015 Refining Cash Operating Expenses Per Barrel of Throughput (Excludes Turnaround and D&A) 12.2 7 Peer Range VLO Median…
  7. February 2016 Investor Presentation – Valero Energy Corporation – slide 7
    Leader in Location-Advantaged CDU Capacity and Our U.S. Gulf Coast Assets Have Flexible Feed Slates Location-Advantaged CDU Capacity Feedstock Ranges in U.S. Gulf Coast (MBPD) (2010 2015) 37% 2,045 Eastern Canada 34% 34% 1,794…
  8. February 2016 Investor Presentation – Valero Energy Corporation – slide 8
    Our Portfolio Facilitates Optimization of Product Exports VLOs U.S. Product Exports (MBPD) Gasoline Diesel 472 412 237 164 308 255 Distillate 69 105 Gasoline 2011 2012 2013 2014 2015 Current Potential Capacity…
  9. February 2016 Investor Presentation – Valero Energy Corporation – slide 9
    Capital Allocation 1 Maintain Strong Balance Sheet Maintain investment grade credit rating and strong balance sheet Target 20% to 30% debt-to-cap ratio(1) Non-Discretionary Sustaining Capex Dividend 2 Approximately 1.5 billion…
  10. February 2016 Investor Presentation – Valero Energy Corporation – slide 10
    Capital Investments Focused on Maintaining Asset Base, Enhancing Margins, and Growing Logistics 2016 Capital Budget (MM) Targeting 2.6 billion in 2016 Includes some 2015 carry forward 2016 growth investments allocated Asset…
  11. February 2016 Investor Presentation – Valero Energy Corporation – slide 11
    Investing in Asset Optimization Light Crude Products & Other 160 MBPD total new CDU Hydrocracker expansions at capacity at Corpus Christi Port Arthur (completed Oct (commissioned Dec 2015) and 2015) and St. Charles (expected…
  12. February 2016 Investor Presentation – Valero Energy Corporation – slide 12
    Investing to Improve Access to North American Crude Diamond Pipeline 440 miles of 20-inch pipe (200 MBPD capacity) connecting Memphis to Cushing, expected to startup in 3Q17 Provides supply flexibility and ability to improve…
  13. February 2016 Investor Presentation – Valero Energy Corporation – slide 13
    Our Sponsored MLP Valero Energy Partners (NYSE:VLP) Summary Accomplishments since IPO VLO owns entire 2% GP interest, all incentive 51% increase in quarterly cash distribution over MQD distribution rights, and a 67.1% of…
  14. February 2016 Investor Presentation – Valero Energy Corporation – slide 14
    More Than 1 Billion of Estimated MLP Eligible EBITDA Inventory Racks, Terminals, Wholesale Fuels Pipelines(1) Rail Marine(1) and Storage(1) Marketing Over 1,200 miles Over 80 million Three crude 51 docks Approximately of…
  15. February 2016 Investor Presentation – Valero Energy Corporation – slide 15
    Renewables Business Ethanol plant in Linden, Indiana Renewables Operations Renewables Outlook 11 ethanol plants with 1.4 billion gallons total annual Low crude and gasoline prices expected to challenge production capacity…
  16. February 2016 Investor Presentation – Valero Energy Corporation – slide 16
    We Believe Valero is an Excellent Investment 2015 Total Stockholder Return 2016E Return on Capital 2016E Price to Earnings Ratio 55% Employed(1) 11x Peer Range VLO Average 47% 47% 24% 9.9x 22% 21% 18% 7.0x 16% 6.4x 5.2x…
  17. February 2016 Investor Presentation – Valero Energy Corporation – slide 17
    Appendix Contents Topic Pages Notes 19 Refining Operating Statistics 20 21 Natural Gas Cost Sensitivity 22 Crude Oil Transportation 23 24 Fundamentals 25 28 Valero Energy Partners LP 29 31 Investor Relations Contacts…
  18. February 2016 Investor Presentation – Valero Energy Corporation – slide 18
    Notes Slide 5 Macro environment themes represent industry consultant views. Slide 6 Contractor total recordable incident rate from U.S. Bureau of Labor Statistics. Tier 1 process safety event defined within API Recommended Practice…
  19. February 2016 Investor Presentation – Valero Energy Corporation – slide 19
    Our Refining Capacity and Nelson Complexity Capacities (MBPD)(1) Nelson Complexity Refinery Throughput Crude Index Corpus Christi(2) 370 275 15.1 Houston 175 90 15.4 Meraux 135 125 9.7 Port Arthur 375 335 12.7 St. Charles 305 215…
  20. February 2016 Investor Presentation – Valero Energy Corporation – slide 20
    Reliability Initiatives Have Improved Refinery Availability and Enabled Higher Utilization Valero Refinery Availability and Utilization Rates Solomon 96% 95% 95% availability 92% 88% 87% 86% 82% 21
  21. February 2016 Investor Presentation – Valero Energy Corporation – slide 21
    U.S. Natural Gas Provides Opex and Feedstock Cost Advantages Our refining operations consume approximately 896,000 mmBtu/day of natural gas, of which 56% is operating expense and balance is cost of goods sold Significant annual…
  22. February 2016 Investor Presentation – Valero Energy Corporation – slide 22
    Estimated Crude Oil Transportation Costs Alberta to Eastern Canada Alberta to Bakken Rail 9 to 10/bbl Rail 9/bbl 1 to 2/bbl Bakken U.S. Ship 4 to 5/bbl USGC to Canada to Cushing Foreign Ship Pipe 5 to 6/bbl to USEC 2/bbl to West…
  23. February 2016 Investor Presentation – Valero Energy Corporation – slide 23
    Pipeline Takeaway Capacity Additions Have Increased Crude Competition in the U.S. Gulf Coast Alberta Bakken Niobrara Pipeline takeaway capacity Cushing additions expected to increase market liquidity and crude Permian…
  24. February 2016 Investor Presentation – Valero Energy Corporation – slide 24
    Production Growth Provides Resource Advantage to North American Refiners U.S. Crude Oil Production U.S. Natural Gas and Imports Production (MBPD) (Bcf/day) Imports Production 9,447 74 9,212 7,312 58 5,475 Source:…
  25. February 2016 Investor Presentation – Valero Energy Corporation – slide 25
    Global Petroleum Demand Growth Expected to Outpace Refinery Capacity Expansion MMBPD 2.0 1.6 1.2 0.8 0.4 0.0 -0.4 -0.8 2012 2013 2014 2015E 2016E Europe China Middle East Other Net CDU Capacity Additions World…
  26. February 2016 Investor Presentation – Valero Energy Corporation – slide 26
    U.S. Gasoline Exports 800 12 Month Moving Average Other (MBPD) 700 Europe 600 Other Latin America Mexico 500 Canada 400 Latest 4 Wk avg estimate (Finished only) 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012…
  27. February 2016 Investor Presentation – Valero Energy Corporation – slide 27
    U.S. Diesel Exports 1400 12 Month Moving Average (MBPD) 1200 Other Europe 1000 Other Latin America 800 Mexico Canada 600 Latest 4 Wk avg estimate 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015…
  28. February 2016 Investor Presentation – Valero Energy Corporation – slide 28
    VLPs Competitive Strengths Strong Sponsor Quality Assets Stable Revenues Strategic relationship with High quality, well Stable and predictable investment grade maintained assets cash flows from long sponsor VLO integrated with VLOs…
  29. February 2016 Investor Presentation – Valero Energy Corporation – slide 29
    VLP Assets Located in U.S. Gulf Coast and Mid-Continent IPO assets Drop downs Texas Crude Systems McKee, Three Rivers, Wynnewood July 1, 2014 - 154 mm(1) Houston and St. Charles Terminals March 1, 2015 - 671 mm(1)…
  30. February 2016 Investor Presentation – Valero Energy Corporation – slide 30
    VLP Unit Price Outperformed Peers since 2014 VLP TLLP MPLX PSXP 85 -15% -1% -35% -76% 15 Prices through Feb 10 close. 31
  31. February 2016 Investor Presentation – Valero Energy Corporation – slide 31
    Investor Relations Contacts For more information, please contact: John Locke Karen Ngo Vice President, Investor Relations Manager, Investor Relations 210.345.3077 210.345.4574 john.lockevalero.com karen.ngovalero.com 32

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