Valero Energy Corporation (NYSE:VLO) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 10:00 am ET

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Valero Energy Corporation (NYSE:VLO) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Welcome to the Valero Energy Corporation announces fourth quarter 2014 earnings results conference call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. John Locke. Mr. Locke, you may begin.

Executive
John Locke

Thank you, Hilda. Good morning and welcome to Valero Energy Corporation's fourth quarter 2014 earnings conference call. With me today are Joe Gorder, our Chairman and CEO; Mike Ciskowski, our EVP and CFO; Lane Riggs, our EVP of Refining Operations and Engineering; Jay Browning, our EVP 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 valero.com.

Also, attached to the earnings release are tables that provide additional financial information on our business segments. If you have any questions after reviewing these tables, please feel free to contact our IR team after the call.

(Forward-Looking Cautionary Statements)

Now, I will turn the call over to Joe for an update on company operations and strategy.

Executive
Joseph Gorder

Well, thanks very much, John, and good morning, everyone. Well, as John will cover in more detail momentarily, we did have a great fourth quarter and a great year. What I'd like to do is spend a few minutes discussing our key strategies and highlight a few of our accomplishments in the quarter.

As you have seen from our recent disclosure, our strategies are focused on operations excellence, returning capital to stockholders, maintaining disciplined capital investments and unlocking asset value. Operations excellence continues to be important to us. Our team understands that reliability drive safe and profitable operations, so we are relentlessly committed here.

An example of this can be seen in our Meraux refinery, where we completed our reliability improvement program and the hydrocracker revamp project. We expect the investments we've made here to improve the refinery for liability and performance. Disciplined capital allocation is another key focus for us. Last week, we increased our regular cash quarterly dividend by 45% to $0.40 per share or $1.60 annualized. This increase demonstrates our belief in Valero's earnings power and our commitment to returning cash to stockholders.

Regarding capital investments, we completed our 2014 capital program under budget, as noted in the release. This resulted from the rigor and discipline that Lane and his team applied to spending throughout Valero's gated project management process. We're committed to applying the same rigor to future investments.

The majority of our growth investments for 2015 and 2016 are allocated to logistics, and to increasing our capability to access and process advantage crude oil for our flexible refining system. We expect the majority of the logistics investments to be eligible for future drops to Valero Energy Partners, which is our sponsored master limited partnership.

On the topic of VLP, we're committed to