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þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _______________ to _______________
|
Delaware
|
74-1828067
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer
þ
Accelerated filer
o
Non-accelerated filer
o
|
Smaller reporting company
o
Emerging growth company
o
|
|
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Page
|
|
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|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and temporary cash investments
|
$
|
4,658
|
|
|
$
|
5,850
|
|
Receivables, net
|
6,814
|
|
|
6,922
|
|
||
Inventories
|
6,555
|
|
|
6,384
|
|
||
Prepaid expenses and other
|
233
|
|
|
156
|
|
||
Total current assets
|
18,260
|
|
|
19,312
|
|
||
Property, plant, and equipment, at cost
|
40,543
|
|
|
40,010
|
|
||
Accumulated depreciation
|
(12,812
|
)
|
|
(12,530
|
)
|
||
Property, plant, and equipment, net
|
27,731
|
|
|
27,480
|
|
||
Deferred charges and other assets, net
|
3,385
|
|
|
3,366
|
|
||
Total assets
|
$
|
49,376
|
|
|
$
|
50,158
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of debt and capital lease obligations
|
$
|
871
|
|
|
$
|
122
|
|
Accounts payable
|
7,966
|
|
|
8,348
|
|
||
Accrued expenses
|
590
|
|
|
712
|
|
||
Taxes other than income taxes payable
|
1,226
|
|
|
1,321
|
|
||
Income taxes payable
|
99
|
|
|
568
|
|
||
Total current liabilities
|
10,752
|
|
|
11,071
|
|
||
Debt and capital lease obligations, less current portion
|
8,086
|
|
|
8,750
|
|
||
Deferred income tax liabilities
|
4,711
|
|
|
4,708
|
|
||
Other long-term liabilities
|
2,902
|
|
|
2,729
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity:
|
|
|
|
||||
Valero Energy Corporation stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value; 1,200,000,000 shares authorized;
673,501,593 and 673,501,593 shares issued
|
7
|
|
|
7
|
|
||
Additional paid-in capital
|
7,026
|
|
|
7,039
|
|
||
Treasury stock, at cost;
242,573,833 and 239,603,534 common shares
|
(13,588
|
)
|
|
(13,315
|
)
|
||
Retained earnings
|
29,415
|
|
|
29,200
|
|
||
Accumulated other comprehensive loss
|
(983
|
)
|
|
(940
|
)
|
||
Total Valero Energy Corporation stockholders’ equity
|
21,877
|
|
|
21,991
|
|
||
Noncontrolling interests
|
1,048
|
|
|
909
|
|
||
Total equity
|
22,925
|
|
|
22,900
|
|
||
Total liabilities and equity
|
$
|
49,376
|
|
|
$
|
50,158
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues (a)
|
$
|
26,439
|
|
|
$
|
21,772
|
|
Cost of sales:
|
|
|
|
||||
Cost of materials and other
|
23,756
|
|
|
19,428
|
|
||
Operating expenses (excluding depreciation and amortization
expense reflected below)
|
1,136
|
|
|
1,124
|
|
||
Depreciation and amortization expense
|
485
|
|
|
488
|
|
||
Total cost of sales
|
25,377
|
|
|
21,040
|
|
||
Other operating expenses
|
10
|
|
|
—
|
|
||
General and administrative expenses (excluding depreciation and
amortization expense reflected below)
|
238
|
|
|
192
|
|
||
Depreciation and amortization expense
|
13
|
|
|
12
|
|
||
Operating income
|
801
|
|
|
528
|
|
||
Other income, net
|
51
|
|
|
26
|
|
||
Interest and debt expense, net of capitalized interest
|
(121
|
)
|
|
(121
|
)
|
||
Income before income tax expense
|
731
|
|
|
433
|
|
||
Income tax expense
|
149
|
|
|
112
|
|
||
Net income
|
582
|
|
|
321
|
|
||
Less: Net income attributable to noncontrolling interests
|
113
|
|
|
16
|
|
||
Net income attributable to Valero Energy Corporation stockholders
|
$
|
469
|
|
|
$
|
305
|
|
|
|
|
|
||||
Earnings per common share
|
$
|
1.09
|
|
|
$
|
0.68
|
|
Weighted-average common shares outstanding (in millions)
|
431
|
|
|
448
|
|
||
Earnings per common share – assuming dilution
|
$
|
1.09
|
|
|
$
|
0.68
|
|
Weighted-average common shares outstanding –
assuming dilution (in millions)
|
432
|
|
|
451
|
|
||
Dividends per common share
|
$
|
0.80
|
|
|
$
|
0.70
|
|
_______________________________________________
|
|
|
|
||||
Supplemental information:
|
|
|
|
||||
(a) Includes excise taxes on sales by certain of our international
operations
|
$
|
1,464
|
|
|
$
|
1,272
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
582
|
|
|
$
|
321
|
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustment
|
45
|
|
|
74
|
|
||
Net gain on pension and other postretirement
benefits
|
8
|
|
|
3
|
|
||
Other comprehensive income before
income tax expense
|
53
|
|
|
77
|
|
||
Income tax expense related to items of
other comprehensive income
|
2
|
|
|
1
|
|
||
Other comprehensive income
|
51
|
|
|
76
|
|
||
Comprehensive income
|
633
|
|
|
397
|
|
||
Less: Comprehensive income attributable
to noncontrolling interests
|
116
|
|
|
16
|
|
||
Comprehensive income attributable to
Valero Energy Corporation stockholders
|
$
|
517
|
|
|
$
|
381
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
582
|
|
|
$
|
321
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
498
|
|
|
500
|
|
||
Deferred income tax expense (benefit)
|
2
|
|
|
(4
|
)
|
||
Changes in current assets and current liabilities
|
(1,026
|
)
|
|
151
|
|
||
Changes in deferred charges and credits and
other operating activities, net
|
82
|
|
|
20
|
|
||
Net cash provided by operating activities
|
138
|
|
|
988
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(356
|
)
|
|
(279
|
)
|
||
Deferred turnaround and catalyst costs
|
(220
|
)
|
|
(245
|
)
|
||
Investments in joint ventures
|
(55
|
)
|
|
(117
|
)
|
||
Acquisition of undivided interests
|
(85
|
)
|
|
(72
|
)
|
||
Capital expenditures of certain variable interest entities
|
(28
|
)
|
|
—
|
|
||
Other investing activities, net
|
(8
|
)
|
|
(1
|
)
|
||
Net cash used in investing activities
|
(752
|
)
|
|
(714
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of Valero Energy Partners LP debt
|
498
|
|
|
—
|
|
||
Repayments of debt and capital lease obligations
|
(415
|
)
|
|
(5
|
)
|
||
Purchase of common stock for treasury
|
(320
|
)
|
|
(314
|
)
|
||
Common stock dividends
|
(345
|
)
|
|
(315
|
)
|
||
Proceeds from issuance of Valero Energy Partners LP common units
|
—
|
|
|
35
|
|
||
Contribution from noncontrolling interest
|
32
|
|
|
—
|
|
||
Distributions to noncontrolling interests
|
(11
|
)
|
|
(34
|
)
|
||
Other financing activities, net
|
(12
|
)
|
|
(19
|
)
|
||
Net cash used in financing activities
|
(573
|
)
|
|
(652
|
)
|
||
Effect of foreign exchange rate changes on cash
|
(5
|
)
|
|
25
|
|
||
Net decrease in cash and temporary cash investments
|
(1,192
|
)
|
|
(353
|
)
|
||
Cash and temporary cash investments at beginning of period
|
5,850
|
|
|
4,816
|
|
||
Cash and temporary cash investments at end of period
|
$
|
4,658
|
|
|
$
|
4,463
|
|
1.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
INVENTORIES
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Refinery feedstocks
|
$
|
2,471
|
|
|
$
|
2,427
|
|
Refined petroleum products and blendstocks
|
3,569
|
|
|
3,459
|
|
||
Ethanol feedstocks and products
|
258
|
|
|
242
|
|
||
Materials and supplies
|
257
|
|
|
256
|
|
||
Inventories
|
$
|
6,555
|
|
|
$
|
6,384
|
|
3.
|
DEBT AND CAPITAL LEASE OBLIGATIONS
|
|
|
|
|
|
|
March 31, 2018
|
||||||||||||
|
|
Facility
Amount |
|
Maturity Date
|
|
Outstanding
Borrowings |
|
Letters of
Credit Issued |
|
Availability
|
||||||||
Committed facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Valero Revolver
|
|
$
|
3,000
|
|
|
November 2020
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
2,862
|
|
VLP Revolver
|
|
750
|
|
|
November 2020
|
|
—
|
|
|
—
|
|
|
750
|
|
||||
Canadian Revolver
|
|
C$
|
75
|
|
|
November 2018
|
|
C$
|
—
|
|
|
C$
|
6
|
|
|
C$
|
69
|
|
Accounts receivable
sales facility
|
|
1,300
|
|
|
July 2018
|
|
100
|
|
|
n/a
|
|
|
1,200
|
|
||||
Letter of credit facility
|
|
100
|
|
|
November 2018
|
|
n/a
|
|
|
—
|
|
|
100
|
|
||||
Uncommitted facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Letter of credit facilities
|
|
n/a
|
|
|
n/a
|
|
n/a
|
|
|
273
|
|
|
n/a
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Interest and debt expense
|
$
|
139
|
|
|
$
|
134
|
|
Less capitalized interest
|
18
|
|
|
13
|
|
||
Interest and debt expense, net of
capitalized interest
|
$
|
121
|
|
|
$
|
121
|
|
4.
|
COMMITMENTS AND CONTINGENCIES
|
5.
|
EQUITY
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Valero
Stockholders’
Equity
|
|
Non-
controlling
Interests (a)
|
|
Total
Equity
|
|
Valero
Stockholders’
Equity
|
|
Non-
controlling
Interests (a)
|
|
Total
Equity
|
||||||||||||
Balance as of
beginning of period
|
$
|
21,991
|
|
|
$
|
909
|
|
|
$
|
22,900
|
|
|
$
|
20,024
|
|
|
$
|
830
|
|
|
$
|
20,854
|
|
Net income
|
469
|
|
|
113
|
|
|
582
|
|
|
305
|
|
|
16
|
|
|
321
|
|
||||||
Dividends
|
(345
|
)
|
|
—
|
|
|
(345
|
)
|
|
(315
|
)
|
|
—
|
|
|
(315
|
)
|
||||||
Stock-based
compensation expense
|
14
|
|
|
—
|
|
|
14
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||
Transactions in connection
with stock-based
compensation plans
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||
Stock purchases under
purchase programs
|
(256
|
)
|
|
—
|
|
|
(256
|
)
|
|
(292
|
)
|
|
—
|
|
|
(292
|
)
|
||||||
Contribution from
noncontrolling interest
|
—
|
|
|
30
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to
noncontrolling interests
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
||||||
Other
|
2
|
|
|
4
|
|
|
6
|
|
|
24
|
|
|
14
|
|
|
38
|
|
||||||
Other comprehensive
income
|
48
|
|
|
3
|
|
|
51
|
|
|
76
|
|
|
—
|
|
|
76
|
|
||||||
Balance as of end of period
|
$
|
21,877
|
|
|
$
|
1,048
|
|
|
$
|
22,925
|
|
|
$
|
19,825
|
|
|
$
|
826
|
|
|
$
|
20,651
|
|
(a)
|
The noncontrolling interests relate to third-party ownership interests in VIEs for which we are the primary beneficiary and therefore consolidate. See
Note 6
for information about our consolidated VIEs.
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Foreign
Currency
Translation
Adjustment
|
|
Defined
Benefit
Plans
Items
|
|
Total
|
|
Foreign
Currency
Translation
Adjustment
|
|
Defined
Benefit
Plans
Items
|
|
Total
|
||||||||||||
Balance as of beginning of period
|
$
|
(507
|
)
|
|
$
|
(433
|
)
|
|
$
|
(940
|
)
|
|
$
|
(1,021
|
)
|
|
$
|
(389
|
)
|
|
$
|
(1,410
|
)
|
Other comprehensive income
before reclassifications
|
42
|
|
|
—
|
|
|
42
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||
Amounts reclassified from
accumulated other
comprehensive loss
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Other comprehensive income
|
42
|
|
|
6
|
|
|
48
|
|
|
74
|
|
|
2
|
|
|
76
|
|
||||||
Reclassification of stranded income
tax effects of Tax Reform
to retained earnings per
ASU 2018-02 (see Note 1)
|
—
|
|
|
(91
|
)
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of end of period
|
$
|
(465
|
)
|
|
$
|
(518
|
)
|
|
$
|
(983
|
)
|
|
$
|
(947
|
)
|
|
$
|
(387
|
)
|
|
$
|
(1,334
|
)
|
|
|
|
|
|
|
|
6.
|
VARIABLE INTEREST ENTITIES
|
•
|
VLP, a publicly traded master limited partnership formed to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets;
|
•
|
Diamond Green Diesel Holdings LLC (DGD), a joint venture formed to construct and operate a biodiesel plant that processes animal fats, used cooking oils, and other vegetable oils into renewable green diesel; and
|
•
|
terminaling agreements with three subsidiaries of Infraestructura Energetica Nova, S.A.B. de C.V. (IEnova), a Mexican subsidiary of Sempra Energy, a U.S. public company (the three subsidiaries are collectively referred to as VPM Terminals).
|
|
December 31, 2017
|
||||||||||||||||||
|
VLP
|
|
DGD
|
|
VPM
Terminals
|
|
Other
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and temporary cash investments
|
$
|
42
|
|
|
$
|
123
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
179
|
|
Other current assets
|
2
|
|
|
66
|
|
|
4
|
|
|
—
|
|
|
72
|
|
|||||
Property, plant, and equipment, net
|
1,416
|
|
|
435
|
|
|
51
|
|
|
127
|
|
|
2,029
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
$
|
27
|
|
|
$
|
33
|
|
|
$
|
26
|
|
|
$
|
9
|
|
|
$
|
95
|
|
Debt and capital lease obligations,
less current portion
|
905
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
948
|
|
7.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Three months ended March 31:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
34
|
|
|
$
|
31
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
23
|
|
|
21
|
|
|
2
|
|
|
3
|
|
||||
Expected return on plan assets
|
(41
|
)
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Net actuarial (gain)
loss
|
16
|
|
|
13
|
|
|
—
|
|
|
(1
|
)
|
||||
Prior service credit
|
(5
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Special charges
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
(credit)
|
$
|
29
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
8.
|
INCOME TAXES
|
9.
|
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Participating
Securities
|
|
Common
Stock
|
|
Participating
Securities
|
|
Common
Stock
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Valero stockholders
|
|
|
$
|
469
|
|
|
|
|
$
|
305
|
|
||||
Less dividends paid:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
|
344
|
|
|
|
|
314
|
|
||||||
Participating securities
|
|
|
1
|
|
|
|
|
1
|
|
||||||
Undistributed
earnings (excess distributions
over earnings)
|
|
|
$
|
124
|
|
|
|
|
$
|
(10
|
)
|
||||
Weighted-average common shares outstanding
|
1
|
|
|
431
|
|
|
2
|
|
|
448
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
Undistributed earnings (excess distributions
over earnings)
|
0.29
|
|
|
0.29
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Total earnings per common share
|
$
|
1.09
|
|
|
$
|
1.09
|
|
|
$
|
0.70
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share –
assuming dilution:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Valero stockholders
|
|
|
$
|
469
|
|
|
|
|
$
|
305
|
|
||||
Weighted-average common shares outstanding
|
|
|
431
|
|
|
|
|
448
|
|
||||||
Common equivalent shares
|
|
|
1
|
|
|
|
|
3
|
|
||||||
Weighted-average common shares outstanding –
assuming dilution
|
|
|
432
|
|
|
|
|
451
|
|
||||||
Earnings per common share – assuming dilution
|
|
|
$
|
1.09
|
|
|
|
|
$
|
0.68
|
|
10.
|
REVENUES AND SEGMENT INFORMATION
|
•
|
The
refining segment
includes the operations of our
15
petroleum refineries, the associated marketing activities, and certain logistics assets that support our refining operations that are not owned by VLP. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks (e.g., conventional gasolines, premium gasolines, and gasoline meeting the specifications of the California Air Resources Board (CARB)), distillates (e.g., diesel, low-sulfur diesel, ultra-low-sulfur diesel, CARB diesel, jet fuel, and other distillates), and other products (e.g., asphalt, petrochemicals, lubricants, and other refined petroleum products).
|
•
|
The
ethanol segment
includes the operations of our
11
ethanol plants, the associated marketing activities, and logistics assets that support our ethanol operations. The principal products manufactured by our ethanol plants are ethanol and distillers grains. Some ethanol is sold to our refining segment, which is blended into gasoline and sold to that segment’s customers as a finished gasoline product.
|
•
|
The
VLP segment
includes the results of VLP. VLP generates revenue from transportation and terminaling activities provided to our refining segment. All of VLP’s revenues are intersegment revenues that are generated under commercial agreements with our refining segment. Revenues generated under these agreements are eliminated in consolidation.
|
|
Refining
|
|
Ethanol
|
|
VLP
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Three months ended March 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
25,561
|
|
|
$
|
877
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
26,439
|
|
Intersegment revenues
|
4
|
|
|
46
|
|
|
132
|
|
|
(182
|
)
|
|
—
|
|
|||||
Total revenues
|
25,565
|
|
|
923
|
|
|
132
|
|
|
(181
|
)
|
|
26,439
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
23,188
|
|
|
749
|
|
|
—
|
|
|
(181
|
)
|
|
23,756
|
|
|||||
Operating expenses (excluding depreciation
and amortization expense reflected below)
|
997
|
|
|
111
|
|
|
29
|
|
|
(1
|
)
|
|
1,136
|
|
|||||
Depreciation and amortization expense
|
448
|
|
|
18
|
|
|
19
|
|
|
—
|
|
|
485
|
|
|||||
Total cost of sales
|
24,633
|
|
|
878
|
|
|
48
|
|
|
(182
|
)
|
|
25,377
|
|
|||||
Other operating expenses
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
|
238
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|||||
Operating income by segment
|
$
|
922
|
|
|
$
|
45
|
|
|
$
|
84
|
|
|
$
|
(250
|
)
|
|
$
|
801
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended March 31, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
20,887
|
|
|
$
|
885
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,772
|
|
Intersegment revenues
|
—
|
|
|
60
|
|
|
106
|
|
|
(166
|
)
|
|
—
|
|
|||||
Total revenues
|
20,887
|
|
|
945
|
|
|
106
|
|
|
(166
|
)
|
|
21,772
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
18,807
|
|
|
787
|
|
|
—
|
|
|
(166
|
)
|
|
19,428
|
|
|||||
Operating expenses (excluding depreciation
and amortization expense reflected below)
|
991
|
|
|
109
|
|
|
24
|
|
|
—
|
|
|
1,124
|
|
|||||
Depreciation and amortization expense
|
449
|
|
|
27
|
|
|
12
|
|
|
—
|
|
|
488
|
|
|||||
Total cost of sales
|
20,247
|
|
|
923
|
|
|
36
|
|
|
(166
|
)
|
|
21,040
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
|
—
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|
192
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||
Operating income by segment
|
$
|
640
|
|
|
$
|
22
|
|
|
$
|
70
|
|
|
$
|
(204
|
)
|
|
$
|
528
|
|
|
Three Months Ended
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Refining:
|
|
|
|
||||
Gasolines and blendstocks
|
$
|
10,629
|
|
|
$
|
9,335
|
|
Distillates
|
12,658
|
|
|
9,696
|
|
||
Other product revenues
|
2,274
|
|
|
1,856
|
|
||
Total refining revenues
|
25,561
|
|
|
20,887
|
|
||
Ethanol:
|
|
|
|
||||
Ethanol
|
701
|
|
|
750
|
|
||
Distillers grains
|
176
|
|
|
135
|
|
||
Total ethanol revenues
|
877
|
|
|
885
|
|
||
VLP:
|
|
|
|
||||
Pipeline transportation
|
31
|
|
|
23
|
|
||
Terminaling
|
99
|
|
|
83
|
|
||
Storage and other
|
2
|
|
|
—
|
|
||
Total VLP revenues
|
132
|
|
|
106
|
|
||
Corporate – other revenues
|
1
|
|
|
—
|
|
||
Elimination of intersegment revenues
|
(132
|
)
|
|
(106
|
)
|
||
Revenues
|
$
|
26,439
|
|
|
$
|
21,772
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Refining
|
$
|
40,699
|
|
|
$
|
40,382
|
|
Ethanol
|
1,355
|
|
|
1,344
|
|
||
VLP
|
1,545
|
|
|
1,517
|
|
||
Corporate and eliminations
|
5,777
|
|
|
6,915
|
|
||
Total assets
|
$
|
49,376
|
|
|
$
|
50,158
|
|
11.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Decrease (increase) in current assets:
|
|
|
|
||||
Receivables, net
|
$
|
145
|
|
|
$
|
817
|
|
Inventories
|
(126
|
)
|
|
(291
|
)
|
||
Prepaid expenses and other
|
(79
|
)
|
|
53
|
|
||
Increase (decrease) in current liabilities:
|
|
|
|
||||
Accounts payable
|
(322
|
)
|
|
(306
|
)
|
||
Accrued expenses
|
(131
|
)
|
|
20
|
|
||
Taxes other than income taxes payable
|
(111
|
)
|
|
(123
|
)
|
||
Income taxes payable
|
(402
|
)
|
|
(19
|
)
|
||
Changes in current assets and current liabilities
|
$
|
(1,026
|
)
|
|
$
|
151
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Interest paid in excess of amount capitalized
|
$
|
127
|
|
|
$
|
128
|
|
Income taxes paid, net
|
552
|
|
|
96
|
|
12.
|
FAIR VALUE MEASUREMENTS
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
|
|
Total
Gross
Fair
Value
|
|
Effect of
Counter-
party
Netting
|
|
Effect of
Cash
Collateral
Netting
|
|
Net
Carrying
Value on
Balance
Sheet
|
|
Cash
Collateral
Paid or
Received
Not Offset
|
||||||||||||||||||||
|
Fair Value Hierarchy
|
|
|
|
|
|
|||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivative
contracts
|
$
|
875
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
894
|
|
|
$
|
(893
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Investments of certain
benefit plans
|
65
|
|
|
—
|
|
|
8
|
|
|
73
|
|
|
n/a
|
|
|
n/a
|
|
|
73
|
|
|
n/a
|
|
||||||||
Total
|
$
|
940
|
|
|
$
|
19
|
|
|
$
|
8
|
|
|
$
|
967
|
|
|
$
|
(893
|
)
|
|
$
|
—
|
|
|
$
|
74
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivative
contracts
|
$
|
955
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
969
|
|
|
$
|
(893
|
)
|
|
$
|
(76
|
)
|
|
$
|
—
|
|
|
$
|
(102
|
)
|
Environmental credit
obligations
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|
n/a
|
|
|
n/a
|
|
|
104
|
|
|
n/a
|
|
||||||||
Physical purchase
contracts
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
n/a
|
|
|
n/a
|
|
|
6
|
|
|
n/a
|
|
||||||||
Foreign currency
contracts
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
n/a
|
|
|
n/a
|
|
|
7
|
|
|
n/a
|
|
||||||||
Total
|
$
|
962
|
|
|
$
|
124
|
|
|
$
|
—
|
|
|
$
|
1,086
|
|
|
$
|
(893
|
)
|
|
$
|
(76
|
)
|
|
$
|
117
|
|
|
|
|
•
|
Commodity derivative contracts consist primarily of exchange-traded futures and swaps, and as disclosed in
Note 13
, some of these contracts are designated as hedging instruments. These contracts are measured at fair value using the market approach. Exchange-traded futures are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. Swaps are priced using third-party broker quotes, industry pricing services, and exchange-traded curves, with appropriate consideration of counterparty credit risk, but because they have contractual terms that are not identical to exchange-traded futures instruments with a comparable market price, these financial instruments are categorized in Level 2 of the fair value hierarchy.
|
•
|
Physical purchase contracts represent the fair value of fixed-price corn purchase contracts. The fair values of these purchase contracts are measured using a market approach based on quoted prices from the commodity exchange or an independent pricing service and are categorized in Level 2 of the fair value hierarchy.
|
•
|
Investments of certain benefit plans consist of investment securities held by trusts for the purpose of satisfying a portion of our obligations under certain U.S. nonqualified benefit plans. The assets categorized in Level 1 of the fair value hierarchy are measured at fair value using a market approach based on quoted prices from national securities exchanges. The assets categorized in Level 3 of the fair value hierarchy represent insurance contracts, the fair value of which is provided by the insurer.
|
•
|
Foreign currency contracts consist of foreign currency exchange and purchase contracts entered into for our international operations to manage our exposure to exchange rate fluctuations on transactions denominated in currencies other than the local (functional) currencies of those operations. These contracts are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy.
|
•
|
Environmental credit obligations represent our liability for the purchase of (i) biofuel credits (primarily Renewable Identification Numbers (RINs) in the U.S.) needed to satisfy our obligation to blend biofuels into the products we produce and (ii) emission credits under the
California Global Warming Solutions Act
(the California cap-and-trade system, also known as AB 32), Quebec’s
Environmental Quality Act
(the Quebec cap-and-trade system), and Ontario’s
Climate Change Mitigation and Low-Carbon Economy Act
(the Ontario cap-and-trade system), (collectively, the cap-and-trade systems). To the degree we are unable to blend biofuels (such as ethanol and biodiesel) at percentages required under the biofuel programs, we must purchase biofuel credits to comply with these programs. Under the cap-and-trade systems, we must purchase emission credits to comply with these systems. These programs are further described in
Note 13
under “Environmental Compliance Program Price Risk.” The liability for environmental credits is based on our deficit for such credits as of the balance sheet date, if any, after considering any credits acquired or under contract, and is equal to the product of the credits deficit and the market price of these credits as of the balance sheet date. The environmental credit obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using the market approach based on quoted prices from an independent pricing service.
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
Hierarchy
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and temporary cash
investments
|
Level 1
|
|
$
|
4,658
|
|
|
$
|
4,658
|
|
|
$
|
5,850
|
|
|
$
|
5,850
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Debt (excluding capital leases)
|
Level 2
|
|
8,392
|
|
|
9,527
|
|
|
8,310
|
|
|
9,795
|
|
13.
|
PRICE RISK MANAGEMENT ACTIVITIES
|
•
|
Economic Hedges
– Economic hedges represent commodity derivative instruments that are used to manage price volatility in certain (i) feedstock and refined petroleum product inventories, (ii) fixed-price purchase contracts, and (iii) forecasted feedstock, refined petroleum product or natural gas purchases and refined petroleum product sales. The objectives of our economic hedges are to hedge price volatility in certain feedstock and refined petroleum product inventories and to lock in the price of forecasted feedstock, refined petroleum product, or natural gas purchases or refined petroleum product sales at existing market prices that we deem favorable. Economic hedges are not designated as fair value or cash flow hedges for accounting purposes, usually due to the difficulty of establishing the required documentation at the date the derivative instrument is entered into for them to qualify as hedging instruments for accounting purposes.
|
|
|
Notional Contract Volumes by
Year of Maturity
|
||||
Derivative Instrument
|
|
2018
|
|
2019
|
||
Crude oil and refined petroleum products:
|
|
|
|
|
||
Swaps – long
|
|
9,099
|
|
|
—
|
|
Swaps – short
|
|
8,636
|
|
|
—
|
|
Futures – long
|
|
99,455
|
|
|
—
|
|
Futures – short
|
|
101,298
|
|
|
—
|
|
Corn:
|
|
|
|
|
||
Futures – long
|
|
23,800
|
|
|
125
|
|
Futures – short
|
|
63,330
|
|
|
4,685
|
|
Physical contracts – long
|
|
35,069
|
|
|
4,759
|
|
Soybean oil:
|
|
|
|
|
||
Futures – long
|
|
28,320
|
|
|
—
|
|
Futures – short
|
|
89,819
|
|
|
—
|
|
•
|
Trading Derivatives
– Our objective for entering into commodity derivative instruments for trading purposes is to take advantage of existing market conditions for crude oil and refined petroleum products.
|
|
|
Notional Contract Volumes by
Year of Maturity
|
||||
Derivative Instrument
|
|
2018
|
|
2019
|
||
Crude oil and refined
petroleum
products:
|
|
|
|
|
||
Swaps – long
|
|
300
|
|
|
—
|
|
Swaps – short
|
|
300
|
|
|
—
|
|
Futures – long
|
|
35,329
|
|
|
2,675
|
|
Futures – short
|
|
35,247
|
|
|
2,675
|
|
Options – long
|
|
112,500
|
|
|
—
|
|
Options – short
|
|
112,800
|
|
|
—
|
|
Corn:
|
|
|
|
|
||
Futures – long
|
|
250
|
|
|
—
|
|
|
Balance Sheet
Location
|
|
March 31, 2018
|
||||||
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|||||
Derivatives not designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
1,009
|
|
|
$
|
1,029
|
|
Swaps
|
Receivables, net
|
|
6
|
|
|
12
|
|
||
Options
|
Receivables, net
|
|
11
|
|
|
5
|
|
||
Physical purchase contracts
|
Inventories
|
|
2
|
|
|
2
|
|
||
Foreign currency contracts
|
Receivables, net
|
|
1
|
|
|
—
|
|
||
Total
|
|
|
$
|
1,029
|
|
|
$
|
1,048
|
|
|
Balance Sheet
Location
|
|
December 31, 2017
|
||||||
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|||||
Derivatives not designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
875
|
|
|
$
|
955
|
|
Swaps
|
Receivables, net
|
|
11
|
|
|
11
|
|
||
Options
|
Receivables, net
|
|
8
|
|
|
3
|
|
||
Physical purchase contracts
|
Inventories
|
|
—
|
|
|
6
|
|
||
Foreign currency contracts
|
Accrued expenses
|
|
—
|
|
|
7
|
|
||
Total
|
|
|
$
|
894
|
|
|
$
|
982
|
|
Derivatives Designated as
Economic Hedges
|
|
Location of Loss
Recognized in Income on Derivatives |
|
Three Months Ended
March 31, |
||||||
2018
|
|
2017
|
||||||||
Commodity contracts
|
|
Cost of materials and other
|
|
$
|
(48
|
)
|
|
$
|
(97
|
)
|
Foreign currency contracts
|
|
Cost of materials and other
|
|
(3
|
)
|
|
(6
|
)
|
Trading Derivatives
|
|
Location of Gain
Recognized in Income on Derivatives |
|
Three Months Ended
March 31, |
||||||
2018
|
|
2017
|
||||||||
Commodity contracts
|
|
Cost of materials and other
|
|
$
|
36
|
|
|
$
|
1
|
|
•
|
future refining segment margins, including gasoline and distillate margins;
|
•
|
future ethanol segment margins;
|
•
|
expectations regarding feedstock costs, including crude oil differentials, and operating expenses;
|
•
|
anticipated levels of crude oil and refined petroleum product inventories;
|
•
|
our anticipated level of capital investments, including deferred costs for refinery turnarounds and catalyst, capital expenditures for environmental and other purposes, and joint venture investments, and the effect of those capital investments on our results of operations;
|
•
|
anticipated trends in the supply of and demand for crude oil and other feedstocks and refined petroleum products in the regions where we operate, as well as globally;
|
•
|
expectations regarding environmental, tax, and other regulatory initiatives; and
|
•
|
the effect of general economic and other conditions on refining, ethanol, and midstream industry fundamentals.
|
•
|
acts of terrorism aimed at either our facilities or other facilities that could impair our ability to produce or transport refined petroleum products or receive feedstocks;
|
•
|
political and economic conditions in nations that produce crude oil or consume refined petroleum products;
|
•
|
demand for, and supplies of, refined petroleum products such as gasoline, diesel, jet fuel, petrochemicals, and ethanol;
|
•
|
demand for, and supplies of, crude oil and other feedstocks;
|
•
|
the ability of the members of the Organization of Petroleum Exporting Countries to agree on and to maintain crude oil price and production controls;
|
•
|
the level of consumer demand, including seasonal fluctuations;
|
•
|
refinery overcapacity or undercapacity;
|
•
|
our ability to successfully integrate any acquired businesses into our operations;
|
•
|
the actions taken by competitors, including both pricing and adjustments to refining capacity in response to market conditions;
|
•
|
the level of competitors’ imports into markets that we supply;
|
•
|
accidents, unscheduled shutdowns, or other catastrophes affecting our refineries, machinery, pipelines, equipment, and information systems, or those of our suppliers or customers;
|
•
|
changes in the cost or availability of transportation for feedstocks and refined petroleum products;
|
•
|
the price, availability, and acceptance of alternative fuels and alternative-fuel vehicles;
|
•
|
the levels of government subsidies for alternative fuels;
|
•
|
the volatility in the market price of biofuel credits (primarily RINs needed to comply with the U.S. federal Renewable Fuel Standard) and GHG emission credits needed to comply with the requirements of various GHG emission programs;
|
•
|
delay of, cancellation of, or failure to implement planned capital projects and realize the various assumptions and benefits projected for such projects or cost overruns in constructing such planned capital projects;
|
•
|
earthquakes, hurricanes, tornadoes, and irregular weather, which can unforeseeably affect the price or availability of natural gas, crude oil, grain and other feedstocks, and refined petroleum products and ethanol;
|
•
|
rulings, judgments, or settlements in litigation or other legal or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;
|
•
|
legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by governmental authorities, including tariffs and tax and environmental regulations, such as those implemented under the California cap-and-trade system (also known as AB 32), the Quebec cap-and-trade system, the Ontario cap-and-trade system, and the U.S. EPA’s regulation of GHGs, which may adversely affect our business or operations;
|
•
|
changes in the credit ratings assigned to our debt securities and trade credit;
|
•
|
changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, and the Mexican peso relative to the U.S. dollar;
|
•
|
overall economic conditions, including the stability and liquidity of financial markets; and
|
•
|
other factors generally described in the “Risk Factors” section included in our annual report on Form 10-K for the year ended
December 31, 2017
that is incorporated by reference herein.
|
•
|
Refining segment.
Refining segment adjusted operating income increased by $122 million primarily due to improved distillate margins and higher throughput volumes, partially offset by lower discounts on crude oils and higher cost of biofuel credits. This is more fully described on pages
43
and
44
.
|
•
|
Ethanol segment.
Ethanol segment operating income increased by
$23 million
primarily due to higher corn related co-product prices, partially offset by lower ethanol prices. This is more fully described on pages
44
and
45
.
|
•
|
VLP segment.
VLP segment operating income increased by
$14 million
primarily due to incremental revenues generated from transportation and terminaling activities provided to our refining segment associated with a terminal and a product pipeline system acquired in November
2017
. This is more fully described on page
45
.
|
•
|
Corporate and eliminations.
Adjusted corporate and eliminations decreased by $6 million primarily due to a decrease in advertising expenses. This is more fully described on page
45
.
|
•
|
Gasoline margins are expected to improve as demand strengthens with the upcoming driving season. Distillate margins are expected to remain near current levels.
|
•
|
Medium and heavy sour crude oil discounts are expected to remain weaker than their five-year averages as supplies of sour crude oils available in the market remain suppressed.
|
•
|
Sweet crude oil discounts are expected to remain near current levels as export demand remains strong and increased supplies from the Permian Basin are delivered into U.S. Gulf Coast markets.
|
•
|
Ethanol margins are expected to remain near current levels.
|
•
|
On April 19, 2018, our Texas City Refinery experienced a fire in its alkylate fractionator, which is more fully discussed in
Note 4
of Condensed Notes to Consolidated Financial Statements. Although we are in the preliminary stages of assessing the extent of damages, we do not believe that this incident will have a material adverse effect on our results of operations for the second quarter of 2018.
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
VLP
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
25,561
|
|
|
$
|
877
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
26,439
|
|
Intersegment revenues
|
4
|
|
|
46
|
|
|
132
|
|
|
(182
|
)
|
|
—
|
|
|||||
Total revenues
|
25,565
|
|
|
923
|
|
|
132
|
|
|
(181
|
)
|
|
26,439
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other (a)
|
23,188
|
|
|
749
|
|
|
—
|
|
|
(181
|
)
|
|
23,756
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
997
|
|
|
111
|
|
|
29
|
|
|
(1
|
)
|
|
1,136
|
|
|||||
Depreciation and amortization expense
|
448
|
|
|
18
|
|
|
19
|
|
|
—
|
|
|
485
|
|
|||||
Total cost of sales
|
24,633
|
|
|
878
|
|
|
48
|
|
|
(182
|
)
|
|
25,377
|
|
|||||
Other operating expenses (c)
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (d)
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
|
238
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|||||
Operating income by segment
|
$
|
922
|
|
|
$
|
45
|
|
|
$
|
84
|
|
|
$
|
(250
|
)
|
|
801
|
|
|
Other income, net
|
|
|
|
|
|
|
|
|
51
|
|
|||||||||
Interest and debt expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
(121
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
731
|
|
|||||||||
Income tax expense (e)
|
|
|
|
|
|
|
|
|
149
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
582
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests (a)
|
|
|
|
|
|
|
|
|
113
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
469
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
VLP
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
20,887
|
|
|
$
|
885
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,772
|
|
Intersegment revenues
|
—
|
|
|
60
|
|
|
106
|
|
|
(166
|
)
|
|
—
|
|
|||||
Total revenues
|
20,887
|
|
|
945
|
|
|
106
|
|
|
(166
|
)
|
|
21,772
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
18,807
|
|
|
787
|
|
|
—
|
|
|
(166
|
)
|
|
19,428
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below) (b)
|
991
|
|
|
109
|
|
|
24
|
|
|
—
|
|
|
1,124
|
|
|||||
Depreciation and amortization expense
|
449
|
|
|
27
|
|
|
12
|
|
|
—
|
|
|
488
|
|
|||||
Total cost of sales
|
20,247
|
|
|
923
|
|
|
36
|
|
|
(166
|
)
|
|
21,040
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|
192
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||
Operating income by segment
|
$
|
640
|
|
|
$
|
22
|
|
|
$
|
70
|
|
|
$
|
(204
|
)
|
|
528
|
|
|
Other income, net (b)
|
|
|
|
|
|
|
|
|
26
|
|
|||||||||
Interest and debt expense, net of capitalized interest
|
|
|
|
|
|
|
|
|
(121
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
433
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
112
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
321
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests
|
|
|
|
|
|
|
|
|
16
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
305
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Reconciliation of net income attributable to Valero Energy
Corporation stockholders to adjusted net income attributable to
Valero Energy Corporation stockholders (f)
|
|
|
|
||||
Net income attributable to Valero Energy Corporation stockholders
|
$
|
469
|
|
|
$
|
305
|
|
Exclude:
|
|
|
|
||||
Blender’s tax credit attributable to Valero Energy Corporation
shareholders (a)
|
90
|
|
|
—
|
|
||
Income tax expense related to the blender’s tax credit
|
(11
|
)
|
|
—
|
|
||
Blender’s tax credit attributable to Valero Energy Corporation
stockholders, net of taxes
|
79
|
|
|
—
|
|
||
Environmental reserve adjustment (d)
|
(52
|
)
|
|
—
|
|
||
Income tax benefit related to the environmental reserve adjustment
|
11
|
|
|
—
|
|
||
Environmental reserve adjustment, net of taxes
|
(41
|
)
|
|
—
|
|
||
Total adjustments
|
38
|
|
|
—
|
|
||
Adjusted net income attributable to
Valero Energy Corporation stockholders
|
$
|
431
|
|
|
$
|
305
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
VLP
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Reconciliation of operating income to adjusted
operating income (f)
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income by segment (see page 35)
|
$
|
922
|
|
|
$
|
45
|
|
|
$
|
84
|
|
|
$
|
(250
|
)
|
|
$
|
801
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
||||||||||
Blender’s tax credit (a)
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170
|
|
|||||
Other operating expenses (c)
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Environmental reserve adjustment (d)
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
|||||
Adjusted operating income
|
$
|
762
|
|
|
$
|
45
|
|
|
$
|
84
|
|
|
$
|
(198
|
)
|
|
$
|
693
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Throughput volumes (thousand barrels per day (BPD))
|
|
|
|
|
|
||||||
Feedstocks:
|
|
|
|
|
|
||||||
Heavy sour crude oil
|
482
|
|
|
448
|
|
|
34
|
|
|||
Medium/light sour crude oil
|
408
|
|
|
455
|
|
|
(47
|
)
|
|||
Sweet crude oil
|
1,344
|
|
|
1,245
|
|
|
99
|
|
|||
Residuals
|
222
|
|
|
235
|
|
|
(13
|
)
|
|||
Other feedstocks
|
119
|
|
|
149
|
|
|
(30
|
)
|
|||
Total feedstocks
|
2,575
|
|
|
2,532
|
|
|
43
|
|
|||
Blendstocks and other
|
356
|
|
|
306
|
|
|
50
|
|
|||
Total throughput volumes
|
2,931
|
|
|
2,838
|
|
|
93
|
|
|||
|
|
|
|
|
|
||||||
Yields (thousand BPD)
|
|
|
|
|
|
||||||
Gasolines and blendstocks
|
1,401
|
|
|
1,360
|
|
|
41
|
|
|||
Distillates
|
1,109
|
|
|
1,090
|
|
|
19
|
|
|||
Other products (g)
|
458
|
|
|
425
|
|
|
33
|
|
|||
Total yields
|
2,968
|
|
|
2,875
|
|
|
93
|
|
|||
|
|
|
|
|
|
||||||
Operating statistics (h)
|
|
|
|
|
|
||||||
Refining segment margin (f)
|
$
|
2,207
|
|
|
$
|
2,080
|
|
|
$
|
127
|
|
Adjusted refining segment operating income
(see page 37) (f)
|
$
|
762
|
|
|
$
|
640
|
|
|
$
|
122
|
|
Throughput volumes (thousand BPD)
|
2,931
|
|
|
2,838
|
|
|
93
|
|
|||
|
|
|
|
|
|
||||||
Refining segment margin per barrel of throughput
|
$
|
8.36
|
|
|
$
|
8.14
|
|
|
$
|
0.22
|
|
Less:
|
|
|
|
|
|
||||||
Operating expenses (excluding depreciation and
amortization expense reflected below) per barrel of
throughput (b)
|
3.78
|
|
|
3.87
|
|
|
(0.09
|
)
|
|||
Depreciation and amortization expense per barrel of
throughput
|
1.69
|
|
|
1.76
|
|
|
(0.07
|
)
|
|||
Adjusted refining segment operating income per barrel of
throughput
|
$
|
2.89
|
|
|
$
|
2.51
|
|
|
$
|
0.38
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Operating statistics (h)
|
|
|
|
|
|
||||||
Ethanol segment margin (f)
|
$
|
174
|
|
|
$
|
158
|
|
|
$
|
16
|
|
Ethanol segment operating income
|
$
|
45
|
|
|
$
|
22
|
|
|
$
|
23
|
|
Production volumes (thousand gallons per day)
|
4,113
|
|
|
4,041
|
|
|
72
|
|
|||
|
|
|
|
|
|
||||||
Ethanol segment margin per gallon of production
|
$
|
0.47
|
|
|
$
|
0.43
|
|
|
$
|
0.04
|
|
Less:
|
|
|
|
|
|
||||||
Operating expenses (excluding depreciation and
amortization expense reflected below) per gallon of
production
|
0.30
|
|
|
0.30
|
|
|
—
|
|
|||
Depreciation and amortization expense per gallon of
production
|
0.05
|
|
|
0.07
|
|
|
(0.02
|
)
|
|||
Ethanol segment operating income per gallon of
production
|
$
|
0.12
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Operating statistics (h)
|
|
|
|
|
|
||||||
Pipeline transportation revenue
|
$
|
31
|
|
|
$
|
23
|
|
|
$
|
8
|
|
Terminaling revenue
|
99
|
|
|
83
|
|
|
16
|
|
|||
Storage and other revenue
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total VLP revenues
|
$
|
132
|
|
|
$
|
106
|
|
|
$
|
26
|
|
|
|
|
|
|
|
||||||
Pipeline transportation throughput (thousand BPD)
|
1,062
|
|
|
962
|
|
|
100
|
|
|||
Pipeline transportation revenue per barrel of throughput
|
$
|
0.33
|
|
|
$
|
0.27
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Terminaling throughput (thousand BPD)
|
3,396
|
|
|
2,734
|
|
|
662
|
|
|||
Terminaling revenue per barrel of throughput
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
(0.02
|
)
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Feedstocks (dollars per barrel)
|
|
|
|
|
|
||||||
Brent crude oil
|
$
|
67.16
|
|
|
$
|
54.65
|
|
|
$
|
12.51
|
|
Brent less West Texas Intermediate (WTI) crude oil
|
4.29
|
|
|
2.82
|
|
|
1.47
|
|
|||
Brent less Alaska North Slope (ANS) crude oil
|
0.20
|
|
|
0.82
|
|
|
(0.62
|
)
|
|||
Brent less Louisiana Light Sweet (LLS) crude oil
|
1.38
|
|
|
1.13
|
|
|
0.25
|
|
|||
Brent less Argus Sour Crude Index (ASCI) crude oil
|
4.88
|
|
|
5.05
|
|
|
(0.17
|
)
|
|||
Brent less Maya crude oil
|
9.46
|
|
|
9.93
|
|
|
(0.47
|
)
|
|||
LLS crude oil
|
65.78
|
|
|
53.52
|
|
|
12.26
|
|
|||
LLS less ASCI crude oil
|
3.50
|
|
|
3.92
|
|
|
(0.42
|
)
|
|||
LLS less Maya crude oil
|
8.08
|
|
|
8.80
|
|
|
(0.72
|
)
|
|||
WTI crude oil
|
62.87
|
|
|
51.83
|
|
|
11.04
|
|
|||
|
|
|
|
|
|
||||||
Natural gas (dollars per million British Thermal Units)
|
3.19
|
|
|
2.95
|
|
|
0.24
|
|
|||
|
|
|
|
|
|
||||||
Products (dollars per barrel, unless otherwise noted)
|
|
|
|
|
|
||||||
U.S. Gulf Coast:
|
|
|
|
|
|
||||||
CBOB gasoline less Brent
|
7.28
|
|
|
8.78
|
|
|
(1.50
|
)
|
|||
Ultra-low-sulfur diesel less Brent
|
13.78
|
|
|
11.12
|
|
|
2.66
|
|
|||
Propylene less Brent
|
(6.82
|
)
|
|
1.22
|
|
|
(8.04
|
)
|
|||
CBOB gasoline less LLS
|
8.66
|
|
|
9.91
|
|
|
(1.25
|
)
|
|||
Ultra-low-sulfur diesel less LLS
|
15.16
|
|
|
12.25
|
|
|
2.91
|
|
|||
Propylene less LLS
|
(5.44
|
)
|
|
2.35
|
|
|
(7.79
|
)
|
|||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
CBOB gasoline less WTI
|
13.47
|
|
|
12.71
|
|
|
0.76
|
|
|||
Ultra-low-sulfur diesel less WTI
|
19.83
|
|
|
13.99
|
|
|
5.84
|
|
|||
North Atlantic:
|
|
|
|
|
|
||||||
CBOB gasoline less Brent
|
8.88
|
|
|
8.68
|
|
|
0.20
|
|
|||
Ultra-low-sulfur diesel less Brent
|
15.95
|
|
|
12.06
|
|
|
3.89
|
|
|||
U.S. West Coast:
|
|
|
|
|
|
||||||
CARBOB 87 gasoline less ANS
|
13.27
|
|
|
16.77
|
|
|
(3.50
|
)
|
|||
CARB diesel less ANS
|
17.28
|
|
|
14.84
|
|
|
2.44
|
|
|||
CARBOB 87 gasoline less WTI
|
17.36
|
|
|
18.77
|
|
|
(1.41
|
)
|
|||
CARB diesel less WTI
|
21.37
|
|
|
16.84
|
|
|
4.53
|
|
|||
New York Harbor corn crush (dollars per gallon)
|
0.19
|
|
|
0.23
|
|
|
(0.04
|
)
|
(a)
|
Cost of materials and other for the three months ended March 31, 2018 includes a benefit of $170 million for the biodiesel blender’s tax credit attributable to volumes blended during 2017. The benefit was recognized during the three months ended March 31, 2018 because the legislation authorizing the credit was passed and signed into law in February 2018. The $170 million pre-tax benefit is included in the refining segment and includes $80 million attributable to noncontrolling interest and $90 million attributable to Valero Energy Corporation stockholders.
|
(b)
|
Effective January 1, 2018, we adopted the provisions of ASU No. 2017-07 which resulted in the reclassification of the non-service component of net periodic pension cost and net periodic postretirement benefit cost from operating expenses (excluding depreciation and amortization expense) and general and administrative expenses (excluding depreciation and amortization expense) to “other income, net.” These new provisions are required to be applied retrospectively. Accordingly, for the three months ended March 31, 2017 we reclassified the non-service component out of operating expenses (excluding depreciation and amortization expense) and general and administrative expenses (excluding depreciation and amortization expense) of $7 million and $2 million, respectively, and into “other income, net.”
|
(c)
|
Other operating expenses reflects expenses that are not associated with our cost of sales. Other operating expenses for the three months ended March 31, 2018 primarily includes repair costs incurred at certain of our refineries due to damage associated with inclement weather events in 2018 and Hurricane Harvey in 2017.
|
(d)
|
General and administrative expenses (excluding depreciation and amortization expense) for the three months ended March 31, 2018 includes a charge of $52 million for an environmental reserve adjustment associated with certain non-operating sites.
|
(e)
|
As a result of Tax Reform that was enacted on December 22, 2017, the U.S. statutory income tax rate was reduced from 35 percent to 21 percent. Therefore, earnings from our U.S. operations for the three months ended March 31, 2018 are now taxed at 21 percent, resulting in a lower effective tax rate compared to the three months ended March 31, 2017.
|
(f)
|
We use certain financial measures (as noted below) that are not defined under U.S.
GAAP and are considered to be non-GAAP measures.
|
◦
|
Adjusted net income attributable to Valero Energy Corporation stockholders
is defined as net income attributable to Valero Energy Corporation stockholders excluding the blender’s tax credit, the environmental reserve adjustment, and their related income tax effect. Because the blender’s tax credit is attributable to volumes blended during 2017 and is not related to 2018 activities (see note (a)), and the environmental reserve adjustment is attributable to sites that were shutdown by prior owners and subsequently acquired by us (referred to as non-operating sites) (see note (d)).
|
◦
|
Refining segment margin
is defined as refining segment operating income excluding the 2017 blender’s tax credit received in 2018 (see note (a)), operating expenses (excluding depreciation and amortization expense), other operating expenses, and depreciation and amortization expense associated with our cost of sales, as reflected below.
|
◦
|
Ethanol segment margin
is defined as ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense associated with our cost of sales, as reflected below.
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Refining
|
|
Ethanol
|
|
Refining
|
|
Ethanol
|
||||||||
Reconciliation of operating income
to segment margin
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
922
|
|
|
$
|
45
|
|
|
$
|
640
|
|
|
$
|
22
|
|
Exclude:
|
|
|
|
|
|
|
|
||||||||
Blender’s tax credit (a)
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Operating expenses (excluding depreciation
and amortization expense reflected below) (b)
|
(997
|
)
|
|
(111
|
)
|
|
(991
|
)
|
|
(109
|
)
|
||||
Depreciation and amortization expense
|
(448
|
)
|
|
(18
|
)
|
|
(449
|
)
|
|
(27
|
)
|
||||
Other operating expenses (c)
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Segment margin
|
$
|
2,207
|
|
|
$
|
174
|
|
|
$
|
2,080
|
|
|
$
|
158
|
|
◦
|
Adjusted refining segment operating income
is defined as refining segment operating income excluding the 2017 blender’s tax credit received in 2018 (see note (a)) and other operating expenses.
|
◦
|
Adjusted corporate and eliminations
is defined as corporate and eliminations excluding environmental reserve adjustments associated with certain non-operating sites (see note (d)).
|
(g)
|
Other products primarily include petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
|
(h)
|
Valero uses certain operating statistics (as noted below) to evaluate performance between comparable periods. Different companies may calculate them in different ways.
|
•
|
Increase in distillate margins.
We experienced improved distillate margins throughout all of our regions in the
first quarter
of
2018
compared to the
first quarter
of
2017
. For example, the Brent-based benchmark reference margin for U.S. Gulf Coast ultra-low-sulfur diesel was
$13.78
per barrel in the
first quarter
of
2018
compared to
$11.12
per barrel in the
first quarter
of
2017
, representing a favorable increase of
$2.66
per barrel. Another example is the WTI-based benchmark reference margin for U.S. Mid-Continent ultra-low-sulfur diesel that was
$19.83
per barrel in the
first quarter
of
2018
compared to
$13.99
per barrel in the
first quarter
of
2017
, representing a favorable increase of
$5.84
per barrel. We estimate that the increase in distillate margins per barrel in the
first quarter
of
2018
compared to the
first quarter
of
2017
had a favorable impact to our refining segment margin of approximately $420 million.
|
•
|
Higher throughput volumes.
Refining throughput volumes increased by
93,000
BPD in the
first quarter
of
2018
. We estimate that the increase in refining throughput volumes had a positive impact on our refining segment margin of approximately $70 million.
|
•
|
Lower discounts on crude oils.
The market prices for refined products generally track the price of Brent crude oil, which is a benchmark crude oil, and we benefit when we process crude oils that are priced at a discount to Brent crude oil. While we benefitted from processing crude oils in the
first quarter
of
2018
, that benefit declined compared to the
first quarter
of
2017
. For example, ASCI crude oil processed in our U.S. Gulf Coast region sold at a discount to Brent crude oil of
$4.88
per barrel in the
first quarter
of
2018
compared to a discount of
$5.05
per barrel in the
first quarter
of
2017
, representing an unfavorable decrease of
$0.17
per barrel. Another example is Maya crude oil, which sold at a discount to Brent crude oil of
$9.46
per barrel in the
first quarter
of
2018
compared to a discount of
$9.93
per barrel in the
first quarter
of
2017
, representing an unfavorable decrease of
$0.47
per barrel. We estimate that the reduction in the discounts for crude oils that we processed in the
first quarter
of
2018
had an unfavorable impact to our refining segment margin of approximately $268 million.
|
•
|
Higher costs of biofuel credits.
As more fully described in
Note 13
of Condensed Notes to Consolidated Financial Statements, we must purchase biofuel credits in order to meet our biofuel blending obligation under various government and regulatory compliance programs, and the cost of these credits (primarily RINs in the U.S.) increased by
$60 million
to
$206 million
in the
first quarter
of
2018
compared to
$146 million
the
first quarter
of
2017
.
|
•
|
Increase in charges from VLP.
Charges from the VLP segment for transportation and terminaling services increased
$26 million
in the
first quarter
of
2018
compared to the
first quarter
of
2017
primarily due to additional services provided to the refining segment using a terminal and a product pipeline system acquired by VLP in November
2017
. The increase in charges from the VLP segment is more fully discussed in the VLP segment analysis below.
|
•
|
Higher co-product prices.
An increase in export demand for corn related co-products, primarily distillers grains, had a favorable effect on the prices we received. We estimate that the increase for corn related co-product prices had a favorable impact to our ethanol segment margin of approximately $33 million.
|
•
|
Lower ethanol prices
. Ethanol prices were lower in the
first quarter
of
2018
compared to the
first quarter
of
2017
primarily due to a decrease in ethanol export demand.
For example, the New York Harbor ethanol price was $1.52 per gallon in the
first quarter
of
2018
compared to $1.58 per gallon
|
(a)
|
Excludes
$71 million
of VLP cash and temporary cash investments that is available for VLP’s use only.
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
138
|
|
|
$
|
988
|
|
Investing activities
|
(752
|
)
|
|
(714
|
)
|
||
Financing activities
|
(573
|
)
|
|
(652
|
)
|
||
Effect of foreign exchange rate changes on cash
|
(5
|
)
|
|
25
|
|
||
Net decrease in cash and temporary
cash investments
|
$
|
(1,192
|
)
|
|
$
|
(353
|
)
|
•
|
a decrease in accounts payable, partially offset by a decrease in receivables, primarily as a result of the timing of payments of invoices and collections of receivables, respectively;
|
•
|
a decrease in income taxes payable resulting from the January 2018 payment of our fourth quarter 2017 estimated taxes that were previously deferred, as allowed by tax relief authorization from the IRS;
|
•
|
a decrease in accrued expenses mainly due to the payment of our annual incentive compensation related to 2017;
|
•
|
a decrease in taxes other than income taxes payable mainly due to the payment of excise and ad valorem taxes; and
|
•
|
an increase
in inventory, mainly due to an increase in commodity prices.
|
•
|
fund
$631 million
in capital investments, which include capital expenditures, deferred turnaround and catalyst costs, and investments in joint ventures;
|
•
|
acquire undivided interests in pipeline and terminal assets for
$85 million
;
|
•
|
make payments on debt and capital lease obligations of
$415 million
, of which
$410 million
related to the VLP Revolver;
|
•
|
purchase common stock for treasury of
$320 million
; and
|
•
|
pay common stock dividends of
$345 million
.
|
•
|
a decrease in receivables, partially offset by a decrease in accounts payable, primarily as a result of the timing of collections of receivables and payments of invoices, respectively; and
|
•
|
an increase in inventory volumes held.
|
•
|
fund
$641 million
in capital investments, which include capital expenditures, deferred turnaround and catalyst costs, and investments in joint ventures;
|
•
|
acquire an undivided interest in crude system assets for
$72 million
;
|
•
|
purchase common stock for treasury of
$314 million
;
|
•
|
pay common stock dividends of
$315 million
; and
|
•
|
pay distributions to noncontrolling interests of
$34 million
.
|
|
|
Rating
|
||
Rating Agency
|
|
Valero
|
|
VLP
|
Moody’s Investors Service
|
|
Baa2 (stable outlook)
|
|
Baa3 (stable outlook)
|
Standard & Poor’s Ratings Services
|
|
BBB (stable outlook)
|
|
BBB- (stable outlook)
|
Fitch Ratings
|
|
BBB (stable outlook)
|
|
BBB- (stable outlook)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
inventories and firm commitments to purchase inventories generally for amounts by which our current year inventory levels (determined on a LIFO basis) differ from our previous year-end LIFO inventory levels, and
|
•
|
forecasted feedstock and refined petroleum product purchases, refined petroleum product sales, natural gas purchases, and corn purchases to lock in the price of those forecasted transactions at existing market prices that we deem favorable.
|
|
Derivative Instruments Held For
|
||||||
|
Non-Trading
Purposes
|
|
Trading
Purposes
|
||||
March 31, 2018:
|
|
|
|
||||
Gain (loss) in fair value resulting from:
|
|
|
|
||||
10% increase in underlying commodity prices
|
$
|
(27
|
)
|
|
$
|
2
|
|
10% decrease in underlying commodity prices
|
27
|
|
|
(1
|
)
|
||
|
|
|
|
||||
December 31, 2017:
|
|
|
|
||||
Gain (loss) in fair value resulting from:
|
|
|
|
||||
10% increase in underlying commodity prices
|
(47
|
)
|
|
4
|
|
||
10% decrease in underlying commodity prices
|
47
|
|
|
(2
|
)
|
|
March 31, 2018
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
There-
after
|
|
Total (a)
|
|
Fair
Value
|
||||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
750
|
|
|
$
|
850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,724
|
|
|
$
|
8,324
|
|
|
$
|
9,381
|
|
Average interest rate
|
—
|
%
|
|
9.4
|
%
|
|
6.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5.5
|
%
|
|
5.9
|
%
|
|
|
|||||||||
Floating rate (b)
|
$
|
104
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
20
|
|
|
$
|
146
|
|
|
$
|
146
|
|
Average interest rate
|
2.4
|
%
|
|
4.1
|
%
|
|
4.1
|
%
|
|
4.1
|
%
|
|
4.1
|
%
|
|
4.1
|
%
|
|
2.9
|
%
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
There-
after
|
|
Total (a)
|
|
Fair
Value
|
||||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
750
|
|
|
$
|
850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,224
|
|
|
$
|
7,824
|
|
|
$
|
9,236
|
|
Average interest rate
|
—
|
%
|
|
9.4
|
%
|
|
6.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5.6
|
%
|
|
6.0
|
%
|
|
|
|||||||||
Floating rate (b)
|
$
|
106
|
|
|
$
|
6
|
|
|
$
|
416
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
559
|
|
|
$
|
559
|
|
Average interest rate
|
2.1
|
%
|
|
3.8
|
%
|
|
2.9
|
%
|
|
3.8
|
%
|
|
3.8
|
%
|
|
3.8
|
%
|
|
2.8
|
%
|
|
|
(a)
|
Excludes unamortized discounts and debt issuance costs.
|
(b)
|
As of
March 31, 2018
and
December 31, 2017
, we had an interest rate swap associated with $46 million and $49 million, respectively, of our floating rate debt resulting in an effective interest rate of 3.85 percent as of each of those reporting dates. The fair value of the swap was immaterial for all periods presented.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal control over financial reporting.
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(a)
|
Unregistered Sales of Equity Securities
. Not applicable.
|
(b)
|
Use of Proceeds
. Not applicable.
|
(c)
|
Issuer Purchases of Equity Securities
. The following table discloses purchases of shares of our common stock made by us or on our behalf during the
first quarter
of
2018
.
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Not
Purchased as Part of
Publicly Announced
Plans or Programs (a)
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs (b)
|
|||||
January 2018
|
|
1,227,185
|
|
|
$
|
93.91
|
|
|
684,249
|
|
|
542,936
|
|
|
$3.7 billion
|
February 2018
|
|
2,260,031
|
|
|
$
|
90.74
|
|
|
549
|
|
|
2,259,482
|
|
|
$3.5 billion
|
March 2018
|
|
1,576
|
|
|
$
|
93.14
|
|
|
1,576
|
|
|
—
|
|
|
$3.5 billion
|
Total
|
|
3,488,792
|
|
|
$
|
91.86
|
|
|
686,374
|
|
|
2,802,418
|
|
|
$3.5 billion
|
(a)
|
The shares reported in this column represent purchases settled in the
first quarter
of
2018
relating to (i) our purchases of shares in open-market transactions to meet our obligations under stock-based compensation plans and (ii) our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.
|
(b)
|
On
January 23, 2018
, we announced that our board of directors authorized our purchase of up to
$2.5 billion
of our outstanding common stock, with no expiration date, which was in addition to the remaining amount available under a
$2.5 billion
program authorized on
September 21, 2016
. As of
March 31, 2018
, the approximate dollar value of shares that may yet be purchased under the 2016 program is
$965 million
and no purchases have been made under the 2018 program.
|
ITEM 6.
|
EXHIBITS
|
Exhibit
No.
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
***101
|
|
Interactive Data Files
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
***
|
Submitted electronically herewith.
|
|
|
|
|
|
|
VALERO ENERGY CORPORATION
(Registrant)
|
|
|
By:
|
/s/ Donna M. Titzman
|
|
|
|
Donna M. Titzman
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal
|
|
|
|
Financial and Accounting Officer)
|
/s/ Joseph W. Gorder
|
|
|
Joseph W. Gorder
Chief Executive Officer and President |
|
|
/s/ Donna M. Titzman
|
|
|
Donna M. Titzman
Executive Vice President and Chief Financial Officer
|
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Joseph W. Gorder
|
|
Joseph W. Gorder
|
|
Chief Executive Officer and President
|
|
May 7, 2018
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Donna M. Titzman
|
|
Donna M. Titzman
|
|
Executive Vice President and Chief Financial Officer
|
|
May 7, 2018
|
|