☑
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
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.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common stock
|
|
VLO
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
☑
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
||||||||
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
Form 10-K Item No. and Caption
|
|
Heading in 2020 Proxy Statement
|
|
|
|
|
|
10.
|
Directors, Executive Officers and
Corporate Governance
|
|
Information Regarding the Board of Directors, Independent Directors, Audit Committee, Proposal No. 1 Election of Directors, Information Concerning Nominees and Other Directors, Identification of Executive Officers, and Governance Documents and Codes of Ethics
|
|
|
|
|
11.
|
Executive Compensation
|
|
Compensation Committee, Compensation Discussion and Analysis, Executive Compensation, Director Compensation, Pay Ratio Disclosure, and Certain Relationships and Related Transactions
|
|
|
|
|
12.
|
Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters
|
|
Beneficial Ownership of Valero Securities and Equity Compensation Plan Information
|
|
|
|
|
13.
|
Certain Relationships and Related
Transactions, and
Director Independence
|
|
Certain Relationships and Related Transactions and Independent Directors
|
|
|
|
|
14.
|
Principal Accountant Fees and Services
|
|
KPMG LLP Fees and Audit Committee Pre-Approval Policy
|
|
|
PAGE
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
•
|
Refining segment includes our refining operations, the associated marketing activities, and logistics assets that support our refining operations;
|
•
|
Ethanol segment includes our ethanol operations, the associated marketing activities, and logistics assets that support our ethanol operations; and
|
•
|
Renewable diesel segment includes the operations of DGD, our consolidated joint venture, as discussed in Note 12 of Notes to Consolidated Financial Statements, which is incorporated herein by reference.
|
Refinery
|
|
Location
|
|
Throughput
Capacity (a)
(BPD)
|
|
U.S.
|
|
|
|
|
|
Benicia
|
|
California
|
|
170,000
|
|
Wilmington
|
|
California
|
|
135,000
|
|
Meraux
|
|
Louisiana
|
|
135,000
|
|
St. Charles
|
|
Louisiana
|
|
340,000
|
|
Ardmore
|
|
Oklahoma
|
|
90,000
|
|
Memphis
|
|
Tennessee
|
|
195,000
|
|
Corpus Christi (b)
|
|
Texas
|
|
370,000
|
|
Houston
|
|
Texas
|
|
255,000
|
|
McKee
|
|
Texas
|
|
200,000
|
|
Port Arthur
|
|
Texas
|
|
395,000
|
|
Texas City
|
|
Texas
|
|
260,000
|
|
Three Rivers
|
|
Texas
|
|
100,000
|
|
Canada
|
|
|
|
|
|
Quebec City
|
|
Quebec, Canada
|
|
235,000
|
|
U.K.
|
|
|
|
|
|
Pembroke
|
|
Wales, U.K.
|
|
270,000
|
|
Total
|
|
|
|
3,150,000
|
|
(a)
|
“Throughput capacity” represents estimated capacity for processing crude oil, inter-mediates, and other feedstocks. Total estimated crude oil capacity is approximately 2.6 million BPD.
|
(b)
|
Represents the combined capacities of two refineries – the Corpus Christi East and Corpus Christi West Refineries.
|
Combined Total Refining System Charges and Yields
|
|||
Charges
|
|
|
|
|
sour crude oil
|
23
|
%
|
|
sweet crude oil
|
54
|
%
|
|
residual fuel oil
|
7
|
%
|
|
other feedstocks
|
5
|
%
|
|
blendstocks
|
11
|
%
|
Yields
|
|
|
|
|
gasolines and blendstocks
|
48
|
%
|
|
distillates
|
38
|
%
|
|
other products (primarily includes petrochemicals,
gas oils, No. 6 fuel oil, petroleum coke, sulfur
and asphalt)
|
14
|
%
|
State
|
|
City
|
|
Ethanol
Production
Capacity
|
|
Production
of DDGs
|
|
Corn
Processed
|
Indiana
|
|
Bluffton
|
|
115
|
|
302,000
|
|
40
|
|
|
Linden
|
|
135
|
|
355,000
|
|
47
|
|
|
Mount Vernon
|
|
100
|
|
263,000
|
|
35
|
Iowa
|
|
Albert City
|
|
135
|
|
355,000
|
|
47
|
|
|
Charles City
|
|
140
|
|
368,000
|
|
49
|
|
|
Fort Dodge
|
|
140
|
|
368,000
|
|
49
|
|
|
Hartley
|
|
140
|
|
368,000
|
|
49
|
|
|
Lakota
|
|
110
|
|
289,000
|
|
38
|
Michigan
|
|
Riga
|
|
55
|
|
145,000
|
|
19
|
Minnesota
|
|
Welcome
|
|
140
|
|
368,000
|
|
49
|
Nebraska
|
|
Albion
|
|
135
|
|
355,000
|
|
47
|
Ohio
|
|
Bloomingburg
|
|
135
|
|
355,000
|
|
47
|
South Dakota
|
|
Aurora
|
|
140
|
|
368,000
|
|
49
|
Wisconsin
|
|
Jefferson
|
|
110
|
|
352,000
|
|
41
|
Total
|
|
|
|
1,730
|
|
4,611,000
|
|
606
|
•
|
Item 1A, “RISK FACTORS”—Compliance with and changes in environmental laws, including proposed climate change laws and regulations, could adversely affect our performance;
|
•
|
Item 1A, “RISK FACTORS”—Compliance with the U.S. Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) could adversely affect our performance;
|
•
|
Item 1A, “RISK FACTORS”—We may incur additional costs as a result of our use of rail cars for the transportation of crude oil and the products that we manufacture;
|
•
|
Item 3, “LEGAL PROCEEDINGS” under the caption “ENVIRONMENTAL ENFORCEMENT MATTERS,” and;
|
•
|
Item 8, “FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” in Note 8 of Notes to Consolidated Financial Statements.
|
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)
|
|||||
October 2019
|
|
332,704
|
|
|
$
|
88.06
|
|
|
98,396
|
|
|
234,308
|
|
|
$1.6 billion
|
November 2019
|
|
1,565,500
|
|
|
$
|
99.21
|
|
|
107,914
|
|
|
1,457,586
|
|
|
$1.5 billion
|
December 2019
|
|
393,694
|
|
|
$
|
94.61
|
|
|
6,984
|
|
|
386,710
|
|
|
$1.5 billion
|
Total
|
|
2,291,898
|
|
|
$
|
96.80
|
|
|
213,294
|
|
|
2,078,604
|
|
|
$1.5 billion
|
(a)
|
The shares reported in this column represent purchases settled in the fourth quarter of 2019 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 (the 2018 Program), with no expiration date. As of December 31, 2019, we had $1.5 billion remaining available for purchase under the 2018 Program.
|
|
As of December 31,
|
||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
Valero Common Stock
|
$
|
100.00
|
|
|
$
|
146.79
|
|
|
$
|
147.94
|
|
|
$
|
207.10
|
|
|
$
|
174.54
|
|
|
$
|
227.53
|
|
S&P 500
|
100.00
|
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
||||||
Peer Group
|
100.00
|
|
|
88.46
|
|
|
106.16
|
|
|
134.53
|
|
|
125.35
|
|
|
137.49
|
|
(a)
|
Assumes that an investment in Valero common stock and each index was $100 on December 31, 2014. “Cumulative total return” is based on share price appreciation plus reinvestment of dividends from December 31, 2014 through December 31, 2019.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017 (a)
|
|
2016 (b)
|
|
2015 (c)
|
||||||||||
Revenues
|
$
|
108,324
|
|
|
$
|
117,033
|
|
|
$
|
93,980
|
|
|
$
|
75,659
|
|
|
$
|
87,804
|
|
Net income
|
2,784
|
|
|
3,353
|
|
|
4,156
|
|
|
2,417
|
|
|
4,101
|
|
|||||
Earnings per common share –
assuming dilution
|
5.84
|
|
|
7.29
|
|
|
9.16
|
|
|
4.94
|
|
|
7.99
|
|
|||||
Dividends per common share
|
3.60
|
|
|
3.20
|
|
|
2.80
|
|
|
2.40
|
|
|
1.70
|
|
|||||
Total assets
|
53,864
|
|
|
50,155
|
|
|
50,158
|
|
|
46,173
|
|
|
44,227
|
|
|||||
Debt and finance lease
obligations, less current portion
|
9,178
|
|
|
8,871
|
|
|
8,750
|
|
|
7,886
|
|
|
7,208
|
|
(a)
|
Includes the impact of Tax Reform that was enacted on December 22, 2017 and resulted in a net income tax benefit of $1.9 billion as described in Note 15 of Notes to Consolidated Financial Statements.
|
(b)
|
Includes a noncash lower of cost or market inventory valuation reserve adjustment that resulted in a net benefit to our results of operations of $747 million.
|
(c)
|
Includes a noncash lower of cost or market inventory valuation reserve adjustment that resulted in a net charge to our results of operations of $790 million.
|
•
|
future refining segment margins, including gasoline and distillate margins;
|
•
|
future ethanol segment margins;
|
•
|
future renewable diesel 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 turnaround and catalyst cost expenditures, 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 renewable diesel 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, and petrochemicals), ethanol, and renewable diesel;
|
•
|
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 RFS) 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, refined petroleum products, ethanol, and renewable diesel;
|
•
|
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 and similar programs, 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, the Mexican peso, and the Peruvian sol 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 Item 1A, “RISK FACTORS” in this report.
|
•
|
Refining segment. Refining segment adjusted operating income decreased by $1.1 billion primarily due to weaker discounts on crude oils and other feedstocks and lower throughput volumes, partially offset by improved distillate margins. This is more fully described on pages 31 and 32.
|
•
|
Ethanol segment. Ethanol segment adjusted operating income decreased by $78 million primarily due to higher corn prices and higher operating expenses (excluding depreciation and amortization expense), partially offset by higher ethanol prices. This is more fully described on page 33.
|
•
|
Renewable diesel segment. Renewable diesel segment adjusted operating income increased by $259 million primarily due to an increase in renewable diesel sales volumes and an increase in the benefit from the blender’s tax credit resulting from an increase in the volume of renewable diesel blended with petroleum-based diesel in 2019 compared to 2018. This is more fully described on pages 34 and 35.
|
•
|
Distillate margins are expected to begin improving due to an anticipated increase in global demand as trade war tensions ease and markets comply with the International Maritime Organization’s lower bunker fuel sulfur specifications, which were effective January 1, 2020. Gasoline margins are expected to remain near current levels.
|
•
|
Discounts for medium and heavy sour crude oils are expected to remain near current levels as compliance with the new bunker fuel sulfur specifications noted above is expected to reduce demand for high sulfur fuel oils, which compete with sour crude oils as a refining feedstock.
|
•
|
Ethanol margins are expected to decline as domestic inventory levels rise.
|
•
|
Renewable diesel segment margins are expected to remain near current levels.
|
•
|
Our refining operations in the U.K. could be adversely affected by Brexit, which formally occurred on January 31, 2020. Although the legal relationship between the U.K. and the EU has changed, their ongoing relationship will continue to follow the EU’s rules during a transition period that is set to expire on December 31, 2020. During the transition period, the U.K. and the EU are expected to negotiate a new free trade agreement, which could negatively impact the operations of our Pembroke Refinery and our marketing operations in the U.K. and Ireland, as could the failure to reach any agreement. The ultimate effect of Brexit will depend on whether an agreement is reached, or on the specific terms of any agreement that is reached by the U.K. and the EU. See Item 1A “RISK FACTORS”—Changes in the U.K.’s economic and other relationships with the EU could adversely affect us.
|
•
|
Global concern about the coronavirus outbreak could result in lower demand for and consumption of transportation fuels, which would have a negative impact on our results of operations.
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
Renewable
Diesel
|
|
Corporate
and Eliminations |
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
103,746
|
|
|
$
|
3,606
|
|
|
$
|
970
|
|
|
$
|
2
|
|
|
$
|
108,324
|
|
Intersegment revenues
|
18
|
|
|
231
|
|
|
247
|
|
|
(496
|
)
|
|
—
|
|
|||||
Total revenues
|
103,764
|
|
|
3,837
|
|
|
1,217
|
|
|
(494
|
)
|
|
108,324
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other (a)
|
93,371
|
|
|
3,239
|
|
|
360
|
|
|
(494
|
)
|
|
96,476
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,289
|
|
|
504
|
|
|
75
|
|
|
—
|
|
|
4,868
|
|
|||||
Depreciation and amortization expense
|
2,062
|
|
|
90
|
|
|
50
|
|
|
—
|
|
|
2,202
|
|
|||||
Total cost of sales
|
99,722
|
|
|
3,833
|
|
|
485
|
|
|
(494
|
)
|
|
103,546
|
|
|||||
Other operating expenses (b)
|
20
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
|
—
|
|
|
—
|
|
|
—
|
|
|
868
|
|
|
868
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
|||||
Operating income by segment
|
$
|
4,022
|
|
|
$
|
3
|
|
|
$
|
732
|
|
|
$
|
(921
|
)
|
|
3,836
|
|
|
Other income, net (d)
|
|
|
|
|
|
|
|
|
104
|
|
|||||||||
Interest and debt expense, net of capitalized
interest
|
|
|
|
|
|
|
|
|
(454
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
3,486
|
|
|||||||||
Income tax expense
|
|
|
|
|
|
|
|
|
702
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
2,784
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests (a)
|
|
|
|
|
|
|
|
|
362
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
2,422
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
Renewable
Diesel
|
|
Corporate
and Eliminations |
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
113,093
|
|
|
$
|
3,428
|
|
|
$
|
508
|
|
|
$
|
4
|
|
|
$
|
117,033
|
|
Intersegment revenues
|
25
|
|
|
210
|
|
|
170
|
|
|
(405
|
)
|
|
—
|
|
|||||
Total revenues
|
113,118
|
|
|
3,638
|
|
|
678
|
|
|
(401
|
)
|
|
117,033
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other (a)
|
101,866
|
|
|
3,008
|
|
|
262
|
|
|
(404
|
)
|
|
104,732
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,154
|
|
|
470
|
|
|
66
|
|
|
—
|
|
|
4,690
|
|
|||||
Depreciation and amortization expense
|
1,910
|
|
|
78
|
|
|
29
|
|
|
—
|
|
|
2,017
|
|
|||||
Total cost of sales
|
107,930
|
|
|
3,556
|
|
|
357
|
|
|
(404
|
)
|
|
111,439
|
|
|||||
Other operating expenses (b)
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
925
|
|
|
925
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Operating income by segment
|
$
|
5,143
|
|
|
$
|
82
|
|
|
$
|
321
|
|
|
$
|
(974
|
)
|
|
4,572
|
|
|
Other income, net (d)
|
|
|
|
|
|
|
|
|
130
|
|
|||||||||
Interest and debt expense, net of capitalized
interest
|
|
|
|
|
|
|
|
|
(470
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
4,232
|
|
|||||||||
Income tax expense (e)
|
|
|
|
|
|
|
|
|
879
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
3,353
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests (a)
|
|
|
|
|
|
|
|
|
231
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
3,122
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Refining
|
|
|
|
|
|
||||||
Feedstocks (dollars per barrel)
|
|
|
|
|
|
||||||
Brent crude oil
|
$
|
64.18
|
|
|
$
|
71.62
|
|
|
$
|
(7.44
|
)
|
Brent less West Texas Intermediate (WTI) crude oil
|
7.15
|
|
|
6.71
|
|
|
0.44
|
|
|||
Brent less Alaska North Slope (ANS) crude oil
|
(0.86
|
)
|
|
0.31
|
|
|
(1.17
|
)
|
|||
Brent less LLS crude oil
|
1.47
|
|
|
1.72
|
|
|
(0.25
|
)
|
|||
Brent less Argus Sour Crude Index (ASCI) crude oil
|
3.56
|
|
|
5.20
|
|
|
(1.64
|
)
|
|||
Brent less Maya crude oil
|
6.57
|
|
|
9.22
|
|
|
(2.65
|
)
|
|||
LLS crude oil
|
62.71
|
|
|
69.90
|
|
|
(7.19
|
)
|
|||
LLS less ASCI crude oil
|
2.09
|
|
|
3.48
|
|
|
(1.39
|
)
|
|||
LLS less Maya crude oil
|
5.10
|
|
|
7.50
|
|
|
(2.40
|
)
|
|||
WTI crude oil
|
57.03
|
|
|
64.91
|
|
|
(7.88
|
)
|
|||
|
|
|
|
|
|
||||||
Natural gas (dollars per million British Thermal Units (MMBtu))
|
2.47
|
|
|
3.23
|
|
|
(0.76
|
)
|
|||
|
|
|
|
|
|
||||||
Products (dollars per barrel)
|
|
|
|
|
|
||||||
U.S. Gulf Coast:
|
|
|
|
|
|
||||||
Conventional Blendstock of Oxygenate Blending
(CBOB) gasoline less Brent
|
4.37
|
|
|
4.81
|
|
|
(0.44
|
)
|
|||
Ultra-low-sulfur (ULS) diesel less Brent
|
14.90
|
|
|
14.02
|
|
|
0.88
|
|
|||
Propylene less Brent
|
(22.31
|
)
|
|
(2.86
|
)
|
|
(19.45
|
)
|
|||
CBOB gasoline less LLS
|
5.84
|
|
|
6.53
|
|
|
(0.69
|
)
|
|||
ULS diesel less LLS
|
16.37
|
|
|
15.74
|
|
|
0.63
|
|
|||
Propylene less LLS
|
(20.84
|
)
|
|
(1.14
|
)
|
|
(19.70
|
)
|
|||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
CBOB gasoline less WTI
|
13.62
|
|
|
13.70
|
|
|
(0.08
|
)
|
|||
ULS diesel less WTI
|
22.77
|
|
|
22.82
|
|
|
(0.05
|
)
|
|||
North Atlantic:
|
|
|
|
|
|
||||||
CBOB gasoline less Brent
|
7.20
|
|
|
7.59
|
|
|
(0.39
|
)
|
|||
ULS diesel less Brent
|
17.22
|
|
|
16.29
|
|
|
0.93
|
|
|||
U.S. West Coast:
|
|
|
|
|
|
||||||
CARBOB 87 gasoline less ANS
|
16.28
|
|
|
13.05
|
|
|
3.23
|
|
|||
CARB diesel less ANS
|
19.30
|
|
|
18.13
|
|
|
1.17
|
|
|||
CARBOB 87 gasoline less WTI
|
24.29
|
|
|
19.45
|
|
|
4.84
|
|
|||
CARB diesel less WTI
|
27.31
|
|
|
24.53
|
|
|
2.78
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Ethanol
|
|
|
|
|
|
||||||
Chicago Board of Trade (CBOT) corn (dollars per bushel)
|
$
|
3.84
|
|
|
$
|
3.68
|
|
|
$
|
0.16
|
|
New York Harbor (NYH) ethanol (dollars per gallon)
|
1.53
|
|
|
1.48
|
|
|
0.05
|
|
|||
|
|
|
|
|
|
||||||
Renewable diesel
|
|
|
|
|
|
||||||
New York Mercantile Exchange ULS diesel
(dollars per gallon)
|
1.94
|
|
|
2.09
|
|
|
(0.15
|
)
|
|||
Biodiesel RIN (dollars per RIN)
|
0.48
|
|
|
0.53
|
|
|
(0.05
|
)
|
|||
California Low-Carbon Fuel Standard (dollars per metric ton)
|
196.82
|
|
|
168.24
|
|
|
28.58
|
|
|||
CBOT soybean oil (dollars per pound)
|
0.29
|
|
|
0.30
|
|
|
(0.01
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Revenues
|
$
|
108,324
|
|
|
$
|
117,033
|
|
|
$
|
(8,709
|
)
|
Cost of sales
|
103,546
|
|
|
111,439
|
|
|
(7,893
|
)
|
|||
General and administrative expenses (excluding depreciation
and amortization expense)
|
868
|
|
|
925
|
|
|
(57
|
)
|
|||
Operating income
|
3,836
|
|
|
4,572
|
|
|
(736
|
)
|
|||
Adjusted operating income (see note (f) on page 42)
|
3,699
|
|
|
4,713
|
|
|
(1,014
|
)
|
|||
Other income, net
|
104
|
|
|
130
|
|
|
(26
|
)
|
|||
Income tax expense
|
702
|
|
|
879
|
|
|
(177
|
)
|
|||
Net income attributable to noncontrolling interests
|
362
|
|
|
231
|
|
|
131
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Revenues
|
$
|
103,764
|
|
|
$
|
113,118
|
|
|
$
|
(9,354
|
)
|
Cost of sales
|
99,722
|
|
|
107,930
|
|
|
(8,208
|
)
|
|||
Operating income
|
4,022
|
|
|
5,143
|
|
|
(1,121
|
)
|
|||
Adjusted operating income (see note (f) on page 41)
|
4,040
|
|
|
5,180
|
|
|
(1,140
|
)
|
|||
Margin (see note (f) on page 40)
|
10,391
|
|
|
11,244
|
|
|
(853
|
)
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,289
|
|
|
4,154
|
|
|
135
|
|
|||
Depreciation and amortization expense
|
2,062
|
|
|
1,910
|
|
|
152
|
|
|||
|
|
|
|
|
|
||||||
Throughput volumes (thousand BPD) (see note (g) on page 42)
|
2,952
|
|
|
2,986
|
|
|
(34
|
)
|
•
|
Refining segment margin is primarily affected by refined petroleum product prices and the cost of crude oil and other feedstocks. The market prices for refined petroleum products generally track the price of benchmark crude oils, such as Brent, WTI, and ANS. An increase in the differential between the market price of the refined petroleum products that we sell and the cost of the reference benchmark crude oil has a favorable impact on our refining segment margin, while a decline in this differential has a negative impact on our refining segment margin. Additionally, our refining segment margin is affected by our ability to purchase and process crude oils and other feedstocks that are priced at a discount to Brent and other benchmark crude oils. While we benefit when we process these types of crude oils and other feedstocks, that benefit will vary as the discount widens or narrows. Improvement in these discounts has a favorable impact on our refining segment margin as it lowers our cost of materials; whereas lower discounts result in higher cost of materials, which has a negative impact on our refining segment margin. The table on page 29 reflects market reference prices and differentials that we believe had a material impact on the change in our refining segment margin in 2019 compared to 2018. Refining segment margin decreased by $853 million in 2019 compared to 2018 primarily due to the following:
|
◦
|
Lower discounts on crude oils had an unfavorable impact to our refining segment margin of approximately $628 million.
|
◦
|
Lower discounts on feedstocks other than crude oils, such as natural gas and residuals, had an unfavorable impact to our refining segment margin of approximately $360 million.
|
◦
|
A decrease in throughput volumes of 34,000 BPD had an unfavorable impact to our refining segment margin of approximately $128 million.
|
◦
|
A decrease in the cost of biofuel credits (primarily RINs in the U.S.) had a favorable impact on our refining segment margin of $218 million. See Note 20 of Notes to Consolidated Financial Statements for additional information on our government and regulatory compliance programs.
|
◦
|
An increase in distillate margins throughout most of our regions had a favorable impact to our refining segment margin of approximately $202 million.
|
•
|
Refining segment operating expenses (excluding depreciation and amortization expense) increased by $135 million primarily due to higher maintenance costs of $86 million, along with the effect of favorable property tax settlements of $20 million and sales and use tax refunds of $17 million received in 2018 that did not recur in 2019.
|
•
|
Refining segment depreciation and amortization expense associated with our cost of sales increased by $152 million primarily due to higher refinery turnaround and catalyst amortization expense of $82 million and an increase in depreciation expense of $79 million associated with capital projects that were completed and finance leases that commenced in the latter part of 2018 and early 2019, partially offset by the write-off of assets that were idled or demolished in 2018 of $15 million.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Revenues
|
$
|
3,837
|
|
|
$
|
3,638
|
|
|
$
|
199
|
|
Cost of sales
|
3,833
|
|
|
3,556
|
|
|
277
|
|
|||
Operating income
|
3
|
|
|
82
|
|
|
(79
|
)
|
|||
Adjusted operating income (see note (f) on page 41)
|
4
|
|
|
82
|
|
|
(78
|
)
|
|||
Margin (see note (f) on page 40)
|
598
|
|
|
630
|
|
|
(32
|
)
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
504
|
|
|
470
|
|
|
34
|
|
|||
Depreciation and amortization expense
|
90
|
|
|
78
|
|
|
12
|
|
|||
|
|
|
|
|
|
||||||
Production volumes (thousand gallons per day)
(see note (g) on page 42)
|
4,269
|
|
|
4,109
|
|
|
160
|
|
•
|
Ethanol segment margin is primarily affected by ethanol and corn related co-product prices and the cost of corn. The table on page 30 reflects market reference prices that we believe had a material impact on the change in our ethanol segment margin in 2019 compared to 2018. Ethanol segment margin decreased by $32 million in 2019 compared to 2018 primarily due to the following:
|
◦
|
Higher corn prices had an unfavorable impact to our ethanol segment margin of approximately $166 million.
|
◦
|
Higher ethanol prices had a favorable impact to our ethanol segment margin of approximately $123 million.
|
•
|
Ethanol segment operating expenses (excluding depreciation and amortization expense) increased by $34 million primarily due to costs to operate the three plants acquired from Green Plains, Inc. (Green Plains) in November 2018 of $79 million, partially offset by lower energy costs of $29 million and lower chemicals and catalyst costs of $12 million incurred by our other ethanol plants.
|
•
|
Ethanol segment depreciation and amortization expense associated with our cost of sales increased by $12 million primarily due to depreciation expense associated with the three plants acquired from Green Plains in November 2018.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Revenues
|
$
|
1,217
|
|
|
$
|
678
|
|
|
$
|
539
|
|
Cost of sales
|
485
|
|
|
357
|
|
|
128
|
|
|||
Operating income
|
732
|
|
|
321
|
|
|
411
|
|
|||
Adjusted operating income (see note (f) on page 42)
|
576
|
|
|
317
|
|
|
259
|
|
|||
Margin (see note (f) on page 41)
|
701
|
|
|
412
|
|
|
289
|
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
75
|
|
|
66
|
|
|
9
|
|
|||
Depreciation and amortization expense
|
50
|
|
|
29
|
|
|
21
|
|
|||
|
|
|
|
|
|
||||||
Sales volumes (thousand gallons per day)
(see note (g) on page 42)
|
760
|
|
|
431
|
|
|
329
|
|
•
|
Renewable diesel segment margin increased by $289 million in 2019 compared to 2018 primarily due to the following:
|
◦
|
An increase in sales volumes of 329,000 gallons per day, which is primarily due to the additional production capacity resulting from the expansion of the DGD Plant completed in the third quarter of 2018, had a favorable impact to our renewable diesel segment margin of $162 million.
|
◦
|
An increase in the benefit for the blender’s tax credit attributable to volumes blended during 2019 compared to 2018 had a favorable impact to our renewable diesel segment margin of $119 million. As more fully described in note (a) on page 38, blender’s tax credits of $275 million and $156 million were attributable to volumes blended during 2019 and 2018, respectively.
|
•
|
Renewable diesel segment operating expenses (excluding depreciation and amortization expense) increased by $9 million, which is primarily attributable to increased costs resulting from the expansion of the DGD Plant completed in the third quarter of 2018.
|
•
|
Renewable diesel segment depreciation and amortization expense associated with our cost of sales increased by $21 million primarily due to higher turnaround and catalyst amortization expense of $13 million and depreciation expense associated with the expansion of the DGD Plant completed in the third quarter of 2018 of $5 million.
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
Renewable
Diesel
|
|
Corporate
and Eliminations |
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
113,093
|
|
|
$
|
3,428
|
|
|
$
|
508
|
|
|
$
|
4
|
|
|
$
|
117,033
|
|
Intersegment revenues
|
25
|
|
|
210
|
|
|
170
|
|
|
(405
|
)
|
|
—
|
|
|||||
Total revenues
|
113,118
|
|
|
3,638
|
|
|
678
|
|
|
(401
|
)
|
|
117,033
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other (a)
|
101,866
|
|
|
3,008
|
|
|
262
|
|
|
(404
|
)
|
|
104,732
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,154
|
|
|
470
|
|
|
66
|
|
|
—
|
|
|
4,690
|
|
|||||
Depreciation and amortization expense
|
1,910
|
|
|
78
|
|
|
29
|
|
|
—
|
|
|
2,017
|
|
|||||
Total cost of sales
|
107,930
|
|
|
3,556
|
|
|
357
|
|
|
(404
|
)
|
|
111,439
|
|
|||||
Other operating expenses (b)
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below) (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
925
|
|
|
925
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Operating income by segment
|
$
|
5,143
|
|
|
$
|
82
|
|
|
$
|
321
|
|
|
$
|
(974
|
)
|
|
4,572
|
|
|
Other income, net (d)
|
|
|
|
|
|
|
|
|
130
|
|
|||||||||
Interest and debt expense, net of capitalized
interest
|
|
|
|
|
|
|
|
|
(470
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
4,232
|
|
|||||||||
Income tax expense (e)
|
|
|
|
|
|
|
|
|
879
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
3,353
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests (a)
|
|
|
|
|
|
|
|
|
231
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
3,122
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Refining
|
|
Ethanol
|
|
Renewable
Diesel
|
|
Corporate
and Eliminations |
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
90,258
|
|
|
$
|
3,324
|
|
|
$
|
393
|
|
|
$
|
5
|
|
|
$
|
93,980
|
|
Intersegment revenues
|
8
|
|
|
176
|
|
|
241
|
|
|
(425
|
)
|
|
—
|
|
|||||
Total revenues
|
90,266
|
|
|
3,500
|
|
|
634
|
|
|
(420
|
)
|
|
93,980
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
80,160
|
|
|
2,804
|
|
|
498
|
|
|
(425
|
)
|
|
83,037
|
|
|||||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,014
|
|
|
443
|
|
|
47
|
|
|
—
|
|
|
4,504
|
|
|||||
Depreciation and amortization expense
|
1,824
|
|
|
81
|
|
|
29
|
|
|
—
|
|
|
1,934
|
|
|||||
Total cost of sales
|
85,998
|
|
|
3,328
|
|
|
574
|
|
|
(425
|
)
|
|
89,475
|
|
|||||
Other operating expenses (b)
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
|
—
|
|
|
—
|
|
|
—
|
|
|
829
|
|
|
829
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Operating income by segment
|
$
|
4,207
|
|
|
$
|
172
|
|
|
$
|
60
|
|
|
$
|
(876
|
)
|
|
3,563
|
|
|
Other income, net
|
|
|
|
|
|
|
|
|
112
|
|
|||||||||
Interest and debt expense, net of capitalized
interest
|
|
|
|
|
|
|
|
|
(468
|
)
|
|||||||||
Income before income tax expense
|
|
|
|
|
|
|
|
|
3,207
|
|
|||||||||
Income tax benefit (e)
|
|
|
|
|
|
|
|
|
(949
|
)
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
4,156
|
|
|||||||||
Less: Net income attributable to noncontrolling
interests
|
|
|
|
|
|
|
|
|
91
|
|
|||||||||
Net income attributable to
Valero Energy Corporation stockholders
|
|
|
|
|
|
|
|
|
$
|
4,065
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Refining
|
|
|
|
|
|
||||||
Feedstocks (dollars per barrel)
|
|
|
|
|
|
||||||
Brent crude oil
|
$
|
71.62
|
|
|
$
|
54.82
|
|
|
$
|
16.80
|
|
Brent less WTI crude oil
|
6.71
|
|
|
3.92
|
|
|
2.79
|
|
|||
Brent less ANS crude oil
|
0.31
|
|
|
0.26
|
|
|
0.05
|
|
|||
Brent less LLS crude oil
|
1.72
|
|
|
0.69
|
|
|
1.03
|
|
|||
Brent less ASCI crude oil
|
5.20
|
|
|
4.18
|
|
|
1.02
|
|
|||
Brent less Maya crude oil
|
9.22
|
|
|
7.74
|
|
|
1.48
|
|
|||
LLS crude oil
|
69.90
|
|
|
54.13
|
|
|
15.77
|
|
|||
LLS less ASCI crude oil
|
3.48
|
|
|
3.49
|
|
|
(0.01
|
)
|
|||
LLS less Maya crude oil
|
7.50
|
|
|
7.05
|
|
|
0.45
|
|
|||
WTI crude oil
|
64.91
|
|
|
50.90
|
|
|
14.01
|
|
|||
|
|
|
|
|
|
||||||
Natural gas (dollars per MMBtu)
|
3.23
|
|
|
2.98
|
|
|
0.25
|
|
|||
|
|
|
|
|
|
||||||
Products (dollars per barrel)
|
|
|
|
|
|
||||||
U.S. Gulf Coast:
|
|
|
|
|
|
||||||
CBOB gasoline less Brent
|
4.81
|
|
|
10.50
|
|
|
(5.69
|
)
|
|||
ULS diesel less Brent
|
14.02
|
|
|
13.26
|
|
|
0.76
|
|
|||
Propylene less Brent
|
(2.86
|
)
|
|
0.48
|
|
|
(3.34
|
)
|
|||
CBOB gasoline less LLS
|
6.53
|
|
|
11.19
|
|
|
(4.66
|
)
|
|||
ULS diesel less LLS
|
15.74
|
|
|
13.95
|
|
|
1.79
|
|
|||
Propylene less LLS
|
(1.14
|
)
|
|
1.17
|
|
|
(2.31
|
)
|
|||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
CBOB gasoline less WTI
|
13.70
|
|
|
15.65
|
|
|
(1.95
|
)
|
|||
ULS diesel less WTI
|
22.82
|
|
|
18.50
|
|
|
4.32
|
|
|||
North Atlantic:
|
|
|
|
|
|
||||||
CBOB gasoline less Brent
|
7.59
|
|
|
12.57
|
|
|
(4.98
|
)
|
|||
ULS diesel less Brent
|
16.29
|
|
|
14.75
|
|
|
1.54
|
|
|||
U.S. West Coast:
|
|
|
|
|
|
||||||
CARBOB 87 gasoline less ANS
|
13.05
|
|
|
18.12
|
|
|
(5.07
|
)
|
|||
CARB diesel less ANS
|
18.13
|
|
|
17.11
|
|
|
1.02
|
|
|||
CARBOB 87 gasoline less WTI
|
19.45
|
|
|
21.78
|
|
|
(2.33
|
)
|
|||
CARB diesel less WTI
|
24.53
|
|
|
20.77
|
|
|
3.76
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Ethanol
|
|
|
|
|
|
||||||
CBOT corn (dollars per bushel)
|
$
|
3.68
|
|
|
$
|
3.59
|
|
|
$
|
0.09
|
|
NYH ethanol (dollars per gallon)
|
1.48
|
|
|
1.56
|
|
|
(0.08
|
)
|
|||
|
|
|
|
|
|
||||||
Renewable diesel
|
|
|
|
|
|
||||||
New York Mercantile Exchange ULS diesel
(dollars per gallon)
|
2.09
|
|
|
1.66
|
|
|
0.43
|
|
|||
Biodiesel RIN (dollars per RIN)
|
0.53
|
|
|
1.01
|
|
|
(0.48
|
)
|
|||
California Low-Carbon Fuel Standard (dollars per metric ton)
|
168.24
|
|
|
89.26
|
|
|
78.98
|
|
|||
CBOT soybean oil (dollars per pound)
|
0.30
|
|
|
0.33
|
|
|
(0.03
|
)
|
(a)
|
Cost of materials and other for the years ended December 31, 2019 and 2018 includes a benefit of $449 million and $170 million, respectively, for the blender’s tax credit. The benefit recognized in 2019 is attributable to volumes blended during 2019 and 2018 and was recognized in December 2019 because the U.S legislation authorizing the credit was passed and signed into law in that month. The benefit recognized in 2018 is attributable to volumes blended during 2017 and was recognized in February 2018 because the U.S. legislation authorizing the credit was passed and signed into law in that month.
|
|
Refining
|
|
Renewable
Diesel
|
|
Total
|
||||||
Periods to which blender’s tax credit is attributable
|
|
|
|
|
|
||||||
2019 blender’s tax credit
|
$
|
16
|
|
|
$
|
275
|
|
|
$
|
291
|
|
2018 blender’s tax credit
|
2
|
|
|
156
|
|
|
158
|
|
|||
Total recognized in 2019
|
$
|
18
|
|
|
$
|
431
|
|
|
$
|
449
|
|
|
|
|
|
|
|
||||||
2017 blender’s tax credit
|
$
|
10
|
|
|
$
|
160
|
|
|
$
|
170
|
|
Total recognized in 2018
|
$
|
10
|
|
|
$
|
160
|
|
|
$
|
170
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Refining segment
|
|
|
|
|
|
||||||
Total blender’s tax credit recognized in period presented
|
$
|
18
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Less: Amount properly reflected in the period associated with volumes blended
|
16
|
|
|
2
|
|
|
10
|
|
|||
Adjustment to reflect blender’s tax credit in proper period
for the refining segment (see note (f))
|
2
|
|
|
8
|
|
|
(10
|
)
|
|||
Renewable diesel segment
|
|
|
|
|
|
||||||
Total blender’s tax credit recognized in period presented
|
431
|
|
|
160
|
|
|
—
|
|
|||
Less: Amount properly reflected in the period associated with volumes blended
|
275
|
|
|
156
|
|
|
160
|
|
|||
Adjustment to reflect blender’s tax credit in proper period
for the renewable diesel segment (see note (f))
|
156
|
|
|
4
|
|
|
(160
|
)
|
|||
Total adjustment to reflect blender’s tax credit in proper
period (see note (f))
|
$
|
158
|
|
|
$
|
12
|
|
|
$
|
(170
|
)
|
(b)
|
Other operating expenses reflects expenses that are not associated with our cost of sales and primarily includes costs to repair, remediate, and restore our facilities to normal operations following a non-operating event, such as a natural disaster or a major unplanned outage.
|
(c)
|
General and administrative expenses (excluding depreciation and amortization expense) for the year ended December 31, 2018 includes a charge of $108 million for environmental reserve adjustments associated with certain non-operating sites.
|
(d)
|
“Other income, net” for the years ended December 31, 2019 and 2018 includes a $22 million charge from the early redemption of $850 million of our 6.125 percent senior notes due February 1, 2020 and a $38 million charge from the early redemption of $750 million of our 9.375 percent senior notes due March 15, 2019, respectively.
|
(e)
|
On December 22, 2017, Tax Reform was enacted, and we recognized an income tax benefit of $1.9 billion in December 2017 that represented our initial estimate of the impact of Tax Reform. We finalized our estimates during the year ended December 31, 2018 and recorded an income tax benefit of $12 million during the period.
|
(f)
|
We use certain financial measures (as noted below) that are not defined under U.S. GAAP and are considered to be non-GAAP financial measures.
|
◦
|
Refining margin is defined as refining operating income adjusted to reflect the blender’s tax credit in the proper period, and excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of refining operating income
to refining margin
|
|
|
|
|
|
||||||
Refining operating income
|
$
|
4,022
|
|
|
$
|
5,143
|
|
|
$
|
4,207
|
|
Exclude:
|
|
|
|
|
|
||||||
Blender’s tax credit (see note (a))
|
2
|
|
|
8
|
|
|
(10
|
)
|
|||
Operating expenses (excluding depreciation and
amortization expense)
|
(4,289
|
)
|
|
(4,154
|
)
|
|
(4,014
|
)
|
|||
Depreciation and amortization expense
|
(2,062
|
)
|
|
(1,910
|
)
|
|
(1,824
|
)
|
|||
Other operating expenses (see note (b))
|
(20
|
)
|
|
(45
|
)
|
|
(61
|
)
|
|||
Refining margin
|
$
|
10,391
|
|
|
$
|
11,244
|
|
|
$
|
10,116
|
|
◦
|
Ethanol margin is defined as ethanol operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of ethanol operating income
to ethanol margin
|
|
|
|
|
|
||||||
Ethanol operating income
|
$
|
3
|
|
|
$
|
82
|
|
|
$
|
172
|
|
Exclude:
|
|
|
|
|
|
||||||
Operating expenses (excluding depreciation and
amortization expense)
|
(504
|
)
|
|
(470
|
)
|
|
(443
|
)
|
|||
Depreciation and amortization expense
|
(90
|
)
|
|
(78
|
)
|
|
(81
|
)
|
|||
Other operating expenses (see note (b))
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Ethanol margin
|
$
|
598
|
|
|
$
|
630
|
|
|
$
|
696
|
|
◦
|
Renewable diesel margin is defined as renewable diesel operating income adjusted to reflect the blender’s tax credit in the proper period, and excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of renewable diesel operating income to renewable diesel margin
|
|
|
|
|
|
||||||
Renewable diesel operating income
|
$
|
732
|
|
|
$
|
321
|
|
|
$
|
60
|
|
Exclude:
|
|
|
|
|
|
||||||
Blender’s tax credit (see note (a))
|
156
|
|
|
4
|
|
|
(160
|
)
|
|||
Operating expenses (excluding depreciation and
amortization expense)
|
(75
|
)
|
|
(66
|
)
|
|
(47
|
)
|
|||
Depreciation and amortization expense
|
(50
|
)
|
|
(29
|
)
|
|
(29
|
)
|
|||
Renewable diesel margin
|
$
|
701
|
|
|
$
|
412
|
|
|
$
|
296
|
|
◦
|
Adjusted refining operating income is defined as refining segment operating income adjusted to reflect the blender’s tax credit in the proper period and excluding other operating expenses, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of refining operating income to adjusted refining operating income
|
|
|
|
|
|
||||||
Refining operating income
|
$
|
4,022
|
|
|
$
|
5,143
|
|
|
$
|
4,207
|
|
Exclude:
|
|
|
|
|
|
||||||
Blender’s tax credit (see note (a))
|
2
|
|
|
8
|
|
|
(10
|
)
|
|||
Other operating expenses (see note (b))
|
(20
|
)
|
|
(45
|
)
|
|
(61
|
)
|
|||
Adjusted refining operating income
|
$
|
4,040
|
|
|
$
|
5,180
|
|
|
$
|
4,278
|
|
◦
|
Adjusted ethanol operating income is defined as ethanol segment operating income excluding other operating expenses as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of ethanol operating income to adjusted ethanol operating income
|
|
|
|
|
|
||||||
Ethanol operating income
|
$
|
3
|
|
|
$
|
82
|
|
|
$
|
172
|
|
Exclude:
|
|
|
|
|
|
||||||
Other operating expenses (see note (b))
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted ethanol operating income
|
$
|
4
|
|
|
$
|
82
|
|
|
$
|
172
|
|
◦
|
Adjusted renewable diesel operating income is defined as renewable diesel segment operating income adjusted to reflect the blender’s tax credit in the proper period, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of renewable diesel operating income to adjusted renewable diesel operating income
|
|
|
|
|
|
||||||
Renewable diesel operating income
|
$
|
732
|
|
|
$
|
321
|
|
|
$
|
60
|
|
Exclude:
|
|
|
|
|
|
||||||
Blender’s tax credit (see note (a))
|
156
|
|
|
4
|
|
|
(160
|
)
|
|||
Adjusted renewable diesel operating income
|
$
|
576
|
|
|
$
|
317
|
|
|
$
|
220
|
|
◦
|
Adjusted operating income is defined as total company operating income adjusted to reflect the blender’s tax credit in the proper period, and excluding other operating expenses and environmental reserve adjustments associated with certain non-operating sites, as reflected in the table below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of total company operating income to adjusted operating income
|
|
|
|
|
|
||||||
Total company operating income
|
$
|
3,836
|
|
|
$
|
4,572
|
|
|
$
|
3,563
|
|
Exclude:
|
|
|
|
|
|
||||||
Blender’s tax credit (see note (a))
|
158
|
|
|
12
|
|
|
(170
|
)
|
|||
Other operating expenses (see note (b))
|
(21
|
)
|
|
(45
|
)
|
|
(61
|
)
|
|||
Environmental reserve adjustments (see note (c))
|
—
|
|
|
(108
|
)
|
|
—
|
|
|||
Adjusted operating income
|
$
|
3,699
|
|
|
$
|
4,713
|
|
|
$
|
3,794
|
|
(g)
|
We use throughput volumes, production volumes, and sales volumes for the refining segment, ethanol segment, and renewable diesel segment, respectively, due to their general use by others who operate facilities similar to those included in our segments.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
$
|
117,033
|
|
|
$
|
93,980
|
|
|
$
|
23,053
|
|
Cost of sales
|
111,439
|
|
|
89,475
|
|
|
21,964
|
|
|||
General and administrative expenses (excluding depreciation
and amortization expense)
|
925
|
|
|
829
|
|
|
96
|
|
|||
Operating income
|
4,572
|
|
|
3,563
|
|
|
1,009
|
|
|||
Adjusted operating income (see note (f) on page 42)
|
4,713
|
|
|
3,794
|
|
|
919
|
|
|||
Other income, net
|
130
|
|
|
112
|
|
|
18
|
|
|||
Income tax expense (benefit)
|
879
|
|
|
(949
|
)
|
|
1,828
|
|
|||
Net income attributable to noncontrolling interests
|
231
|
|
|
91
|
|
|
140
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
$
|
113,118
|
|
|
$
|
90,266
|
|
|
$
|
22,852
|
|
Cost of sales
|
107,930
|
|
|
85,998
|
|
|
21,932
|
|
|||
Operating income
|
5,143
|
|
|
4,207
|
|
|
936
|
|
|||
Adjusted operating income (see note (f) on page 41)
|
5,180
|
|
|
4,278
|
|
|
902
|
|
|||
Margin (see note (f) on page 40)
|
11,244
|
|
|
10,116
|
|
|
1,128
|
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
4,154
|
|
|
4,014
|
|
|
140
|
|
|||
Depreciation and amortization expense
|
1,910
|
|
|
1,824
|
|
|
86
|
|
|||
|
|
|
|
|
|
||||||
Throughput volumes (thousand BPD) (see note (g) on page 42)
|
2,986
|
|
|
2,940
|
|
|
46
|
|
•
|
Refining segment margin is primarily affected by refined petroleum product prices and the cost of crude oil and other feedstocks. The market prices for refined petroleum products generally track the price of benchmark crude oils, such as Brent, WTI, and ANS. An increase in the differential between the market price of the refined petroleum products that we sell and the cost of the reference benchmark crude oil has a favorable impact on our refining segment margin, while a decline in this differential has a negative impact on our refining segment margin. Additionally, our refining segment margin is affected by our ability to purchase and process crude oils and other feedstocks that are priced at a discount to Brent and other benchmark crude oils. While we benefit when we process these types of crude oils and other feedstocks, that benefit will vary as the discount widens or narrows. Improvement in these discounts has a favorable impact on our refining segment margin as it lowers our cost of materials; whereas lower discounts result in higher cost of materials, which has a negative impact on our refining segment margin. The table on page 37 reflects market reference prices and differentials that we believe had a material impact on the change in our refining segment margin in 2018 compared to 2017. Refining segment margin increased by $1.1 billion in 2018 compared to 2017, primarily due to the following:
|
◦
|
An increase in distillate margins throughout all of our regions had a favorable impact to our refining segment margin of approximately $1.3 billion.
|
◦
|
Higher discounts on crude oils had a favorable impact to our refining segment margin of approximately $561 million.
|
◦
|
A decrease in the cost of biofuel credits (primarily RINs in the U.S.) had a favorable impact to our refining segment margin of $406 million. See Note 20 of Notes to Consolidated Financial Statements for additional information on our government and regulatory compliance programs.
|
◦
|
An increase in throughput volumes of 46,000 BPD had a favorable impact to our refining segment margin of approximately $153 million.
|
◦
|
A decrease in gasoline margins throughout all of our regions had an unfavorable impact to our refining segment margin of approximately $1.3 billion.
|
•
|
Refining segment operating expenses (excluding depreciation and amortization expense) increased by $140 million primarily due to higher employee-related expenses of $33 million, an increase in energy costs of $28 million, the effect of a favorable insurance settlement of $20 million in 2017 for our McKee Refinery, higher maintenance expense of $17 million, and higher chemicals and catalyst costs of $15 million.
|
•
|
Refining segment depreciation and amortization expense associated with our cost of sales increased by $86 million primarily due to an increase in depreciation expense of $44 million associated with capital projects that were completed in the latter part of 2017 and early 2018 and higher refinery turnaround and catalyst amortization expense of $35 million, along with the write-off of assets that were idled or demolished in 2018 of $15 million.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
$
|
3,638
|
|
|
$
|
3,500
|
|
|
$
|
138
|
|
Cost of sales
|
3,556
|
|
|
3,328
|
|
|
228
|
|
|||
Operating income
|
82
|
|
|
172
|
|
|
(90
|
)
|
|||
Margin (see note (f) on page 40)
|
630
|
|
|
696
|
|
|
(66
|
)
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
470
|
|
|
443
|
|
|
27
|
|
|||
Depreciation and amortization expense
|
78
|
|
|
81
|
|
|
(3
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Production volumes (thousand gallons per day)
(see note (g) on page 42)
|
4,109
|
|
|
3,972
|
|
|
137
|
|
•
|
Ethanol segment margin is primarily affected by ethanol and corn related co-product prices and the cost of corn. The table on page 38 reflects market reference prices that we believe had a material impact on the change in our ethanol segment margin in 2018 compared to 2017. Ethanol segment margin decreased by $66 million in 2018 compared to 2017 primarily due to the following:
|
◦
|
Lower ethanol prices had an unfavorable impact to our ethanol segment margin of approximately $159 million.
|
◦
|
Higher corn prices had an unfavorable impact to our ethanol segment margin of approximately $36 million.
|
◦
|
Higher prices of the corn related co-products that we produced had a favorable impact to our ethanol segment margin of approximately $101 million.
|
◦
|
Higher production volumes of 137,000 gallons per day had a favorable impact to our ethanol segment margin of approximately $26 million.
|
•
|
Ethanol segment operating expenses (excluding depreciation and amortization expense) increased by $27 million primarily due to costs to operate the three plants acquired from Green Plains in November 2018 of $14 million and higher chemicals and catalysts costs of $8 million incurred by our other ethanol plants.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
$
|
678
|
|
|
$
|
634
|
|
|
$
|
44
|
|
Cost of sales
|
357
|
|
|
574
|
|
|
(217
|
)
|
|||
Operating income
|
321
|
|
|
60
|
|
|
261
|
|
|||
Adjusted operating income (see note (f) on page 42)
|
317
|
|
|
220
|
|
|
97
|
|
|||
Margin (see note (f) on page 41)
|
412
|
|
|
296
|
|
|
116
|
|
|||
Operating expenses (excluding depreciation and
amortization expense reflected below)
|
66
|
|
|
47
|
|
|
19
|
|
|||
Depreciation and amortization expense
|
29
|
|
|
29
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Sales volumes (thousand gallons per day)
(see note (g) on page 42)
|
431
|
|
|
440
|
|
|
(9
|
)
|
•
|
Renewable diesel segment margin increased by $116 million in 2018 compared to 2017 primarily due to the following:
|
◦
|
An increase in renewable diesel prices in 2018 had a favorable impact to our renewable diesel segment margin of $60 million.
|
◦
|
Price risk management activities had a favorable impact to our renewable diesel segment margin of $40 million. We recognized a hedge gain of $29 million in 2018 from commodity derivative instruments associated with our price risk management activities compared to a loss of $11 million in 2017.
|
•
|
Renewable diesel segment operating expenses (excluding depreciation and amortization expense) increased by $19 million primarily attributable to higher chemical and catalyst costs of $10 million and increased costs resulting from the expansion of the DGD Plant completed in the third quarter of 2018 of $3 million.
|
(a)
|
Excludes $110 million of cash and cash equivalents related to our variable interest entities (VIEs) that is available for use only by our VIEs.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
5,531
|
|
|
$
|
4,371
|
|
|
$
|
5,482
|
|
Investing activities
|
(3,001
|
)
|
|
(3,928
|
)
|
|
(2,382
|
)
|
|||
Financing activities
|
(2,997
|
)
|
|
(3,168
|
)
|
|
(2,272
|
)
|
|||
Effect of foreign exchange rate changes on cash
|
68
|
|
|
(143
|
)
|
|
206
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(399
|
)
|
|
$
|
(2,868
|
)
|
|
$
|
1,034
|
|
•
|
an increase of $1.5 billion in accounts payable due to an increase in commodity prices in December 2019 compared to December 2018 combined with an increase in crude oil volumes purchased and the timing of payments of invoices;
|
•
|
a decrease of $427 million in prepaid expenses and other mainly due to a decrease in income taxes receivable resulting from a refund of $348 million, including interest, associated with the settlement of the combined audit related to our U.S. federal income tax returns for 2010 and 2011;
|
•
|
an increase of $153 million in income taxes payable primarily resulting from higher pre-tax income in the fourth quarter of 2019; partially offset by
|
•
|
an increase of $1.5 billion in receivables resulting from (i) an increase in commodity prices in December 2019 compared to December 2018 combined with an increase in sales volumes, and (ii) a receivable of $449 million for the blender’s tax credit attributable to volumes blended during 2019 and 2018; and
|
•
|
an increase of $385 million in inventories due to an increase in commodity prices in December 2019 compared to December 2018 combined with higher inventory levels.
|
•
|
fund $2.7 billion in capital investments, as defined in “Capital Investments” on page 50, of which $160 million related to self-funded capital investments by DGD;
|
•
|
fund $225 million of capital expenditures of VIEs other than DGD;
|
•
|
acquire undivided interests in pipeline and terminal assets for $72 million;
|
•
|
redeem our 6.125 percent Senior Notes for $871 million (or 102.48 percent of stated value);
|
•
|
purchase common stock for treasury of $777 million;
|
•
|
pay common stock dividends of $1.5 billion;
|
•
|
acquire all of the outstanding publicly held common units of VLP for $950 million; and
|
•
|
pay distributions to noncontrolling interests of $70 million.
|
•
|
an increase of $457 million in receivables resulting from an increase in sales volumes, partially offset by a decrease in commodity prices;
|
•
|
an increase of $197 million in inventory primarily due to higher inventory levels;
|
•
|
a decrease of $684 million in income taxes payable primarily resulting from (i) $527 million of payments in early 2018 related to 2017 tax liabilities and (ii) $181 million of payments in late 2018 that will be applied to 2019 tax liabilities;
|
•
|
a decrease of $113 million in accrued expenses mainly due to the timing of payments on our environmental compliance program obligations; partially offset by
|
•
|
an increase of $304 million in accounts payable due to an increase in crude oil and other feedstock volumes purchased, partially offset by a decrease in commodity prices.
|
•
|
fund $2.7 billion in capital investments, of which $192 million related to self-funded capital investments by DGD;
|
•
|
fund $124 million of capital expenditures of VIEs other than DGD;
|
•
|
fund (i) $468 million for the Peru Acquisition (as defined and discussed in Note 2 of Notes to Consolidated Financial Statements) in May 2018; (ii) $320 million for the acquisition of three ethanol plants in November 2018; and (iii) $88 million for other minor acquisitions;
|
•
|
acquire undivided interests in pipeline and terminal assets for $212 million;
|
•
|
redeem our 9.375 percent Senior Notes for $787 million (or 104.9 percent of stated value);
|
•
|
make payments on debt and finance lease obligations of $435 million, of which $410 million related to the repayment of all outstanding borrowings under VLP’s $750 million senior unsecured revolving credit facility (the VLP Revolver);
|
•
|
retire $137 million of debt assumed in connection with the Peru Acquisition;
|
•
|
purchase common stock for treasury of $1.7 billion;
|
•
|
pay common stock dividends of $1.4 billion; and
|
•
|
pay distributions to noncontrolling interests of $116 million.
|
•
|
an increase of $1.8 billion in accounts payable primarily as a result of an increase in commodity prices;
|
•
|
an increase of $489 million in income taxes payable resulting from deferring the payment of our fourth quarter 2017 estimated taxes to January 2018, as allowed by tax relief authorization from the IRS; partially offset by
|
•
|
an increase of $870 million in receivables primarily as a result of an increase in commodity prices; and
|
•
|
an increase of $516 million in inventory due to higher volumes held combined with an increase in commodity prices.
|
•
|
fund $2.3 billion in capital investments, of which $88 million related to self-funded capital investments by DGD;
|
•
|
fund $26 million of capital expenditures of VIEs other than DGD;
|
•
|
acquire an undivided interest in crude system assets for $72 million;
|
•
|
purchase common stock for treasury of $1.4 billion;
|
•
|
pay common stock dividends of $1.2 billion;
|
•
|
pay distributions to noncontrolling interests of $67 million; and
|
•
|
increase available cash on hand by $1.0 billion.
|
•
|
Capital expenditures for purchases of, additions to, and improvements in our property, plant, and equipment, including those made by DGD but excluding other VIEs;
|
•
|
Deferred turnaround and catalyst cost expenditures, including those made by DGD; and
|
•
|
Investments in unconsolidated joint ventures.
|
|
Payments Due by Year
|
|
|
||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt and finance
lease obligations (a)
|
$
|
541
|
|
|
$
|
103
|
|
|
$
|
93
|
|
|
$
|
110
|
|
|
$
|
82
|
|
|
$
|
9,485
|
|
|
$
|
10,414
|
|
Debt obligations – interest payments
|
464
|
|
|
462
|
|
|
455
|
|
|
449
|
|
|
449
|
|
|
3,947
|
|
|
6,226
|
|
|||||||
Operating lease liabilities (b)
|
376
|
|
|
250
|
|
|
194
|
|
|
160
|
|
|
125
|
|
|
498
|
|
|
1,603
|
|
|||||||
Purchase obligations
|
14,284
|
|
|
1,906
|
|
|
1,644
|
|
|
1,565
|
|
|
1,519
|
|
|
3,558
|
|
|
24,476
|
|
|||||||
Other long-term liabilities (c)
|
—
|
|
|
160
|
|
|
168
|
|
|
200
|
|
|
215
|
|
|
2,185
|
|
|
2,928
|
|
|||||||
Total
|
$
|
15,665
|
|
|
$
|
2,881
|
|
|
$
|
2,554
|
|
|
$
|
2,484
|
|
|
$
|
2,390
|
|
|
$
|
19,673
|
|
|
$
|
45,647
|
|
(a)
|
Debt obligations exclude amounts related to unamortized discounts and debt issuance costs. Finance lease obligations include related interest expense. Debt obligations due in 2020 include $348 million associated with borrowings under the IEnova Revolver (as defined and described in Note 9 of Notes to Consolidated Financial Statements) for the construction of terminals in Mexico by Central Mexico Terminals (as defined and described in Note 12 of Notes to Consolidated Financial Statements). The IEnova Revolver is only available to the operations of Central Mexico Terminals, and its creditors do not have recourse against us.
|
(b)
|
Operating lease liabilities include related interest expense.
|
(c)
|
Other long-term liabilities exclude amounts related to the long-term portion of operating lease liabilities that are separately presented above.
|
Rating Agency
|
|
Rating
|
Moody’s Investors Service
|
|
Baa2 (stable outlook)
|
Standard & Poor’s Ratings Services
|
|
BBB (stable outlook)
|
Fitch Ratings
|
|
BBB (stable outlook)
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
Increase in projected benefit obligation resulting from:
|
|
|
|
||||
Discount rate decrease of 0.25%
|
$
|
134
|
|
|
$
|
10
|
|
Compensation rate increase of 0.25%
|
17
|
|
|
n/a
|
|
||
Increase in expense resulting from:
|
|
|
|
||||
Discount rate decrease of 0.25%
|
12
|
|
|
—
|
|
||
Expected return on plan assets decrease of 0.25%
|
6
|
|
|
n/a
|
|
||
Compensation rate increase of 0.25%
|
4
|
|
|
n/a
|
|
•
|
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, renewable diesel sales, or natural gas purchases to lock in the price of those forecasted transactions at existing market prices that we deem favorable.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Gain (loss) in fair value resulting from:
|
|
|
|
||||
10% increase in underlying commodity prices
|
$
|
(39
|
)
|
|
$
|
2
|
|
10% decrease in underlying commodity prices
|
38
|
|
|
(6
|
)
|
|
December 31, 2019
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2020 (a)
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
There-
after
|
|
Total (b)
|
|
Fair
Value
|
||||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,474
|
|
|
$
|
8,485
|
|
|
$
|
10,099
|
|
Average interest rate
|
—
|
%
|
|
5.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5.2
|
%
|
|
5.2
|
%
|
|
|
|||||||||
Floating rate (c)
|
$
|
453
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
484
|
|
|
$
|
484
|
|
Average interest rate
|
5.0
|
%
|
|
4.5
|
%
|
|
4.5
|
%
|
|
4.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5.0
|
%
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2019 (a)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
There-
after
|
|
Total (b)
|
|
Fair
Value
|
||||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
850
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,474
|
|
|
$
|
8,334
|
|
|
$
|
8,737
|
|
Average interest rate
|
—
|
%
|
|
6.1
|
%
|
|
5.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5.4
|
%
|
|
5.5
|
%
|
|
|
|||||||||
Floating rate (c)
|
$
|
214
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
249
|
|
|
$
|
249
|
|
Average interest rate
|
4.6
|
%
|
|
4.7
|
%
|
|
4.7
|
%
|
|
4.7
|
%
|
|
4.7
|
%
|
|
—
|
%
|
|
4.6
|
%
|
|
|
(a)
|
As of December 31, 2019 and 2018, our floating rate debt due in 2020 and 2019 includes $348 million and $109 million, respectively, associated with borrowings under the IEnova Revolver for the construction of terminals in Mexico by Central Mexico Terminals. The IEnova Revolver is only available to the operations of Central Mexico Terminals, and its creditors do not have recourse against us.
|
(b)
|
Excludes unamortized discounts and debt issuance costs.
|
(c)
|
As of December 31, 2019 and 2018, we had an interest rate swap associated with $36 million and $40 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.
|
•
|
Obtaining an understanding and evaluating the Company’s income tax positions as filed or intended to be filed;
|
•
|
Evaluating the Company’s interpretation of income tax laws by developing an independent assessment of the Company’s income tax positions and comparing the results to the Company’s assessment;
|
•
|
Inspecting settlements with applicable taxing authorities; and
|
•
|
Assessing the expiration of applicable statutes of limitations.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,583
|
|
|
$
|
2,982
|
|
Receivables, net
|
8,904
|
|
|
7,345
|
|
||
Inventories
|
7,013
|
|
|
6,532
|
|
||
Prepaid expenses and other
|
469
|
|
|
816
|
|
||
Total current assets
|
18,969
|
|
|
17,675
|
|
||
Property, plant, and equipment, at cost
|
44,294
|
|
|
42,473
|
|
||
Accumulated depreciation
|
(15,030
|
)
|
|
(13,625
|
)
|
||
Property, plant, and equipment, net
|
29,264
|
|
|
28,848
|
|
||
Deferred charges and other assets, net
|
5,631
|
|
|
3,632
|
|
||
Total assets
|
$
|
53,864
|
|
|
$
|
50,155
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of debt and finance lease obligations
|
$
|
494
|
|
|
$
|
238
|
|
Accounts payable
|
10,205
|
|
|
8,594
|
|
||
Accrued expenses
|
949
|
|
|
630
|
|
||
Taxes other than income taxes payable
|
1,304
|
|
|
1,213
|
|
||
Income taxes payable
|
208
|
|
|
49
|
|
||
Total current liabilities
|
13,160
|
|
|
10,724
|
|
||
Debt and finance lease obligations, less current portion
|
9,178
|
|
|
8,871
|
|
||
Deferred income tax liabilities
|
5,103
|
|
|
4,962
|
|
||
Other long-term liabilities
|
3,887
|
|
|
2,867
|
|
||
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
|
6,821
|
|
|
7,048
|
|
||
Treasury stock, at cost;
264,209,742 and 255,905,051 common shares
|
(15,648
|
)
|
|
(14,925
|
)
|
||
Retained earnings
|
31,974
|
|
|
31,044
|
|
||
Accumulated other comprehensive loss
|
(1,351
|
)
|
|
(1,507
|
)
|
||
Total Valero Energy Corporation stockholders’ equity
|
21,803
|
|
|
21,667
|
|
||
Noncontrolling interests
|
733
|
|
|
1,064
|
|
||
Total equity
|
22,536
|
|
|
22,731
|
|
||
Total liabilities and equity
|
$
|
53,864
|
|
|
$
|
50,155
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues (a)
|
$
|
108,324
|
|
|
$
|
117,033
|
|
|
$
|
93,980
|
|
Cost of sales:
|
|
|
|
|
|
||||||
Cost of materials and other
|
96,476
|
|
|
104,732
|
|
|
83,037
|
|
|||
Operating expenses (excluding depreciation and amortization
expense reflected below)
|
4,868
|
|
|
4,690
|
|
|
4,504
|
|
|||
Depreciation and amortization expense
|
2,202
|
|
|
2,017
|
|
|
1,934
|
|
|||
Total cost of sales
|
103,546
|
|
|
111,439
|
|
|
89,475
|
|
|||
Other operating expenses
|
21
|
|
|
45
|
|
|
61
|
|
|||
General and administrative expenses (excluding depreciation and
amortization expense reflected below)
|
868
|
|
|
925
|
|
|
829
|
|
|||
Depreciation and amortization expense
|
53
|
|
|
52
|
|
|
52
|
|
|||
Operating income
|
3,836
|
|
|
4,572
|
|
|
3,563
|
|
|||
Other income, net
|
104
|
|
|
130
|
|
|
112
|
|
|||
Interest and debt expense, net of capitalized interest
|
(454
|
)
|
|
(470
|
)
|
|
(468
|
)
|
|||
Income before income tax expense (benefit)
|
3,486
|
|
|
4,232
|
|
|
3,207
|
|
|||
Income tax expense (benefit)
|
702
|
|
|
879
|
|
|
(949
|
)
|
|||
Net income
|
2,784
|
|
|
3,353
|
|
|
4,156
|
|
|||
Less: Net income attributable to noncontrolling interests
|
362
|
|
|
231
|
|
|
91
|
|
|||
Net income attributable to Valero Energy Corporation stockholders
|
$
|
2,422
|
|
|
$
|
3,122
|
|
|
$
|
4,065
|
|
|
|
|
|
|
|
||||||
Earnings per common share
|
$
|
5.84
|
|
|
$
|
7.30
|
|
|
$
|
9.17
|
|
Weighted-average common shares outstanding (in millions)
|
413
|
|
|
426
|
|
|
442
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share – assuming dilution
|
$
|
5.84
|
|
|
$
|
7.29
|
|
|
$
|
9.16
|
|
Weighted-average common shares outstanding –
assuming dilution (in millions)
|
414
|
|
|
428
|
|
|
444
|
|
|||
_______________________________________________
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
||||||
(a) Includes excise taxes on sales by certain of our international
operations
|
$
|
5,595
|
|
|
$
|
5,626
|
|
|
$
|
5,573
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
2,784
|
|
|
$
|
3,353
|
|
|
$
|
4,156
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
349
|
|
|
(517
|
)
|
|
514
|
|
|||
Net gain (loss) on pension
and other postretirement benefits
|
(234
|
)
|
|
49
|
|
|
(65
|
)
|
|||
Net loss on cash flow hedges
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss) before
income tax expense (benefit)
|
107
|
|
|
(468
|
)
|
|
449
|
|
|||
Income tax expense (benefit) related to
items of other comprehensive income (loss)
|
(48
|
)
|
|
10
|
|
|
(21
|
)
|
|||
Other comprehensive income (loss)
|
155
|
|
|
(478
|
)
|
|
470
|
|
|||
Comprehensive income
|
2,939
|
|
|
2,875
|
|
|
4,626
|
|
|||
Less: Comprehensive income attributable
to noncontrolling interests
|
361
|
|
|
229
|
|
|
91
|
|
|||
Comprehensive income attributable to
Valero Energy Corporation stockholders
|
$
|
2,578
|
|
|
$
|
2,646
|
|
|
$
|
4,535
|
|
|
Valero Energy Corporation Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|
Non-
controlling
Interests
|
|
Total
Equity
|
||||||||||||||||
Balance as of December 31, 2016
|
$
|
7
|
|
|
$
|
7,088
|
|
|
$
|
(12,027
|
)
|
|
$
|
26,366
|
|
|
$
|
(1,410
|
)
|
|
$
|
20,024
|
|
|
$
|
830
|
|
|
$
|
20,854
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,065
|
|
|
—
|
|
|
4,065
|
|
|
91
|
|
|
4,156
|
|
||||||||
Dividends on common stock
($2.80 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,242
|
)
|
|
—
|
|
|
(1,242
|
)
|
|
—
|
|
|
(1,242
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
||||||||
Transactions in connection with
stock-based compensation plans
|
—
|
|
|
(82
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
(63
|
)
|
||||||||
Stock purchases under purchase programs
|
—
|
|
|
—
|
|
|
(1,307
|
)
|
|
—
|
|
|
—
|
|
|
(1,307
|
)
|
|
—
|
|
|
(1,307
|
)
|
||||||||
Issuance of Valero Energy Partners LP
common units |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
(67
|
)
|
||||||||
Other
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
11
|
|
|
—
|
|
|
(24
|
)
|
|
(8
|
)
|
|
(32
|
)
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
470
|
|
|
470
|
|
|
—
|
|
|
470
|
|
||||||||
Balance as of December 31, 2017
|
7
|
|
|
7,039
|
|
|
(13,315
|
)
|
|
29,200
|
|
|
(940
|
)
|
|
21,991
|
|
|
909
|
|
|
22,900
|
|
||||||||
Reclassification of stranded income
tax effects
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,122
|
|
|
—
|
|
|
3,122
|
|
|
231
|
|
|
3,353
|
|
||||||||
Dividends on common stock
($3.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,369
|
)
|
|
—
|
|
|
(1,369
|
)
|
|
—
|
|
|
(1,369
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
||||||||
Transactions in connection with
stock-based compensation plans
|
—
|
|
|
(70
|
)
|
|
(99
|
)
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
(169
|
)
|
||||||||
Stock purchases under purchase programs
|
—
|
|
|
—
|
|
|
(1,511
|
)
|
|
—
|
|
|
—
|
|
|
(1,511
|
)
|
|
—
|
|
|
(1,511
|
)
|
||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
(116
|
)
|
||||||||
Other
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
10
|
|
|
7
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(476
|
)
|
|
(476
|
)
|
|
(2
|
)
|
|
(478
|
)
|
||||||||
Balance as of December 31, 2018
|
7
|
|
|
7,048
|
|
|
(14,925
|
)
|
|
31,044
|
|
|
(1,507
|
)
|
|
21,667
|
|
|
1,064
|
|
|
22,731
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
|
—
|
|
|
2,422
|
|
|
362
|
|
|
2,784
|
|
||||||||
Dividends on common stock
($3.60 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
(1,492
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
||||||||
Transactions in connection with
stock-based compensation plans
|
—
|
|
|
(50
|
)
|
|
30
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
||||||||
Stock purchases under purchase program
|
—
|
|
|
—
|
|
|
(753
|
)
|
|
—
|
|
|
—
|
|
|
(753
|
)
|
|
—
|
|
|
(753
|
)
|
||||||||
Acquisition of Valero Energy Partners LP
publicly held common units
|
—
|
|
|
(328
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(328
|
)
|
|
(622
|
)
|
|
(950
|
)
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(70
|
)
|
||||||||
Other
|
—
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
156
|
|
|
(1
|
)
|
|
155
|
|
||||||||
Balance as of December 31, 2019
|
$
|
7
|
|
|
$
|
6,821
|
|
|
$
|
(15,648
|
)
|
|
$
|
31,974
|
|
|
$
|
(1,351
|
)
|
|
$
|
21,803
|
|
|
$
|
733
|
|
|
$
|
22,536
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,784
|
|
|
$
|
3,353
|
|
|
$
|
4,156
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
2,255
|
|
|
2,069
|
|
|
1,986
|
|
|||
Deferred income tax expense (benefit)
|
234
|
|
|
203
|
|
|
(2,543
|
)
|
|||
Changes in current assets and current liabilities
|
294
|
|
|
(1,297
|
)
|
|
1,289
|
|
|||
Changes in deferred charges and credits and
other operating activities, net
|
(36
|
)
|
|
43
|
|
|
594
|
|
|||
Net cash provided by operating activities
|
5,531
|
|
|
4,371
|
|
|
5,482
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures (excluding variable interest entities (VIEs))
|
(1,627
|
)
|
|
(1,463
|
)
|
|
(1,269
|
)
|
|||
Capital expenditures of VIEs:
|
|
|
|
|
|
||||||
Diamond Green Diesel Holdings LLC (DGD)
|
(142
|
)
|
|
(165
|
)
|
|
(84
|
)
|
|||
Other VIEs
|
(225
|
)
|
|
(124
|
)
|
|
(26
|
)
|
|||
Deferred turnaround and catalyst cost expenditures (excluding VIEs)
|
(762
|
)
|
|
(888
|
)
|
|
(519
|
)
|
|||
Deferred turnaround and catalyst cost expenditures of DGD
|
(18
|
)
|
|
(27
|
)
|
|
(4
|
)
|
|||
Investments in unconsolidated joint ventures
|
(164
|
)
|
|
(181
|
)
|
|
(406
|
)
|
|||
Peru Acquisition, net of cash acquired
|
—
|
|
|
(468
|
)
|
|
—
|
|
|||
Acquisition of ethanol plants
|
(3
|
)
|
|
(320
|
)
|
|
—
|
|
|||
Acquisitions of undivided interests
|
(72
|
)
|
|
(212
|
)
|
|
(72
|
)
|
|||
Minor acquisitions
|
—
|
|
|
(88
|
)
|
|
—
|
|
|||
Other investing activities, net
|
12
|
|
|
8
|
|
|
(2
|
)
|
|||
Net cash used in investing activities
|
(3,001
|
)
|
|
(3,928
|
)
|
|
(2,382
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from debt issuances and borrowings (excluding VIEs)
|
1,892
|
|
|
1,258
|
|
|
380
|
|
|||
Proceeds from borrowings of VIEs
|
239
|
|
|
109
|
|
|
—
|
|
|||
Repayments of debt and finance lease obligations (excluding VIEs)
|
(1,805
|
)
|
|
(1,353
|
)
|
|
(15
|
)
|
|||
Repayments of debt of VIEs
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Purchases of common stock for treasury
|
(777
|
)
|
|
(1,708
|
)
|
|
(1,372
|
)
|
|||
Common stock dividends
|
(1,492
|
)
|
|
(1,369
|
)
|
|
(1,242
|
)
|
|||
Acquisition of Valero Energy Partners LP publicly held common units
|
(950
|
)
|
|
—
|
|
|
—
|
|
|||
Contributions from noncontrolling interests
|
—
|
|
|
32
|
|
|
30
|
|
|||
Distributions to noncontrolling interests
|
(70
|
)
|
|
(116
|
)
|
|
(67
|
)
|
|||
Other financing activities, net
|
(28
|
)
|
|
(15
|
)
|
|
20
|
|
|||
Net cash used in financing activities
|
(2,997
|
)
|
|
(3,168
|
)
|
|
(2,272
|
)
|
|||
Effect of foreign exchange rate changes on cash
|
68
|
|
|
(143
|
)
|
|
206
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(399
|
)
|
|
(2,868
|
)
|
|
1,034
|
|
|||
Cash and cash equivalents at beginning of year
|
2,982
|
|
|
5,850
|
|
|
4,816
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,583
|
|
|
$
|
2,982
|
|
|
$
|
5,850
|
|
1.
|
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES
|
•
|
turnaround costs, which are incurred in connection with planned major maintenance activities at our refineries, ethanol plants, and renewable diesel plant, are deferred when incurred and amortized on a straight-line basis over the period of time estimated to lapse until the next turnaround occurs;
|
•
|
fixed-bed catalyst costs, representing the cost of catalyst that is changed out at periodic intervals when the quality of the catalyst has deteriorated beyond its prescribed function, are deferred when incurred and amortized on a straight-line basis over the estimated useful life of the specific catalyst;
|
•
|
operating lease ROU (defined below) assets, which are amortized as discussed in “Leases” below;
|
•
|
investments in unconsolidated joint ventures;
|
•
|
income taxes receivable;
|
•
|
intangible assets, which are amortized over their estimated useful lives; and
|
•
|
goodwill.
|
ASU
|
|
Basis of
Adoption
|
|
2017-12
|
Derivatives and Hedging (Topic 815): Targeted
Improvements to Accounting for Hedging Activities
|
|
Cumulative
effect
|
ASU
|
|
Basis of
Adoption
|
|
2016-13
|
Financial Instruments—Credit Losses (Topic 326):
Measurement of Credit Losses on Financial
Instruments (including codification improvements in
ASUs 2018-19 and 2019-11 and ASU 2020-02—
Financial Instruments—Credit Losses (Topic 326):
Amendments to SEC Paragraphs Pursuant to SEC Staff
Accounting Bulletin No. 119)
|
|
Cumulative
effect
|
2018-15
|
Intangibles—Goodwill and Other—Internal-Use
Software (Subtopic 350-40): Customer’s Accounting
for Implementation Costs Incurred in a Cloud
Computing Arrangement That Is a Service Contract
|
|
Prospectively
|
2019-12
|
Income Taxes (Topic 740): Simplifying the Accounting
for Income Taxes
|
|
Prospectively
|
2.
|
MERGER AND ACQUISITIONS
|
Current assets, net of cash acquired
|
$
|
158
|
|
Property, plant, and equipment
|
102
|
|
|
Deferred charges and other assets
|
466
|
|
|
Current liabilities, excluding current portion of debt
|
(26
|
)
|
|
Debt assumed, including current portion
|
(137
|
)
|
|
Deferred income tax liabilities
|
(62
|
)
|
|
Other long-term liabilities
|
(27
|
)
|
|
Noncontrolling interest
|
(6
|
)
|
|
Total consideration, net of cash acquired
|
$
|
468
|
|
3.
|
RECEIVABLES
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Receivables from contracts with customers
|
$
|
5,610
|
|
|
$
|
4,673
|
|
Receivables from certain purchase and sale arrangements
|
2,484
|
|
|
2,311
|
|
||
Commodity derivative and foreign currency
contract receivables
|
116
|
|
|
229
|
|
||
Other receivables
|
730
|
|
|
166
|
|
||
Total receivables
|
8,940
|
|
|
7,379
|
|
||
Allowance for doubtful accounts
|
(36
|
)
|
|
(34
|
)
|
||
Receivables, net
|
$
|
8,904
|
|
|
$
|
7,345
|
|
|
|
|
|
|
|
4.
|
INVENTORIES
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Refinery feedstocks
|
$
|
2,399
|
|
|
$
|
2,265
|
|
Refined petroleum products and blendstocks
|
4,034
|
|
|
3,653
|
|
||
Ethanol feedstocks and products
|
260
|
|
|
298
|
|
||
Renewable diesel feedstocks and products
|
46
|
|
|
52
|
|
||
Materials and supplies
|
274
|
|
|
264
|
|
||
Inventories
|
$
|
7,013
|
|
|
$
|
6,532
|
|
5.
|
LEASES
|
•
|
Pipelines, Terminals, and Tanks includes facilities and equipment used in the storage, transportation, production, and sale of refinery feedstock, refined petroleum product, and corn inventories;
|
•
|
Marine Transportation includes time charters for ocean-going tankers and coastal vessels;
|
•
|
Rail Transportation includes railcars and related storage facilities;
|
•
|
Feedstock Processing Equipment includes machinery, equipment, and various facilities used in our refining, ethanol, and renewable diesel operations;
|
•
|
Energy and Gases includes facilities and equipment related to industrial gases and power used in our operations;
|
•
|
Real Estate includes land and rights-of-way associated with our refineries and pipelines, as well as office facilities; and
|
•
|
Other includes equipment primarily used at our corporate offices, such as printers and copiers.
|
|
Year Ended December 31, 2019
|
||||||||||||||||||||||||||||||
|
Pipelines,
Terminals,
and Tanks
|
|
Transportation
|
|
Feedstock
Processing
Equipment
|
|
Energy
and
Gases
|
|
Real
Estate
|
|
Other
|
|
Total
|
||||||||||||||||||
|
|
Marine
|
|
Rail
|
|
|
|
|
|
||||||||||||||||||||||
Finance lease cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amortization of ROU assets
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
Interest on lease liabilities
|
47
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||||||
Operating lease cost
|
182
|
|
|
145
|
|
|
52
|
|
|
20
|
|
|
9
|
|
|
27
|
|
|
4
|
|
|
439
|
|
||||||||
Variable lease cost
|
66
|
|
|
35
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
103
|
|
||||||||
Short-term lease cost
|
9
|
|
|
53
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||||||
Sublease income
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(30
|
)
|
||||||||
Total lease cost
|
$
|
348
|
|
|
$
|
206
|
|
|
$
|
52
|
|
|
$
|
58
|
|
|
$
|
14
|
|
|
$
|
25
|
|
|
$
|
4
|
|
|
$
|
707
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Minimum rental expense
|
$
|
515
|
|
|
$
|
691
|
|
Contingent rental expense
|
19
|
|
|
21
|
|
||
Total rental expense
|
534
|
|
|
712
|
|
||
Less: Sublease rental income
|
31
|
|
|
54
|
|
||
Rental expense, net of sublease rental income
|
$
|
503
|
|
|
$
|
658
|
|
|
|
December 31, 2019
|
||||||
|
|
Operating
Leases
|
|
Finance
Leases
|
||||
Supplemental balance sheet information
|
|
|
|
|
||||
ROU assets, net reflected in the following
balance sheet line items:
|
|
|
|
|
||||
Property, plant, and equipment, net
|
|
$
|
—
|
|
|
$
|
790
|
|
Deferred charges and other assets, net
|
|
1,329
|
|
|
—
|
|
||
Total ROU assets, net
|
|
$
|
1,329
|
|
|
$
|
790
|
|
|
|
|
|
|
||||
Current lease liabilities reflected in the following
balance sheet line items:
|
|
|
|
|
||||
Current portion of debt and finance lease obligations
|
|
$
|
—
|
|
|
$
|
41
|
|
Accrued expenses
|
|
331
|
|
|
—
|
|
||
Noncurrent lease liabilities reflected in the following
balance sheet line items:
|
|
|
|
|
||||
Debt and finance lease obligations, less current portion
|
|
—
|
|
|
750
|
|
||
Other long-term liabilities
|
|
959
|
|
|
—
|
|
||
Total lease liabilities
|
|
$
|
1,290
|
|
|
$
|
791
|
|
|
|
|
|
|
||||
Other supplemental information
|
|
|
|
|
||||
Weighted-average remaining lease term
|
|
7.7 years
|
|
|
19.7 years
|
|
||
Weighted-average discount rate
|
|
4.9
|
%
|
|
5.2
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Operating
Leases
|
|
Finance
Leases
|
|
Operating
Leases
|
|
Capital
Leases
|
||||||||
2019
|
n/a
|
|
|
n/a
|
|
|
$
|
359
|
|
|
$
|
69
|
|
||
2020
|
$
|
376
|
|
|
$
|
88
|
|
|
245
|
|
|
65
|
|
||
2021
|
250
|
|
|
86
|
|
|
178
|
|
|
62
|
|
||||
2022
|
194
|
|
|
87
|
|
|
146
|
|
|
64
|
|
||||
2023
|
160
|
|
|
91
|
|
|
123
|
|
|
65
|
|
||||
2024
|
125
|
|
|
82
|
|
|
n/a
|
|
|
n/a
|
|
||||
Thereafter
|
498
|
|
|
1,011
|
|
|
514
|
|
|
957
|
|
||||
Total undiscounted lease payments
|
1,603
|
|
|
1,445
|
|
|
$
|
1,565
|
|
|
1,282
|
|
|||
Less: Amount associated with discounting
|
313
|
|
|
654
|
|
|
|
|
676
|
|
|||||
Total lease liabilities
|
$
|
1,290
|
|
|
$
|
791
|
|
|
|
|
$
|
606
|
|
6.
|
PROPERTY, PLANT, AND EQUIPMENT
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
476
|
|
|
$
|
416
|
|
Crude oil processing facilities
|
|
32,047
|
|
|
30,721
|
|
||
Transportation and terminaling facilities
|
|
5,179
|
|
|
4,935
|
|
||
Grain processing equipment
|
|
1,201
|
|
|
1,212
|
|
||
Administrative buildings
|
|
1,015
|
|
|
953
|
|
||
Finance lease ROU assets (see Note 5)
|
|
944
|
|
|
711
|
|
||
Other
|
|
1,701
|
|
|
1,565
|
|
||
Construction in progress
|
|
1,731
|
|
|
1,960
|
|
||
Property, plant, and equipment, at cost
|
|
44,294
|
|
|
42,473
|
|
||
Accumulated depreciation
|
|
(15,030
|
)
|
|
(13,625
|
)
|
||
Property, plant, and equipment, net
|
|
$
|
29,264
|
|
|
$
|
28,848
|
|
7.
|
DEFERRED CHARGES AND OTHER ASSETS
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred turnaround and catalyst costs, net
|
$
|
1,778
|
|
|
$
|
1,749
|
|
Operating lease ROU assets, net (see Note 5)
|
1,329
|
|
|
—
|
|
||
Investments in unconsolidated joint ventures
|
942
|
|
|
542
|
|
||
Income taxes receivable
|
525
|
|
|
343
|
|
||
Intangible assets, net
|
283
|
|
|
307
|
|
||
Goodwill
|
260
|
|
|
260
|
|
||
Other
|
514
|
|
|
431
|
|
||
Deferred charges and other assets, net
|
$
|
5,631
|
|
|
$
|
3,632
|
|
8.
|
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES
|
|
Accrued
Expenses
|
|
Other Long-Term
Liabilities
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating lease liabilities (see Note 5)
|
$
|
331
|
|
|
$
|
—
|
|
|
$
|
959
|
|
|
$
|
—
|
|
Liability for unrecognized tax benefits (see Note 15)
|
—
|
|
|
—
|
|
|
954
|
|
|
721
|
|
||||
Defined benefit plan liabilities (see Note 13)
|
37
|
|
|
43
|
|
|
834
|
|
|
654
|
|
||||
Repatriation tax liability (see Note 15) (a)
|
—
|
|
|
—
|
|
|
508
|
|
|
603
|
|
||||
Environmental liabilities
|
27
|
|
|
29
|
|
|
319
|
|
|
327
|
|
||||
Wage and other employee-related liabilities
|
292
|
|
|
302
|
|
|
121
|
|
|
109
|
|
||||
Accrued interest expense
|
83
|
|
|
93
|
|
|
—
|
|
|
—
|
|
||||
Contract liabilities from contracts with customers
(see Note 17)
|
55
|
|
|
31
|
|
|
—
|
|
|
—
|
|
||||
Environmental credit obligations (see Note 19)
|
31
|
|
|
34
|
|
|
—
|
|
|
—
|
|
||||
Other accrued liabilities
|
93
|
|
|
98
|
|
|
192
|
|
|
453
|
|
||||
Accrued expenses and other long-term liabilities
|
$
|
949
|
|
|
$
|
630
|
|
|
$
|
3,887
|
|
|
$
|
2,867
|
|
(a)
|
The current portion of repatriation tax liability is included in income taxes payable. As of December 31, 2019, the current portion of repatriation tax liability was $54 million. There was no current portion of repatriation tax liability as of December 31, 2018.
|
9.
|
DEBT AND FINANCE LEASE OBLIGATIONS
|
|
Final
Maturity
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
|||||
Credit facilities:
|
|
|
|
|
|
||||
Valero Revolver
|
2024
|
|
$
|
—
|
|
|
$
|
—
|
|
IEnova Revolver
|
2028
|
|
348
|
|
|
109
|
|
||
Canadian Revolver
|
2020
|
|
—
|
|
|
—
|
|
||
Accounts receivable sales facility
|
2020
|
|
100
|
|
|
100
|
|
||
Public debt:
|
|
|
|
|
|
||||
Valero Senior Notes
|
|
|
|
|
|
||||
6.625%
|
2037
|
|
1,500
|
|
|
1,500
|
|
||
3.4%
|
2026
|
|
1,250
|
|
|
1,250
|
|
||
4.0%
|
2029
|
|
1,000
|
|
|
—
|
|
||
6.125%
|
2020
|
|
—
|
|
|
850
|
|
||
4.35%
|
2028
|
|
750
|
|
|
750
|
|
||
7.5%
|
2032
|
|
750
|
|
|
750
|
|
||
4.9%
|
2045
|
|
650
|
|
|
650
|
|
||
3.65%
|
2025
|
|
600
|
|
|
600
|
|
||
10.5%
|
2039
|
|
250
|
|
|
250
|
|
||
8.75%
|
2030
|
|
200
|
|
|
200
|
|
||
7.45%
|
2097
|
|
100
|
|
|
100
|
|
||
6.75%
|
2037
|
|
24
|
|
|
24
|
|
||
VLP Senior Notes
|
|
|
|
|
|
||||
4.375%
|
2026
|
|
500
|
|
|
500
|
|
||
4.5%
|
2028
|
|
500
|
|
|
500
|
|
||
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0%
|
2040
|
|
300
|
|
|
300
|
|
||
Debenture, 7.65%
|
2026
|
|
100
|
|
|
100
|
|
||
Other debt
|
Various
|
|
47
|
|
|
50
|
|
||
Net unamortized debt issuance costs and other
|
|
|
(88
|
)
|
|
(80
|
)
|
||
Total debt
|
|
|
8,881
|
|
|
8,503
|
|
||
Finance lease obligations (see Note 5)
|
|
|
791
|
|
|
606
|
|
||
Total debt and finance lease obligations
|
|
|
9,672
|
|
|
9,109
|
|
||
Less: Current portion
|
|
|
494
|
|
|
238
|
|
||
Debt and finance lease obligations, less current portion
|
|
|
$
|
9,178
|
|
|
$
|
8,871
|
|
|
|
|
|
|
|
December 31, 2019
|
||||||||||||
|
|
Facility
Amount
|
|
Maturity Date
|
|
Outstanding
Borrowings
|
|
Letters of Credit
Issued (a)
|
|
Availability
|
||||||||
|
|
|
|
|
|
|||||||||||||
Committed facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Valero Revolver
|
|
$
|
4,000
|
|
|
March 2024
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
3,966
|
|
Canadian Revolver
|
|
C$
|
150
|
|
|
November 2020
|
|
C$
|
—
|
|
|
C$
|
5
|
|
|
C$
|
145
|
|
Accounts receivable
sales facility
|
|
$
|
1,300
|
|
|
July 2020
|
|
$
|
100
|
|
|
n/a
|
|
|
$
|
1,200
|
|
|
Letter of credit
facility (b)
|
|
$
|
50
|
|
|
November 2020
|
|
n/a
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
Committed facility of
VIE (c):
|
|
|
|
|
|
|
|
|
|
|
||||||||
IEnova Revolver
|
|
$
|
491
|
|
|
February 2028
|
|
$
|
348
|
|
|
n/a
|
|
|
$
|
143
|
|
|
Uncommitted facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Letter of credit facilities
|
|
n/a
|
|
|
n/a
|
|
n/a
|
|
|
$
|
121
|
|
|
n/a
|
|
(a)
|
Letters of credit issued as of December 31, 2019 expire at various times in 2020 through 2021.
|
(b)
|
The letter of credit facility was amended to reduce the facility from $100 million to $50 million and to extend the maturity date from November 2019 to November 2020.
|
(c)
|
Creditors of our VIE do not have recourse against us.
|
•
|
We issued $1.0 billion of 4.00 percent Senior Notes due April 1, 2029 (4.00 percent Senior Notes). Proceeds from this debt issuance totaled $992 million before deducting the underwriting discount and other debt issuance costs. The proceeds were used to redeem our 6.125 percent Senior Notes due February 1, 2020 (6.125 percent Senior Notes) for $871 million, or 102.48 percent of stated value, which includes an early redemption fee of $21 million that is reflected in “other income, net” in our statement of income for the year ended December 31, 2019.
|
•
|
In connection with the completion of the Merger Transaction as described in Note 2, Valero entered into a guarantee agreement to fully and unconditionally guarantee the prompt payment, when due, of any amount owed to the holders of VLP’s 4.375 percent Senior Notes due December 15, 2026 and 4.5 percent Senior Notes due March 15, 2028. See Note 21 for condensed consolidating financial statements.
|
•
|
We issued $750 million of 4.35 percent Senior Notes due June 1, 2028. Proceeds from this debt issuance totaled $749 million before deducting the underwriting discount and other debt issuance costs. The proceeds were used to redeem our 9.375 percent Senior Notes due March 15, 2019 for $787 million, or 104.9 percent of stated value, which includes an early redemption fee of $37 million that is reflected in “other income, net” in our statement of income for the year ended December 31, 2018.
|
•
|
VLP issued $500 million of 4.5 percent Senior Notes due March 15, 2028. Proceeds from this debt issuance totaled $498 million before deducting the underwriting discount and other debt issuance costs. The proceeds were available only to the operations of VLP and were used to repay the outstanding balance of $410 million on the VLP Revolver and $85 million on its notes payable to us, which is eliminated in consolidation.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest and debt expense
|
$
|
544
|
|
|
$
|
557
|
|
|
$
|
539
|
|
Less: Capitalized interest
|
90
|
|
|
87
|
|
|
71
|
|
|||
Interest and debt expense, net of
capitalized interest
|
$
|
454
|
|
|
$
|
470
|
|
|
$
|
468
|
|
2020 (a)
|
$
|
453
|
|
2021
|
17
|
|
|
2022
|
6
|
|
|
2023
|
19
|
|
|
2024
|
—
|
|
|
Thereafter
|
8,474
|
|
|
Net unamortized debt issuance costs and other
|
(88
|
)
|
|
Total debt
|
$
|
8,881
|
|
(a)
|
As of December 31, 2019, our debt obligations due in 2020 include $348 million associated with borrowings under the IEnova Revolver.
|
10.
|
COMMITMENTS AND CONTINGENCIES
|
11.
|
EQUITY
|
|
Common
Stock
|
|
Treasury
Stock
|
||
Balance as of December 31, 2016
|
673
|
|
|
(222
|
)
|
Transactions in connection with
stock-based compensation plans
|
—
|
|
|
1
|
|
Stock purchases under purchase programs
|
—
|
|
|
(19
|
)
|
Balance as of December 31, 2017
|
673
|
|
|
(240
|
)
|
Stock purchases under purchase programs
|
—
|
|
|
(16
|
)
|
Balance as of December 31, 2018
|
673
|
|
|
(256
|
)
|
Transactions in connection with
stock-based compensation plans
|
—
|
|
|
1
|
|
Stock purchases under purchase program
|
—
|
|
|
(9
|
)
|
Balance as of December 31, 2019
|
673
|
|
|
(264
|
)
|
|
Before-Tax
Amount
|
|
Tax Expense
(Benefit)
|
|
Net Amount
|
||||||
Year ended December 31, 2019
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
349
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Loss arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
(245
|
)
|
|
(54
|
)
|
|
(191
|
)
|
|||
Prior service cost
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Miscellaneous loss
|
—
|
|
|
4
|
|
|
(4
|
)
|
|||
Amounts reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
38
|
|
|
9
|
|
|
29
|
|
|||
Prior service credit
|
(28
|
)
|
|
(6
|
)
|
|
(22
|
)
|
|||
Curtailment and settlement loss
|
4
|
|
|
1
|
|
|
3
|
|
|||
Net loss on pension and other
postretirement benefits
|
(234
|
)
|
|
(47
|
)
|
|
(187
|
)
|
|||
Derivative instruments designated and
qualifying as cash flow hedges:
|
|
|
|
|
|
||||||
Net loss arising during the year
|
(6
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|||
Net gain reclassified into income
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Net loss on cash flow hedges
|
(8
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Other comprehensive income
|
$
|
107
|
|
|
$
|
(48
|
)
|
|
$
|
155
|
|
|
Before-Tax
Amount
|
|
Tax Expense
(Benefit)
|
|
Net Amount
|
||||||
Year ended December 31, 2018
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
(517
|
)
|
|
$
|
—
|
|
|
$
|
(517
|
)
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Gain arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial gain
|
1
|
|
|
—
|
|
|
1
|
|
|||
Prior service credit
|
7
|
|
|
1
|
|
|
6
|
|
|||
Amounts reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
63
|
|
|
14
|
|
|
49
|
|
|||
Prior service credit
|
(29
|
)
|
|
(7
|
)
|
|
(22
|
)
|
|||
Curtailment and settlement loss
|
7
|
|
|
2
|
|
|
5
|
|
|||
Net gain on pension and other
postretirement benefits
|
49
|
|
|
10
|
|
|
39
|
|
|||
Other comprehensive loss
|
$
|
(468
|
)
|
|
$
|
10
|
|
|
$
|
(478
|
)
|
|
|
|
|
|
|
||||||
Year ended December 31, 2017
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
514
|
|
|
$
|
—
|
|
|
$
|
514
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Loss arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
(79
|
)
|
|
(29
|
)
|
|
(50
|
)
|
|||
Prior service cost
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Miscellaneous loss
|
—
|
|
|
3
|
|
|
(3
|
)
|
|||
Amounts reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
50
|
|
|
18
|
|
|
32
|
|
|||
Prior service credit
|
(36
|
)
|
|
(13
|
)
|
|
(23
|
)
|
|||
Curtailment and settlement loss
|
4
|
|
|
1
|
|
|
3
|
|
|||
Net loss on pension and other
postretirement benefits
|
(65
|
)
|
|
(21
|
)
|
|
(44
|
)
|
|||
Other comprehensive income
|
$
|
449
|
|
|
$
|
(21
|
)
|
|
$
|
470
|
|
|
|
|
|
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Defined
Benefit
Plans
Items
|
|
Losses on
Cash Flow
Hedges
|
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
(1,021
|
)
|
|
$
|
(389
|
)
|
|
$
|
—
|
|
|
$
|
(1,410
|
)
|
Other comprehensive income (loss)
before reclassifications
|
514
|
|
|
(56
|
)
|
|
—
|
|
|
458
|
|
||||
Amounts reclassified from
accumulated other comprehensive
loss
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Other comprehensive income (loss)
|
514
|
|
|
(44
|
)
|
|
—
|
|
|
470
|
|
||||
Balance as of December 31, 2017
|
(507
|
)
|
|
(433
|
)
|
|
—
|
|
|
(940
|
)
|
||||
Other comprehensive income (loss)
before reclassifications
|
(515
|
)
|
|
7
|
|
|
—
|
|
|
(508
|
)
|
||||
Amounts reclassified from
accumulated other comprehensive
loss
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||
Other comprehensive income (loss)
|
(515
|
)
|
|
39
|
|
|
—
|
|
|
(476
|
)
|
||||
Reclassification of stranded income
tax effects
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
||||
Balance as of December 31, 2018
|
(1,022
|
)
|
|
(485
|
)
|
|
—
|
|
|
(1,507
|
)
|
||||
Other comprehensive income (loss)
before reclassifications
|
346
|
|
|
(197
|
)
|
|
(2
|
)
|
|
147
|
|
||||
Amounts reclassified from
accumulated other comprehensive
loss
|
—
|
|
|
10
|
|
|
(1
|
)
|
|
9
|
|
||||
Other comprehensive income (loss)
|
346
|
|
|
(187
|
)
|
|
(3
|
)
|
|
156
|
|
||||
Balance as of December 31, 2019
|
$
|
(676
|
)
|
|
$
|
(672
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1,351
|
)
|
Details about
Accumulated Other
Comprehensive Loss
Components
|
|
|
|
Affected Line
Item in the
Statement of
Income
|
||||||||||
|
Year Ended December 31,
|
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Amortization of items related to
defined benefit pension plans:
|
|
|
|
|
|
|
|
|
||||||
Net actuarial loss
|
|
$
|
(38
|
)
|
|
$
|
(63
|
)
|
|
$
|
(50
|
)
|
|
(a) Other income, net
|
Prior service credit
|
|
28
|
|
|
29
|
|
|
36
|
|
|
(a) Other income, net
|
|||
Curtailment and settlement
|
|
(4
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|
(a) Other income, net
|
|||
|
|
(14
|
)
|
|
(41
|
)
|
|
(18
|
)
|
|
Total before tax
|
|||
|
|
4
|
|
|
9
|
|
|
6
|
|
|
Tax benefit
|
|||
|
|
$
|
(10
|
)
|
|
$
|
(32
|
)
|
|
$
|
(12
|
)
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
||||||
Gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||
Commodity contracts
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Revenues
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net of tax
|
|
|
|
|
|
|
|
|
|
||||||
Total reclassifications for the year
|
|
$
|
(8
|
)
|
|
$
|
(32
|
)
|
|
$
|
(12
|
)
|
|
Net of tax
|
(a)
|
These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (credit), as discussed in Note 13.
|
12.
|
VARIABLE INTEREST ENTITIES
|
•
|
DGD is a joint venture with a subsidiary of Darling Ingredients Inc. that owns and operates a plant that processes animal fats, used cooking oils, and other vegetable oils into renewable diesel. The plant is located in Norco, Louisiana next to our St. Charles Refinery. Our significant agreements with DGD include an operations agreement that outlines our responsibilities as operator of the plant and a marketing agreement.
|
•
|
Central Mexico Terminals is a collective group of three subsidiaries of Infraestructura Energetica Nova, S.A.B. de C.V. (IEnova), a Mexican company and subsidiary of Sempra Energy, a U.S. public company. We have terminaling agreements with Central Mexico Terminals that represent variable interests because we have determined them to be finance leases due to our exclusive use of the terminals. Although we do not have an ownership interest in the entities that own each of the three terminals, the finance leases convey to us (i) the power to direct the activities that most significantly impact the economic performance of all three terminals and (ii) the ability to influence the benefits received or the losses incurred by the terminals because of our use of the terminals. As a result, we determined each of the entities was a VIE and that we are the primary beneficiary of each. Substantially all of Central Mexico Terminals’ revenues will be derived from us; therefore, there is limited risk to us associated with Central Mexico Terminals’ operations.
|
•
|
We also have financial interests in other entities that have been determined to be VIEs because the entities’ contractual arrangements transfer the power to us to direct the activities that most significantly impact their economic performance or reduce the exposure to operational variability and risk of loss created by the entity that otherwise would be held exclusively by the equity owners. Furthermore, we determined that we are the primary beneficiary of these VIEs because (i) certain contractual arrangements (exclusive of our ownership rights) provide us with the power to direct the activities that most significantly impact the economic performance of these entities and/or (ii) our 50 percent ownership interests provide us with significant economic rights and obligations.
|
|
December 31, 2019
|
||||||||||||||
|
DGD
|
|
Central
Mexico
Terminals |
|
Other
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
110
|
|
Other current assets
|
567
|
|
|
33
|
|
|
89
|
|
|
689
|
|
||||
Property, plant, and equipment, net
|
706
|
|
|
381
|
|
|
105
|
|
|
1,192
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Current liabilities, including current portion
of debt and finance lease obligations
|
$
|
66
|
|
|
$
|
409
|
|
|
$
|
8
|
|
|
$
|
483
|
|
Debt and finance lease obligations,
less current portion
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|
December 31, 2018
|
||||||||||||||||||
|
VLP (a)
|
|
DGD
|
|
Central
Mexico
Terminals |
|
Other
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
152
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
235
|
|
Other current assets
|
2
|
|
|
112
|
|
|
20
|
|
|
64
|
|
|
198
|
|
|||||
Property, plant, and equipment, net
|
1,409
|
|
|
576
|
|
|
156
|
|
|
113
|
|
|
2,254
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities, including current portion
of debt and finance lease obligations
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
118
|
|
|
$
|
9
|
|
|
$
|
182
|
|
Debt and finance lease obligations,
less current portion
|
990
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
1,024
|
|
(a)
|
Prior to the completion of the Merger Transaction with VLP on January 10, 2019 as discussed in Note 2, VLP was a publicly traded master limited partnership that we had determined was a VIE. VLP was formed by us to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. As of December 31, 2018, we owned a 66.2 percent limited partner interest and a 2.0 percent general partner interest in VLP, and public unitholders owned a 31.8 percent limited partner interest. Upon completion of the Merger Transaction, VLP became our indirect wholly owned subsidiary and, as a result, was no longer a VIE.
|
13.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Changes in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation as of beginning of year
|
$
|
2,639
|
|
|
$
|
2,926
|
|
|
$
|
292
|
|
|
$
|
306
|
|
Service cost
|
119
|
|
|
133
|
|
|
5
|
|
|
6
|
|
||||
Interest cost
|
98
|
|
|
91
|
|
|
11
|
|
|
10
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
11
|
|
|
10
|
|
||||
Benefits paid
|
(154
|
)
|
|
(207
|
)
|
|
(29
|
)
|
|
(28
|
)
|
||||
Actuarial (gain) loss
|
528
|
|
|
(285
|
)
|
|
41
|
|
|
(9
|
)
|
||||
Other
|
9
|
|
|
(19
|
)
|
|
5
|
|
|
(3
|
)
|
||||
Benefit obligation as of end of year
|
$
|
3,239
|
|
|
$
|
2,639
|
|
|
$
|
336
|
|
|
$
|
292
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in plan assets (a)
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets as of beginning of year
|
$
|
2,236
|
|
|
$
|
2,428
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
490
|
|
|
(130
|
)
|
|
—
|
|
|
—
|
|
||||
Valero contributions
|
128
|
|
|
156
|
|
|
18
|
|
|
18
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
11
|
|
|
10
|
|
||||
Benefits paid
|
(154
|
)
|
|
(207
|
)
|
|
(29
|
)
|
|
(28
|
)
|
||||
Other
|
9
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets as of end of year
|
$
|
2,709
|
|
|
$
|
2,236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of funded status (a)
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets as of end of year
|
$
|
2,709
|
|
|
$
|
2,236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: Benefit obligation as of end of year
|
3,239
|
|
|
2,639
|
|
|
336
|
|
|
292
|
|
||||
Funded status as of end of year
|
$
|
(530
|
)
|
|
$
|
(403
|
)
|
|
$
|
(336
|
)
|
|
$
|
(292
|
)
|
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
3,039
|
|
|
$
|
2,492
|
|
|
n/a
|
|
|
n/a
|
|
(a)
|
Plan assets include only the assets associated with pension plans subject to legal minimum funding standards. Plan assets associated with U.S. nonqualified pension plans are not included here because they are not protected from our creditors and therefore cannot be reflected as a reduction from our obligations under the pension plans. As a result, the reconciliation of funded status does not reflect the effect of plan assets that exist for all of our defined benefit plans. See Note 19 for the assets associated with certain U.S. nonqualified pension plans.
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Deferred charges and other assets, net
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued expenses
|
(17
|
)
|
|
(22
|
)
|
|
(20
|
)
|
|
(21
|
)
|
||||
Other long-term liabilities
|
(518
|
)
|
|
(383
|
)
|
|
(316
|
)
|
|
(271
|
)
|
||||
|
$
|
(530
|
)
|
|
$
|
(403
|
)
|
|
$
|
(336
|
)
|
|
$
|
(292
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
3,182
|
|
|
$
|
2,564
|
|
Fair value of plan assets
|
2,647
|
|
|
2,160
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accumulated benefit obligation
|
$
|
2,760
|
|
|
$
|
2,253
|
|
Fair value of plan assets
|
2,402
|
|
|
1,974
|
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
2020
|
$
|
179
|
|
|
$
|
21
|
|
2021
|
219
|
|
|
20
|
|
||
2022
|
190
|
|
|
20
|
|
||
2023
|
204
|
|
|
19
|
|
||
2024
|
205
|
|
|
19
|
|
||
2025-2029
|
1,105
|
|
|
88
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
119
|
|
|
$
|
133
|
|
|
$
|
123
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Interest cost
|
98
|
|
|
91
|
|
|
86
|
|
|
11
|
|
|
10
|
|
|
10
|
|
||||||
Expected return on plan assets
|
(166
|
)
|
|
(163
|
)
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial (gain) loss
|
41
|
|
|
65
|
|
|
53
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Prior service credit
|
(19
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|
(9
|
)
|
|
(11
|
)
|
|
(16
|
)
|
||||||
Special charges
|
4
|
|
|
7
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost (credit)
|
$
|
77
|
|
|
$
|
115
|
|
|
$
|
96
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Net gain (loss) arising during
the year:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial gain (loss)
|
$
|
(204
|
)
|
|
$
|
(8
|
)
|
|
$
|
(73
|
)
|
|
$
|
(41
|
)
|
|
$
|
9
|
|
|
$
|
(6
|
)
|
Prior service (cost) credit
|
—
|
|
|
7
|
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||||
Net (gain) loss reclassified into
income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial (gain) loss
|
41
|
|
|
65
|
|
|
53
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Prior service credit
|
(19
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|
(9
|
)
|
|
(11
|
)
|
|
(16
|
)
|
||||||
Curtailment and settlement loss
|
4
|
|
|
7
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total changes in other
comprehensive income (loss)
|
$
|
(178
|
)
|
|
$
|
53
|
|
|
$
|
(40
|
)
|
|
$
|
(56
|
)
|
|
$
|
(4
|
)
|
|
$
|
(25
|
)
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net actuarial (gain) loss
|
$
|
988
|
|
|
$
|
828
|
|
|
$
|
(20
|
)
|
|
$
|
(64
|
)
|
Prior service credit
|
(90
|
)
|
|
(108
|
)
|
|
(19
|
)
|
|
(31
|
)
|
||||
Total
|
$
|
898
|
|
|
$
|
720
|
|
|
$
|
(39
|
)
|
|
$
|
(95
|
)
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Discount rate
|
3.14
|
%
|
|
4.25
|
%
|
|
3.32
|
%
|
|
4.40
|
%
|
Rate of compensation increase
|
3.75
|
%
|
|
3.78
|
%
|
|
n/a
|
|
|
n/a
|
|
Interest crediting rate for
cash balance plans
|
3.03
|
%
|
|
3.04
|
%
|
|
n/a
|
|
|
n/a
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Discount rate
|
4.24
|
%
|
|
3.59
|
%
|
|
4.08
|
%
|
|
4.40
|
%
|
|
3.72
|
%
|
|
4.26
|
%
|
Expected long-term rate of return
on plan assets
|
7.22
|
%
|
|
7.24
|
%
|
|
7.29
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Rate of compensation increase
|
3.78
|
%
|
|
3.86
|
%
|
|
3.81
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Interest crediting rate for
cash balance plans
|
3.04
|
%
|
|
3.04
|
%
|
|
3.04
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
Health care cost trend rate assumed for the next year
|
7.32
|
%
|
|
7.29
|
%
|
Rate to which the cost trend rate was assumed to decline
(the ultimate trend rate)
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2026
|
|
|
2026
|
|
|
Fair Value Hierarchy
|
|
Total as of
December 31, 2019 |
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. companies (a)
|
$
|
622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
622
|
|
International companies
|
205
|
|
|
1
|
|
|
—
|
|
|
206
|
|
||||
Preferred stock
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
International growth
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
||||
Index funds
|
90
|
|
|
—
|
|
|
—
|
|
|
90
|
|
||||
Corporate debt instruments (a)
|
—
|
|
|
293
|
|
|
—
|
|
|
293
|
|
||||
Government securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Other government securities
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||
Common collective trusts (b)
|
—
|
|
|
751
|
|
|
—
|
|
|
751
|
|
||||
Pooled separate accounts
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||
Private funds
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Insurance contract
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Interest and dividends receivable
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Cash and cash equivalents
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
Securities transactions payable, net
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Total pension plan assets
|
$
|
1,145
|
|
|
$
|
1,564
|
|
|
$
|
—
|
|
|
$
|
2,709
|
|
|
Fair Value Hierarchy
|
|
Total as of
December 31, 2018 |
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. companies (a)
|
$
|
497
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
497
|
|
International companies
|
159
|
|
|
1
|
|
|
—
|
|
|
160
|
|
||||
Preferred stock
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
International growth
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||
Index funds
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
Corporate debt instruments (a)
|
—
|
|
|
284
|
|
|
—
|
|
|
284
|
|
||||
Government securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
Other government securities
|
—
|
|
|
138
|
|
|
—
|
|
|
138
|
|
||||
Common collective trusts (b)
|
—
|
|
|
609
|
|
|
—
|
|
|
609
|
|
||||
Pooled separate accounts
|
—
|
|
|
190
|
|
|
—
|
|
|
190
|
|
||||
Private funds
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
||||
Insurance contract
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||
Interest and dividends receivable
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Cash and cash equivalents
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
Securities transactions payable, net
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Total pension plan assets
|
$
|
909
|
|
|
$
|
1,327
|
|
|
$
|
—
|
|
|
$
|
2,236
|
|
(a)
|
This class of securities is held in a wide range of industrial sectors.
|
(b)
|
This class includes primarily investments in approximately 75 percent equities and 25 percent bonds as of December 31, 2019. As of December 31, 2018, this class included primarily investments in approximately 70 percent equities and 30 percent bonds.
|
14.
|
STOCK-BASED COMPENSATION
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Stock-based compensation expense:
|
|
|
|
|
|
||||||
Restricted stock
|
$
|
64
|
|
|
$
|
63
|
|
|
$
|
58
|
|
Performance awards
|
23
|
|
|
22
|
|
|
19
|
|
|||
Stock options and other awards
|
2
|
|
|
1
|
|
|
—
|
|
|||
Total stock-based compensation expense
|
$
|
89
|
|
|
$
|
86
|
|
|
$
|
77
|
|
Tax benefit recognized on stock-based compensation expense
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
27
|
|
Tax benefit realized for tax deductions resulting from
exercises and vestings
|
17
|
|
|
32
|
|
|
44
|
|
|||
Effect of tax deductions in excess of recognized
stock-based compensation expense
|
7
|
|
|
20
|
|
|
24
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
Per Share
|
|||
Nonvested shares as of January 1, 2019
|
1,176,578
|
|
|
$
|
80.70
|
|
Granted
|
677,482
|
|
|
98.75
|
|
|
Vested
|
(757,217
|
)
|
|
78.54
|
|
|
Forfeited
|
(4,989
|
)
|
|
83.18
|
|
|
Nonvested shares as of December 31, 2019
|
1,091,854
|
|
|
93.38
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average grant-date fair value per share of
restricted stock granted
|
$
|
98.75
|
|
|
$
|
92.12
|
|
|
$
|
79.32
|
|
Fair value of restricted stock vested (in millions)
|
74
|
|
|
80
|
|
|
71
|
|
15.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
U.S. operations
|
$
|
2,496
|
|
|
$
|
3,168
|
|
|
$
|
2,283
|
|
International operations
|
990
|
|
|
1,064
|
|
|
924
|
|
|||
Income before income tax expense (benefit)
|
$
|
3,486
|
|
|
$
|
4,232
|
|
|
$
|
3,207
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
U.S.
|
21
|
%
|
|
21
|
%
|
|
35
|
%
|
Canada
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
U.K.
|
19
|
%
|
|
19
|
%
|
|
19
|
%
|
Ireland
|
13
|
%
|
|
13
|
%
|
|
13
|
%
|
Peru
|
30
|
%
|
|
30
|
%
|
|
n/a
|
|
Mexico
|
30
|
%
|
|
30
|
%
|
|
n/a
|
|
|
U.S.
|
|
International
|
|
Total
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax expense at statutory rates
|
$
|
524
|
|
|
21.0
|
%
|
|
$
|
147
|
|
|
14.8
|
%
|
|
$
|
671
|
|
|
19.2
|
%
|
U.S. state and Canadian provincial
tax expense, net of federal
income tax effect
|
16
|
|
|
0.7
|
%
|
|
88
|
|
|
8.9
|
%
|
|
104
|
|
|
3.0
|
%
|
|||
Permanent differences
|
(36
|
)
|
|
(1.5
|
)%
|
|
10
|
|
|
1.0
|
%
|
|
(26
|
)
|
|
(0.7
|
)%
|
|||
GILTI tax (a)
|
115
|
|
|
4.6
|
%
|
|
—
|
|
|
—
|
|
|
115
|
|
|
3.3
|
%
|
|||
Foreign tax credits
|
(95
|
)
|
|
(3.8
|
)%
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
(2.7
|
)%
|
|||
Repatriation withholding tax
|
45
|
|
|
1.8
|
%
|
|
—
|
|
|
—
|
|
|
45
|
|
|
1.3
|
%
|
|||
Tax effects of income associated
with noncontrolling interests
|
(77
|
)
|
|
(3.1
|
)%
|
|
2
|
|
|
0.2
|
%
|
|
(75
|
)
|
|
(2.2
|
)%
|
|||
Other, net
|
(36
|
)
|
|
(1.4
|
)%
|
|
(1
|
)
|
|
(0.1
|
)%
|
|
(37
|
)
|
|
(1.1
|
)%
|
|||
Income tax expense
|
$
|
456
|
|
|
18.3
|
%
|
|
$
|
246
|
|
|
24.8
|
%
|
|
$
|
702
|
|
|
20.1
|
%
|
(a)
|
See note on page 112.
|
|
U.S.
|
|
International
|
|
Total
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax expense at statutory rates
|
$
|
665
|
|
|
21.0
|
%
|
|
$
|
163
|
|
|
15.3
|
%
|
|
$
|
828
|
|
|
19.6
|
%
|
U.S. state and Canadian provincial
tax expense, net of federal
income tax effect
|
44
|
|
|
1.4
|
%
|
|
80
|
|
|
7.5
|
%
|
|
124
|
|
|
2.9
|
%
|
|||
Permanent differences
|
(9
|
)
|
|
(0.3
|
)%
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(0.2
|
)%
|
|||
GILTI tax (a)
|
67
|
|
|
2.1
|
%
|
|
—
|
|
|
—
|
|
|
67
|
|
|
1.6
|
%
|
|||
Foreign tax credits
|
(50
|
)
|
|
(1.6
|
)%
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
(1.2
|
)%
|
|||
Effects of Tax Reform (a)
|
(12
|
)
|
|
(0.4
|
)%
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(0.3
|
)%
|
|||
Tax effects of income associated
with noncontrolling interests
|
(49
|
)
|
|
(1.5
|
)%
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
(1.2
|
)%
|
|||
Other, net
|
(23
|
)
|
|
(0.7
|
)%
|
|
3
|
|
|
0.3
|
%
|
|
(20
|
)
|
|
(0.5
|
)%
|
|||
Income tax expense
|
$
|
633
|
|
|
20.0
|
%
|
|
$
|
246
|
|
|
23.1
|
%
|
|
$
|
879
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax expense at statutory rates
|
$
|
799
|
|
|
35.0
|
%
|
|
$
|
158
|
|
|
17.1
|
%
|
|
$
|
957
|
|
|
29.8
|
%
|
U.S. state and Canadian provincial
tax expense, net of federal
income tax effect
|
37
|
|
|
1.6
|
%
|
|
46
|
|
|
5.0
|
%
|
|
83
|
|
|
2.6
|
%
|
|||
Permanent differences:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Manufacturing deduction
|
(42
|
)
|
|
(1.8
|
)%
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
(1.3
|
)%
|
|||
Other
|
(9
|
)
|
|
(0.4
|
)%
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(0.3
|
)%
|
|||
Change in tax law (a)
|
(1,862
|
)
|
|
(81.6
|
)%
|
|
—
|
|
|
—
|
|
|
(1,862
|
)
|
|
(58.1
|
)%
|
|||
Tax effects of income associated
with noncontrolling interests
|
(31
|
)
|
|
(1.4
|
)%
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(1.0
|
)%
|
|||
Other, net
|
(52
|
)
|
|
(2.3
|
)%
|
|
7
|
|
|
0.8
|
%
|
|
(45
|
)
|
|
(1.4
|
)%
|
|||
Income tax expense (benefit)
|
$
|
(1,160
|
)
|
|
(50.9
|
)%
|
|
$
|
211
|
|
|
22.9
|
%
|
|
$
|
(949
|
)
|
|
(29.7
|
)%
|
(a)
|
See “Tax Reform” below for a discussion of the changes in tax law in the U.S. that were enacted in December 2017.
|
|
U.S.
|
|
International
|
|
Total
|
||||||
Year ended December 31, 2019
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Country
|
$
|
145
|
|
|
$
|
186
|
|
|
$
|
331
|
|
U.S. state / Canadian provincial
|
37
|
|
|
100
|
|
|
137
|
|
|||
Total current
|
182
|
|
|
286
|
|
|
468
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Country
|
290
|
|
|
(28
|
)
|
|
262
|
|
|||
U.S. state / Canadian provincial
|
(16
|
)
|
|
(12
|
)
|
|
(28
|
)
|
|||
Total deferred
|
274
|
|
|
(40
|
)
|
|
234
|
|
|||
Income tax expense
|
$
|
456
|
|
|
$
|
246
|
|
|
$
|
702
|
|
|
|
|
|
|
|
||||||
Year ended December 31, 2018
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Country
|
$
|
432
|
|
|
$
|
141
|
|
|
$
|
573
|
|
U.S. state / Canadian provincial
|
37
|
|
|
66
|
|
|
103
|
|
|||
Total current
|
469
|
|
(a)
|
207
|
|
|
676
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Country
|
145
|
|
|
25
|
|
|
170
|
|
|||
U.S. state / Canadian provincial
|
19
|
|
|
14
|
|
|
33
|
|
|||
Total deferred
|
164
|
|
(b)
|
39
|
|
|
203
|
|
|||
Income tax expense
|
$
|
633
|
|
|
$
|
246
|
|
|
$
|
879
|
|
|
|
|
|
|
|
||||||
Year ended December 31, 2017
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Country
|
$
|
1,305
|
|
|
$
|
194
|
|
|
$
|
1,499
|
|
U.S. state / Canadian provincial
|
34
|
|
|
61
|
|
|
95
|
|
|||
Total current
|
1,339
|
|
(a)
|
255
|
|
|
1,594
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Country
|
(2,522
|
)
|
|
(29
|
)
|
|
(2,551
|
)
|
|||
U.S. state / Canadian provincial
|
23
|
|
|
(15
|
)
|
|
8
|
|
|||
Total deferred
|
(2,499
|
)
|
(b)
|
(44
|
)
|
|
(2,543
|
)
|
|||
Income tax expense (benefit)
|
$
|
(1,160
|
)
|
|
$
|
211
|
|
|
$
|
(949
|
)
|
(a)
|
Current income tax expense includes a $21 million benefit and a $781 million expense related to our Tax Reform adjustment for the years ended December 31, 2018 and 2017, respectively, as described in “Tax Reform” below.
|
(b)
|
Deferred income tax expense (benefit) includes a $9 million expense and a $2.6 billion benefit related to our Tax Reform adjustment for the years ended December 31, 2018 and 2017, respectively, as described in “Tax Reform” below.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
U.S.
|
$
|
(298
|
)
|
(a)
|
$
|
1,016
|
|
|
$
|
239
|
|
International
|
182
|
|
|
345
|
|
|
171
|
|
|||
Income taxes paid (refunded), net
|
$
|
(116
|
)
|
|
$
|
1,361
|
|
|
$
|
410
|
|
(a)
|
This amount includes a refund of $348 million, including interest, that we received related to the settlement of the combined audit of our U.S. federal income tax returns for 2010 and 2011. See “Tax Returns Under Audit – U.S. Federal” below.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred income tax assets:
|
|
|
|
||||
Tax credit carryforwards
|
$
|
683
|
|
|
$
|
644
|
|
Net operating losses (NOLs)
|
582
|
|
|
523
|
|
||
Inventories
|
141
|
|
|
101
|
|
||
Compensation and employee benefit liabilities
|
213
|
|
|
175
|
|
||
Environmental liabilities
|
69
|
|
|
71
|
|
||
Other
|
156
|
|
|
141
|
|
||
Total deferred income tax assets
|
1,844
|
|
|
1,655
|
|
||
Valuation allowance
|
(1,200
|
)
|
|
(1,111
|
)
|
||
Net deferred income tax assets
|
644
|
|
|
544
|
|
||
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant, and equipment
|
4,924
|
|
|
4,589
|
|
||
Deferred turnaround costs
|
331
|
|
|
316
|
|
||
Inventories
|
217
|
|
|
287
|
|
||
Investments
|
122
|
|
|
142
|
|
||
Other
|
153
|
|
|
172
|
|
||
Total deferred income tax liabilities
|
5,747
|
|
|
5,506
|
|
||
Net deferred income tax liabilities
|
$
|
5,103
|
|
|
$
|
4,962
|
|
|
Amount
|
|
Expiration
|
||
U.S. state income tax credits (gross amount)
|
$
|
89
|
|
|
2020 through 2033
|
U.S. state income tax credits (gross amount)
|
17
|
|
|
Unlimited
|
|
U.S. foreign tax credits
|
598
|
|
|
2027
|
|
U.S. state NOLs (gross amount)
|
10,913
|
|
|
2020 through 2039
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance as of beginning of year
|
$
|
970
|
|
|
$
|
941
|
|
|
$
|
936
|
|
Additions for tax positions related to the current year
|
19
|
|
|
23
|
|
|
33
|
|
|||
Additions for tax positions related to prior years
|
30
|
|
|
28
|
|
|
15
|
|
|||
Reductions for tax positions related to prior years
|
(101
|
)
|
|
(19
|
)
|
|
(42
|
)
|
|||
Reductions for tax positions related to the lapse of
applicable statute of limitations
|
(14
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Settlements
|
(7
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Balance as of end of year
|
$
|
897
|
|
|
$
|
970
|
|
|
$
|
941
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Unrecognized tax benefits
|
$
|
897
|
|
|
$
|
970
|
|
Tax refund claims not yet filed but that we intend to file
|
(29
|
)
|
|
(277
|
)
|
||
Interest and penalties
|
100
|
|
|
88
|
|
||
Liability for unrecognized tax benefits presented in our balance sheets
|
$
|
968
|
|
|
$
|
781
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Income taxes payable
|
$
|
—
|
|
|
$
|
42
|
|
Other long-term liabilities
|
954
|
|
|
721
|
|
||
Deferred tax liabilities
|
14
|
|
|
18
|
|
||
Liability for unrecognized tax benefits presented in our balance sheets
|
$
|
968
|
|
|
$
|
781
|
|
•
|
reduction in the statutory income tax rate from 35 percent to 21 percent;
|
•
|
assessment of a one-time transition tax on deemed repatriated earnings and profits from our international subsidiaries;
|
•
|
shift from a worldwide system of taxation to a hybrid territorial system of taxation, resulting in a minimum tax on the income of international subsidiaries (the GILTI tax) rather than a tax deferral on such earnings in certain circumstances;
|
•
|
deduction for all of the costs to acquire or construct certain business assets in the year they are placed in service through 2022; and
|
•
|
repeal of the manufacturing deduction;
|
•
|
We remeasured our U.S. deferred tax assets and liabilities using the 21 percent rate, which resulted in a tax benefit and a reduction to our net deferred tax liabilities of $2.6 billion.
|
•
|
We recognized a one-time transition tax of $734 million on the deemed repatriation of previously undistributed accumulated earnings and profits of our international subsidiaries based on approximately $4.7 billion of the combined earnings and profits of our international subsidiaries that had not been distributed to us. This transition tax will be remitted to the Internal Revenue Service (IRS) over the eight-year period provided in the Code, with the first annual remittance paid in 2018.
|
•
|
We accrued withholding tax of $47 million on a portion of the earnings of one of our international subsidiaries that we have deemed to not be permanently reinvested in our operations in that country.
|
|
Year Ended December 31,
|
|
Cumulative
Tax Reform
Adjustment
|
||||||||||||
|
2017
|
|
2018
|
|
|||||||||||
|
Accounting
Status
|
|
Amount
|
|
Accounting
Status
|
|
Amount
|
|
|||||||
Income tax benefit from the remeasurement of
U.S. deferred income tax assets and liabilities
|
Complete
|
|
$
|
(2,643
|
)
|
|
Complete
|
|
$
|
—
|
|
|
$
|
(2,643
|
)
|
Tax on the deemed repatriation of the
accumulated earnings and profits of our
international subsidiaries
|
Provisional
|
|
734
|
|
|
Complete
|
|
6
|
|
|
740
|
|
|||
Recognition of foreign withholding tax, net of
U.S. federal tax benefit
|
Complete
|
|
47
|
|
|
Complete
|
|
—
|
|
|
47
|
|
|||
Deductibility of certain executive compensation
expense
|
Incomplete
|
|
—
|
|
|
Complete
|
|
5
|
|
|
5
|
|
|||
Income tax expense associated with the statutory
income tax rate differential on accrual to
return adjustments that were identified upon
completion of our U.S. federal income
tax return in 2018
|
Incomplete
|
|
—
|
|
|
Complete
|
|
9
|
|
|
9
|
|
|||
Foreign tax credit available to offset the tax on
deemed repatriation of the accumulated
earnings and profits of our international
subsidiaries
|
Incomplete
|
|
—
|
|
|
Complete
|
|
(32
|
)
|
|
(32
|
)
|
|||
Tax Reform benefit
|
|
|
$
|
(1,862
|
)
|
|
|
|
$
|
(12
|
)
|
|
$
|
(1,874
|
)
|
16.
|
EARNINGS PER COMMON SHARE
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Earnings per common share
|
|
|
|
|
|
||||||
Net income attributable to Valero stockholders
|
$
|
2,422
|
|
|
$
|
3,122
|
|
|
$
|
4,065
|
|
Less: Income allocated to participating securities
|
7
|
|
|
9
|
|
|
14
|
|
|||
Net income available to common shareholders
|
$
|
2,415
|
|
|
$
|
3,113
|
|
|
$
|
4,051
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
413
|
|
|
426
|
|
|
442
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share
|
$
|
5.84
|
|
|
$
|
7.30
|
|
|
$
|
9.17
|
|
|
|
|
|
|
|
||||||
Earnings per common share – assuming dilution
|
|
|
|
|
|
||||||
Net income attributable to Valero stockholders
|
$
|
2,422
|
|
|
$
|
3,122
|
|
|
$
|
4,065
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
413
|
|
|
426
|
|
|
442
|
|
|||
Effect of dilutive securities
|
1
|
|
|
2
|
|
|
2
|
|
|||
Weighted-average common shares outstanding –
assuming dilution
|
414
|
|
|
428
|
|
|
444
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share – assuming dilution
|
$
|
5.84
|
|
|
$
|
7.29
|
|
|
$
|
9.16
|
|
17.
|
REVENUES AND SEGMENT INFORMATION
|
•
|
The refining segment includes the operations of our 15 petroleum refineries, the associated marketing activities, and logistics assets that support our refining operations. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks, distillates, and other products.
|
•
|
The ethanol segment includes the operations of our 14 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. This segment sells some ethanol to the refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product.
|
•
|
The renewable diesel segment includes the operations of DGD, our consolidated joint venture as discussed in Note 12. The principal product manufactured by DGD and sold by this segment is renewable diesel. This segment sells some renewable diesel to the refining segment, which is then sold to that segment’s customers.
|
|
Refining
|
|
Ethanol
|
|
Renewable Diesel
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
103,746
|
|
|
$
|
3,606
|
|
|
$
|
970
|
|
|
$
|
2
|
|
|
$
|
108,324
|
|
Intersegment revenues
|
18
|
|
|
231
|
|
|
247
|
|
|
(496
|
)
|
|
—
|
|
|||||
Total revenues
|
103,764
|
|
|
3,837
|
|
|
1,217
|
|
|
(494
|
)
|
|
108,324
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
93,371
|
|
|
3,239
|
|
|
360
|
|
|
(494
|
)
|
|
96,476
|
|
|||||
Operating expenses (excluding depreciation
and amortization expense reflected below)
|
4,289
|
|
|
504
|
|
|
75
|
|
|
—
|
|
|
4,868
|
|
|||||
Depreciation and amortization expense
|
2,062
|
|
|
90
|
|
|
50
|
|
|
—
|
|
|
2,202
|
|
|||||
Total cost of sales
|
99,722
|
|
|
3,833
|
|
|
485
|
|
|
(494
|
)
|
|
103,546
|
|
|||||
Other operating expenses
|
20
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense
reflected below)
|
—
|
|
|
—
|
|
|
—
|
|
|
868
|
|
|
868
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
|||||
Operating income by segment
|
$
|
4,022
|
|
|
$
|
3
|
|
|
$
|
732
|
|
|
$
|
(921
|
)
|
|
$
|
3,836
|
|
Total expenditures for long-lived assets (a)
|
$
|
2,581
|
|
|
$
|
47
|
|
|
$
|
160
|
|
|
$
|
58
|
|
|
$
|
2,846
|
|
(a)
|
See note on page 123.
|
|
Refining
|
|
Ethanol
|
|
Renewable Diesel
|
|
Corporate
and
Eliminations
|
|
Total
|
||||||||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
113,093
|
|
|
$
|
3,428
|
|
|
$
|
508
|
|
|
$
|
4
|
|
|
$
|
117,033
|
|
Intersegment revenues
|
25
|
|
|
210
|
|
|
170
|
|
|
(405
|
)
|
|
—
|
|
|||||
Total revenues
|
113,118
|
|
|
3,638
|
|
|
678
|
|
|
(401
|
)
|
|
117,033
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
101,866
|
|
|
3,008
|
|
|
262
|
|
|
(404
|
)
|
|
104,732
|
|
|||||
Operating expenses (excluding depreciation
and amortization expense reflected below)
|
4,154
|
|
|
470
|
|
|
66
|
|
|
—
|
|
|
4,690
|
|
|||||
Depreciation and amortization expense
|
1,910
|
|
|
78
|
|
|
29
|
|
|
—
|
|
|
2,017
|
|
|||||
Total cost of sales
|
107,930
|
|
|
3,556
|
|
|
357
|
|
|
(404
|
)
|
|
111,439
|
|
|||||
Other operating expenses
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense
reflected below)
|
—
|
|
|
—
|
|
|
—
|
|
|
925
|
|
|
925
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Operating income by segment
|
$
|
5,143
|
|
|
$
|
82
|
|
|
$
|
321
|
|
|
$
|
(974
|
)
|
|
$
|
4,572
|
|
Total expenditures for long-lived assets (a)
|
$
|
2,767
|
|
|
$
|
373
|
|
|
$
|
192
|
|
|
$
|
44
|
|
|
$
|
3,376
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from external customers
|
$
|
90,258
|
|
|
$
|
3,324
|
|
|
$
|
393
|
|
|
$
|
5
|
|
|
$
|
93,980
|
|
Intersegment revenues
|
8
|
|
|
176
|
|
|
241
|
|
|
(425
|
)
|
|
—
|
|
|||||
Total revenues
|
90,266
|
|
|
3,500
|
|
|
634
|
|
|
(420
|
)
|
|
93,980
|
|
|||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
80,160
|
|
|
2,804
|
|
|
498
|
|
|
(425
|
)
|
|
83,037
|
|
|||||
Operating expenses (excluding depreciation
and amortization expense reflected below)
|
4,014
|
|
|
443
|
|
|
47
|
|
|
—
|
|
|
4,504
|
|
|||||
Depreciation and amortization expense
|
1,824
|
|
|
81
|
|
|
29
|
|
|
—
|
|
|
1,934
|
|
|||||
Total cost of sales
|
85,998
|
|
|
3,328
|
|
|
574
|
|
|
(425
|
)
|
|
89,475
|
|
|||||
Other operating expenses
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||
General and administrative expenses (excluding
depreciation and amortization expense
reflected below)
|
—
|
|
|
—
|
|
|
—
|
|
|
829
|
|
|
829
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||
Operating income by segment
|
$
|
4,207
|
|
|
$
|
172
|
|
|
$
|
60
|
|
|
$
|
(876
|
)
|
|
$
|
3,563
|
|
Total expenditures for long-lived assets (a)
|
$
|
1,732
|
|
|
$
|
84
|
|
|
$
|
88
|
|
|
$
|
44
|
|
|
$
|
1,948
|
|
(a)
|
Total expenditures for long-lived assets includes amounts related to capital expenditures; deferred turnaround and catalyst costs; and property, plant, and equipment for acquisitions.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Refining:
|
|
|
|
|
|
||||||
Gasolines and blendstocks
|
$
|
42,798
|
|
|
$
|
46,596
|
|
|
$
|
40,347
|
|
Distillates
|
51,942
|
|
|
55,037
|
|
|
41,680
|
|
|||
Other product revenues
|
9,006
|
|
|
11,460
|
|
|
8,231
|
|
|||
Total refining revenues
|
103,746
|
|
|
113,093
|
|
|
90,258
|
|
|||
Ethanol:
|
|
|
|
|
|
||||||
Ethanol
|
2,889
|
|
|
2,713
|
|
|
2,764
|
|
|||
Distillers grains
|
717
|
|
|
715
|
|
|
560
|
|
|||
Total ethanol revenues
|
3,606
|
|
|
3,428
|
|
|
3,324
|
|
|||
Renewable diesel:
|
|
|
|
|
|
||||||
Renewable diesel
|
970
|
|
|
508
|
|
|
393
|
|
|||
Corporate – other revenues
|
2
|
|
|
4
|
|
|
5
|
|
|||
Revenues
|
$
|
108,324
|
|
|
$
|
117,033
|
|
|
$
|
93,980
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
U.S.
|
$
|
27,485
|
|
|
$
|
27,475
|
|
Canada
|
1,886
|
|
|
1,798
|
|
||
U.K. and Ireland
|
1,232
|
|
|
1,113
|
|
||
Other countries
|
497
|
|
|
266
|
|
||
Total long-lived assets
|
$
|
31,100
|
|
|
$
|
30,652
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Refining
|
$
|
47,067
|
|
|
$
|
43,488
|
|
Ethanol
|
1,615
|
|
|
1,691
|
|
||
Renewable diesel
|
1,412
|
|
|
787
|
|
||
Corporate and eliminations
|
3,770
|
|
|
4,189
|
|
||
Total assets
|
$
|
53,864
|
|
|
$
|
50,155
|
|
18.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Decrease (increase) in current assets:
|
|
|
|
|
|
||||||
Receivables, net
|
$
|
(1,468
|
)
|
|
$
|
(457
|
)
|
|
$
|
(870
|
)
|
Inventories
|
(385
|
)
|
|
(197
|
)
|
|
(516
|
)
|
|||
Prepaid expenses and other
|
427
|
|
|
(77
|
)
|
|
151
|
|
|||
Increase (decrease) in current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
1,534
|
|
|
304
|
|
|
1,842
|
|
|||
Accrued expenses
|
(27
|
)
|
|
(113
|
)
|
|
21
|
|
|||
Taxes other than income taxes payable
|
60
|
|
|
(73
|
)
|
|
172
|
|
|||
Income taxes payable
|
153
|
|
|
(684
|
)
|
|
489
|
|
|||
Changes in current assets and current liabilities
|
$
|
294
|
|
|
$
|
(1,297
|
)
|
|
$
|
1,289
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest paid in excess of amount capitalized,
including interest on finance leases
|
$
|
452
|
|
|
$
|
463
|
|
|
$
|
457
|
|
Income taxes paid (refunded), net (see Note 15)
|
(116
|
)
|
|
1,361
|
|
|
410
|
|
|
Year Ended
December 31, 2019
|
||||||
|
Operating
Leases
|
|
Finance
Leases
|
||||
Cash paid for amounts included in the
measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows
|
$
|
441
|
|
|
$
|
50
|
|
Investing cash flows
|
1
|
|
|
—
|
|
||
Financing cash flows
|
—
|
|
|
34
|
|
||
Changes in lease balances resulting from new
and modified leases (a)
|
1,756
|
|
|
239
|
|
(a)
|
Includes noncash activity of $1.3 billion for operating lease ROU assets recorded on January 1, 2019 upon adoption of Topic 842.
|
19.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 - Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3 - Unobservable inputs for the asset or liability. Unobservable inputs reflect our own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include occasional market quotes or sales of similar instruments or our own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant judgment.
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
|
|
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
|
$
|
2,792
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,792
|
|
|
$
|
(2,669
|
)
|
|
$
|
(34
|
)
|
|
$
|
89
|
|
|
$
|
—
|
|
Foreign currency
contracts
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
n/a
|
|
|
n/a
|
|
|
4
|
|
|
n/a
|
|
||||||||
Investments of certain
benefit plans
|
60
|
|
|
—
|
|
|
9
|
|
|
69
|
|
|
n/a
|
|
|
n/a
|
|
|
69
|
|
|
n/a
|
|
||||||||
Total
|
$
|
2,856
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
2,865
|
|
|
$
|
(2,669
|
)
|
|
$
|
(34
|
)
|
|
$
|
162
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivative
contracts
|
$
|
2,681
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,681
|
|
|
$
|
(2,669
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(136
|
)
|
Environmental credit
obligations
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
n/a
|
|
|
n/a
|
|
|
13
|
|
|
n/a
|
|
||||||||
Physical purchase
contracts
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
n/a
|
|
|
n/a
|
|
|
5
|
|
|
n/a
|
|
||||||||
Foreign currency
contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
n/a
|
|
|
n/a
|
|
|
1
|
|
|
n/a
|
|
||||||||
Total
|
$
|
2,682
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
2,700
|
|
|
$
|
(2,669
|
)
|
|
$
|
(12
|
)
|
|
$
|
19
|
|
|
|
•
|
Commodity derivative contracts consist primarily of exchange-traded futures, which are used to reduce the impact of price volatility on our results of operations and cash flows as discussed in Note 20. These contracts are measured at fair value using a market approach based on quoted prices from the commodity exchange and are categorized in Level 1 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 plan 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 plan 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 and foreign currency swap agreements related to our international operations to manage our exposure to exchange rate fluctuations on transactions denominated in currencies other than the local (functional) currencies of our operations. These contracts are valued based on quoted foreign currency exchange rates 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 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) and similar programs, (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 described in Note 20 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.
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
Hierarchy
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
Level 1
|
|
$
|
2,583
|
|
|
$
|
2,583
|
|
|
$
|
2,982
|
|
|
$
|
2,982
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Debt (excluding finance leases)
|
Level 2
|
|
8,881
|
|
|
10,583
|
|
|
8,503
|
|
|
8,986
|
|
20.
|
PRICE RISK MANAGEMENT ACTIVITIES
|
•
|
Cash flow hedges – The objective of our cash flow hedges is to lock in the price of forecasted (i) feedstock, refined petroleum product, or natural gas purchases, or (ii) refined petroleum product or renewable diesel sales at existing market prices that we deem favorable.
|
•
|
Economic hedges – Our objectives for holding economic hedges are to (i) manage price volatility in certain feedstock and refined petroleum product inventories and fixed-price purchase contracts, and (ii) lock in the price of forecasted feedstock, refined petroleum product, or natural gas purchases or refined petroleum product or renewable diesel sales at existing market prices that we deem favorable.
|
|
|
Notional Contract Volumes by
Year of Maturity
|
||||
|
|
2020
|
|
2021
|
||
Derivatives designated as cash flow hedges
|
|
|
|
|
||
Renewable diesel:
|
|
|
|
|
||
Futures – long
|
|
995
|
|
|
—
|
|
Futures – short
|
|
2,492
|
|
|
—
|
|
|
|
|
|
|
||
Derivatives designated as economic hedges
|
|
|
|
|
||
Crude oil and refined petroleum products:
|
|
|
|
|
||
Futures – long
|
|
73,348
|
|
|
2
|
|
Futures – short
|
|
76,045
|
|
|
—
|
|
Options – long
|
|
1,550
|
|
|
—
|
|
Options – short
|
|
1,550
|
|
|
—
|
|
Corn:
|
|
|
|
|
||
Futures – long
|
|
50,120
|
|
|
—
|
|
Futures – short
|
|
66,575
|
|
|
295
|
|
Physical contracts – long
|
|
22,055
|
|
|
306
|
|
|
Balance Sheet
Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Asset
Derivatives |
|
Liability
Derivatives |
|
Asset
Derivatives |
|
Liability
Derivatives |
|||||||||
Derivatives designated
as hedging instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Receivables, net
|
|
$
|
9
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated
as hedging instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Receivables, net
|
|
$
|
608
|
|
|
$
|
648
|
|
|
$
|
2,792
|
|
|
$
|
2,681
|
|
Physical purchase contracts
|
Inventories
|
|
—
|
|
|
3
|
|
|
—
|
|
|
5
|
|
||||
Foreign currency contracts
|
Receivables, net
|
|
27
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Foreign currency contracts
|
Accrued expenses
|
|
—
|
|
|
10
|
|
|
—
|
|
|
1
|
|
||||
Total
|
|
|
$
|
635
|
|
|
$
|
661
|
|
|
$
|
2,796
|
|
|
$
|
2,687
|
|
Derivatives Not Designated
as Hedging Instruments
|
|
Location of Gain (Loss)
Recognized in Income
on Derivatives
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||||
Commodity contracts
|
|
Revenues
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts
|
|
Cost of materials and other
|
|
(68
|
)
|
|
(165
|
)
|
|
(278
|
)
|
|||
Commodity contracts
|
|
Operating expenses
(excluding depreciation and
amortization expense)
|
|
—
|
|
|
7
|
|
|
—
|
|
|||
Foreign currency contracts
|
|
Cost of materials and other
|
|
(21
|
)
|
|
56
|
|
|
(40
|
)
|
|||
Foreign currency contracts
|
|
Other income, net
|
|
75
|
|
|
(43
|
)
|
|
—
|
|
21.
|
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
912
|
|
|
$
|
—
|
|
|
$
|
1,671
|
|
|
$
|
—
|
|
|
$
|
2,583
|
|
Receivables, net
|
—
|
|
|
—
|
|
|
8,904
|
|
|
—
|
|
|
8,904
|
|
|||||
Receivables from affiliates
|
4,336
|
|
|
—
|
|
|
13,806
|
|
|
(18,142
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
7,013
|
|
|
—
|
|
|
7,013
|
|
|||||
Prepaid expenses and other
|
63
|
|
|
—
|
|
|
406
|
|
|
—
|
|
|
469
|
|
|||||
Total current assets
|
5,311
|
|
|
—
|
|
|
31,800
|
|
|
(18,142
|
)
|
|
18,969
|
|
|||||
Property, plant and equipment, at cost
|
—
|
|
|
—
|
|
|
44,294
|
|
|
—
|
|
|
44,294
|
|
|||||
Accumulated depreciation
|
—
|
|
|
—
|
|
|
(15,030
|
)
|
|
—
|
|
|
(15,030
|
)
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
29,264
|
|
|
—
|
|
|
29,264
|
|
|||||
Investment in affiliates
|
37,902
|
|
|
2,673
|
|
|
382
|
|
|
(40,957
|
)
|
|
—
|
|
|||||
Deferred charges and other assets, net
|
771
|
|
|
—
|
|
|
4,860
|
|
|
—
|
|
|
5,631
|
|
|||||
Total assets
|
$
|
43,984
|
|
|
$
|
2,673
|
|
|
$
|
66,306
|
|
|
$
|
(59,099
|
)
|
|
$
|
53,864
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt and finance lease obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
494
|
|
|
$
|
—
|
|
|
$
|
494
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
10,205
|
|
|
—
|
|
|
10,205
|
|
|||||
Accounts payable to affiliates
|
12,515
|
|
|
1,291
|
|
|
4,336
|
|
|
(18,142
|
)
|
|
—
|
|
|||||
Accrued expenses
|
120
|
|
|
7
|
|
|
822
|
|
|
—
|
|
|
949
|
|
|||||
Taxes other than income taxes payable
|
—
|
|
|
—
|
|
|
1,304
|
|
|
—
|
|
|
1,304
|
|
|||||
Income taxes payable
|
108
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
208
|
|
|||||
Total current liabilities
|
12,743
|
|
|
1,298
|
|
|
17,261
|
|
|
(18,142
|
)
|
|
13,160
|
|
|||||
Debt and finance lease obligations, less current portion
|
7,095
|
|
|
991
|
|
|
1,092
|
|
|
—
|
|
|
9,178
|
|
|||||
Deferred income tax liabilities
|
—
|
|
|
2
|
|
|
5,101
|
|
|
—
|
|
|
5,103
|
|
|||||
Other long-term liabilities
|
2,343
|
|
|
—
|
|
|
1,544
|
|
|
—
|
|
|
3,887
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock
|
7
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
7
|
|
|||||
Additional paid-in capital
|
6,821
|
|
|
—
|
|
|
9,771
|
|
|
(9,771
|
)
|
|
6,821
|
|
|||||
Treasury stock, at cost
|
(15,648
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,648
|
)
|
|||||
Retained earnings
|
31,974
|
|
|
—
|
|
|
31,636
|
|
|
(31,636
|
)
|
|
31,974
|
|
|||||
Partners’ equity
|
—
|
|
|
382
|
|
|
—
|
|
|
(382
|
)
|
|
—
|
|
|||||
Accumulated other comprehensive loss
|
(1,351
|
)
|
|
—
|
|
|
(833
|
)
|
|
833
|
|
|
(1,351
|
)
|
|||||
Total stockholders’ equity
|
21,803
|
|
|
382
|
|
|
40,575
|
|
|
(40,957
|
)
|
|
21,803
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
733
|
|
|
—
|
|
|
733
|
|
|||||
Total equity
|
21,803
|
|
|
382
|
|
|
41,308
|
|
|
(40,957
|
)
|
|
22,536
|
|
|||||
Total liabilities and equity
|
$
|
43,984
|
|
|
$
|
2,673
|
|
|
$
|
66,306
|
|
|
$
|
(59,099
|
)
|
|
$
|
53,864
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
291
|
|
|
$
|
152
|
|
|
$
|
2,539
|
|
|
$
|
—
|
|
|
$
|
2,982
|
|
Receivables, net
|
—
|
|
|
—
|
|
|
7,345
|
|
|
—
|
|
|
7,345
|
|
|||||
Receivables from affiliates
|
4,369
|
|
|
2
|
|
|
10,684
|
|
|
(15,055
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
6,532
|
|
|
—
|
|
|
6,532
|
|
|||||
Prepaid expenses and other
|
466
|
|
|
—
|
|
|
355
|
|
|
(5
|
)
|
|
816
|
|
|||||
Total current assets
|
5,126
|
|
|
154
|
|
|
27,455
|
|
|
(15,060
|
)
|
|
17,675
|
|
|||||
Property, plant and equipment, at cost
|
—
|
|
|
—
|
|
|
42,473
|
|
|
—
|
|
|
42,473
|
|
|||||
Accumulated depreciation
|
—
|
|
|
—
|
|
|
(13,625
|
)
|
|
—
|
|
|
(13,625
|
)
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
28,848
|
|
|
—
|
|
|
28,848
|
|
|||||
Investment in affiliates
|
34,696
|
|
|
2,267
|
|
|
(321
|
)
|
|
(36,642
|
)
|
|
—
|
|
|||||
Long-term notes receivable from affiliates
|
285
|
|
|
—
|
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
|||||
Deferred charges and other assets, net
|
572
|
|
|
1
|
|
|
3,059
|
|
|
—
|
|
|
3,632
|
|
|||||
Total assets
|
$
|
40,679
|
|
|
$
|
2,422
|
|
|
$
|
59,041
|
|
|
$
|
(51,987
|
)
|
|
$
|
50,155
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt and finance lease obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
238
|
|
|
$
|
—
|
|
|
$
|
238
|
|
Accounts payable
|
14
|
|
|
—
|
|
|
8,580
|
|
|
—
|
|
|
8,594
|
|
|||||
Accounts payable to affiliates
|
9,847
|
|
|
837
|
|
|
4,370
|
|
|
(15,054
|
)
|
|
—
|
|
|||||
Accrued expenses
|
155
|
|
|
7
|
|
|
468
|
|
|
—
|
|
|
630
|
|
|||||
Accrued expenses to affiliates
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Taxes other than income taxes payable
|
—
|
|
|
—
|
|
|
1,213
|
|
|
—
|
|
|
1,213
|
|
|||||
Income taxes payable
|
53
|
|
|
1
|
|
|
—
|
|
|
(5
|
)
|
|
49
|
|
|||||
Total current liabilities
|
10,069
|
|
|
846
|
|
|
14,869
|
|
|
(15,060
|
)
|
|
10,724
|
|
|||||
Debt and finance lease obligations, less current portion
|
6,955
|
|
|
990
|
|
|
926
|
|
|
—
|
|
|
8,871
|
|
|||||
Long-term notes payable to affiliates
|
—
|
|
|
285
|
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
|||||
Deferred income tax liabilities
|
—
|
|
|
2
|
|
|
4,960
|
|
|
—
|
|
|
4,962
|
|
|||||
Other long-term liabilities
|
1,988
|
|
|
—
|
|
|
879
|
|
|
—
|
|
|
2,867
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock
|
7
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
7
|
|
|||||
Additional paid-in capital
|
7,048
|
|
|
—
|
|
|
9,754
|
|
|
(9,754
|
)
|
|
7,048
|
|
|||||
Treasury stock, at cost
|
(14,925
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,925
|
)
|
|||||
Retained earnings
|
31,044
|
|
|
—
|
|
|
28,305
|
|
|
(28,305
|
)
|
|
31,044
|
|
|||||
Partners’ equity
|
—
|
|
|
299
|
|
|
—
|
|
|
(299
|
)
|
|
—
|
|
|||||
Accumulated other comprehensive loss
|
(1,507
|
)
|
|
—
|
|
|
(1,097
|
)
|
|
1,097
|
|
|
(1,507
|
)
|
|||||
Total stockholders’ equity
|
21,667
|
|
|
299
|
|
|
36,963
|
|
|
(37,262
|
)
|
|
21,667
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
444
|
|
|
620
|
|
|
1,064
|
|
|||||
Total equity
|
21,667
|
|
|
299
|
|
|
37,407
|
|
|
(36,642
|
)
|
|
22,731
|
|
|||||
Total liabilities and equity
|
$
|
40,679
|
|
|
$
|
2,422
|
|
|
$
|
59,041
|
|
|
$
|
(51,987
|
)
|
|
$
|
50,155
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108,324
|
|
|
$
|
—
|
|
|
$
|
108,324
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
—
|
|
|
—
|
|
|
96,476
|
|
|
—
|
|
|
96,476
|
|
|||||
Operating expenses (excluding depreciation and amortization expense reflected below)
|
—
|
|
|
—
|
|
|
4,868
|
|
|
—
|
|
|
4,868
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
2,202
|
|
|
—
|
|
|
2,202
|
|
|||||
Total cost of sales
|
—
|
|
|
—
|
|
|
103,546
|
|
|
—
|
|
|
103,546
|
|
|||||
Other operating expenses
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
General and administrative expenses (excluding depreciation and amortization expense reflected below)
|
6
|
|
|
—
|
|
|
862
|
|
|
—
|
|
|
868
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|||||
Operating income (loss)
|
(6
|
)
|
|
—
|
|
|
3,842
|
|
|
—
|
|
|
3,836
|
|
|||||
Equity in earnings of subsidiaries
|
3,006
|
|
|
406
|
|
|
357
|
|
|
(3,769
|
)
|
|
—
|
|
|||||
Other income, net
|
193
|
|
|
—
|
|
|
625
|
|
|
(714
|
)
|
|
104
|
|
|||||
Interest and debt expense, net of capitalized interest
|
(927
|
)
|
|
(47
|
)
|
|
(194
|
)
|
|
714
|
|
|
(454
|
)
|
|||||
Income before income tax expense (benefit)
|
2,266
|
|
|
359
|
|
|
4,630
|
|
|
(3,769
|
)
|
|
3,486
|
|
|||||
Income tax expense (benefit)
|
(156
|
)
|
|
—
|
|
|
858
|
|
|
—
|
|
|
702
|
|
|||||
Net income
|
2,422
|
|
|
359
|
|
|
3,772
|
|
|
(3,769
|
)
|
|
2,784
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
360
|
|
|
2
|
|
|
362
|
|
|||||
Net income attributable to stockholders
|
$
|
2,422
|
|
|
$
|
359
|
|
|
$
|
3,412
|
|
|
$
|
(3,771
|
)
|
|
$
|
2,422
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
117,033
|
|
|
$
|
—
|
|
|
$
|
117,033
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
—
|
|
|
—
|
|
|
104,732
|
|
|
—
|
|
|
104,732
|
|
|||||
Operating expenses (excluding depreciation and amortization expense reflected below)
|
—
|
|
|
—
|
|
|
4,690
|
|
|
—
|
|
|
4,690
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
2,017
|
|
|
—
|
|
|
2,017
|
|
|||||
Total cost of sales
|
—
|
|
|
—
|
|
|
111,439
|
|
|
—
|
|
|
111,439
|
|
|||||
Other operating expenses
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
|||||
General and administrative expenses (excluding depreciation and amortization expense reflected below)
|
2
|
|
|
—
|
|
|
923
|
|
|
—
|
|
|
925
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
|||||
Operating income (loss)
|
(2
|
)
|
|
—
|
|
|
4,574
|
|
|
—
|
|
|
4,572
|
|
|||||
Equity in earnings of subsidiaries
|
3,724
|
|
|
319
|
|
|
196
|
|
|
(4,239
|
)
|
|
—
|
|
|||||
Other income, net
|
220
|
|
|
2
|
|
|
621
|
|
|
(713
|
)
|
|
130
|
|
|||||
Interest and debt expense, net of capitalized interest
|
(913
|
)
|
|
(55
|
)
|
|
(215
|
)
|
|
713
|
|
|
(470
|
)
|
|||||
Income before income tax expense (benefit)
|
3,029
|
|
|
266
|
|
|
5,176
|
|
|
(4,239
|
)
|
|
4,232
|
|
|||||
Income tax expense (benefit)
|
(93
|
)
|
|
2
|
|
|
970
|
|
|
—
|
|
|
879
|
|
|||||
Net income
|
3,122
|
|
|
264
|
|
|
4,206
|
|
|
(4,239
|
)
|
|
3,353
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
163
|
|
|
68
|
|
|
231
|
|
|||||
Net income attributable to stockholders
|
$
|
3,122
|
|
|
$
|
264
|
|
|
$
|
4,043
|
|
|
$
|
(4,307
|
)
|
|
$
|
3,122
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
93,980
|
|
|
$
|
—
|
|
|
$
|
93,980
|
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of materials and other
|
—
|
|
|
—
|
|
|
83,037
|
|
|
—
|
|
|
83,037
|
|
|||||
Operating expenses (excluding depreciation and amortization expense reflected below)
|
—
|
|
|
—
|
|
|
4,504
|
|
|
—
|
|
|
4,504
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
1,934
|
|
|
—
|
|
|
1,934
|
|
|||||
Total cost of sales
|
—
|
|
|
—
|
|
|
89,475
|
|
|
—
|
|
|
89,475
|
|
|||||
Other operating expenses
|
—
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
|||||
General and administrative expenses (excluding depreciation and amortization expense reflected below)
|
6
|
|
|
—
|
|
|
823
|
|
|
—
|
|
|
829
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
|||||
Operating income (loss)
|
(6
|
)
|
|
—
|
|
|
3,569
|
|
|
—
|
|
|
3,563
|
|
|||||
Equity in earnings of subsidiaries
|
5,236
|
|
|
275
|
|
|
176
|
|
|
(5,687
|
)
|
|
—
|
|
|||||
Other income, net
|
290
|
|
|
1
|
|
|
415
|
|
|
(594
|
)
|
|
112
|
|
|||||
Interest and debt expense, net of capitalized interest
|
(780
|
)
|
|
(36
|
)
|
|
(246
|
)
|
|
594
|
|
|
(468
|
)
|
|||||
Income before income tax expense (benefit)
|
4,740
|
|
|
240
|
|
|
3,914
|
|
|
(5,687
|
)
|
|
3,207
|
|
|||||
Income tax expense (benefit)
|
675
|
|
|
2
|
|
|
(1,626
|
)
|
|
—
|
|
|
(949
|
)
|
|||||
Net income
|
4,065
|
|
|
238
|
|
|
5,540
|
|
|
(5,687
|
)
|
|
4,156
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
29
|
|
|
62
|
|
|
91
|
|
|||||
Net income attributable to stockholders
|
$
|
4,065
|
|
|
$
|
238
|
|
|
$
|
5,511
|
|
|
$
|
(5,749
|
)
|
|
$
|
4,065
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
2,422
|
|
|
$
|
359
|
|
|
$
|
3,772
|
|
|
$
|
(3,769
|
)
|
|
$
|
2,784
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
346
|
|
|
—
|
|
|
286
|
|
|
(283
|
)
|
|
349
|
|
|||||
Net loss on pension and other postretirement benefits
|
(234
|
)
|
|
—
|
|
|
(19
|
)
|
|
19
|
|
|
(234
|
)
|
|||||
Net loss on cash flow hedges
|
(4
|
)
|
|
—
|
|
|
(8
|
)
|
|
4
|
|
|
(8
|
)
|
|||||
Other comprehensive income before income tax benefit
|
108
|
|
|
—
|
|
|
259
|
|
|
(260
|
)
|
|
107
|
|
|||||
Income tax benefit related to items of other comprehensive income
|
(48
|
)
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
(48
|
)
|
|||||
Other comprehensive income
|
156
|
|
|
—
|
|
|
263
|
|
|
(264
|
)
|
|
155
|
|
|||||
Comprehensive income
|
2,578
|
|
|
359
|
|
|
4,035
|
|
|
(4,033
|
)
|
|
2,939
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
359
|
|
|
2
|
|
|
361
|
|
|||||
Comprehensive income attributable to stockholders
|
$
|
2,578
|
|
|
$
|
359
|
|
|
$
|
3,676
|
|
|
$
|
(4,035
|
)
|
|
$
|
2,578
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
3,122
|
|
|
$
|
264
|
|
|
$
|
4,206
|
|
|
$
|
(4,239
|
)
|
|
$
|
3,353
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
(515
|
)
|
|
—
|
|
|
(419
|
)
|
|
417
|
|
|
(517
|
)
|
|||||
Net gain on pension and other postretirement benefits
|
49
|
|
|
—
|
|
|
18
|
|
|
(18
|
)
|
|
49
|
|
|||||
Other comprehensive loss before income tax expense
|
(466
|
)
|
|
—
|
|
|
(401
|
)
|
|
399
|
|
|
(468
|
)
|
|||||
Income tax expense related to items of other comprehensive loss
|
10
|
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
10
|
|
|||||
Other comprehensive loss
|
(476
|
)
|
|
—
|
|
|
(404
|
)
|
|
402
|
|
|
(478
|
)
|
|||||
Comprehensive income
|
2,646
|
|
|
264
|
|
|
3,802
|
|
|
(3,837
|
)
|
|
2,875
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
161
|
|
|
68
|
|
|
229
|
|
|||||
Comprehensive income attributable to stockholders
|
$
|
2,646
|
|
|
$
|
264
|
|
|
$
|
3,641
|
|
|
$
|
(3,905
|
)
|
|
$
|
2,646
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
4,065
|
|
|
$
|
238
|
|
|
$
|
5,540
|
|
|
$
|
(5,687
|
)
|
|
$
|
4,156
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
514
|
|
|
—
|
|
|
434
|
|
|
(434
|
)
|
|
514
|
|
|||||
Net gain (loss) on pension and other postretirement benefits
|
(65
|
)
|
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(65
|
)
|
|||||
Other comprehensive income before income tax expense (benefit)
|
449
|
|
|
—
|
|
|
438
|
|
|
(438
|
)
|
|
449
|
|
|||||
Income tax expense (benefit) related to items of other comprehensive income
|
(21
|
)
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(21
|
)
|
|||||
Other comprehensive income
|
470
|
|
|
—
|
|
|
437
|
|
|
(437
|
)
|
|
470
|
|
|||||
Comprehensive income
|
4,535
|
|
|
238
|
|
|
5,977
|
|
|
(6,124
|
)
|
|
4,626
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
29
|
|
|
62
|
|
|
91
|
|
|||||
Comprehensive income attributable to stockholders
|
$
|
4,535
|
|
|
$
|
238
|
|
|
$
|
5,948
|
|
|
$
|
(6,186
|
)
|
|
$
|
4,535
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(131
|
)
|
|
$
|
(46
|
)
|
|
$
|
6,165
|
|
|
$
|
(457
|
)
|
|
$
|
5,531
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(1,627
|
)
|
|
—
|
|
|
(1,627
|
)
|
|||||
Capital expenditures of VIEs:
|
|
|
|
|
|
|
|
|
|
||||||||||
DGD
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
(142
|
)
|
|||||
Other VIEs
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(762
|
)
|
|
—
|
|
|
(762
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures of DGD
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
—
|
|
|
(164
|
)
|
|
—
|
|
|
(164
|
)
|
|||||
Acquisitions of ethanol plants
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Acquisitions of undivided interests
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
—
|
|
|
(72
|
)
|
|||||
Intercompany investing activities
|
395
|
|
|
2
|
|
|
(2,973
|
)
|
|
2,576
|
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Net cash provided by (used in) investing activities
|
395
|
|
|
2
|
|
|
(5,974
|
)
|
|
2,576
|
|
|
(3,001
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt issuances and borrowings (excluding VIEs)
|
992
|
|
|
—
|
|
|
900
|
|
|
—
|
|
|
1,892
|
|
|||||
Proceeds from borrowings of VIEs
|
—
|
|
|
—
|
|
|
239
|
|
|
—
|
|
|
239
|
|
|||||
Repayments of debt and finance lease obligations (excluding VIEs)
|
(871
|
)
|
|
—
|
|
|
(934
|
)
|
|
—
|
|
|
(1,805
|
)
|
|||||
Repayments of debt of VIEs
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Intercompany financing activities
|
2,520
|
|
|
268
|
|
|
(212
|
)
|
|
(2,576
|
)
|
|
—
|
|
|||||
Purchases of common stock for treasury
|
(777
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(777
|
)
|
|||||
Common stock dividends
|
(1,492
|
)
|
|
—
|
|
|
(81
|
)
|
|
81
|
|
|
(1,492
|
)
|
|||||
Acquisition of VLP publicly held common units
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
|
(950
|
)
|
|||||
Distributions to noncontrolling interests and unitholders of VLP
|
—
|
|
|
(376
|
)
|
|
(70
|
)
|
|
376
|
|
|
(70
|
)
|
|||||
Other financing activities, net
|
(15
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(28
|
)
|
|||||
Net cash provided by (used in) financing activities
|
357
|
|
|
(108
|
)
|
|
(1,127
|
)
|
|
(2,119
|
)
|
|
(2,997
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
621
|
|
|
(152
|
)
|
|
(868
|
)
|
|
—
|
|
|
(399
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
291
|
|
|
152
|
|
|
2,539
|
|
|
—
|
|
|
2,982
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
912
|
|
|
$
|
—
|
|
|
$
|
1,671
|
|
|
$
|
—
|
|
|
$
|
2,583
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(1,207
|
)
|
|
$
|
(51
|
)
|
|
$
|
5,828
|
|
|
$
|
(199
|
)
|
|
$
|
4,371
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(1,463
|
)
|
|
—
|
|
|
(1,463
|
)
|
|||||
Capital expenditures of VIEs:
|
|
|
|
|
|
|
|
|
|
||||||||||
DGD
|
—
|
|
|
—
|
|
|
(165
|
)
|
|
—
|
|
|
(165
|
)
|
|||||
Other VIEs
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
—
|
|
|
(124
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(888
|
)
|
|
—
|
|
|
(888
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures of DGD
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
(181
|
)
|
|||||
Peru Acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
(468
|
)
|
|
—
|
|
|
(468
|
)
|
|||||
Acquisitions of ethanol plants
|
—
|
|
|
—
|
|
|
(320
|
)
|
|
—
|
|
|
(320
|
)
|
|||||
Acquisitions of undivided interests
|
—
|
|
|
—
|
|
|
(212
|
)
|
|
—
|
|
|
(212
|
)
|
|||||
Minor acquisitions
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
(88
|
)
|
|||||
Intercompany investing activities
|
758
|
|
|
102
|
|
|
(2,381
|
)
|
|
1,521
|
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Net cash provided by (used in) investing activities
|
758
|
|
|
102
|
|
|
(6,309
|
)
|
|
1,521
|
|
|
(3,928
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt issuances and borrowings (excluding VIEs)
|
750
|
|
|
498
|
|
|
10
|
|
|
—
|
|
|
1,258
|
|
|||||
Proceeds from borrowings of VIEs
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
|||||
Repayments of debt and finance lease obligations (excluding VIEs)
|
(787
|
)
|
|
(410
|
)
|
|
(156
|
)
|
|
—
|
|
|
(1,353
|
)
|
|||||
Repayments of debt of VIEs
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Intercompany financing activities
|
2,106
|
|
|
190
|
|
|
(775
|
)
|
|
(1,521
|
)
|
|
—
|
|
|||||
Purchases of common stock for treasury
|
(1,708
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,708
|
)
|
|||||
Common stock dividends
|
(1,369
|
)
|
|
—
|
|
|
(32
|
)
|
|
32
|
|
|
(1,369
|
)
|
|||||
Contributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Distributions to noncontrolling interests and unitholders of VLP
|
—
|
|
|
(215
|
)
|
|
(68
|
)
|
|
167
|
|
|
(116
|
)
|
|||||
Other financing activities, net
|
2
|
|
|
(4
|
)
|
|
(13
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(1,006
|
)
|
|
59
|
|
|
(899
|
)
|
|
(1,322
|
)
|
|
(3,168
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(1,455
|
)
|
|
110
|
|
|
(1,523
|
)
|
|
—
|
|
|
(2,868
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
1,746
|
|
|
42
|
|
|
4,062
|
|
|
—
|
|
|
5,850
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
291
|
|
|
$
|
152
|
|
|
$
|
2,539
|
|
|
$
|
—
|
|
|
$
|
2,982
|
|
|
Valero
Energy Corporation |
|
Valero
Energy Partners LP |
|
Other Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(73
|
)
|
|
$
|
(34
|
)
|
|
$
|
5,720
|
|
|
$
|
(131
|
)
|
|
$
|
5,482
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(1,269
|
)
|
|
—
|
|
|
(1,269
|
)
|
|||||
Capital expenditures of VIEs:
|
|
|
|
|
|
|
|
|
|
||||||||||
DGD
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|||||
Other VIEs
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures (excluding VIEs)
|
—
|
|
|
—
|
|
|
(519
|
)
|
|
—
|
|
|
(519
|
)
|
|||||
Deferred turnaround and catalyst cost expenditures of DGD
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
—
|
|
|
(406
|
)
|
|
—
|
|
|
(406
|
)
|
|||||
Acquisitions of undivided interests
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
—
|
|
|
(72
|
)
|
|||||
Intercompany investing activities
|
(4,002
|
)
|
|
(187
|
)
|
|
(6,696
|
)
|
|
10,885
|
|
|
—
|
|
|||||
Other investing activities, net
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net cash used in investing activities
|
(4,002
|
)
|
|
(187
|
)
|
|
(9,078
|
)
|
|
10,885
|
|
|
(2,382
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt issuances and borrowings (excluding VIEs)
|
—
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|||||
Repayments of debt and finance lease obligations (excluding VIEs)
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Repayments of debt of VIEs
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Intercompany financing activities
|
6,704
|
|
|
(63
|
)
|
|
4,244
|
|
|
(10,885
|
)
|
|
—
|
|
|||||
Purchases of common stock for treasury
|
(1,372
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,372
|
)
|
|||||
Common stock dividends
|
(1,242
|
)
|
|
—
|
|
|
(10
|
)
|
|
10
|
|
|
(1,242
|
)
|
|||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Distributions to noncontrolling interests and unitholders of VLP
|
—
|
|
|
(161
|
)
|
|
(27
|
)
|
|
121
|
|
|
(67
|
)
|
|||||
Other financing activities, net
|
10
|
|
|
36
|
|
|
(26
|
)
|
|
—
|
|
|
20
|
|
|||||
Net cash provided by financing activities
|
4,100
|
|
|
192
|
|
|
4,190
|
|
|
(10,754
|
)
|
|
(2,272
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
25
|
|
|
(29
|
)
|
|
1,038
|
|
|
—
|
|
|
1,034
|
|
|||||
Cash and cash equivalents at beginning of year
|
1,721
|
|
|
71
|
|
|
3,024
|
|
|
—
|
|
|
4,816
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
1,746
|
|
|
$
|
42
|
|
|
$
|
4,062
|
|
|
$
|
—
|
|
|
$
|
5,850
|
|
22.
|
QUARTERLY FINANCIAL DATA (Unaudited)
|
|
2019 Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
24,263
|
|
|
$
|
28,933
|
|
|
$
|
27,249
|
|
|
$
|
27,879
|
|
Gross profit (a)
|
533
|
|
|
1,123
|
|
|
1,119
|
|
|
2,003
|
|
||||
Operating income
|
308
|
|
|
908
|
|
|
881
|
|
|
1,739
|
|
||||
Net income
|
167
|
|
|
648
|
|
|
639
|
|
|
1,330
|
|
||||
Net income attributable to
Valero Energy Corporation
stockholders
|
141
|
|
|
612
|
|
|
609
|
|
|
1,060
|
|
||||
Earnings per common share
|
0.34
|
|
|
1.47
|
|
|
1.48
|
|
|
2.58
|
|
||||
Earnings per common share –
assuming dilution
|
0.34
|
|
|
1.47
|
|
|
1.48
|
|
|
2.58
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2018 Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
26,439
|
|
|
$
|
31,015
|
|
|
$
|
30,849
|
|
|
$
|
28,730
|
|
Gross profit (a)
|
1,062
|
|
|
1,535
|
|
|
1,451
|
|
|
1,546
|
|
||||
Operating income
|
801
|
|
|
1,253
|
|
|
1,219
|
|
|
1,299
|
|
||||
Net income
|
582
|
|
|
875
|
|
|
874
|
|
|
1,022
|
|
||||
Net income attributable to
Valero Energy Corporation
stockholders
|
469
|
|
|
845
|
|
|
856
|
|
|
952
|
|
||||
Earnings per common share
|
1.09
|
|
|
1.96
|
|
|
2.01
|
|
|
2.26
|
|
||||
Earnings per common share –
assuming dilution
|
1.09
|
|
|
1.96
|
|
|
2.01
|
|
|
2.24
|
|
(a)
|
Gross profit is calculated as revenues less total cost of sales.
|
|
|
|
—
|
||
|
|
|
3.01
|
—
|
Amended and Restated Certificate of Incorporation of Valero Energy Corporation, formerly known as Valero Refining and Marketing Company–incorporated by reference to Exhibit 3.1 to Valero’s Registration Statement on Form S-1 (SEC File No. 333-27013) filed May 13, 1997.
|
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
—
|
||
|
|
|
***101.INS
|
—
|
Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
***101.SCH
|
—
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
***101.CAL
|
—
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
***101.DEF
|
—
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
***101.LAB
|
—
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
***101.PRE
|
—
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
***104
|
—
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
***
|
Submitted electronically herewith.
|
+
|
Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.
|
++
|
Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any such omitted schedule to the SEC upon request.
|
|
VALERO ENERGY CORPORATION
(Registrant)
|
|
|
By:
|
/s/ Joseph W. Gorder
|
|
|
(Joseph W. Gorder)
|
|
|
Chairman of the Board
and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph W. Gorder
|
|
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
|
|
February 26, 2020
|
(Joseph W. Gorder)
|
|
|
||
|
|
|
|
|
/s/ Donna M. Titzman
|
|
Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
February 26, 2020
|
(Donna M. Titzman)
|
|
|
||
|
|
|
|
|
/s/ H. Paulett Eberhart
|
|
Director
|
|
February 26, 2020
|
(H. Paulett Eberhart)
|
|
|
||
|
|
|
|
|
/s/ Kimberly S. Greene
|
|
Director
|
|
February 26, 2020
|
(Kimberly S. Greene)
|
|
|
||
|
|
|
|
|
/s/ Deborah P. Majoras
|
|
Director
|
|
February 26, 2020
|
(Deborah P. Majoras)
|
|
|
||
|
|
|
|
|
/s/ Donald L. Nickles
|
|
Director
|
|
February 26, 2020
|
(Donald L. Nickles)
|
|
|
||
|
|
|
|
|
/s/ Philip J. Pfeiffer
|
|
Director
|
|
February 26, 2020
|
(Philip J. Pfeiffer)
|
|
|
||
|
|
|
|
|
/s/ Robert A. Profusek
|
|
Director
|
|
February 26, 2020
|
(Robert A. Profusek)
|
|
|
||
|
|
|
|
|
/s/ Stephen M. Waters
|
|
Director
|
|
February 26, 2020
|
(Stephen M. Waters)
|
|
|
||
|
|
|
|
|
/s/ Randall J. Weisenburger
|
|
Director
|
|
February 26, 2020
|
(Randall J. Weisenburger)
|
|
|
||
|
|
|
|
|
/s/ Rayford Wilkins, Jr.
|
|
Director
|
|
February 26, 2020
|
(Rayford Wilkins, Jr.)
|
|
|
•
|
for any breach of his/her duty of loyalty to us or our stockholders;
|
•
|
for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
|
•
|
for the declaration or payment of unlawful dividends or unlawful stock repurchases or redemptions; and
|
•
|
for any transaction from which the director derived an improper personal benefit.
|
•
|
before that person became a 15% stockholder, our board of directors approved the transaction in which the stockholder became a 15% stockholder or approved the business combination;
|
•
|
upon completion of the transaction that resulted in the stockholder’s becoming a 15% stockholder, the stockholder owned at least 85% of our voting stock outstanding at the time the transaction began (excluding stock held by directors who are also officers and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); and
|
•
|
after the transaction in which that person became a 15% stockholder, the business combination is approved by our board of directors and authorized at a stockholders’ meeting by at least two-thirds of the outstanding voting stock not owned by the 15% stockholder.
|
•
|
stockholders may act only at an annual or special meeting and not by written consent;
|
•
|
an 80% vote of the outstanding voting stock is required for the stockholders to amend our Bylaws; and
|
•
|
an 80% vote of the outstanding voting stock is required to amend our Certificate of Incorporation with respect to certain matters, including those described in the first two bullet points above.
|
1.
|
Grant of Performance Shares. Valero hereby grants to Participant [no. of shares] Performance Shares pursuant to Section 6.7 of the Plan. The Performance Shares represent rights to receive shares of Common Stock of Valero, subject to the terms and conditions of this Agreement and the Plan.
|
2.
|
Vesting and Delivery of Shares.
|
A.
|
Vesting. The Performance Shares granted hereunder shall vest over a period of three years in equal, one-third increments with the first increment vesting on the date of the regularly scheduled meeting of the Board’s Compensation Committee in January 2021, and the second and third increments vesting on the Committee’s meeting dates in January 2022 and January 2023, respectively (each of these vesting dates is referred to as a “Normal Vesting Date”); any award(s) of shares of Common Stock resulting in connection with such vesting shall be subject to the Compensation Committee’s verification of attainment of the Performance Objectives described in Section 4 below. If the Committee is unable to meet in January of a given year, then the Normal Vesting Date for that year will be the date not later than March 31 of that year as selected by the Compensation Committee.
|
B.
|
Rights. Until shares of Common Stock are actually issued to Participant (or his or her estate) in settlement of the Performance Shares, neither Participant nor any person claiming by, through or under Participant shall have any rights as a stockholder of Valero (including, without limitation, voting rights or any right to receive dividends or other distributions except as expressly provided in this Agreement) with respect to such shares.
|
C.
|
Distribution. Any shares of Common Stock to be distributed under the terms of this Agreement shall be distributed as soon as administratively practicable after Performance Objectives described in Section 4 below have been verified by the Compensation Committee, but not later than two-and-one-half months following the end of the year in which such verification occurred.
|
3.
|
Performance Period. Except as provided below with respect to a Change of Control (as defined in the Plan), the “Performance Period” for any Performance Shares eligible to vest on any Normal Vesting Date shall be as follows:
|
A.
|
First Segment. The Performance Period for the first one-third vesting of Performance Shares (those vesting on the Normal Vesting Date in January 2021) shall be the calendar year ending on December 31, 2020.
|
B.
|
Second Segment. The Performance Period for the second one-third vesting of Performance Shares (those vesting on the Normal Vesting Date in January 2022) shall be the two calendar years ending December 31, 2021.
|
C.
|
Third Segment. The Performance Period for the final one-third vesting of Performance Shares (those vesting on the Normal Vesting Date in January 2023) shall be the three calendar years ending December 31, 2022.
|
A.
|
Total Shareholder Return. Total Shareholder Return (“TSR”) will be compiled for a peer group of companies (the “Target Group”) for the Performance Period immediately preceding each Normal Vesting Date. TSR for each such company is measured by dividing (A) the sum of (i) the dividends on the common stock of such company during the Performance Period, assuming dividend reinvestment, and (ii) the difference between the average closing price of a share of such company’s common stock for the 15 trading days ending December 31 at the end of the Performance Period and the average closing price of such shares for the 15 trading days ending December 31 immediately prior to the beginning of the Performance Period (appropriately adjusted for any stock dividend, stock split, spin-off, merger or other similar corporate events), by (B) the average closing price of a share of such company’s common stock for the 15 trading days ending December 31 immediately prior to the beginning of the Performance Period.
|
B.
|
Target Group. The applicable Target Group shall be selected by the Compensation Committee, acting in its sole discretion, each year not later than 90 days after the commencement of the calendar year preceding each Normal Vesting Date. The same Target Group shall be used to measure TSR with regard to all Performance Shares vesting under all Performance Award Agreements of Valero having a similar Normal Vesting Date.
|
C.
|
Performance Ranking and Award of Common Shares. For each Performance Period, the TSR for Valero and each company in the Target Group shall be arranged by rank from highest performer to lowest performer according to the TSR achieved by each company. Shares of Common Stock will be awarded to Participant in accordance with Valero’s percentile ranking within the Target Group. The number of shares of Common Stock, if any, that Participant will be entitled to receive in settlement of the vested Performance Shares will be determined on each Normal Vesting Date and, subject to the provisions of the Plan and this Agreement, on such Normal Vesting Date, the following percentage of the vested Performance Shares will be awarded as shares of Common Stock to the Participant when Valero’s TSR during the Performance Period falls within the following percentiles (“Percentiles”):
|
D.
|
Unearned Shares. Any Performance Shares not awarded as shares of Common Stock on a Normal Vesting Date will expire and be forfeited; such Performance Shares may not be carried forward for any additional Performance Period.
|
5.
|
Dividend Equivalent Award. In addition to the Performance Shares granted in Section 1, the Participant is granted a Dividend Equivalent Award payable in shares of Common Stock, as provided herein. On each Normal Vesting Date, the amount of dividends paid to holders of Common Stock during the applicable Performance Period shall be determined with respect to the Participant’s Performance Shares that are vesting on that Normal Vesting Date — calculated as if the Performance Shares were outstanding shares of Common Stock (the resulting value being hereafter referred to as the “Target Dividend Equivalent Value”). The Target Dividend Equivalent Value shall then be subject to further calculation according to Valero’s TSR ranking during the Performance Period as prescribed in Section 4.C. above (i.e., payout from 0% to 200% depending on Valero’s TSR ranking). The number of shares of Common Stock payable to Participant with respect to the Dividend Equivalent Award is equal to (x) the Target Dividend Equivalent Value multiplied by the Performance Period’s payout percentage calculated per Section 4.C., divided by (y) the Fair Market Value of the Common Stock on the Normal Vesting Date (the resulting number being rounded up to the nearest whole number of shares). See Exhibit A for an example of this calculation.
|
6.
|
Termination of Employment.
|
A.
|
Voluntary Termination, Termination for “Cause,” and Early Retirement. If Participant’s employment is
|
(i)
|
voluntarily terminated by the Participant (other than through retirement at age 60+, death or disability), including termination in connection with Participant’s voluntary early retirement (i.e., prior to age 60),
|
(ii)
|
terminated by Valero for “cause” (as defined pursuant to the Plan),
|
B.
|
Retirement. If a Participant’s employment is terminated through his or her retirement when the Participant is age 60 or older, then any Performance Shares that (i) have not theretofore vested or been forfeited, and (ii) were granted at least one year prior to the Participant’s effective date of retirement, shall continue to remain outstanding and shall vest on the Normal Vesting Dates according to their original vesting schedule.
|
•
|
13,530 Performance Shares granted on October 30, 2019,
|
•
|
Participant retires at age 60+ effective April 15, 2020,
|
•
|
working period is calculated as 6 months (5 full months plus partial month rounding upward to 6 months),
|
•
|
original grant is adjusted by 6/12ths (50%) resulting in 6,765 Performance Shares to vest according to their original vesting schedule.
|
C.
|
Death, Disability, Involuntary Termination Other Than for “Cause,” and Change of Control. If a Participant’s employment is terminated (i) through death or disability, or (ii) by Valero other than for cause (as determined pursuant to the Plan), or (iii) as a result of a Change of Control (as described in the Plan) (each of the foregoing is hereafter referred to as a “Trigger
|
(i)
|
For purposes of determining the number of Performance Shares to be received as of any Trigger Date, the Target Group as most recently determined by the Compensation Committee prior to the Trigger Date shall be used.
|
(ii)
|
If the Trigger Date is the result of a Change of Control, then the number of shares of Common Stock to be awarded to the Participant shall be prorated commensurate with the length of service of the Participant during each Performance Period. See Exhibit B for an example of this calculation.
|
7.
|
Cash Payment Election. Effective on any Normal Vesting Date (or Trigger Date under Section 6.C), the Participant (or the Participant’s estate under Section 6.C) may elect to receive up to 50% of the after-tax value of the aggregate number of shares of Common Stock earned on such Normal Vesting Date (or Trigger Date) in cash, with the remainder paid in shares of Common Stock. Example:
|
•
|
following the calculation of Valero’s performance against the Target Group for the two-year performance period ending December 31, 2021, it is determined that the Participant is entitled to receive 4,000 shares of Common Stock on the Normal Vesting Date occurring in January 2022 (the “2022 Normal Vesting Date”),
|
•
|
the 4,000 shares have an aggregate tax value of $300,000 (4,000 shares times an assumed $75 FMV per share on the 2022 Normal Vesting Date), and the Participant has made a tax withholding election of 39.6%,
|
•
|
the after-tax value of the 4,000 shares of Common Stock awarded on the 2022 Normal Vesting Date is $181,200 ($300,000 times 60.4%),
|
•
|
the Participant may elect to receive up to $90,600 ($181,200 times 50%) in cash on the 2022 Normal Vesting Date.
|
8.
|
Plan Incorporated by Reference. The Plan is incorporated into this Agreement by this reference and is made a part hereof for all purposes. Capitalized terms not otherwise defined in this Agreement shall have the meaning specified in the Plan.
|
9.
|
No Assignment. This Agreement and the Participant’s interest in the Performance Shares granted by this Agreement are of a personal nature, and, except as expressly permitted under the Plan, Participant’s rights with respect thereto may not be sold, mortgaged, pledged, assigned, transferred, conveyed or disposed of in any manner by Participant, except by an executor or beneficiary pursuant to a will or pursuant to the laws of descent and distribution. Any such attempted sale, mortgage, pledge, assignment, transfer, conveyance or disposition is void, and Valero will not be bound thereby.
|
10.
|
Integration. This Agreement constitutes the entire agreement of the parties relating to the transactions contemplated hereby, and supersedes all provisions and concepts contained in all prior contracts or agreements between the Participant and Valero, including that certain Change of Control Severance Agreement (“COC Agreement”) between Participant and Valero. For avoidance of doubt, Participant acknowledges that in the context of a Change of Control of Valero, the terms of this
|
11.
|
Successors. This Agreement shall be binding upon any successors of Valero and upon the beneficiaries, legatees, heirs, administrators, executors, legal representatives, successors and permitted assigns of Participant.
|
12.
|
Code Section 409A. This Agreement is intended to comply, and shall be administered consistently in all respects, with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and additional guidance promulgated thereunder to the extent applicable. Accordingly, Valero shall have the authority to take any action, or refrain from taking any action, with respect to this Agreement that is reasonably necessary to ensure compliance with Code Section 409A (provided that Valero shall choose the action that best preserves the value of payments and benefits provided to Participant under this Agreement that is consistent with Code Section 409A), and the parties agree that this Agreement shall be interpreted in a manner that is consistent with Code Section 409A. In furtherance, but not in limitation of the foregoing:
|
(a)
|
in no event may Participant designate, directly or indirectly, the calendar year of any payment to be made hereunder;
|
(b)
|
to the extent the Participant is a “specified employee” within the meaning of Code Section 409A, payments, if any, that constitute a “deferral of compensation” under Code Section 409A and that would otherwise become due during the first six months following Participant’s termination of employment shall be delayed and all such delayed payments shall be paid in full in the seventh month after such termination date, provided that the above delay shall not apply to any payment that is excepted from coverage by Code Section 409A, such as a payment covered by the short-term deferral exception described in Treasury Regulations Section 1.409A-1(b)(4);
|
(c)
|
notwithstanding any other provision of this Agreement, a termination, resignation or retirement of Participant’s employment hereunder shall mean and be interpreted consistent with a “separation from service” within the meaning of Code Section 409A;
|
(d)
|
terms defined in this section will have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. Notwithstanding any other provision hereof, Valero makes no representations or warranties and will have no liability to Participant or any other person if any provision of or payment under this Agreement is determined to constitute deferred compensation subject to Section 409A but does not satisfy the conditions of Section 409A.
|
|
|
|
[name], Participant
|
|
|
1.
|
Assume the Participant was granted 12,000 Performance Shares on October 31, 2019.
|
2.
|
Assume the Normal Vesting Date for the second segment of these Performance Shares is January 22, 2022. On that date 4,000 Performance Shares (12,000 / 3 = 4,000) vest with respect to the two-year Performance Period ending December 31, 2021.
|
3.
|
Assume the cumulative amount of dividends paid to holders of Common Stock during the Performance Period is $7.20 per share (determined as follows).
|
dividends paid in 1Q20
|
|
$0.90
|
2Q20
|
|
$0.90
|
3Q20
|
|
$0.90
|
4Q20
|
|
$0.90
|
1Q21
|
|
$0.90
|
2Q21
|
|
$0.90
|
3Q21
|
|
$0.90
|
4Q21
|
|
$0.90
|
|
|
$7.20 per share
|
4.
|
The “Target Dividend Equivalent Value” is $28,800 (4,000 Performance Shares vesting, multiplied by $7.20 accumulated dividends per share).
|
5.
|
Valero’s TSR ranking for the Performance Period is determined (per Section 4.C.) to generate a payout of 150.0%.
|
6.
|
The Fair Market Value of the Common Stock on the vesting date is $75.00.
|
7.
|
Based on the foregoing, the total number of shares of Common Stock earned by the Participant on the vesting date is 6,576. The calculation is illustrated below.
|
Section 4.C.
|
4,000
|
|
|
Performance Shares vesting
|
|
|
x 150.0%
|
|
|
multiply by TSR ranking payout percentage
|
|
|
6,000
|
|
|
common shares earned for Performance Shares
|
|
|
|
|
|
||
Section 5.
|
$
|
28,800.00
|
|
|
Target Dividend Equivalent Value
|
|
x 150.0%
|
|
|
multiply by TSR ranking payout percentage
|
|
|
$
|
43,200.00
|
|
|
dividend equivalent based on segment performance
|
|
/ $75.00
|
|
|
divided by FMV per share
|
|
|
576
|
|
|
common shares earned for Dividend Equivalent Award (rounded up)
|
|
|
|
|
|
||
|
6,576
|
|
|
total common shares earned on vesting date
|
1.
|
Assume the Participant was granted 15,000 Performance Shares on October 30, 2019.
|
2.
|
Assume Participant’s employment is terminated on June 30, 2020 as a result of a Change of Control.
|
3.
|
Per Section 6.C. of the Agreement, all Performance Periods for all segments (First Segment, Second Segment, Third Segment (See Section 3)) are shortened to end on June 30, 2020.
|
4.
|
As a result of the TSR calculations of Section 4.C., Valero is ranked in the 90.0 percentile for each shortened Performance Period, resulting in a 200% payout of common shares in each instance.
|
5.
|
Payout of common shares to the Participant is prorated based on the Participant’s length of service during the original Performance Periods.
|
First Segment calculation.
|
|
|
|
|
15,000 / 3 = 5,000 performance shares.
|
|
|
|
|
6 months of service in the 12-month Performance Period.
|
|
|
|
|
|
5,000 perf. shares
|
|
|
|
|
x 200% payout
|
|
|
|
|
10,000 common shares x 6 / 12 =
|
|
5,000
|
common shares
|
|
|
|
|
|
Second Segment calculation.
|
|
|
|
|
15,000 / 3 = 5,000 performance shares.
|
|
|
|
|
6 months of service in the 24-month Performance Period.
|
|
|
|
|
|
5,000 perf. shares
|
|
|
|
|
x 200% payout
|
|
|
|
|
10,000 common shares x 6 / 24 =
|
|
2,500
|
common shares
|
|
|
|
|
|
Third Segment calculation.
|
|
|
|
|
15,000 / 3 = 5,000 performance shares.
|
|
|
|
|
6 months of service in the 36-month Performance Period.
|
|
|
|
|
|
5,000 perf. shares
|
|
|
|
|
x 200% payout
|
|
|
|
|
10,000 common shares x 6 / 36 =
|
|
1,667
|
common shares
|
|
|
|
|
|
|
Total payout
|
|
9,167
|
common shares
|
1.
|
Certain Defined Terms. Capitalized terms used herein but not otherwise defined herein shall have the meanings given to them in the Valero Energy Corporation 2011 Omnibus Stock Incentive Plan (the “Plan”).
|
2.
|
Long-Term Incentive Awards. For so long as the Officer remains an employee of Valero (or one of its Affiliates) continuously from the Effective Date through each of the grant dates listed in the table below (each, a “Grant Date”), Valero agrees to grant to the Officer, on each Grant Date, shares of Restricted Stock (“Restricted Shares”) having the respective aggregate Fair Market Value listed in the table below. The Restricted Shares shall vest (become nonforfeitable) in increments, subject to Section 4 below, on the vesting dates (each, a “Vesting Date”) scheduled below.
|
Grant Date
|
Aggregate FMV
|
Vesting Dates
|
Dec. 18, 2019
|
$1,000,000
|
in equal 1/3 increments on:
|
|
|
Dec. 18, 2020
|
|
|
Dec. 18, 2021
|
|
|
Dec. 18, 2022
|
|
|
|
Feb. 26, 2020
|
$2,000,000
|
in equal 1/3 increments on:
|
|
|
Feb. 26, 2021
|
|
|
Feb. 26, 2022
|
|
|
Feb. 26, 2023
|
|
|
|
Feb. 23, 2021
|
$2,000,000
|
in equal 1/2 increments on:
|
|
|
Feb. 23, 2022
|
|
|
Feb. 23, 2023
|
3.
|
Restricted Stock Agreements. On each Grant Date, Valero and the Officer shall enter into a Restricted Stock Agreement substantially in the form of the agreement attached hereto as Exhibit A.
|
4.
|
Termination of Employment.
|
A.
|
Voluntary Termination, Termination for “Cause”. If the Officer’s employment is:
|
(ii)
|
terminated by Valero for “Cause” (as defined in the Plan),
|
B.
|
Death or Disability. If the Officer’s employment is terminated as a result of his death or disability, then any outstanding Restricted Shares held by the Officer that remain unvested as of the date of his death or disability shall immediately vest and become non-forfeitable as of such date.
|
5.
|
Cash Payment Election. Effective on any Vesting Date, the Officer may elect to receive up to 50% of the after-tax value of the aggregate number of shares of Restricted Stock vesting on such Vesting Date in cash, with the remainder paid in shares of Common Stock. Example:
|
•
|
assume that the Officer is entitled to receive 4,000 shares of Common Stock on a Vesting Date,
|
•
|
assume that the 4,000 shares have an aggregate tax value of $380,000 (4,000 shares times an assumed $95 FMV per share on the Vesting Date), and the Officer has made a tax withholding election of 39.6%,
|
•
|
the after-tax value of the 4,000 shares of Common Stock awarded on the Vesting Date is $229,520 ($380,000 times 60.4%),
|
•
|
the Officer may elect to receive up to $114,760 ($229,520 times 50%) in cash on the Vesting Date.
|
6.
|
No Assignment. This Agreement and the Officer’s rights and interests granted by this Agreement are of a personal nature, and, except as expressly permitted under the Plan, Officer’s rights with respect thereto may not be sold, mortgaged, pledged, assigned, transferred, conveyed or disposed of in any manner by Officer. Any such attempted sale, mortgage, pledge, assignment, transfer, conveyance or disposition is void, and Valero will not be bound thereby.
|
7.
|
Interpretation of Terms. The terms and conditions of this Agreement shall prevail over any conflicting provisions in the Plan.
|
8.
|
Employment at Will. This Agreement is not an employment contract. Neither this Agreement nor any Restricted Stock Agreement entered into pursuant to this Agreement shall confer upon the Officer any right with respect to the continuance of the Officer’s employment by Valero or any of its subsidiaries or affiliates.
|
9.
|
Successors. This Agreement shall be binding upon any successors of Valero and upon the beneficiaries, legatees, heirs, administrators, executors, legal representatives, successors and permitted assigns of Officer.
|
10.
|
Governing Law. This Agreement shall be construed under and governed by the laws of the State of Texas.
|
Name of Entity
|
|
State of Incorporation/Organization
|
|
|
|
AIR BP-PBF DEL PERU SAC
|
|
Peru
|
BELFAST STORAGE LTD
|
|
Northern Ireland
|
CANADIAN ULTRAMAR COMPANY
|
|
Nova Scotia
|
COLONNADE TEXAS INSURANCE COMPANY, LLC
|
|
Texas
|
COLONNADE VERMONT INSURANCE COMPANY
|
|
Vermont
|
DIAMOND ALTERNATIVE ENERGY, LLC
|
|
Delaware
|
DIAMOND ALTERNATIVE ENERGY OF CANADA INC.
|
|
Canada
|
DIAMOND GREEN DIESEL HOLDINGS LLC
|
|
Delaware
|
DIAMOND GREEN DIESEL LLC
|
|
Delaware
|
DIAMOND K RANCH LLC
|
|
Texas
|
DIAMOND OMEGA COMPANY, L.L.C.
|
|
Delaware
|
DIAMOND SHAMROCK REFINING COMPANY, L.P.
|
|
Delaware
|
DIAMOND UNIT INVESTMENTS, L.L.C.
|
|
Delaware
|
DSRM NATIONAL BANK
|
|
U.S.A.
|
ENTERPRISE CLAIMS MANAGEMENT, INC.
|
|
Texas
|
GCP LOGISTICS COMPANY LLC
|
|
Delaware
|
GOLDEN EAGLE ASSURANCE LIMITED
|
|
British Columbia
|
HAMMOND MAINLINE PIPELINE LLC
|
|
Delaware
|
HUNTWAY REFINING COMPANY
|
|
Delaware
|
MAINLINE PIPELINES LIMITED
|
|
England and Wales
|
MAPLE ETHANOL LTD.
|
|
Virgin Islands (U.K.)
|
MICHIGAN REDEVELOPMENT GP, LLC
|
|
Delaware
|
MICHIGAN REDEVELOPMENT, L.P.
|
|
Delaware
|
MRP PROPERTIES COMPANY, LLC
|
|
Michigan
|
NECHES RIVER HOLDING CORP.
|
|
Delaware
|
OCEANIC TANKERS AGENCY LIMITED
|
|
Quebec
|
PARKWAY PIPELINE LLC
|
|
Delaware
|
PENTA TANKS TERMINALS S.A.
|
|
Peru
|
PICKARD PLACE CONDOMINIUM ASSOCIATION
|
|
Michigan
|
PI DOCK FACILITIES LLC
|
|
Delaware
|
PORT ARTHUR COKER COMPANY L.P.
|
|
Delaware
|
PREMCOR USA INC.
|
|
Delaware
|
PROPERTY RESTORATION, L.P.
|
|
Delaware
|
PURE BIOFUELS HOLDINGS L.P.
|
|
Alberta
|
SABINE RIVER HOLDING CORP.
|
|
Delaware
|
SABINE RIVER LLC
|
|
Delaware
|
SAINT BERNARD PROPERTIES COMPANY LLC
|
|
Delaware
|
SUNBELT REFINING COMPANY, L.P.
|
|
Delaware
|
THE PREMCOR PIPELINE CO.
|
|
Delaware
|
THE PREMCOR REFINING GROUP INC.
|
|
Delaware
|
THE SHAMROCK PIPE LINE CORPORATION
|
|
Delaware
|
TRANSPORT MARITIME ST. LAURENT INC.
|
|
Quebec
|
ULTRAMAR ACCEPTANCE INC.
|
|
Canada
|
ULTRAMAR ENERGY INC.
|
|
Delaware
|
ULTRAMAR INC.
|
|
Nevada
|
V-TEX LOGISTICS LLC
|
|
Delaware
|
VALERO ADMINISTRATIVE SERVICES DE MÉXICO, S.A. DE C.V.
|
|
Mexico
|
VALERO ARUBA ACQUISITION COMPANY I, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA FINANCE INTERNATIONAL, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA HOLDING COMPANY N.V.
|
|
Aruba
|
VALERO ARUBA HOLDINGS INTERNATIONAL, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA MAINTENANCE/OPERATIONS COMPANY N.V.
|
|
Aruba
|
VALERO (BARBADOS) SRL
|
|
Barbados
|
VALERO BROWNSVILLE TERMINAL LLC
|
|
Texas
|
VALERO CANADA FINANCE, INC.
|
|
Delaware
|
VALERO CANADA L.P.
|
|
Newfoundland
|
VALERO CAPITAL CORPORATION
|
|
Delaware
|
VALERO COKER CORPORATION ARUBA N.V.
|
|
Aruba
|
VALERO CUSTOMS & TRADE SERVICES, INC.
|
|
Delaware
|
VALERO ENERGY ARUBA II COMPANY
|
|
Cayman Islands
|
VALERO ENERGY INC.
|
|
Canada
|
VALERO ENERGY (IRELAND) LIMITED
|
|
Ireland
|
VALERO ENERGY LTD
|
|
England and Wales
|
VALERO ENERGY PARTNERS GP LLC
|
|
Delaware
|
VALERO ENERGY PARTNERS LP
|
|
Delaware
|
VALERO ENERGY UK LTD
|
|
England and Wales
|
VALERO ENTERPRISES, INC.
|
|
Delaware
|
VALERO EQUITY SERVICES LTD
|
|
England and Wales
|
VALERO FINANCE L.P. I
|
|
Newfoundland
|
VALERO FINANCE L.P. II
|
|
Newfoundland
|
VALERO FINANCE L.P. III
|
|
Newfoundland
|
VALERO FOREST CONTRIBUTION LLC
|
|
Delaware
|
VALERO GRAIN MARKETING, LLC
|
|
Texas
|
VALERO HOLDCO UK LTD
|
|
United Kingdom
|
VALERO HOLDINGS, INC.
|
|
Delaware
|
VALERO INTERNATIONAL HOLDINGS, INC.
|
|
Nevada
|
VALERO LATIN AMERICA SERVICES LLC
|
|
Delaware
|
VALERO LIVE OAK LLC
|
|
Texas
|
VALERO LOGISTICS IRELAND LIMITED
|
|
Ireland
|
VALERO LOGISTICS UK LTD
|
|
England and Wales
|
VALERO MARKETING AND SUPPLY COMPANY
|
|
Delaware
|
VALERO MARKETING AND SUPPLY DE MÉXICO S.A. DE C.V.
|
|
Mexico
|
VALERO MARKETING AND SUPPY INTERNATIONAL LTD.
|
|
Cayman Islands
|
VALERO MARKETING AND SUPPLY (PANAMA) LLC
|
|
Delaware
|
VALERO MARKETING IRELAND LIMITED
|
|
Ireland
|
VALERO MKS LOGISTICS, L.L.C.
|
|
Delaware
|
VALERO NEDERLAND COÖPERATIEF U.A.
|
|
The Netherlands
|
VALERO NEW AMSTERDAM B.V.
|
|
The Netherlands
|
VALERO OPERATIONAL SERVICES DE MÉXICO, S.A. DE C.V.
|
|
Mexico
|
VALERO OPERATIONS SUPPORT, LTD
|
|
England and Wales
|
VALERO PARTNERS CCTS, LLC
|
|
Delaware
|
VALERO PARTNERS CORPUS EAST, LLC
|
|
Delaware
|
VALERO PARTNERS CORPUS WEST, LLC
|
|
Delaware
|
VALERO PARTNERS EP, LLC
|
|
Delaware
|
VALERO PARTNERS HOUSTON, LLC
|
|
Delaware
|
VALERO PARTNERS LOUISIANA, LLC
|
|
Delaware
|
VALERO PARTNERS LUCAS, LLC
|
|
Delaware
|
VALERO PARTNERS MCKEE, LLC
|
|
Delaware
|
VALERO PARTNERS MEMPHIS, LLC
|
|
Delaware
|
VALERO PARTNERS MERAUX, LLC
|
|
Delaware
|
VALERO PARTNERS NORTH TEXAS, LLC
|
|
Delaware
|
VALERO PARTNERS OPERATING CO. LLC
|
|
Delaware
|
VALERO PARTNERS PAPS, LLC
|
|
Delaware
|
VALERO PARTNERS PORT ARTHUR, LLC
|
|
Delaware
|
VALERO PARTNERS SOUTH TEXAS, LLC
|
|
Delaware
|
VALERO PARTNERS TEXAS CITY, LLC
|
|
Delaware
|
VALERO PARTNERS THREE RIVERS, LLC
|
|
Delaware
|
VALERO PARTNERS WEST MEMPHIS, LLC
|
|
Delaware
|
VALERO PARTNERS WEST TEXAS, LLC
|
|
Delaware
|
VALERO PARTNERS WYNNEWOOD, LLC
|
|
Delaware
|
VALERO PAYMENT SERVICES COMPANY
|
|
Virginia
|
VALERO PEMBROKESHIRE LLC
|
|
Delaware
|
VALERO PEMBROKESHIRE OIL TERMINAL LTD
|
|
England and Wales
|
VALERO (PERU) HOLDINGS GP LLC
|
|
Delaware
|
VALERO (PERU) HOLDINGS LIMITED
|
|
British Columbia
|
VALERO PERU S.A.C.
|
|
Peru
|
VALERO PLAINS COMPANY LLC
|
|
Texas
|
VALERO POWER MARKETING LLC
|
|
Delaware
|
VALERO RAIL OPERATIONS DE MÉXICO, S.A. DE C.V.
|
|
Mexico
|
VALERO REFINING AND MARKETING COMPANY
|
|
Delaware
|
VALERO REFINING COMPANY-ARUBA N.V.
|
|
Aruba
|
VALERO REFINING COMPANY-CALIFORNIA
|
|
Delaware
|
VALERO REFINING COMPANY-OKLAHOMA
|
|
Michigan
|
VALERO REFINING COMPANY-TENNESSEE, L.L.C.
|
|
Delaware
|
VALERO REFINING-MERAUX LLC
|
|
Delaware
|
VALERO REFINING-NEW ORLEANS, L.L.C.
|
|
Delaware
|
VALERO REFINING-TEXAS, L.P.
|
|
Texas
|
VALERO RENEWABLE FUELS COMPANY, LLC
|
|
Texas
|
VALERO SECURITY SYSTEMS, INC.
|
|
Delaware
|
VALERO SERVICES, INC.
|
|
Delaware
|
VALERO SKELLYTOWN PIPELINE, LLC
|
|
Delaware
|
VALERO TEJAS COMPANY LLC
|
|
Delaware
|
VALERO TERMINAL HOLDCO LTD
|
|
England and Wales
|
VALERO TERMINALING AND DISTRIBUTION COMPANY
|
|
Delaware
|
VALERO TERMINALING AND DISTRIBUTION DE MEXICO, S.A. DE C.V.
|
|
Mexico
|
VALERO TEXAS POWER MARKETING, INC.
|
|
Delaware
|
VALERO ULTRAMAR HOLDINGS INC.
|
|
Delaware
|
VALERO UNIT INVESTMENTS, L.L.C.
|
|
Delaware
|
VALERO WEST WALES LLC
|
|
Delaware
|
VRG PROPERTIES COMPANY
|
|
Delaware
|
VTD PROPERTIES COMPANY
|
|
Delaware
|
WARSHALL COMPANY LLC
|
|
Delaware
|
ZELIG COMMERCIAL, INC.
|
|
Panama
|
/s/ Joseph W. Gorder
|
|
|
Joseph W. Gorder
Chief Executive Officer
|
|
|
/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
|
|
February 26, 2020
|
|
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
|
|
February 26, 2020
|
|