Condensed Consolidating Financial Statements

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

21.

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

In connection with the completion of the Merger Transaction as described in Note 2, Valero Energy Corporation, the parent company, entered into a guarantee agreement to fully and unconditionally guarantee the prompt payment, when due, of the following debt issued by Valero Energy Partners LP, an indirect wholly owned subsidiary of Valero Energy Corporation, that was outstanding as of December 31, 2019:

•4.375 percent Senior Notes due December 15, 2026, and

•4.5 percent Senior Notes due March 15, 2028.

The following condensed consolidating financial information is provided as an alternative to providing separate financial statements for Valero Energy Partners LP, which has no independent assets or operations. The financial position, results of operations, and cash flows of Valero Energy Partners LP’s wholly owned subsidiaries are included in “Other Non-Guarantor Subsidiaries.” The accounts for all companies reflected herein are presented using the equity method of accounting for investments in subsidiaries.

Condensed Consolidating Balance Sheet

December 31, 2019

(in millions)

	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

Condensed Consolidating Balance Sheet

December 31, 2018

(in millions)

	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

Condensed Consolidating Statement of Income

Year Ended December 31, 2019

(in millions)

	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

Condensed Consolidating Statement of Income

Year Ended December 31, 2018

(in millions)

	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

Condensed Consolidating Statement of Income

Year Ended December 31, 2017

(in millions)

	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

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2019

(in millions)

	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

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2018

(in millions)

	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

Condensed Consolidating Statement of Comprehensive Income

Year Ended December 31, 2017

(in millions)

	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

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2019

(in millions)

	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

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2018

(in millions)

	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

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2017

(in millions)

	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