Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | VALERO ENERGY CORP/TX | ||
Entity Central Index Key | 1,035,002 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 47.5 | ||
Entity Common Stock, Shares Outstanding | 417,614,487 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,982 | $ 5,850 |
Receivables, net | 7,345 | 6,922 |
Inventories | 6,532 | 6,384 |
Prepaid expenses and other | 816 | 156 |
Total current assets | 17,675 | 19,312 |
Property, plant, and equipment, at cost | 42,473 | 40,010 |
Accumulated depreciation | (13,625) | (12,530) |
Property, plant, and equipment, net | 28,848 | 27,480 |
Deferred charges and other assets, net | 3,632 | 3,366 |
Total assets | 50,155 | 50,158 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 238 | 122 |
Accounts payable | 8,594 | 8,348 |
Accrued expenses | 630 | 712 |
Taxes other than income taxes payable | 1,213 | 1,321 |
Income taxes payable | 49 | 568 |
Total current liabilities | 10,724 | 11,071 |
Debt and capital lease obligations, less current portion | 8,871 | 8,750 |
Deferred income tax liabilities | 4,962 | 4,708 |
Other long-term liabilities | 2,867 | 2,729 |
Commitments and contingencies | ||
Valero Energy Corporation stockholders’ equity: | ||
Common stock, $0.01 par value; 1,200,000,000 shares authorized; 673,501,593 and 673,501,593 shares issued | 7 | 7 |
Additional paid-in capital | 7,048 | 7,039 |
Treasury stock, at cost; 255,905,051 and 239,603,534 common shares | (14,925) | (13,315) |
Retained earnings | 31,044 | 29,200 |
Accumulated other comprehensive loss | (1,507) | (940) |
Total Valero Energy Corporation stockholders’ equity | 21,667 | 21,991 |
Noncontrolling interests | 1,064 | 909 |
Total equity | 22,731 | 22,900 |
Total liabilities and equity | $ 50,155 | $ 50,158 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Valero Energy Corporation stockholders’ equity: | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (shares) | 1,200,000,000 | 1,200,000,000 |
Common stock issued (shares) | 673,501,593 | 673,501,593 |
Treasury stock (shares) | 255,905,051 | 239,603,534 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues | [1] | $ 117,033 | $ 93,980 | $ 75,659 |
Cost of sales: | ||||
Cost of materials and other | 104,732 | 83,037 | 65,962 | |
Operating expenses (excluding depreciation and amortization expense reflected below) | 4,690 | 4,504 | 4,251 | |
Depreciation and amortization expense | 2,017 | 1,934 | 1,846 | |
Lower of cost or market inventory valuation adjustment | 0 | 0 | (747) | |
Total cost of sales | 111,439 | 89,475 | 71,312 | |
Other operating expenses | 45 | 61 | 0 | |
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 925 | 829 | 709 | |
Depreciation and amortization expense | 52 | 52 | 48 | |
Asset impairment loss | 0 | 0 | 56 | |
Operating income | 4,572 | 3,563 | 3,534 | |
Other income, net | 130 | 112 | 94 | |
Interest and debt expense, net of capitalized interest | (470) | (468) | (446) | |
Income before income tax expense (benefit) | 4,232 | 3,207 | 3,182 | |
Income tax expense (benefit) | 879 | (949) | 765 | |
Net income | 3,353 | 4,156 | 2,417 | |
Less: Net income attributable to noncontrolling interests | 231 | 91 | 128 | |
Net income attributable to Valero Energy Corporation stockholders | $ 3,122 | $ 4,065 | $ 2,289 | |
Earnings per common share (in usd per share) | $ 7.30 | $ 9.17 | $ 4.94 | |
Weighted-average common shares outstanding (shares) | 426 | 442 | 461 | |
Earnings per common share – assuming dilution (in usd per share) | $ 7.29 | $ 9.16 | $ 4.94 | |
Weighted-average common shares outstanding – assuming dilution (shares) | 428 | 444 | 464 | |
[1] | Includes excise taxes on sales by certain of our international operations of $5,626 million, $5,573 million, and $5,493 million for the years ended December 31, 2018, 2017, and 2016. |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental information: | |||
Includes excise taxes on sales by certain of our international operations | $ 5,626 | $ 5,573 | $ 5,493 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 3,353 | $ 4,156 | $ 2,417 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | (517) | 514 | (415) |
Net gain (loss) on pension and other postretirement benefits | 49 | (65) | (98) |
Other comprehensive income (loss) before income tax expense (benefit) | (468) | 449 | (513) |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 10 | (21) | (37) |
Other comprehensive income (loss) | (478) | 470 | (476) |
Comprehensive income | 2,875 | 4,626 | 1,941 |
Less: Comprehensive income attributable to noncontrolling interests | 229 | 91 | 129 |
Comprehensive income attributable to Valero Energy Corporation stockholders | $ 2,646 | $ 4,535 | $ 1,812 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Valero Energy Partners LP [Member] | Entities Other Than Valero Energy Partners LP [Member] | Valero Energy Corporation Stockholders' Equity [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Non-controlling Interests [Member] | Non-controlling Interests [Member]Valero Energy Partners LP [Member] | Non-controlling Interests [Member]Entities Other Than Valero Energy Partners LP [Member] |
Balance as of beginning of period at Dec. 31, 2015 | $ 21,354 | $ 20,527 | $ 7 | $ 7,064 | $ (10,799) | $ 25,188 | $ (933) | $ 827 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||||||||
Net income | 2,417 | 2,289 | 2,289 | 128 | ||||||||
Dividends on common stock | (1,111) | (1,111) | (1,111) | |||||||||
Stock-based compensation expense | 68 | 68 | 68 | |||||||||
Transactions in connection with stock-based compensation plans | (55) | (55) | (89) | 34 | ||||||||
Stock purchases under purchase programs | (1,262) | (1,262) | (1,262) | |||||||||
Issuance of Valero Energy Partners LP common units and contributions from noncontrolling interests | $ 11 | $ 11 | ||||||||||
Distributions to noncontrolling interests | (65) | (65) | ||||||||||
Other | (27) | 45 | 45 | 0 | (72) | |||||||
Other comprehensive income (loss) | (476) | (477) | (477) | 1 | ||||||||
Balance as of end of period at Dec. 31, 2016 | 20,854 | 20,024 | 7 | 7,088 | (12,027) | 26,366 | (1,410) | 830 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||||||||
Net income | 4,156 | 4,065 | 4,065 | 91 | ||||||||
Dividends on common stock | (1,242) | (1,242) | (1,242) | |||||||||
Stock-based compensation expense | 68 | 68 | 68 | |||||||||
Transactions in connection with stock-based compensation plans | (63) | (63) | (82) | 19 | ||||||||
Stock purchases under purchase programs | (1,307) | (1,307) | (1,307) | |||||||||
Issuance of Valero Energy Partners LP common units and contributions from noncontrolling interests | $ 33 | $ 30 | $ 33 | $ 30 | ||||||||
Distributions to noncontrolling interests | (67) | (67) | ||||||||||
Other | (32) | (24) | (35) | 11 | (8) | |||||||
Other comprehensive income (loss) | 470 | 470 | 470 | 0 | ||||||||
Balance as of end of period at Dec. 31, 2017 | 22,900 | 21,991 | 7 | 7,039 | (13,315) | 29,200 | (940) | 909 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | ||||||||||||
Reclassification of stranded income tax effects of Tax Reform per ASU 2018-02 (see Note 1) | 0 | 0 | 91 | (91) | ||||||||
Net income | 3,353 | 3,122 | 3,122 | 231 | ||||||||
Dividends on common stock | (1,369) | (1,369) | (1,369) | |||||||||
Stock-based compensation expense | 82 | 82 | 82 | |||||||||
Transactions in connection with stock-based compensation plans | (169) | (169) | (70) | (99) | ||||||||
Stock purchases under purchase programs | (1,511) | (1,511) | (1,511) | |||||||||
Issuance of Valero Energy Partners LP common units and contributions from noncontrolling interests | $ 32 | $ 32 | ||||||||||
Distributions to noncontrolling interests | (116) | (116) | ||||||||||
Other | 7 | (3) | (3) | 0 | 10 | |||||||
Other comprehensive income (loss) | (478) | (476) | (476) | (2) | ||||||||
Balance as of end of period at Dec. 31, 2018 | $ 22,731 | $ 21,667 | $ 7 | $ 7,048 | $ (14,925) | $ 31,044 | $ (1,507) | $ 1,064 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock dividends: | |||
Dividends on common stock (in usd per share) | $ 3.2 | $ 2.8 | $ 2.4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 3,353 | $ 4,156 | $ 2,417 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 2,069 | 1,986 | 1,894 |
Lower of cost or market inventory valuation adjustment | 0 | 0 | (747) |
Asset impairment loss | 0 | 0 | 56 |
Deferred income tax expense (benefit) | 203 | (2,543) | 230 |
Changes in current assets and current liabilities | (1,297) | 1,289 | 976 |
Changes in deferred charges and credits and other operating activities, net | 43 | 594 | (6) |
Net cash provided by operating activities | 4,371 | 5,482 | 4,820 |
Cash flows from investing activities: | |||
Deferred turnaround and catalyst costs | (915) | (523) | (718) |
Investments in joint ventures | (181) | (406) | (4) |
Peru Acquisition, net of cash acquired | (468) | 0 | 0 |
Acquisitions of undivided interests | (212) | (72) | 0 |
Other investing activities, net | 8 | (2) | (6) |
Net cash used in investing activities | (3,928) | (2,382) | (2,006) |
Cash flows from financing activities: | |||
Repayments of debt and capital lease obligations | (1,359) | (21) | (1,475) |
Purchases of common stock for treasury | (1,708) | (1,372) | (1,336) |
Common stock dividends | (1,369) | (1,242) | (1,111) |
Contributions from noncontrolling interests | 32 | 30 | 0 |
Distributions to noncontrolling interests | (116) | (67) | (65) |
Other financing activities, net | (15) | 20 | (178) |
Net cash used in financing activities | (3,168) | (2,272) | (2,012) |
Effect of foreign exchange rate changes on cash | (143) | 206 | (100) |
Net increase (decrease) in cash and cash equivalents | (2,868) | 1,034 | 702 |
Cash and cash equivalents at beginning of year | 5,850 | 4,816 | 4,114 |
Cash and cash equivalents at end of year | 2,982 | 5,850 | 4,816 |
Minor Acquisitions [Member] | |||
Cash flows from investing activities: | |||
Asset acquisitions | (88) | 0 | 0 |
Ethanol Plants [Member] | |||
Cash flows from investing activities: | |||
Asset acquisitions | (320) | 0 | 0 |
Certain variable interest entities (VIEs) [Member] | |||
Cash flows from investing activities: | |||
Capital expenditures | (124) | (26) | 0 |
Cash flows from financing activities: | |||
Proceeds from debt issuances and borrowings | 109 | 0 | 0 |
Excluding certain variable interest entities (VIEs) [Member] | |||
Cash flows from investing activities: | |||
Capital expenditures | (1,628) | (1,353) | (1,278) |
Cash flows from financing activities: | |||
Proceeds from debt issuances and borrowings | $ 1,258 | $ 380 | $ 2,153 |
Description of Business, Basis
Description of Business, Basis of Presentation, and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES Description of Business The terms “Valero,” “we,” “our,” and “us,” as used in this report, may refer to Valero Energy Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole. We are an independent petroleum refiner and ethanol producer. We own 15 petroleum refineries located in the United States (U.S.), Canada, and the United Kingdom (U.K.) with a combined throughput capacity of approximately 3.1 million barrels per day as of December 31, 2018 . We sell our refined petroleum products in both the wholesale rack and bulk markets, and approximately 7,000 outlets carry our brand names in the U.S., Canada, the U.K., and Ireland. Most of our logistics assets support our refining operations, and some of these assets are owned by Valero Energy Partners LP (VLP). See Note 12 for further information about VLP. We also own 14 ethanol plants in the Mid-Continent region of the U.S. with a combined production capacity of approximately 1.73 billion gallons per year as of December 31, 2018 . We sell our ethanol in the wholesale bulk market, and some of our logistics assets support our ethanol operations. Basis of Presentation General These consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Reclassifications Certain prior year amounts have been reclassified to conform to the 2018 presentation. The changes were primarily due to our retrospective adoption on January 1, 2018 of Accounting Standards Update (ASU) No. 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU requires employers to report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost (non-service cost components) to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The adoption of this ASU did not affect our financial position or results of operations, but resulted in the reclassification of the non-service components of pension and postretirement benefit costs from operating expenses (excluding depreciation and amortization expense) and general and administrative expenses (excluding depreciation and amortization expense) to other income, net. This resulted in an increase of $42 million and $44 million in operating expenses (excluding depreciation and amortization expense) and a decrease of $6 million and $6 million in general and administrative expenses (excluding depreciation and amortization expense) for the years ended December 31, 2017 and 2016, respectively. Significant Accounting Policies Principles of Consolidation These financial statements include those of Valero, our wholly owned subsidiaries, and VIEs in which we have a controlling interest. Our VIEs are described in Note 12 . The ownership interests held by others in the VIEs are recorded as noncontrolling interests. Intercompany items and transactions have been eliminated in consolidation. Investments in less than wholly owned entities where we have significant influence are accounted for using the equity method. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Cash Equivalents Our cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have a maturity of three months or less when acquired. Receivables Trade receivables are carried at original invoice amount. We maintain an allowance for doubtful accounts, which is adjusted based on management’s assessment of our customers’ historical collection experience, known credit risks, and industry and economic conditions. Inventories The cost of refinery feedstocks, refined petroleum products, and grain and ethanol inventories is determined under the last-in, first-out (LIFO) method using the dollar-value LIFO approach, with any increments valued based on average purchase prices during the year. Our LIFO inventories are carried at the lower of cost or market. The cost of products purchased for resale and the cost of materials and supplies are determined principally under the weighted-average cost method. Our non-LIFO inventories are carried at the lower of cost or net realizable value. If the aggregate market value of our LIFO inventories or the aggregate net realizable value of our non-LIFO inventories is less than the related aggregate cost, we recognize a loss for the difference in our statements of income. Property, Plant, and Equipment The cost of property, plant, and equipment (property assets) purchased or constructed, including betterments of property assets, is capitalized. However, the cost of repairs to and normal maintenance of property assets is expensed as incurred. Betterments of property assets are those that extend the useful life, increase the capacity or improve the operating efficiency of the asset, or improve the safety of our operations. The cost of property assets constructed includes interest and certain overhead costs allocable to the construction activities. Our operations, especially those of our refining segment, are highly capital intensive. Each of our refineries comprises a large base of property assets, consisting of a series of interconnected, highly integrated and interdependent crude oil processing facilities and supporting logistical infrastructure (Units), and these Units are continuously improved. Improvements consist of the addition of new Units and betterments of existing Units. We plan for these improvements by developing a multi-year capital program that is updated and revised based on changing internal and external factors. Depreciation of property assets used in our refining segment is recorded on a straight-line basis over the estimated useful lives of these assets primarily using the composite method of depreciation. We maintain a separate composite group of property assets for each of our refineries. We estimate the useful life of each group based on an evaluation of the property assets comprising the group, and such evaluations consist of, but are not limited to, the physical inspection of the assets to determine their condition, consideration of the manner in which the assets are maintained, assessment of the need to replace assets, and evaluation of the manner in which improvements impact the useful life of the group. The estimated useful lives of our composite groups range primarily from 25 to 30 years. Under the composite method of depreciation, the cost of an improvement is added to the composite group to which it relates and is depreciated over that group’s estimated useful life. We design improvements to our refineries in accordance with engineering specifications, design standards, and practices accepted in our industry, and these improvements have design lives consistent with our estimated useful lives. Therefore, we believe the use of the group life to depreciate the cost of improvements made to the group is reasonable because the estimated useful life of each improvement is consistent with that of the group. Also under the composite method of depreciation, the historical cost of a minor property asset (net of salvage value) that is retired or replaced is charged to accumulated depreciation and no gain or loss is recognized in income. However, a gain or loss is recognized in income for a major property asset that is retired, replaced, sold, or for an abnormal disposition of a property asset (primarily involuntary conversions). Gains and losses are reflected in depreciation and amortization expense, unless such amounts are reported separately due to materiality. Depreciation of property assets used in our ethanol segment is recorded on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the related asset. Assets acquired under capital leases are amortized on a straight-line basis over (i) the lease term if transfer of ownership does not occur at the end of the lease term or (ii) the estimated useful life of the asset if transfer of ownership does occur at the end of the lease term. Deferred Charges and Other Assets “Deferred charges and other assets, net” primarily include the following: • turnaround costs, which are incurred in connection with planned major maintenance activities at our refineries and ethanol plants and which 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, which are deferred when incurred and amortized on a straight-line basis over the estimated useful life of the specific catalyst; • income taxes receivable; • investments in joint ventures accounted for under the equity method; • intangible assets; and • goodwill. Impairment of Assets Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. A long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discounted estimated net cash flows or other appropriate methods. We evaluate our equity method investments for impairment when there is evidence that we may not be able to recover the carrying amount of our investments or the investee is unable to sustain an earnings capacity that justifies the carrying amount. A loss in the value of an investment that is other than a temporary decline is recognized currently in income, and is based on the difference between the estimated current fair value of the investment and its carrying amount. Asset Retirement Obligations We record a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to retire a tangible long-lived asset at the time we incur that liability, which is generally when the asset is purchased, constructed, or leased. We record the liability when we have a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability’s fair value. We have obligations with respect to certain of our assets related to our refining and ethanol segments to clean and/or dispose of various component parts of the assets at the time they are retired. However, these component parts can be used for extended and indeterminate periods of time as long as they are properly maintained and/or upgraded. It is our practice and current intent to maintain all our assets and continue making improvements to those assets based on technological advances. As a result, we believe that our assets related to our refining and ethanol segments have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire such assets cannot reasonably be estimated at this time. We will recognize a liability at such time when sufficient information exists to estimate a date or range of potential settlement dates that is needed to employ a present value technique to estimate fair value. Environmental Matters Liabilities for future remediation costs are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on the completion of investigations or other studies or a commitment to a formal plan of action. Amounts recorded for environmental liabilities have not been reduced by possible recoveries from third parties and have not been measured on a discounted basis. Legal Contingencies We are subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. We accrue losses associated with legal claims when such losses are probable and reasonably estimable. If we determine that a loss is probable and cannot estimate a specific amount for that loss but can estimate a range of loss, the best estimate within the range is accrued. If no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. Estimates are adjusted as additional information becomes available or circumstances change. Legal defense costs associated with loss contingencies are expensed in the period incurred. Foreign Currency Translation Generally, our international subsidiaries use their local currency as their functional currency. Balance sheet amounts are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Income statement amounts are translated into U.S. dollars using the exchange rates in effect at the time the underlying transactions occur. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive loss. Revenue Recognition Our revenues are primarily generated from contracts with customers. We generate revenue from contracts with customers from the sale of products by our refining and ethanol segments. Our VLP segment generates intersegment revenues from transportation and terminaling activities provided to our refining segment that are eliminated in consolidation. Revenues are recognized when we satisfy our performance obligation to transfer products to our customers, which typically occurs at a point in time upon shipment or delivery of the products, and for an amount that reflects the transaction price that is allocated to the performance obligation. The customer is able to direct the use of, and obtain substantially all of the benefits from, the products at the point of shipment or delivery. As a result, we consider control to have transferred upon shipment or delivery because we have a present right to payment at that time, the customer has legal title to the asset, we have transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset. Our contracts with customers state the final terms of the sale, including the description, quantity, and price for goods sold. Payment is typically due in full within two to ten days of delivery. In the normal course of business, we generally do not accept product returns. The transaction price is the consideration that we expect to be entitled to in exchange for our products. The transaction price for substantially all of our contracts is generally based on commodity market pricing (i.e., variable consideration). As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. Some of our contracts also contain variable consideration in the form of sales incentives to our customers, such as discounts and rebates. For contracts that include variable consideration, we estimate the factors that determine the variable consideration in order to establish the transaction price. We have elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer (e.g., sales tax, use tax, value-added tax, etc.). We continue to include in the transaction price excise taxes that are imposed on certain inventories in our international operations. The amount of such taxes is provided in supplemental information in a footnote on the statements of income. There are instances where we provide shipping services in relation to the goods sold to our customer. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are included in cost of materials and other. We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities rather than as a promised service and we have included these activities in cost of materials and other. We enter into certain purchase and sale arrangements with the same counterparty that are deemed to be made in contemplation of one another. We combine these transactions and present the net effect in cost of materials and other. We also enter into refined petroleum product exchange transactions to fulfill sales contracts with our customers by accessing refined petroleum products in markets where we do not operate our own refineries. These refined petroleum product exchanges are accounted for as exchanges of nonmonetary assets, and no revenues are recorded on these transactions. Cost Classifications “Cost of materials and other” primarily includes the cost of materials that are a component of our products sold. These costs include (i) the direct cost of materials (such as crude oil and other refinery feedstocks, refined petroleum products and blendstocks, and ethanol feedstocks and products) that are a component of our products sold; (ii) costs related to the delivery (such as shipping and handling costs) of products sold; (iii) costs related to our environmental credit obligations to comply with various governmental and regulatory programs (such as the cost of Renewable Identification Numbers (RINs) as required by the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard and emission credits under various cap-and-trade systems, as defined in Note 19 ); (iv) gains and losses on our commodity derivative instruments; and (v) certain excise taxes. “Operating expenses (excluding depreciation and amortization expense)” include costs to operate our refineries, ethanol plants, and logistics assets, except for depreciation and amortization expense. These costs primarily include employee-related expenses, energy and utility costs, catalysts and chemical costs, and repair and maintenance expenses. “Depreciation and amortization expense” associated with our operations is separately presented in our statement of income as a component of cost of sales and general and administrative expenses and is disclosed by reportable segment in Note 17 . “Other operating expenses” include costs, if any, incurred by our reportable segments that are not associated with our cost of sales. Environmental Compliance Program Costs We purchase credits in the open market to meet our obligations under various environmental compliance programs. We purchase biofuel credits (primarily RINs in the U.S.) to comply with government regulations that require us to blend a certain percentage of biofuels into the products we produce. To the degree that we are unable to blend biofuels at the required percentage, we must purchase biofuel credits to meet our obligation. We purchase greenhouse gas (GHG) emission credits to comply with government regulations concerning various GHG emission programs, including cap-and-trade systems. These programs are described in Note 20 under “Environmental Compliance Program Price Risk.” The costs of purchased biofuel credits and GHG emission credits are charged to cost of materials and other as such credits are needed to satisfy our obligation. To the extent we have not purchased enough credits to satisfy our obligation as of the balance sheet date, we charge cost of materials and other for such deficiency based on the market price of the credits as of the balance sheet date, and we record a liability for our obligation to purchase those credits. See Note 19 for disclosure of our fair value liability. Stock-Based Compensation Compensation expense for our share-based compensation plans is based on the fair value of the awards granted and is recognized in income on a straight-line basis over the shorter of (i) the requisite service period of each award or (ii) the period from the grant date to the date retirement eligibility is achieved if that date is expected to occur during the vesting period established in the award. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by unrecognized tax benefits, if such items may be available to offset the unrecognized tax benefit. Stranded income tax effects are released from accumulated other comprehensive loss to retained earnings on an individual item basis as those items are reclassified into income. We have elected to classify any interest expense and penalties related to the underpayment of income taxes in income tax expense. We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense. Earnings per Common Share Earnings per common share is computed by dividing net income attributable to Valero stockholders by the weighted-average number of common shares outstanding for the year. Participating securities are included in the computation of basic earnings per share using the two-class method. Earnings per common share – assuming dilution is computed by dividing net income attributable to Valero stockholders by the weighted-average number of common shares outstanding for the year increased by the effect of dilutive securities. Potentially dilutive securities are excluded from the computation of earnings per common share – assuming dilution when the effect of including such shares would be antidilutive. Financial Instruments Our financial instruments include cash and cash equivalents, receivables, payables, debt, capital lease obligations, commodity derivative contracts, and foreign currency derivative contracts. The estimated fair values of these financial instruments approximate their carrying amounts, except for certain debt as discussed in Note 19 . Derivatives and Hedging All derivative instruments, not designated as normal purchases or sales, are recorded in the balance sheet as either assets or liabilities measured at their fair values with changes in fair value recognized currently in income. To manage commodity price risk, we use economic hedges, which are derivative instruments not designated as fair value or cash flow hedges, and we also use fair value and cash flow hedges from time to time. The cash flow effects of all of our derivative instruments are reflected in operating activities in the statements of cash flows. Accounting Pronouncements Adopted During 2018 Topic 606 On January 1, 2018, we adopted the provisions of Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers,” (Topic 606). This standard clarifies the principles for recognizing revenue and supersedes previous revenue recognition requirements under “Revenue Recognition (Topic 605).” We adopted the provisions of Topic 606 using the modified retrospective method of adoption as permitted by the standard. Under this method, the cumulative effect of initially applying the standard is recognized as an adjustment to the opening balance of retained earnings, and revenues reported in the periods prior to the date of adoption are not changed. We elected to apply the transition guidance for Topic 606 only to contracts that were not completed as of the date of adoption. There was no material impact to our financial position as a result of adopting Topic 606; therefore, there was no cumulative-effect adjustment to retained earnings as of January 1, 2018, and there was no material impact to our financial statements as of and for the year ended December 31, 2018 . Our revenue recognition accounting policy described above has been updated in conjunction with our adoption of Topic 606, but our previous policy has been omitted because the adoption of Topic 606 had no material impact to us as previously described. ASU No. 2016-01 On January 1, 2018, we adopted the provisions of ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU enhances the reporting model for financial instruments regarding certain aspects of recognition, measurement, presentation, and disclosure. We adopted the provisions of this ASU using the cumulative-effect method of adoption as required by the ASU. The adoption of this ASU did not affect our financial position or our results of operations as of or for the year ended December 31, 2018 , but resulted in reduced disclosures as it eliminated the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. ASU No. 2017-04 Effective October 1, 2018, we early adopted the provisions of ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the provisions of this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill, and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the impairment charge should not exceed the carrying amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The adoption of this ASU did not affect our financial position or results of operations and did not result in additional disclosures because it is applied prospectively to impairment tests performed after the date of adoption. ASU No. 2017-09 On January 1, 2018, we adopted the provisions of ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” This ASU reduces diversity in practice, as well as reduces cost and complexity regarding a change to the terms or conditions of a share-based payment award. The adoption of this ASU did not have an immediate effect on our financial position or results of operations as it is applied prospectively to an award modified on or after adoption. ASU No. 2018-02 On January 1, 2018, we adopted the provisions of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” (ASU No. 2018-02). This ASU allows for the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (Tax Reform) to be reclassified from accumulated other comprehensive income to retained earnings. We elected to reclassify the stranded income tax effects resulting from Tax Reform from accumulated other comprehensive income to retained earnings as of the beginning of the interim period of adoption. The adoption of this ASU did not affect our financial position or results of operations but resulted in the reclassification of $91 million of income tax benefits related to Tax Reform from accumulated other comprehensive loss to retained earnings as of January 1, 2018 as presented in our statement of equity and in Note 11 under “ Accumulated Other Comprehensive Loss .” ASU No. 2018-05 In March 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” (ASU No. 2018-05) to amend certain SEC material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. See Note 15 for a discussion of the impact of this ASU. ASU No. 2018-13 Effective October 1, 2018, we adopted all of the provisions of ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU improves the effectiveness of disclosures in the notes to financial statements by removing, modifying, and adding certain disclosure requirements for fair value measurements. We are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain provisions of this ASU, primarily related to disclosures, require the prospective method of adoption, with the remaining provisions applied retrospectively. The early adoption of this ASU did not affect our financial position or results of operations, but resulted in revised disclosures as discussed above. ASU No. 2018-14 Effective December 31, 2018, we adopted the provisions of ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU improves the effectiveness of disclosures in the notes to financial statements by removing, modifying, and adding certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. We are no longer required to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, but we are required to (i) disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and (ii) provide an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The early adoption of this ASU did not affect our financial position or results of operations, but resulted in revised disclosures as discussed above. Accounting Pronouncements Adopted on January 1, 2019 Topic 842 In February 2016, the FASB issued ASC Topic 842, “Leases,” (Topic 842) to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. We adopted this new standard on January 1, 2019 using the optional transition method; however, we did not have a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption as noted below, but we will apply the new disclosure requirements beginning in 2019. The new standard provid |
Acquisitions and Merger
Acquisitions and Merger | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND MERGER | 2. ACQUISITIONS AND MERGER Peru Acquisition On May 14, 2018 , we acquired 100 percent of the issued and outstanding equity interests in Pure Biofuels del Peru S.A.C. (Pure Biofuels) from Pegasus Capital Advisors L.P. and various minority equity holders. Pure Biofuels markets refined petroleum products through its logistics assets in Peru. Pure Biofuels owns a terminal at the Port of Callao, near Lima, with approximately 1 million barrels of storage capacity for refined petroleum and renewable products. Through one of its subsidiaries, Pure Biofuels also owns a 180,000 -barrel storage terminal in Paita, in northern Peru, which is scheduled to commence operations in the second half of 2019, pending regulatory approvals. We paid $468 million from available cash on hand, of which $132 million was for working capital. This acquisition, which is referred to as the Peru Acquisition, is consistent with our general business strategy and broadens the geographic diversity of our refining segment. This acquisition was accounted for as a business acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, based on an independent appraisal that was completed in the fourth quarter of 2018 (in millions). During the third and fourth quarters of 2018, we recognized immaterial adjustments to the preliminary amounts recorded for the Peru Acquisition with a corresponding adjustment to goodwill due to the completion of the independent appraisal. These adjustments did not have a material effect on our results of operations for the year ended December 31, 2018. 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 Deferred charges and other assets primarily include identifiable intangible assets of $200 million and goodwill of $260 million . Identifiable intangible assets, which consist of customer contracts and relationships, are amortized on a straight-line basis over ten years . Goodwill is calculated as the excess of the consideration transferred over the estimated fair values of the underlying tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill represents the future economic benefits expected to be recognized from our expansion into the Latin American refined petroleum products markets arising from other assets acquired that were not individually identified and separately recognized. We determined that the entire balance of goodwill is related to the refining segment. None of the goodwill is deductible for tax purposes. Our statements of income include the results of operations of Pure Biofuels since the date of acquisition, and such results are reflected in the refining segment. Results of operations since the date of acquisition, supplemental pro forma financial information, and acquisition-related costs have not been presented for the Peru Acquisition as such information is not material to our results of operations. Acquisition of Ethanol Plants On November 15, 2018 , we acquired three ethanol plants from two subsidiaries of Green Plains Inc. for total cash consideration of $320 million including working capital of $20 million . The ethanol plants are located in Bluffton, Indiana; Lakota, Iowa; and Riga, Michigan with a combined ethanol production capacity of 280 million gallons per year. This acquisition was accounted for as an asset acquisition. Merger with VLP On January 10, 2019, we completed our acquisition of all of the outstanding publicly held common units of VLP pursuant to a definitive Agreement and Plan of Merger (Merger Agreement, and together with the transactions contemplated thereby, the Merger Transaction) with VLP. Upon completion of the Merger Transaction, each outstanding publicly held common unit was converted into the right to receive $42.25 per common unit in cash without any interest thereon, and all such publicly traded common units were automatically canceled and ceased to exist. Upon completion of the Merger Transaction, we paid aggregate merger consideration of $950 million , which was funded with available cash on hand. We consolidate the financial statements of VLP (see Note 12 ) and we reflect noncontrolling interests on our balance sheet for the portion of VLP’s partners’ capital held by VLP’s public common unitholders. However, upon completion of the Merger Transaction, VLP became our indirect wholly owned subsidiary and, as a result, we will no longer reflect noncontrolling interests on our balance sheet with respect to VLP. In addition, we will no longer attribute a portion of VLP’s net income to noncontrolling interests. Because we had a controlling financial interest in VLP before the merger and retained our controlling financial interest in VLP after the merger, the change in our ownership interest in VLP as a result of the merger was accounted for as an equity transaction. Accordingly, we did not recognize a gain or loss on the merger. |
Aruba Disposition
Aruba Disposition | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ARUBA DISPOSITION | 3. ARUBA DISPOSITION Effective October 1, 2016, we (i) transferred ownership of all of our assets in Aruba, other than certain hydrocarbon inventories and working capital, to Refineria di Aruba N.V., an entity wholly-owned by the Government of Aruba (GOA), (ii) settled our obligations under various agreements with the GOA, including agreements that required us to dismantle our leasehold improvements under certain conditions, and (iii) sold the working capital of our Aruba operations, including hydrocarbon inventories, to the GOA and CITGO (defined below). We refer to this transaction as the “Aruba Disposition.” The agreements associated with the Aruba Disposition were finalized in September 2016, including approval of such agreements by the Aruba Parliament. We no longer own any assets or have any operations in Aruba. In September 2016 and in connection with the Aruba Disposition, our U.S. subsidiaries were unable to collect outstanding debt obligations owed to them by our Aruba subsidiaries, which resulted in the recognition by us of an income tax benefit in the U.S. of $42 million during the year ended December 31, 2016. We had no income tax effect in Aruba from the cancellation of debt or other effects of the Aruba Disposition because of net operating loss carryforwards associated with our operations in Aruba against which we had previously recorded a full valuation allowance. Prior to the Aruba Disposition, we recognized an asset impairment loss of $56 million in June 2016 representing all of the remaining carrying value of our long-lived assets in Aruba. These assets were primarily related to our crude oil and refined petroleum products terminal and transshipment facility in Aruba (collectively, the Aruba Terminal), which were included in our refining segment. We recognized the impairment loss at that time because we concluded that it was more likely than not that we would ultimately transfer ownership of these assets to the GOA as a result of agreements entered into in June 2016 between the GOA, CITGO Aruba Refining N.V. (CAR), and CITGO Petroleum Corporation (together with CAR and certain other affiliates, collectively, CITGO) providing for, among other things, the GOA’s lease of those assets to CITGO. (See Note 19 for disclosure related to the method to determine fair value.) |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
RECEIVABLES | 4. RECEIVABLES Receivables consisted of the following (in millions): December 31, 2018 2017 Receivables from contracts with customers $ 4,673 $ 5,686 Receivables from certain purchase and sale arrangements 2,311 1,098 Commodity derivative and foreign currency contract receivables 229 102 Other receivables 166 69 Total receivables 7,379 6,955 Allowance for doubtful accounts (34 ) (33 ) Receivables, net $ 7,345 $ 6,922 There were no significant changes in our allowance for doubtful accounts during the years ended December 31, 2018 , 2017 , and 2016 . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventories consisted of the following (in millions): December 31, 2018 2017 Refinery feedstocks $ 2,292 $ 2,427 Refined petroleum products and blendstocks 3,678 3,459 Ethanol feedstocks and products 298 242 Materials and supplies 264 256 Inventories $ 6,532 $ 6,384 As of December 31, 2018 and 2017 , the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $1.5 billion and $3.0 billion , respectively, and our non-LIFO inventories accounted for $1.1 billion and $1.0 billion , respectively, of our total inventories. During the year ended December 31, 2016 , we recorded a change in our lower of cost or market inventory valuation reserve that resulted in a net benefit to our results of operations of $747 million . |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 6. PROPERTY, PLANT, AND EQUIPMENT Major classes of property, plant, and equipment, including assets held under capital leases, consisted of the following (in millions): December 31, 2018 2017 Land $ 416 $ 411 Crude oil processing facilities 30,721 30,109 Transportation and terminaling facilities 4,935 4,335 Grain processing equipment 1,212 903 Administrative buildings 953 910 Other 2,276 2,068 Construction in progress 1,960 1,274 Property, plant, and equipment, at cost 42,473 40,010 Accumulated depreciation (13,625 ) (12,530 ) Property, plant, and equipment, net $ 28,848 $ 27,480 Our assets under capital leases are presented in the table above within “Other” and consist of various types of assets that primarily support our refining operations and totaled $711 million and $635 million as of December 31, 2018 and 2017 , respectively. Accumulated amortization on assets under capital leases was $106 million and $72 million as of December 31, 2018 and 2017 , respectively. Depreciation expense for the years ended December 31, 2018 , 2017 , and 2016 was $1.4 billion , $1.3 billion , and $1.3 billion , respectively. |
Deferred Charges and Other Asse
Deferred Charges and Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEFERRED CHARGES AND OTHER ASSETS | 7. DEFERRED CHARGES AND OTHER ASSETS “Deferred charges and other assets, net” consisted of the following (in millions): December 31, 2018 2017 Deferred turnaround and catalyst costs, net $ 1,749 $ 1,520 Income taxes receivable 343 673 Investments in joint ventures 542 530 Intangible assets, net 307 142 Goodwill 260 — Other 431 501 Deferred charges and other assets, net $ 3,632 $ 3,366 Amortization expense for the deferred charges and other assets shown above was $668 million , $650 million , and $575 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The increase in intangible assets, net and goodwill resulted primarily from the Peru Acquisition as described in Note 2 . |
Accrued Expenses and Other Long
Accrued Expenses and Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES | 8. ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES Accrued expenses and other long-term liabilities consisted of the following (in millions): Accrued Expenses Other Long-Term Liabilities December 31, December 31, 2018 2017 2018 2017 Defined benefit plan liabilities (see Note 13) $ 43 $ 33 $ 654 $ 776 Wage and other employee-related liabilities 302 278 109 111 Uncertain income tax position liabilities (see Note 15) — — 721 723 Repatriation tax liability (see Note 15) (a) — — 603 597 Environmental liabilities (see Note 10) 29 30 327 232 Environmental credit obligations (see Note 19) 34 152 — — Accrued interest expense 93 105 — — Other accrued liabilities 129 114 453 290 Accrued expenses and other long-term liabilities $ 630 $ 712 $ 2,867 $ 2,729 __________________________ (a) The current portion of repatriation tax liability is included in income taxes payable. There was no current portion of repatriation tax liability as of December 31, 2018 and $114 million as of December 31, 2017 . |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt and Capital Lease Obligations [Abstract] | |
DEBT AND CAPITAL LEASE OBLIGATIONS | 9. DEBT AND CAPITAL LEASE OBLIGATIONS Debt, at stated values, and capital lease obligations consisted of the following (in millions): Final Maturity December 31, 2018 2017 Credit facilities: Valero Revolver 2020 $ — $ — VLP Revolver 2020 — 410 IEnova Revolver 2028 109 — Canadian Revolver 2019 — — Accounts receivable sales facility 2019 100 100 Public debt: Valero Senior Notes 6.625% 2037 1,500 1,500 3.4% 2026 1,250 1,250 6.125% 2020 850 850 4.35 % 2028 750 — 9.375% 2019 — 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 — Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0% 2040 300 300 Debenture, 7.65% 2026 100 100 Other debt Various 50 49 Net unamortized debt issuance costs and other (80 ) (73 ) Total debt 8,503 8,310 Capital lease obligations 606 562 Total debt and capital lease obligations 9,109 8,872 Less current portion 238 122 Debt and capital lease obligations, less current portion $ 8,871 $ 8,750 Credit Facilities Valero Revolver We have a $3 billion revolving credit facility (the Valero Revolver) with a group of financial institution lenders that matures in November 2020 . The Valero Revolver also provides for the issuance of letters of credit of up to $2.0 billion . Outstanding borrowings under the Valero Revolver bear interest, at our option, at either (i) the adjusted LIBO rate (as defined in the Valero Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (ii) the alternate base rate (as defined in the Valero Revolver) plus the applicable margin. The Valero Revolver also requires payments for customary fees, including facility fees, letter of credit participation fees, and administrative agent fees. The interest rate and facility fees under the Valero Revolver are subject to adjustment based upon the credit ratings assigned to our senior unsecured debt. We had no borrowings or repayments under the Valero Revolver during the years ended December 31, 2018 , 2017 , and 2016 . VLP Revolver As of December 31, 2018 and 2017 , VLP had a $750 million senior unsecured revolving credit facility (the VLP Revolver) with a group of lenders that was scheduled to mature in November 2020 . However, on January 10, 2019 , in connection with the completion of the Merger Transaction as described in Note 2 , the VLP Revolver was terminated. Outstanding borrowings under the VLP Revolver bore interest, at VLP’s option, at either (i) the adjusted LIBO rate (as defined in the VLP Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (ii) the alternate base rate (as defined in the VLP Revolver) plus the applicable margin. As of December 31, 2017 , the variable rate was 2.875 percent. The VLP Revolver required payments for customary fees, including commitment fees, letter of credit participation fees, and administrative agent fees. During the year ended December 31, 2018 , VLP repaid the outstanding balance of $410 million on the VLP Revolver using proceeds from its public offering of $500 million 4.5 percent Senior Notes as described in “Public Debt” below. During the year ended December 31, 2017 , VLP borrowed $380 million under the revolver and made no repayments. During the year ended December 31, 2016 , VLP borrowed $349 million under the revolver and repaid $494 million . IEnova Revolver In February 2018, Central Mexico Terminals (as described in Note 12 ) entered into a combined $340 million unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 12 ) that matures in February 2028 . IEnova may terminate this revolver at any time and demand repayment of all outstanding amounts; therefore, all outstanding borrowings are reflected in current portion of debt. The IEnova Revolver is available only to the operations of Central Mexico Terminals, and the creditors of Central Mexico Terminals do not have recourse against us. Outstanding borrowings under this revolver bear interest at the three-month LIBO rate for the applicable interest period in effect from time to time plus the applicable margin. The interest rate under this revolver is subject to adjustment, with agreement by both parties, based upon changes in market conditions. As of December 31, 2018 , the variable rate was 6.046 percent. During the year ended December 31, 2018 , Central Mexico Terminals borrowed $109 million and had no repayments under this revolver. Canadian Revolver In November 2018, one of our Canadian subsidiaries amended its committed revolving credit facility (the Canadian Revolver) to increase the borrowing capacity from C$75 million to C$150 million under which it may borrow and obtain letters of credit and to extend the maturity date from November 2018 to November 2019 . We had no borrowings or repayments under this revolver during the years ended December 31, 2018 , 2017 , and 2016 . Accounts Receivable Sales Facility We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell up to $1.3 billion of eligible trade receivables on a revolving basis. In July 2018, we amended our agreement to extend the maturity date to July 2019 . Under this program, one of our marketing subsidiaries (Valero Marketing) sells eligible receivables, without recourse, to another of our subsidiaries (Valero Capital), whereupon the receivables are no longer owned by Valero Marketing. Valero Capital, in turn, sells an undivided percentage ownership interest in the eligible receivables, without recourse, to the third-party entities and financial institutions. To the extent that Valero Capital retains an ownership interest in the receivables it has purchased from Valero Marketing, such interest is included in our financial statements solely as a result of the consolidation of the financial statements of Valero Capital with those of Valero Energy Corporation; the receivables are not available to satisfy the claims of the creditors of Valero Marketing or Valero Energy Corporation. As of December 31, 2018 and 2017 , $1.8 billion and $2.3 billion , respectively, of our accounts receivable composed the designated pool of accounts receivable included in the program. All amounts outstanding under the accounts receivable sales facility are reflected as debt on our balance sheets and proceeds and repayments are reflected as cash flows from financing activities on the statements of cash flows. As of December 31, 2018 and 2017 , the variable interest rate on the accounts receivable sales facility was 3.0618 percent and 2.0387 percent, respectively. During the years ended December 31, 2018 , 2017 , and 2016 , we had no proceeds from or repayments under the accounts receivable sales facility. Summary of Credit Facilities We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted): December 31, 2018 Facility Amount Maturity Date Outstanding Borrowings Letters of Credit Issued Availability Committed facilities: Valero Revolver $ 3,000 November 2020 $ — $ 57 $ 2,943 Canadian Revolver C$ 150 November 2019 C$ — C$ 5 C$ 145 Accounts receivable sales facility $ 1,300 July 2019 $ 100 n/a $ 1,200 Letter of credit facility $ 100 November 2019 n/a $ — $ 100 Committed facilities of VIEs (a): VLP Revolver (b) $ 750 November 2020 $ — $ — $ 750 IEnova Revolver $ 340 February 2028 $ 109 n/a $ 231 Uncommitted facilities: Letter of credit facilities n/a n/a n/a $ 229 n/a __________________________ (a) Creditors of our VIEs do not have recourse against us. (b) The VLP Revolver was terminated on January 10, 2019 . See “VLP Revolver” above. In November 2018, our committed letter of credit facility was amended to extend the maturity date from November 2018 to November 2019 . Letters of credit issued as of December 31, 2018 expire at various times in 2019 through 2020 . We are charged letter of credit issuance fees under our various uncommitted short-term bank credit facilities. These uncommitted credit facilities have no commitment fees or compensating balance requirements. Public Debt During the year ended December 31, 2018 , the following activity occurred: • 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. • 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. On January 10, 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 these notes. During the year ended December 31, 2017 , there was no issuance or redemption activity related to our public debt. During the year ended December 31, 2016 , the following activity occurred: • We issued $1.25 billion of 3.4 percent Senior Notes due September 15, 2026 . Proceeds from this debt issuance totaled $1.246 billion before deducting the underwriting discount and other debt issuance costs. • We redeemed our 6.125 percent Senior Notes due June 15, 2017 for $778 million , or 103.70 percent of stated value. • We redeemed our 7.2 percent Senior Notes due October 15, 2017 for $213 million , or 106.27 percent of stated value. • VLP issued $500 million of 4.375 percent Senior Notes due December 15, 2026 . Proceeds from this debt issuance totaled $500 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 $494 million on the VLP Revolver. On January 10, 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 these notes. Other Debt During the year ended December 31, 2018 , we retired $137 million of debt assumed in connection with the Peru Acquisition with available cash on hand. Capital Lease Obligations We have capital lease obligations that mature at various dates through 2046 for storage tanks, terminal facilities, and other assets that are used in our refining operations. During the years ended December 31, 2018 and 2017 , we recognized capital lease assets and related obligations totaling $63 million and $502 million , respectively. These capital lease agreements were primarily for the lease of storage tanks. Other Disclosures Interest and debt expense, net of capitalized interest is comprised as follows (in millions): Year Ended December 31, 2018 2017 2016 Interest and debt expense $ 557 $ 539 $ 511 Less capitalized interest 87 71 65 Interest and debt expense, net of capitalized interest $ 470 $ 468 $ 446 Our credit facilities and other debt arrangements contain various customary restrictive covenants, including cross-default and cross-acceleration clauses. Principal maturities for our debt obligations and future minimum rentals on capital lease obligations as of December 31, 2018 were as follows (in millions): Debt Capital Lease Obligations 2019 $ 214 $ 69 2020 855 65 2021 15 62 2022 5 64 2023 20 65 Thereafter 7,474 957 Net unamortized debt issuance costs and other (80 ) n/a Total minimum lease payments n/a 1,282 Less amount representing interest n/a 676 Total $ 8,503 $ 606 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Operating Leases We have long-term operating lease commitments for land and office facilities; time charters for ocean-going tankers and coastal vessels (i.e., marine transportation assets); railcars; facilities and equipment related to industrial gases and power used in our operations; machinery and equipment used in our refining and ethanol operations; and various facilities and equipment used in the storage, transportation, production, and sale of refinery feedstock, refined petroleum product and corn inventories. In addition to minimum lease payments, some arrangements contain provisions for contingent lease payments. Certain leases for the storage and transportation of feedstock and refined petroleum products provide for contingent lease payments based on throughput volumes in excess of a base amount, while other leases for time charters of ocean-going tankers and coastal vessels contain payment provisions that are contingent on usage. Additionally, rental increases that are not scheduled in the lease are considered contingent lease payments. In most cases, we expect that in the normal course of business, our leases will be renewed or replaced by other leases. As of December 31, 2018 , our future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year were as follows (in millions): 2019 $ 359 2020 245 2021 178 2022 146 2023 123 Thereafter 514 Total minimum rental payments $ 1,565 Rental expense, net of sublease rental income was as follows (in millions): Year Ended December 31, 2018 2017 2016 Minimum rental expense $ 515 $ 691 $ 739 Contingent rental expense 19 21 70 Total rental expense 534 712 809 Less sublease rental income 31 54 31 Rental expense, net of sublease rental income $ 503 $ 658 $ 778 Purchase Obligations We have various purchase obligations under certain crude oil and other feedstock supply arrangements, industrial gas supply arrangements (such as hydrogen supply arrangements), natural gas supply arrangements, and various throughput, transportation and terminaling agreements. We enter into these contracts to ensure an adequate supply of feedstock and utilities and adequate storage capacity to operate our refineries and ethanol plants. Substantially all of our purchase obligations are based on market prices or adjustments based on market indices. Certain of these purchase obligations include fixed or minimum volume requirements, while others are based on our usage requirements. None of these obligations is associated with suppliers’ financing arrangements. These purchase obligations are not reflected as liabilities. Other Commitments MVP Terminal We have a 50 percent membership interest in MVP Terminalling, LLC (MVP), a Delaware limited liability company formed in September 2017 with a subsidiary of Magellan Midstream Partners LP (Magellan), to construct, own, and operate the Magellan Valero Pasadena marine terminal (MVP Terminal) located adjacent to the Houston Ship Channel in Pasadena, Texas. The MVP Terminal will contain (i) approximately 5 million barrels of storage capacity, (ii) a dock with two ship berths, and (iii) a three-bay truck rack facility. In connection with our terminaling agreement with MVP, described below, we will have dedicated use of (i) approximately 4 million barrels of storage, (ii) one ship berth, and (iii) the three-bay truck rack facility. Construction of phases one and two of the project began in 2017 with a total estimated cost of approximately $840 million , of which we have committed to contribute 50 percent (approximately $420 million ). The project could expand up to four phases with a total project cost of approximately $1.4 billion if warranted by additional demand and agreed to by Magellan and us. Since inception, we have contributed $247 million to MVP, of which $166 million was contributed during the year ended December 31, 2018 . Concurrent with the formation of MVP, we entered into a terminaling agreement with MVP to utilize the MVP Terminal upon completion of phase two, which is expected to occur in early 2020. The terminaling agreement has an initial term of 12 years with two five -year automatic renewals, and year-to-year renewals thereafter. Due to our membership interest in MVP and because we determined that the terminaling agreement was a capital lease, we are the accounting owner of the MVP Terminal during the construction period. Accordingly, as of December 31, 2018 , we recorded an asset of $539 million in property, plant, and equipment representing 100 percent of the construction costs incurred by MVP, as well as capitalized interest incurred by us, and a long-term liability of $292 million payable to Magellan. The amounts recorded for the portion of the construction costs associated with the payable to Magellan are noncash investing and financing items, respectively. On January 1, 2019, as a result of our adoption of Topic 842 as described in Note 1 , we derecognized the asset and liability related to MVP discussed above and recorded our equity investment in MVP of $247 million , which will be included in deferred charges and other assets. We will recognize a finance lease asset and liability upon commencement of our terminaling arrangement with MVP as described above . Central Texas Pipeline We have committed to a 40 percent undivided interest in a project with a subsidiary of Magellan to jointly build an estimated 130 -mile, 20 -inch refined petroleum products pipeline with a capacity of up to 150,000 barrels per day from Houston to Hearne, Texas. The pipeline is expected to be completed in mid-2019. The estimated cost of our 40 percent undivided interest in this pipeline is $170 million . Since inception, expenditures have totaled $80 million , of which $73 million was spent during the year ended December 31, 2018 . Sunrise Pipeline System Effective January 31, 2018, we entered into a joint ownership agreement with Sunrise Pipeline LLC, a subsidiary of Plains All American Pipeline, L.P. (Plains), that provides us a 20 percent undivided interest in the Sunrise Pipeline System expansion to be constructed by Plains. The Sunrise Pipeline System contains (i) a 262 -mile, 24 -inch crude oil pipeline (the Sunrise Pipeline) that originates at Plains’ terminal in Midland, Texas and terminates at Plains’ station in Wichita Falls, Texas with throughput capacity of approximately 500,000 barrels per day, and (ii) two 270,000 shell barrel capacity tanks located at the Colorado City, Texas station. The Sunrise Pipeline System expansion was placed in service in the fourth quarter of 2018. Expenditures totaled $139 million for the year ended December 31, 2018 . Environmental Matters We are involved, together with several other companies, in an environmental cleanup in the Village of Hartford, Illinois (the Village) and during 2015, one of these companies assumed the ongoing environmental cleanup in the Village pursuant to a federal court order. We had previously conducted an initial response in the Village, along with other companies, pursuant to an administrative order issued by the U.S. EPA. The parties involved in the initial response may have further claims among themselves for costs already incurred. We also continue to be engaged in site assessment and interim measures at the shutdown refinery site, which is adjacent to the Village. In 2018, we entered into a consent order with the Illinois EPA that was approved by the Illinois state court on July 26, 2018. In the consent order, we assumed the underlying liability for full cleanup of the shutdown refinery site, and we recorded an adjustment to our existing environmental liability related to this matter, which did not materially affect our financial position or results of operations as of or for the year ended December 31, 2018 . We continue to seek contribution under Illinois law in state court and are pursuing claims under the Comprehensive Environmental Response, Compensation and Liability Act in federal court from other potentially responsible parties. Factors underlying the expected cost of the cleanup are subject to change from time to time, and actual results may vary significantly from the current estimate. Self-Insurance We are self-insured for certain medical and dental, workers’ compensation, automobile liability, general liability, and property liability claims up to applicable retention limits. Liabilities are accrued for self-insured claims, or when estimated losses exceed coverage limits, and when sufficient information is available to reasonably estimate the amount of the loss. These liabilities are included in accrued expenses and other long-term liabilities. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
EQUITY | 11. EQUITY Share Activity Activity in the number of shares of common stock and treasury stock was as follows (in millions): Common Stock Treasury Stock Balance as of December 31, 2015 673 (200 ) Transactions in connection with stock-based compensation plans — 1 Stock purchases under purchase program — (23 ) 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 ) Preferred Stock We have 20 million shares of preferred stock authorized with a par value of $0.01 per share. No shares of preferred stock were outstanding as of December 31, 2018 or 2017 . Treasury Stock We purchase shares of our common stock as authorized under our common stock purchase program (described below) and to meet our obligations under employee stock-based compensation plans. On July 13, 2015 , our board of directors authorized us to purchase $2.5 billion of our outstanding common stock with no expiration date, and we completed that program during 2017. On September 21, 2016 , our board of directors authorized our purchase of up to an additional $2.5 billion with no expiration date, and we completed that program during 2018. On January 23, 2018 , our board of directors authorized our purchase of up to an additional $2.5 billion (the 2018 Program) with no expiration date. During the years ended December 31, 2018 , 2017 , and 2016 , we purchased $1.5 billion , $1.3 billion , and $1.3 billion , respectively, of our common stock under our programs. As of December 31, 2018 , we have approval under the 2018 Program to purchase approximately $2.2 billion of our common stock. Common Stock Dividends On January 24, 2019 , our board of directors declared a quarterly cash dividend of $0.90 per common share payable on March 5, 2019 to holders of record at the close of business on February 13, 2019 . Valero Energy Partners LP Units On September 16, 2016, VLP entered into an equity distribution agreement pursuant to which VLP offered and sold from time to time their common units having an aggregate offering price of up to $350 million based on amounts, at prices, and on terms determined by market conditions and other factors at the time of the offerings (such continuous offering program, or at-the-market program, referred to as the “ATM Program”). There were no issuances of common units under the ATM Program during the year ended December 31, 2018 . VLP issued 742,897 and 223,083 common units under the ATM Program and received net proceeds of $35 million and $9 million after deducting offering costs during the years ended December 31, 2017 and 2016, respectively. Simultaneous with the Merger Transaction as described in Note 2 , the ATM Program was terminated. Income Tax Effects Related to Components of Other Comprehensive Income (Loss) The tax effects allocated to each component of other comprehensive income (loss) were as follows (in millions): 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 ) Before-Tax Amount Tax Expense (Benefit) Net Amount 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 Year Ended December 31, 2016: Foreign currency translation adjustment $ (415 ) $ — $ (415 ) Pension and other postretirement benefits: Loss arising during the year related to: Net actuarial loss (110 ) (34 ) (76 ) Miscellaneous gain — (8 ) 8 Amounts reclassified into income related to: Net actuarial loss 48 18 30 Prior service credit (36 ) (13 ) (23 ) Net loss on pension and other postretirement benefits (98 ) (37 ) (61 ) Other comprehensive loss $ (513 ) $ (37 ) $ (476 ) Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component, net of tax, were as follows (in millions): Foreign Currency Translation Adjustment Defined Benefit Plan Items Total Balance as of December 31, 2015 $ (605 ) $ (328 ) $ (933 ) Other comprehensive loss before reclassifications (416 ) (68 ) (484 ) Amounts reclassified from accumulated other comprehensive loss — 7 7 Other comprehensive loss (416 ) (61 ) (477 ) 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 of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) — (91 ) (91 ) Balance as of December 31, 2018 $ (1,022 ) $ (485 ) $ (1,507 ) Gains (losses) reclassified out of accumulated other comprehensive loss and into net income were as follows (in millions): Details about Accumulated Other Comprehensive Loss Components Affected Line Item in the Statement of Income Year Ended December 31, 2018 2017 2016 Amortization of items related to defined benefit pension plans: Net actuarial loss $ (63 ) $ (50 ) $ (48 ) (a) Other income, net Prior service credit 29 36 36 (a) Other income, net Curtailment and settlement (7 ) (4 ) — (a) Other income, net (41 ) (18 ) (12 ) Total before tax 9 6 5 Tax benefit Total reclassifications for the year $ (32 ) $ (12 ) $ (7 ) 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 . |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | 12. VARIABLE INTEREST ENTITIES Consolidated VIEs In the normal course of business, we have financial interests in certain entities that have been determined to be VIEs. We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary such that we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. In order to make this determination, we evaluated our contractual arrangements with the VIEs, including arrangements for the use of assets, purchases of products and services, debt, equity, or management of operating activities. The following discussion summarizes our involvement with our VIEs: • 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 whose common limited partner units were traded on the New York Stock Exchange under the trading symbol “VLP.” 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. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the U.S. Gulf Coast and U.S. Mid-Continent regions that are integral to the operations of ten of our refineries. 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. We determined VLP was a VIE because the public limited partners of VLP (i.e., parties other than entities under common control with the general partner) lacked the power to direct the activities of VLP that most significantly impacted its economic performance because they did not have substantive kick-out rights over the general partner or substantive participating rights in VLP. Furthermore, we determined that we were the primary beneficiary of VLP because (i) we were the single decision maker and our general partner interest provides us with the sole power to direct the activities that most significantly impact VLP’s economic performance and (ii) our 66.2 percent limited partner interest and 2.0 percent general partner interest provides us with significant economic rights and obligations. Substantially all of VLP’s revenues were derived from us; therefore, there was limited risk to us associated with VLP’s operations. • Diamond Green Diesel Holdings LLC (DGD) is a joint venture with Darling Green Energy LLC, a subsidiary of Darling Ingredients Inc., that was formed to construct and operate a biodiesel plant that processes animal fats, used cooking oils, and other vegetable oils into renewable green diesel. The plant is located next to our St. Charles Refinery and began operations in June 2013. Our significant agreements with DGD include an operations agreement that outlines our responsibilities as operator of the plant, a debt agreement whereby we financed approximately 60 percent of the construction costs of the plant, and a marketing agreement. As operator, we operate the plant and perform certain day-to-day operating and management functions for DGD as an independent contractor. The operations agreement provides us (as operator) with certain power to direct the activities that most significantly impact DGD’s economic performance. Because this agreement conveys such power to us and is separate from our ownership rights, we determined that DGD was a VIE. For this reason and because we hold a 50 percent ownership interest that provides us with significant economic rights and obligations, we determined that we are the primary beneficiary of DGD. DGD has risk associated with its operations because it generates revenues from third-party customers. • We have terminaling agreements with 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. The three subsidiaries are collectively referred to as Central Mexico Terminals and were previously referred to by us as VPM Terminals. The terminaling agreements represent variable interests because we have determined them to be capital 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 capital 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. The financial position, results of operations, and cash flows of these VIEs are not material to us. The VIEs’ assets can only be used to settle their own obligations and the VIEs’ creditors have no recourse to our assets. We do not provide financial guarantees to our VIEs. Although we have provided credit facilities to some of our VIEs in support of their construction or acquisition activities, these transactions are eliminated in consolidation. Our financial position, results of operations, and cash flows are impacted by our consolidated VIEs’ performance, net of intercompany eliminations, to the extent of our ownership interest in each VIE. The following tables present summarized balance sheet information for the significant assets and liabilities of our VIEs, which are included in our balance sheets (in millions). December 31, 2018 VLP DGD Central Mexico 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 capital lease obligations $ 27 $ 28 $ 118 $ 9 $ 182 Debt and capital lease obligations, less current portion 990 — — 34 1,024 December 31, 2017 VLP DGD Central Mexico Other Total Assets Cash and cash equivalents $ 42 $ 123 $ 1 $ 13 $ 179 Other current assets 2 66 4 — 72 Property, plant, and equipment, net 1,416 435 51 127 2,029 Liabilities Current liabilities, including current portion of debt and capital lease obligations $ 27 $ 33 $ 26 $ 9 $ 95 Debt and capital lease obligations, less current portion 905 — — 43 948 Non-Consolidated VIEs We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. These non-consolidated VIEs are not material to our financial position or results of operations and are primarily accounted for as equity investments. One of our non-consolidated VIEs is MVP, which is described in Note 10 . We have a 50 percent membership interest in MVP, which was formed to construct, own, and operate the MVP Terminal. We determined MVP is a VIE because the power to direct the activities that most significantly impact its economic performance is not required to be held by its two members, but is held by Magellan, as operator under a construction, operating, and management agreement with MVP. For this reason and because Magellan holds a 50 percent interest in MVP that provides it with significant economic rights and obligations, we determined that we are not the primary beneficiary. As of December 31, 2018 , our maximum exposure to loss was $247 million , which represents our equity investment in MVP. We have not provided any financial support to MVP other than amounts previously required by our membership interest. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | 13. EMPLOYEE BENEFIT PLANS Defined Benefit Plans We have defined benefit pension plans, some of which are subject to collective bargaining agreements, that cover most of our employees. These plans provide eligible employees with retirement income based primarily on years of service and compensation during specific periods under final average pay and cash balance formulas. We fund our pension plans as required by local regulations. In the U.S., all qualified pension plans are subject to the Employee Retirement Income Security Act minimum funding standard. We typically do not fund or fully fund U.S. nonqualified and certain international pension plans that are not subject to funding requirements because contributions to these pension plans may be less economic and investment returns may be less attractive than our other investment alternatives. We also provide health care and life insurance benefits for certain retired employees through our postretirement benefit plans. Most of our employees become eligible for these benefits if, while still working for us, they reach normal retirement age or take early retirement. These plans are unfunded, and retired employees share the cost with us. Individuals who became our employees as a result of an acquisition became eligible for postretirement benefits under our plans as determined by the terms of the relevant acquisition agreement. The changes in benefit obligation related to all of our defined benefit plans, the changes in fair value of plan assets (a) , and the funded status of our defined benefit plans as of and for the years ended were as follows (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Changes in benefit obligation: Benefit obligation as of beginning of year $ 2,926 $ 2,567 $ 306 $ 302 Service cost 133 123 6 6 Interest cost 91 86 10 10 Participant contributions — — 10 9 Benefits paid (207 ) (158 ) (28 ) (28 ) Actuarial (gain) loss (285 ) 286 (9 ) 6 Other (19 ) 22 (3 ) 1 Benefit obligation as of end of year $ 2,639 $ 2,926 $ 292 $ 306 Changes in plan assets (a): Fair value of plan assets as of beginning of year $ 2,428 $ 2,097 $ — $ — Actual return on plan assets (130 ) 363 — — Valero contributions 156 110 18 19 Participant contributions — — 10 9 Benefits paid (207 ) (158 ) (28 ) (28 ) Other (11 ) 16 — — Fair value of plan assets as of end of year $ 2,236 $ 2,428 $ — $ — Reconciliation of funded status (a) : Fair value of plan assets as of end of year $ 2,236 $ 2,428 $ — $ — Less benefit obligation as of end of year 2,639 2,926 292 306 Funded status as of end of year $ (403 ) $ (498 ) $ (292 ) $ (306 ) Accumulated benefit obligation $ 2,492 $ 2,746 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. The actuarial gain for the year ended December 31, 2018 primarily resulted from an increase in the discount rates used to determine our benefit obligations for our pension plans from 3.58 percent in 2017 to 4.25 percent in 2018 . The actuarial loss for the year ended December 31, 2017 primarily resulted from a decrease in the discount rates used to determine the benefit obligations for our pension plans from 4.08 percent in 2016 to 3.58 percent in 2017 . The fair value of our plan assets as of December 31, 2018 was unfavorably impacted by the negative return on plan assets resulting primarily from a significant decline in equity market prices for the year. The fair value of our plan assets as of December 31, 2017 was favorably impacted by the return on plan assets resulting primarily from a favorable increase in equity market prices for the year. Amounts recognized in our balance sheet for our pension and other postretirement benefits plans include (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Deferred charges and other assets, net $ 2 $ 5 $ — $ — Accrued expenses (22 ) (14 ) (21 ) (19 ) Other long-term liabilities (383 ) (489 ) (271 ) (287 ) $ (403 ) $ (498 ) $ (292 ) $ (306 ) The following table presents information for our pension plans with projected benefit obligations in excess of plan assets (in millions). December 31, 2018 2017 Projected benefit obligation $ 2,564 $ 2,872 Fair value of plan assets 2,160 2,369 The following table presents information for our pension plans with accumulated benefit obligations in excess of plan assets (in millions). December 31, 2018 2017 Accumulated benefit obligation $ 2,253 $ 2,526 Fair value of plan assets 1,974 2,180 Benefit payments that we expect to pay, including amounts related to expected future services that we expect to receive, are as follows for the years ending December 31 (in millions): Pension Benefits Other Postretirement Benefits 2019 $ 169 $ 21 2020 193 21 2021 175 21 2022 180 20 2023 194 20 2024-2028 1,043 95 We plan to contribute approximately $35 million to our pension plans and $21 million to our other postretirement benefit plans during 2019 . The components of net periodic benefit cost (credit) related to our defined benefit plans were as follows (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Service cost $ 133 $ 123 $ 111 $ 6 $ 6 $ 7 Interest cost 91 86 84 10 10 12 Expected return on plan assets (163 ) (150 ) (139 ) — — — Amortization of: Net actuarial (gain) loss 65 53 49 (2 ) (3 ) (1 ) Prior service credit (18 ) (20 ) (20 ) (11 ) (16 ) (16 ) Special charges (credits) 7 4 (7 ) — — — Net periodic benefit cost (credit) $ 115 $ 96 $ 78 $ 3 $ (3 ) $ 2 The components of net periodic benefit cost (credit) other than the service cost component (i.e., the non-service cost components) are included in other income, net in the statements of income. Amortization of prior service credit shown in the preceding table was based on a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under each respective plan. Amortization of the net actuarial (gain) loss shown in the preceding table was based on the straight-line amortization of the excess of the unrecognized (gain) loss over 10 percent of the greater of the projected benefit obligation or market-related value of plan assets (smoothed asset value) over the average remaining service period of active employees expected to receive benefits under each respective plan. Pre-tax amounts recognized in other comprehensive income (loss) were as follows (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Net gain (loss) arising during the year: Net actuarial gain (loss) $ (8 ) $ (73 ) $ (145 ) $ 9 $ (6 ) $ 35 Prior service (cost) credit 7 (4 ) — — — — Net (gain) loss reclassified into income: Net actuarial (gain) loss 65 53 49 (2 ) (3 ) (1 ) Prior service credit (18 ) (20 ) (20 ) (11 ) (16 ) (16 ) Curtailment and settlement loss 7 4 — — — — Total changes in other comprehensive income (loss) $ 53 $ (40 ) $ (116 ) $ (4 ) $ (25 ) $ 18 The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost (credit) were as follows (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Net actuarial (gain) loss $ 828 $ 894 $ (64 ) $ (57 ) Prior service credit (108 ) (121 ) (31 ) (42 ) Total $ 720 $ 773 $ (95 ) $ (99 ) The weighted-average assumptions used to determine the benefit obligations were as follows: Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Discount rate 4.25 % 3.58 % 4.40 % 3.72 % Rate of compensation increase 3.78 % 3.86 % n/a n/a Interest crediting rate for cash balance plans 3.04 % 3.04 % n/a n/a The discount rate assumption used to determine the benefit obligations as of December 31, 2018 and 2017 for the majority of our pension plans and other postretirement benefit plans was based on the Aon AA Only Above Median yield curve and considered the timing of the projected cash outflows under our plans. This curve was designed by Aon to provide a means for plan sponsors to value the liabilities of their pension plans or postretirement benefit plans. It is a hypothetical double-A yield curve represented by a series of annualized individual discount rates with maturities from one-half year to 99 years . Each bond issue underlying the curve is required to have an average rating of double-A when averaging all available ratings by Moody’s Investors Service, Standard & Poor’s Ratings Services, and Fitch Ratings. Only the bonds representing the 50 percent highest yielding issuances among those with average ratings of double-A are included in this yield curve. We based our discount rate assumption on the Aon AA Only Above Median yield curve because we believe it is representative of the types of bonds we would use to settle our pension and other postretirement benefit plan liabilities as of those dates. We believe that the yields associated with the bonds used to develop this yield curve reflect the current level of interest rates. The weighted-average assumptions used to determine the net periodic benefit cost were as follows: Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Discount rate 3.59 % 4.08 % 4.45 % 3.72 % 4.26 % 4.53 % Expected long-term rate of return on plan assets 7.24 % 7.29 % 7.28 % n/a n/a n/a Rate of compensation increase 3.86 % 3.81 % 3.79 % n/a n/a n/a Interest crediting rate for cash balance plans 3.04 % 3.04 % 3.10 % n/a n/a n/a The assumed health care cost trend rates were as follows: December 31, 2018 2017 Health care cost trend rate assumed for the next year 7.29 % 7.30 % 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 The following tables present the fair values of the assets of our pension plans (in millions) as of December 31, 2018 and 2017 by level of the fair value hierarchy. Assets categorized in Level 1 of the hierarchy are measured at fair value using a market approach based on unadjusted quoted prices from national securities exchanges. Assets categorized in Level 2 of the hierarchy are measured at net asset value in a market that is not active. As previously noted, we do not fund or fully fund U.S. nonqualified and certain international pension plans that are not subject to funding requirements, and we do not fund our other postretirement benefit plans. Fair Value Hierarchy Total as of 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 (b) 76 — — 76 Corporate debt instruments — 284 — 284 Government securities: U.S. Treasury securities 45 — — 45 Other government securities — 138 — 138 Common collective trusts (c) — 609 — 609 Pooled separate accounts (d) — 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 ___________________________ See notes on page 110 . Fair Value Hierarchy Total as of Level 1 Level 2 Level 3 Equity securities: U.S. companies (a) $ 571 $ — $ — $ 571 International companies 187 1 — 188 Preferred stock 4 — — 4 Mutual funds: International growth 118 — — 118 Index funds (b) 85 — — 85 Corporate debt instruments — 272 — 272 Government securities: U.S. Treasury securities 45 — — 45 Other government securities — 144 — 144 Common collective trusts (c) — 621 — 621 Pooled separate accounts (d) — 192 — 192 Private funds — 101 — 101 Insurance contract — 18 — 18 Interest and dividends receivable 5 — — 5 Cash and cash equivalents 85 1 — 86 Securities transactions payable, net (22 ) — — (22 ) Total pension plan assets $ 1,078 $ 1,350 $ — $ 2,428 __________________________________ (a) Equity securities are held in a wide range of industrial sectors, including consumer goods, information technology, healthcare, industrials, and financial services. (b) This class includes primarily investments in approximately 60 percent equities and 40 percent bonds as of December 31, 2018 . As of December 31, 2017 , this class included primarily investments in approximately 70 percent equities and 30 percent bonds. (c) This class includes primarily investments in approximately 70 percent equities and 30 percent bonds as of December 31, 2018 . As of December 31, 2017 , this class included primarily investments in approximately 80 percent equities and 20 percent bonds. (d) This class includes primarily investments in approximately 50 percent equities and 50 percent bonds as of December 31, 2018 and 2017 . The investment policies and strategies for the assets of our pension plans incorporate a well-diversified approach that is expected to earn long-term returns from capital appreciation and a growing stream of current income. This approach recognizes that assets are exposed to risk and the market value of the pension plans’ assets may fluctuate from year to year. Risk tolerance is determined based on our financial ability to withstand risk within the investment program and the willingness to accept return volatility. In line with the investment return objective and risk parameters, the pension plans’ mix of assets includes a diversified portfolio of equity and fixed-income investments. Equity securities include international stocks and a blend of U.S. growth and value stocks of various sizes of capitalization. Fixed income securities include bonds and notes issued by the U.S. government and its agencies, corporate bonds, and mortgage-backed securities. The aggregate asset allocation is reviewed on an annual basis. As of December 31, 2018 , the target allocations for plan assets under our primary pension plan are 70 percent equity securities and 30 percent fixed income investments. The expected long-term rate of return on plan assets is based on a forward-looking expected asset return model. This model derives an expected rate of return based on the target asset allocation of a plan’s assets. The underlying assumptions regarding expected rates of return for each asset class reflect Aon’s best expectations for these asset classes. The model reflects the positive effect of periodic rebalancing among diversified asset classes. We select an expected asset return that is supported by this model. Defined Contribution Plans We have defined contribution plans that cover most of our employees. Our contributions to these plans are based on employees’ compensation and/or a partial match of employee contributions to the plans. Our contributions to these defined contribution plans were $74 million , $70 million , and $67 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION Overview Under our 2011 Omnibus Stock Incentive Plan (the OSIP), various stock and stock-based awards may be granted to employees and non-employee directors. Awards available under the OSIP include, but are not limited to, (i) restricted stock that vests over a period determined by our compensation committee, (ii) performance awards that vest upon the achievement of an objective performance goal, (iii) options to purchase shares of common stock, (iv) dividend equivalent rights, and (v) stock appreciation rights. The OSIP was approved by our stockholders on April 28, 2011 and re-approved by our stockholders on May 12, 2016. As of December 31, 2018 , 8,532,542 shares of our common stock remained available to be awarded under the OSIP. We also maintain other stock-based compensation plans under which previously granted equity awards remain outstanding. No additional grants may be awarded under these plans. The following table reflects activity related to our stock-based compensation arrangements (in millions): Year Ended December 31, 2018 2017 2016 Stock-based compensation expense: Restricted stock $ 63 $ 58 $ 52 Performance awards 22 19 15 Stock options and other awards 1 — 1 Total stock-based compensation expense $ 86 $ 77 $ 68 Tax benefit recognized on stock-based compensation expense $ 18 $ 27 $ 24 Tax benefit realized for tax deductions resulting from exercises and vestings 32 44 33 Effect of tax deductions in excess of recognized stock-based compensation expense 20 24 22 The following is a discussion of our significant stock-based compensation arrangement. Restricted Stock Restricted stock is granted to employees and non-employee directors. Restricted stock granted to employees vests in accordance with individual written agreements between the participants and us, usually in equal annual installments over a period of three years beginning one year after the date of grant. Restricted stock granted to our non-employee directors vests in equal annual installments over a period of three years beginning one year after the date of grant. The fair value of each restricted stock per share is equal to the market price of our common stock. A summary of the status of our restricted stock awards is presented in the following table. Number of Shares Weighted- Average Grant-Date Fair Value Per Share Nonvested shares as of January 1, 2018 1,401,040 $ 69.82 Granted 628,908 92.12 Vested (843,709 ) 71.26 Forfeited (9,661 ) 69.97 Nonvested shares as of December 31, 2018 1,176,578 80.70 As of December 31, 2018 , there was $56 million of unrecognized compensation cost related to outstanding unvested restricted stock awards, which is expected to be recognized over a weighted-average period of approximately two years. The following table reflects activity related to our restricted stock: Year Ended December 31, 2018 2017 2016 Weighted-average grant-date fair value per share of restricted stock granted $ 92.12 $ 79.32 $ 59.00 Fair value of restricted stock vested (in millions) 80 71 46 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. INCOME TAXES Tax Reform On December 22, 2017, Tax Reform was enacted, which resulted in significant changes to the U.S. Internal Revenue Code of 1986, as amended (the Code) and was effective beginning on January 1, 2018. The most significant changes affecting us are as follows: • reduction in the statutory income tax rate from 35 percent to 21 percent; • repeal of the manufacturing deduction; • deduction for all of the costs to acquire or construct certain business assets in the year they are placed in service through 2022; • shift from a worldwide system of taxation to a 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; and • assessment of a one-time transition tax on deemed repatriated earnings and profits from our international subsidiaries. The following narrative describes the activity that occurred with respect to Tax Reform for the years ended December 31, 2017 and 2018. We reflected an overall income tax benefit of $1.9 billion for the year ended December 31, 2017 with respect to Tax Reform as a result of the following: • 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 being paid in 2018. • We accrued withholding tax of $47 million on a portion of the cash held by one of our international subsidiaries that we have deemed to not be permanently reinvested in our operations in that country. Because of the significant and complex changes to the Code from Tax Reform, including the need for regulatory guidance from the IRS to properly account for many of the provisions, the SEC issued Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act,” that was codified through the issuance of ASU No. 2018-05 as described in Note 1 . Specifically, ASU No. 2018-05 required that the effects of Tax Reform be recorded for items where the accounting was complete, as well as for items where a reasonable estimate could be made (referred to as provisional amounts). For items where reasonable estimates could not be made, provisional amounts were not recorded and those items continued to be accounted for under the Code prior to changes from Tax Reform until a reasonable estimate could be made. During the fourth quarter of 2018, we completed our accounting for the income tax effects of Tax Reform, and we reflected an overall income tax benefit of $12 million for the year ended December 31, 2018 with respect to Tax Reform. The following table summarizes the components of our adjustment (in millions) to reflect the effects of Tax Reform for the years ended December 31, 2018 and 2017 , including whether such amounts were complete, provisional, or incomplete. The amounts presented for 2018 were completed during the fourth quarter of 2018. 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 ) Income Statement Components Income before income tax expense (benefit) was as follows (in millions): Year Ended December 31, 2018 2017 2016 U.S. operations $ 3,168 $ 2,283 $ 1,733 International operations 1,064 924 1,449 Income before income tax expense (benefit) $ 4,232 $ 3,207 $ 3,182 Statutory income tax rates applicable to the countries in which we operate were as follows: Year Ended December 31, 2018 2017 2016 U.S. 21 % 35 % 35 % Canada 15 % 15 % 15 % U.K. 19 % 19 % 20 % Ireland 13 % 13 % 13 % Peru 30 % n/a n/a Mexico 30 % n/a n/a Aruba n/a n/a 7 % The following is a reconciliation of income tax expense (benefit) computed by applying statutory income tax rates as reflected in the preceding table to actual income tax expense (benefit) related to our operations (in millions): Year Ended December 31, 2018 U.S. International Total Amount Percent Amount Percent Amount Percent 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 67 2.1 % — — 67 1.6 % Foreign tax credits (50 ) (1.6 )% — — (50 ) (1.2 )% Effects of Tax Reform (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 U.S. International Total Amount Percent Amount Percent Amount Percent 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 (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 )% Year Ended December 31, 2016 U.S. International Total Amount Percent Amount Percent Amount Percent Income tax expense at statutory rates $ 606 35.0 % $ 256 17.7 % $ 862 27.1 % U.S. state and Canadian provincial tax expense, net of federal income tax effect 5 0.3 % 31 2.1 % 36 1.1 % Permanent differences: Manufacturing deduction (22 ) (1.3 )% — — (22 ) (0.7 )% Other (3 ) (0.2 )% (10 ) (0.7 )% (13 ) (0.4 )% Change in tax law — — (7 ) (0.5 )% (7 ) (0.2 )% Tax effects of income associated with noncontrolling interests (44 ) (2.5 )% — — (44 ) (1.4 )% Other, net (37 ) (2.1 )% (10 ) (0.7 )% (47 ) (1.5 )% Income tax expense $ 505 29.2 % $ 260 17.9 % $ 765 24.0 % Components of income tax expense (benefit) related to our operations were as follows (in millions): Year Ended December 31, 2018 U.S. International Total 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 U.S. International Total 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” above. (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” above. Year Ended December 31, 2016 U.S. International Total Current: Country $ 294 $ 194 $ 488 U.S. state / Canadian provincial 12 35 47 Total current 306 229 535 Deferred: Country 203 35 238 U.S. state / Canadian provincial (4 ) (4 ) (8 ) Total deferred 199 31 230 Income tax expense $ 505 $ 260 $ 765 Income Taxes Paid Income taxes paid to U.S. and international taxing authorities were as follows (in millions): Year Ended December 31, 2018 2017 2016 U.S. $ 1,016 $ 239 $ 241 International 345 171 203 Income taxes paid, net $ 1,361 $ 410 $ 444 Deferred Income Tax Assets and Liabilities The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions): December 31, 2018 2017 Deferred income tax assets: Tax credit carryforwards $ 644 $ 69 Net operating losses (NOLs) 523 492 Inventories 101 135 Compensation and employee benefit liabilities 175 179 Environmental liabilities 71 47 Other 141 112 Total deferred income tax assets 1,655 1,034 Valuation allowance (1,111 ) (498 ) Net deferred income tax assets 544 536 Deferred income tax liabilities: Property, plant, and equipment 4,589 4,545 Deferred turnaround costs 316 272 Inventories 287 243 Investments 142 77 Other 172 107 Total deferred income tax liabilities 5,506 5,244 Net deferred income tax liabilities $ 4,962 $ 4,708 We had the following income tax credit and loss carryforwards as of December 31, 2018 (in millions): Amount Expiration U.S. state income tax credits $ 80 2019 through 2031 U.S. state income tax credits 6 Unlimited U.S. foreign tax credits 575 2027 U.S. state NOLs (gross amount) 10,039 2019 through 2038 We have recorded a valuation allowance as of December 31, 2018 and 2017 due to uncertainties related to our ability to utilize some of our deferred income tax assets, primarily consisting of U.S. foreign tax credits and certain U.S. state income tax credits and NOLs, before they expire. The valuation allowance is based on our estimates of taxable income in the various jurisdictions in which we operate and the period over which deferred income tax assets will be recoverable. As a part of the completion of the accounting for the income tax effects of Tax Reform as described in “Tax Reform” above, we assessed the ability of our available foreign tax credits to offset the tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries. The completion of such accounting resulted in U.S. general limitation foreign tax credit carryforwards and a correlating valuation allowance provided on the balance of the deferred income tax asset related to those carryforwards as it is not more likely than not that the deferred income tax asset will be realized. The valuation allowance increased by $613 million , primarily due to approximately $575 million of excess U.S. foreign tax credits. Foreign tax credits as of December 31, 2017 were used to offset the one-time transition tax, and excess tax credits were generated on the transition tax inclusion. Tax Reform imposes certain limits on a company’s use of foreign tax credits in the future, including any excess credits generated from the mandatory income inclusion of previously deferred foreign earnings. The realization of net deferred income tax assets related to state income tax credits and NOLs recorded as of December 31, 2018 is primarily dependent upon our ability to generate future taxable income in certain U.S. states. As described in “Tax Reform” above, one of the most significant changes in Tax Reform was the shift from a worldwide system of taxation to a territorial system. The shift to a territorial system allows us to distribute cash via a dividend from our international subsidiaries with a full dividend received deduction. As a result, we will not recognize U.S. federal deferred taxes for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and the respective tax bases for our international subsidiaries. As of December 31, 2017 , we recognized a one-time transition tax of $734 million on approximately $4.7 billion of combined earnings and profits of our international subsidiaries. In the fourth quarter of 2018, the one-time transition tax was increased by $6 million . Also, in the fourth quarter, we recorded a foreign tax credit of $32 million related to the one-time transition tax. Because of the deemed repatriation of these accumulated earnings and profits, there are no longer any U.S. federal income tax consequences associated with the repatriation of any of the $2.4 billion of cash and cash equivalents held by our international subsidiaries as of December 31, 2018 . However, certain countries in which our international subsidiaries are organized impose withholding taxes on cash distributed outside of those countries. As of December 31, 2018 , the cumulative undistributed earnings of these subsidiaries were approximately $5.3 billion . We have accrued for withholding taxes on a portion of the cash held by one of our international subsidiaries that we have deemed to not be permanently reinvested in our operations in that country. The remaining cash held by that subsidiary as well as our other international subsidiaries will be permanently reinvested in our operations in those countries. It is not practicable to estimate the amount of additional tax that would be payable on those earnings, if distributed. Unrecognized Tax Benefits The following is a reconciliation of the change in unrecognized tax benefits, excluding related penalties and interest, (in millions): Year Ended December 31, 2018 2017 2016 Balance as of beginning of year $ 941 $ 936 $ 964 Additions based on tax positions related to the current year 23 33 36 Additions for tax positions related to prior years 28 15 11 Reductions for tax positions related to prior years (19 ) (42 ) (46 ) Reductions for tax positions related to the lapse of applicable statute of limitations (1 ) (1 ) (3 ) Settlements (2 ) — (237 ) Reclassification of uncertain tax receivable to long-term receivable from IRS — — 211 Balance as of end of year $ 970 $ 941 $ 936 As of December 31, 2018 , the balance in unrecognized tax benefits included $277 million of tax refunds that we intend to claim by amending various of our income tax returns for 2010 through 2016. We intend to propose that incentive payments received from the U.S. federal government for blending biofuels into refined petroleum products be excluded from taxable income during these periods. However, due to the complexity of this matter and uncertainties with respect to the interpretation of the Code, we concluded that the refund claims included in the following table cannot be recognized in our financial statements. As a result, these amounts are not included in our uncertain tax position liabilities as of December 31, 2018 , 2017 , and 2016 even though they are reflected in the preceding table. The following is a reconciliation of unrecognized tax benefits reflected in the preceding table to our uncertain tax position liabilities that are presented in our balance sheets (in millions). December 31, 2018 2017 Unrecognized tax benefits $ 970 $ 941 Tax refund claim not presented in our balance sheets (277 ) (274 ) Other 88 77 Uncertain tax position liabilities presented in our balance sheets $ 781 $ 744 Amounts recognized in our balance sheets for uncertain tax positions include (in millions): December 31, 2018 2017 Income taxes payable $ 42 $ — Other long-term liabilities 721 723 Deferred tax liabilities 18 21 Uncertain tax position liabilities presented in our balance sheets $ 781 $ 744 As of December 31, 2018 and 2017 , there were $807 million and $793 million , respectively, of unrecognized tax benefits that if recognized would affect our annual effective tax rate. Penalties and interest during the years ended December 31, 2018 , 2017 , and 2016 were immaterial. Accrued penalties and interest totaled $88 million and $77 million as of December 31, 2018 and 2017 , respectively, excluding the U.S. federal and state income tax effects related to interest. During the next 12 months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits, excluding interest, either because the tax positions are sustained on audit or because we agree to their disallowance. We do not expect these reductions to have a significant impact on our financial statements because such reductions would not significantly affect our annual effective tax rate. Tax Returns Under Audit U.S. Federal As of December 31, 2018 , our U.S. federal tax returns for 2010 through 2015 were under audit by the IRS. The IRS has proposed adjustments to our taxable income for certain open years. We are currently contesting the proposed adjustments with the Office of Appeals of the IRS for certain open years and do not expect that the ultimate disposition of these adjustments will result in a material change to our financial position, results of operations, or liquidity. We are continuing to work with the IRS to resolve these matters and we believe that they will be resolved for amounts consistent with recorded amounts of unrecognized tax benefits associated with these matters. We have amended our U.S federal income tax returns for 2005 through 2009 to exclude from taxable income incentive payments received from the U.S. federal government for blending alcohol fuel mixtures. These amended return claims have been disallowed by the IRS and we are currently protesting the disallowance of these adjustments. An ultimate disallowance of the exclusion from income would not result in a material change to our financial position, results of operations, or liquidity. U.S. State As of December 31, 2018 , our California tax returns for 2004 through 2008 and 2011 through 2014 were under audit by the state of California. We do not expect the ultimate disposition of these audits will result in a material change to our financial position, results of operations, or liquidity. We believe these audits will be resolved for amounts consistent with our recorded amounts of unrecognized tax benefits associated with these audits. International As of December 31, 2018 , our Canadian subsidiary’s federal tax returns for 2013 and 2014 were under audit by Canada Revenue Agency (CRA) and our Quebec provincial tax returns for 2013 through 2016 were under audit by Revenue Quebec. We are protesting the proposed adjustments by CRA for 2013 and we do not expect the ultimate disposition of these adjustments will result in a material change to our financial position, results of operations, or liquidity. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | 16. EARNINGS PER COMMON SHARE Earnings per common share were computed as follows (dollars and shares in millions, except per share amounts): Year Ended December 31, 2018 2017 2016 Earnings per common share: Net income attributable to Valero stockholders $ 3,122 $ 4,065 $ 2,289 Less income allocated to participating securities 9 14 7 Net income available to common shareholders $ 3,113 $ 4,051 $ 2,282 Weighted-average common shares outstanding 426 442 461 Earnings per common share $ 7.30 $ 9.17 $ 4.94 Earnings per common share – assuming dilution: Net income attributable to Valero stockholders $ 3,122 $ 4,065 $ 2,289 Weighted-average common shares outstanding 426 442 461 Effect of dilutive securities 2 2 3 Weighted-average common shares outstanding – assuming dilution 428 444 464 Earnings per common share – assuming dilution $ 7.29 $ 9.16 $ 4.94 Participating securities include restricted stock and performance awards granted under our 2011 Omnibus Stock Incentive Plan. Dilutive securities include participating securities as well as outstanding stock options granted under our 2011 Omnibus Stock Incentive Plan. |
Revenues and Segment Informatio
Revenues and Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
REVENUES AND SEGMENT INFORMATION | 17. REVENUES AND SEGMENT INFORMATION Revenue from Contracts with Customers Disaggregation of Revenue Revenue is presented in the table below under “Segment Information” disaggregated by product because this is the level of disaggregation that management has determined to be beneficial to users of our financial statements. Receivables from Contracts with Customers Our receivables from contracts with customers are included in receivables, net as presented in Note 4 . Remaining Performance Obligations The majority of our contracts with customers are spot contracts and therefore have no remaining performance obligations. Our remaining contracts with customers are primarily term contracts. The transaction price for these term contracts includes an immaterial fixed amount and variable consideration (i.e., a commodity price). The variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation; therefore, the variable consideration is not included in the remaining performance obligation. As of December 31, 2018 , after excluding contracts with an original expected duration of one year or less, the aggregate amount of the transaction price allocated to our remaining performance obligations was not material as the transaction price for these contracts includes only an immaterial fixed amount. Segment Information As of December 31, 2018 , we had three reportable segments – refining, ethanol, and VLP. Each segment is a strategic business unit that offers different products and services by employing unique technologies and marketing strategies and whose operations and operating performance are managed and evaluated separately. Operating performance is measured based on the operating income generated by the segment, which includes revenues and expenses that are directly attributable to the management of the respective segment. Intersegment sales are generally derived from transactions made at prevailing market rates. The following is a description of each segment’s business operations. • The refining segment includes the operations of our 15 petroleum refineries, the associated marketing activities, and certain logistics assets that support our refining operations that are not owned by VLP. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks (e.g., conventional gasolines, premium gasolines, and gasoline meeting the specifications of the California Air Resources Board (CARB)), distillates (e.g., diesel, low-sulfur diesel, ultra-low-sulfur diesel, CARB diesel, jet fuel, and other distillates), and other products (e.g., asphalt, petrochemicals, lubricants, and other refined petroleum products). • The ethanol segment includes the operations of our 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. We sell some ethanol to our refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product. • The VLP segment includes the results of VLP. VLP generates revenue from transportation and terminaling activities provided to our refining segment. All of VLP’s revenues are intersegment revenues that are generated under commercial agreements with our refining segment. Revenues generated under these agreements are eliminated in consolidation. Operations that are not included in any of the reportable segments are included in the corporate category. The following tables reflect information about our operating income and total expenditures for long-lived assets by reportable segment (in millions): Refining Ethanol VLP Corporate and Eliminations Total Year ended December 31, 2018: Revenues: Revenues from external customers $ 113,601 $ 3,428 $ — $ 4 $ 117,033 Intersegment revenues 14 210 546 (770 ) — Total revenues 113,615 3,638 546 (766 ) 117,033 Cost of sales: Cost of materials and other 102,489 3,008 — (765 ) 104,732 Operating expenses (excluding depreciation and amortization expense reflected below) 4,099 470 125 (4 ) 4,690 Depreciation and amortization expense 1,863 78 76 — 2,017 Total cost of sales 108,451 3,556 201 (769 ) 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 $ 5,119 $ 82 $ 345 $ (974 ) $ 4,572 Total expenditures for long-lived assets (a) $ 2,935 $ 373 $ 24 $ 44 $ 3,376 __________________________ See note on page 126 . Refining Ethanol VLP Corporate and Eliminations Total Year ended December 31, 2017: Revenues: Revenues from external customers $ 90,651 $ 3,324 $ — $ 5 $ 93,980 Intersegment revenues 6 176 452 (634 ) — Total revenues 90,657 3,500 452 (629 ) 93,980 Cost of sales: Cost of materials and other 80,865 2,804 — (632 ) 83,037 Operating expenses (excluding depreciation and amortization expense reflected below) 3,959 443 104 (2 ) 4,504 Depreciation and amortization expense 1,800 81 53 — 1,934 Total cost of sales 86,624 3,328 157 (634 ) 89,475 Other operating expenses 58 — 3 — 61 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 829 829 Depreciation and amortization expense — — — 52 52 Operating income by segment $ 3,975 $ 172 $ 292 $ (876 ) $ 3,563 Total expenditures for long-lived assets (a) $ 1,710 $ 84 $ 110 $ 44 $ 1,948 Year Ended December 31, 2016: Revenues: Revenues from external customers $ 71,968 $ 3,691 $ — $ — $ 75,659 Intersegment revenues — 210 363 (573 ) — Total revenues 71,968 3,901 363 (573 ) 75,659 Cost of sales: Cost of materials and other 63,405 3,130 — (573 ) 65,962 Operating expenses (excluding depreciation and amortization expense reflected below) 3,740 415 96 — 4,251 Depreciation and amortization expense 1,734 66 46 — 1,846 Lower of cost or market inventory valuation adjustment (697 ) (50 ) — — (747 ) Total cost of sales 68,182 3,561 142 (573 ) 71,312 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 709 709 Depreciation and amortization expense — — — 48 48 Asset impairment loss 56 — — — 56 Operating income by segment $ 3,730 $ 340 $ 221 $ (757 ) $ 3,534 Total expenditures for long-lived assets (a) $ 1,867 $ 68 $ 23 $ 38 $ 1,996 __________________________ (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. The following table provides a disaggregation of revenues by reportable segment (in millions). Refining and ethanol segment revenues are disaggregated for our principal products, and VLP segment revenues are disaggregated by activity type. Year Ended December 31, 2018 2017 2016 Refining: Gasolines and blendstocks $ 46,606 $ 40,366 $ 33,450 Distillates 55,546 42,074 32,576 Other product revenues 11,463 8,217 5,942 Total refining revenues 113,615 90,657 71,968 Ethanol: Ethanol 2,912 2,940 3,315 Distillers grains 726 560 586 Total ethanol revenues 3,638 3,500 3,901 VLP: Pipeline transportation 124 101 78 Terminaling 415 348 284 Storage and other 7 3 1 Total VLP revenues 546 452 363 Corporate – other revenues 4 5 — Elimination of intersegment revenues (770 ) (634 ) (573 ) Revenues $ 117,033 $ 93,980 $ 75,659 Revenues by geographic area are shown in the following table (in millions). The geographic area is based on location of customer and no customer accounted for 10 percent or more of our revenues. Year Ended December 31, 2018 2017 2016 U.S. $ 82,992 $ 66,614 $ 51,479 Canada 9,211 7,039 6,115 U.K. and Ireland 15,208 11,556 10,797 Other countries 9,622 8,771 7,268 Revenues $ 117,033 $ 93,980 $ 75,659 Long-lived assets include property, plant, and equipment and certain long-lived assets included in “deferred charges and other assets, net.” Long-lived assets by geographic area consisted of the following (in millions): December 31, 2018 2017 U.S. $ 27,475 $ 26,083 Canada 1,798 1,915 U.K. and Ireland 1,113 1,063 Other countries 266 — Total long-lived assets $ 30,652 $ 29,061 Total assets by reportable segment were as follows (in millions): December 31, 2018 2017 Refining $ 42,673 $ 40,382 Ethanol 1,691 1,344 VLP 1,620 1,517 Corporate and eliminations 4,171 6,915 Total assets $ 50,155 $ 50,158 As of December 31, 2018 and 2017 , our investments in joint ventures accounted for under the equity method were $542 million and $530 million , respectively, all of which related to the refining segment and are reflected in “deferred charges and other assets, net” as presented in Note 7 . Effective January 1, 2019, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, we created a new reportable segment — renewable diesel — because of the growing importance of renewable fuels in the market and the growth of our investments in renewable fuels production. The renewable diesel segment includes the operations of DGD, our consolidated joint venture as discussed in Note 12 . The operations of DGD have been included in the refining segment through December 31, 2018 , but were transferred from that segment on January 1, 2019. Also effective January 1, 2019, we no longer have a VLP segment, and we include the operations of VLP in our refining segment. This change was made because of the Merger Transaction with VLP, as described in Note 2 , and the resulting change in how we manage VLP’s operations. We no longer manage VLP as a business but as logistics assets that support the operations of our refining segment. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 18. SUPPLEMENTAL CASH FLOW INFORMATION In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in millions): Year Ended December 31, 2018 2017 2016 Decrease (increase) in current assets: Receivables, net $ (457 ) $ (870 ) $ (1,531 ) Inventories (197 ) (516 ) 771 Prepaid expenses and other (77 ) 151 47 Increase (decrease) in current liabilities: Accounts payable 304 1,842 1,556 Accrued expenses (113 ) 21 117 Taxes other than income taxes payable (73 ) 172 82 Income taxes payable (684 ) 489 (66 ) Changes in current assets and current liabilities $ (1,297 ) $ 1,289 $ 976 Cash flows related to interest and income taxes were as follows (in millions): Year Ended December 31, 2018 2017 2016 Interest paid in excess of amount capitalized $ 463 $ 457 $ 427 Income taxes paid, net 1,361 410 444 Cash flows reflected as “other financing activities, net” for the year ended December 31, 2016 included the payment of a long-term liability of $137 million owed to a joint venture partner associated with an owner-method joint venture investment. Noncash investing and financing activities for the year ended December 31, 2018 included the recognition of (i) capital lease assets and related obligations totaling $63 million primarily for the lease of storage tanks as described in Note 9 and (ii) terminal assets and related obligation totaling $198 million under owner accounting as described in Note 10 . Noncash investing and financing activities for the year ended December 31, 2017 included the recognition of (i) capital lease assets and related obligations totaling $502 million primarily for the lease of storage tanks as described in Note 9 and (ii) terminal assets and related obligation totaling $94 million under owner accounting as described in Note 10 . There were no significant noncash investing and financing activities for the year ended December 31, 2016 . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 19. FAIR VALUE MEASUREMENTS General U.S. GAAP requires or permits certain assets and liabilities to be measured at fair value on a recurring or nonrecurring basis in our balance sheets, and those assets and liabilities are presented below under “Recurring Fair Value Measurements” and “Nonrecurring Fair Value Measurements.” Assets and liabilities measured at fair value on a recurring basis, such as derivative financial instruments, are measured at fair value at the end of each reporting period. Assets and liabilities measured at fair value on a nonrecurring basis, such as the impairment of property, plant and equipment, are measured at fair value in particular circumstances. U.S. GAAP also requires the disclosure of the fair values of financial instruments when an option to elect fair value accounting has been provided, but such election has not been made. A debt obligation is an example of such a financial instrument. The disclosure of the fair values of financial instruments not recognized at fair value in our balance sheet is presented below under “Other Financial Instruments.” U.S. GAAP provides a framework for measuring fair value and establishes a three-level fair value hierarchy that prioritizes inputs to valuation techniques based on the degree to which objective prices in external active markets are available to measure fair value. Following is a description of each of the levels of the fair value hierarchy. • 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. Recurring Fair Value Measurements The following tables present information (in millions) about our assets and liabilities recognized at their fair values in our balance sheets categorized according to the fair value hierarchy of the inputs utilized by us to determine the fair values as of December 31, 2018 and 2017 . We have elected to offset the fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty, including any related cash collateral assets or obligations as shown below; however, fair value amounts by hierarchy level are presented in the following tables on a gross basis. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet. 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 December 31, 2017 Total Gross Fair Value Effect of Counter- party Netting Effect of Cash Collateral Netting Net Carrying Value on Balance Sheet Cash Collateral Paid or Received Not Offset Fair Value Hierarchy Level 1 Level 2 Level 3 Assets: Commodity derivative contracts $ 875 $ 19 $ — $ 894 $ (893 ) $ — $ 1 $ — Investments of certain benefit plans 65 — 8 73 n/a n/a 73 n/a Total $ 940 $ 19 $ 8 $ 967 $ (893 ) $ — $ 74 Liabilities: Commodity derivative contracts $ 955 $ 14 $ — $ 969 $ (893 ) $ (76 ) $ — $ (102 ) Environmental credit obligations — 104 — 104 n/a n/a 104 n/a Physical purchase contracts — 6 — 6 n/a n/a 6 n/a Foreign currency contracts 7 — — 7 n/a n/a 7 n/a Total $ 962 $ 124 $ — $ 1,086 $ (893 ) $ (76 ) $ 117 A description of our assets and liabilities recognized at fair value along with the valuation methods and inputs we used to develop their fair value measurements are as follows: • 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 the market approach. Exchange-traded futures are valued 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 entered into for our international operations to manage our exposure to exchange rate fluctuations on transactions denominated in currencies other than the local (functional) currencies of those operations. These contracts are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. • Environmental credit obligations represent our liability for the purchase of (i) biofuel credits (primarily 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. There were no transfers into or out of Level 3 for assets and liabilities held as of December 31, 2018 and 2017 that were measured at fair value on a recurring basis. There was no significant activity during the years ended December 31, 2018 , 2017 , and 2016 related to the fair value amounts categorized in Level 3 as of December 31, 2018 and 2017 . Nonrecurring Fair Value Measurements As discussed in Note 3 , we concluded that the Aruba Terminal was impaired as of June 30, 2016, which resulted in an asset impairment loss of $56 million that was recorded in June 2016. The fair value of the Aruba Terminal was determined using an income approach and was classified in Level 3. We employed a probability-weighted approach to possible future cash flow scenarios, including transferring ownership of the business to the GOA or continuing to operate the business. There were no assets or liabilities that were measured at fair value on a nonrecurring basis as of December 31, 2018 and 2017 . Other Financial Instruments Financial instruments that we recognize in our balance sheets at their carrying amounts are shown in the following table along with their associated fair values (in millions): December 31, 2018 December 31, 2017 Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Cash and cash equivalents Level 1 $ 2,982 $ 2,982 $ 5,850 $ 5,850 Financial liabilities: Debt (excluding capital leases) Level 2 8,503 8,986 8,310 9,795 |
Price Risk Management Activitie
Price Risk Management Activities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
PRICE RISK MANAGEMENT ACTIVITIES | 20. PRICE RISK MANAGEMENT ACTIVITIES We are exposed to market risks primarily related to the volatility in the price of commodities, and foreign currency exchange rates, and the price of credits needed to comply with various government and regulatory programs. We enter into derivative instruments to manage some of these risks, including derivative instruments related to the various commodities we purchase or produce, and foreign currency exchange and purchase contracts, as described below under “Risk Management Activities by Type of Risk.” These derivative instruments are recorded as either assets or liabilities measured at their fair values (see Note 19 ), as summarized below under “Fair Values of Derivative Instruments,” with changes in fair value recognized currently in income. The effect of these derivative instruments on our income is summarized below under “Effect of Derivative Instruments on Income.” Risk Management Activities by Type of Risk Commodity Price Risk We are exposed to market risks related to the volatility in the price of crude oil, refined petroleum products (primarily gasoline and distillate), grain (primarily corn), soybean oil, and natural gas used in our operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, such as futures and options. Our positions in commodity derivative instruments are monitored and managed on a daily basis by our risk control group to ensure compliance with our stated risk management policy that has been approved by our board of directors. We primarily use commodity derivative instruments as economic hedges, which are not designated as hedging instruments, and we use fair value and cash flow hedges from time to time. We had no commodity derivative instruments outstanding as of December 31, 2018 and 2017 , and no activity during the years ended December 31, 2018 , 2017 , and 2016 that were designated as fair value or cash flow 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 and refined petroleum product sales at existing market prices that we deem favorable. As of December 31, 2018 , we had the following outstanding commodity derivative instruments that were used as economic hedges, as well as commodity derivative instruments related to the physical purchase of corn at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels, except those identified as natural gas contracts that are presented in millions of British thermal units, corn contracts that are presented in thousands of bushels, and soybean oil contracts that are presented in thousands of pounds). Notional Contract Volumes by Year of Maturity Derivative Instrument 2019 2020 Crude oil and refined petroleum products: Futures – long 149,470 224 Futures – short 143,826 671 Options – long 26,500 — Options – short 26,500 — Natural gas: Futures – long 5,000,000 — Corn: Futures – long 26,025 — Futures – short 55,395 875 Physical contracts – long 27,109 875 Soybean oil: Futures – long 137,518 — Futures – short 285,957 — Foreign Currency Risk We are exposed to exchange rate fluctuations on transactions entered into by our international operations that are denominated in currencies other than the local (functional) currencies of these operations. To manage our exposure to these exchange rate fluctuations, we use foreign currency exchange and purchase contracts. These contracts are not designated as hedging instruments for accounting purposes and therefore are classified as economic hedges. As of December 31, 2018 , we had forward contracts to purchase $441 million of U.S. dollars. All of these commitments matured on or before January 31, 2019 . Environmental Compliance Program Price Risk We are exposed to market risk related to the volatility in the price of credits needed to comply with various governmental and regulatory environmental compliance programs. To manage this risk, we enter into contracts to purchase these credits when prices are deemed favorable. Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values. Certain of these programs require us to blend biofuels into the products we produce, and we are subject to such programs in most of the countries in which we operate. These countries set annual quotas for the percentage of biofuels that must be blended into the motor fuels consumed in these countries. As a producer of motor fuels from petroleum, we are obligated to blend biofuels into the products we produce at a rate that is at least equal to the applicable quota. To the degree we are unable to blend at the applicable rate, we must purchase biofuel credits (primarily RINs in the U.S.). We are exposed to the volatility in the market price of these credits, and we manage that risk by purchasing biofuel credits when prices are deemed favorable. For the years ended December 31, 2018 , 2017 , and 2016 , the cost of meeting our obligations under these compliance programs was $536 million , $942 million , and $749 million , respectively. These amounts are reflected in cost of materials and other. We are subject to additional requirements under GHG emission programs, including the cap-and-trade systems, as discussed in Note 19 . Under these cap-and-trade systems, we purchase various GHG emission credits available on the open market. Therefore, we are exposed to the volatility in the market price of these credits. The cost to implement certain provisions of the cap-and-trade systems are significant; however, we recovered the majority of these costs from our customers for the years ended December 31, 2018 , 2017 , and 2016 and expect to continue to recover the majority of these costs in the future. For the years ended December 31, 2018 , 2017 , and 2016 , the net cost of meeting our obligations under these compliance programs was immaterial. Fair Values of Derivative Instruments The following tables provide information about the fair values of our derivative instruments as of December 31, 2018 and 2017 (in millions) and the line items in the balance sheets in which the fair values are reflected. See Note 19 for additional information related to the fair values of our derivative instruments. As indicated in Note 19 , we net fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty under master netting arrangements, including cash collateral assets and obligations. The following tables, however, are presented on a gross asset and gross liability basis, which results in the reflection of certain assets in liability accounts and certain liabilities in asset accounts. Balance Sheet Location December 31, 2018 December 31, 2017 Asset Liability Asset Liability Derivatives not designated as hedging instruments Commodity contracts: Futures Receivables, net $ 2,787 $ 2,681 $ 886 $ 966 Options Receivables, net 5 — 8 3 Physical purchase contracts Inventories — 5 — 6 Foreign currency contracts Receivables, net 4 — — — Foreign currency contracts Accrued expenses — 1 — 7 Total $ 2,796 $ 2,687 $ 894 $ 982 Market Risk Our price risk management activities involve the receipt or payment of fixed price commitments into the future. These transactions give rise to market risk, which is the risk that future changes in market conditions may make an instrument less valuable. We closely monitor and manage our exposure to market risk on a daily basis in accordance with policies approved by our board of directors. Market risks are monitored by our risk control group to ensure compliance with our stated risk management policy. We do not require any collateral or other security to support derivative instruments into which we enter. We also do not have any derivative instruments that require us to maintain a minimum investment-grade credit rating. Effect of Derivative Instruments on Income The following tables provide information about the gain or loss recognized in income on our derivative instruments and the line items in the statements of income in which such gains and losses are reflected (in millions). Derivatives Used as Economic Hedges Location of Gain (Loss) Recognized in Income on Derivatives Year Ended December 31, 2018 2017 2016 Commodity contracts Cost of materials and other $ (165 ) $ (278 ) $ (86 ) Commodity contracts Operating expenses (excluding depreciation and amortization expense) 7 — — Foreign currency contracts Cost of materials and other 56 (40 ) 16 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (Unaudited) | 21. QUARTERLY FINANCIAL DATA (Unaudited) The following tables summarize quarterly financial data for the years ended December 31, 2018 and 2017 (in millions, except per share amounts). 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 2017 Quarter Ended March 31 June 30 September 30 December 31 (b) Revenues $ 21,772 $ 22,254 $ 23,562 $ 26,392 Gross profit (a) 732 1,049 1,614 1,110 Operating income 528 860 1,332 843 Net income 321 572 863 2,400 Net income attributable to Valero Energy Corporation stockholders 305 548 841 2,371 Earnings per common share 0.68 1.23 1.91 5.43 Earnings per common share – assuming dilution 0.68 1.23 1.91 5.42 ___________________________ (a) Gross profit is calculated as revenues less total cost of sales. (b) During the quarter ended December 31, 2017 , we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15 . |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation General These consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the 2018 presentation. The changes were primarily due to our retrospective adoption on January 1, 2018 of Accounting Standards Update (ASU) No. 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU requires employers to report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic postretirement benefit cost (non-service cost components) to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The adoption of this ASU did not affect our financial position or results of operations, but resulted in the reclassification of the non-service components of pension and postretirement benefit costs from operating expenses (excluding depreciation and amortization expense) and general and administrative expenses (excluding depreciation and amortization expense) to other income, net. This resulted in an increase of $42 million and $44 million in operating expenses (excluding depreciation and amortization expense) and a decrease of $6 million and $6 million in general and administrative expenses (excluding depreciation and amortization expense) for the years ended December 31, 2017 and 2016, respectively. |
Principles of Consolidation | Principles of Consolidation These financial statements include those of Valero, our wholly owned subsidiaries, and VIEs in which we have a controlling interest. Our VIEs are described in Note 12 . The ownership interests held by others in the VIEs are recorded as noncontrolling interests. Intercompany items and transactions have been eliminated in consolidation. Investments in less than wholly owned entities where we have significant influence are accounted for using the equity method. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Cash Equivalents | Cash Equivalents Our cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have a maturity of three months or less when acquired. |
Receivables | Receivables Trade receivables are carried at original invoice amount. We maintain an allowance for doubtful accounts, which is adjusted based on management’s assessment of our customers’ historical collection experience, known credit risks, and industry and economic conditions. |
Inventories | Inventories The cost of refinery feedstocks, refined petroleum products, and grain and ethanol inventories is determined under the last-in, first-out (LIFO) method using the dollar-value LIFO approach, with any increments valued based on average purchase prices during the year. Our LIFO inventories are carried at the lower of cost or market. The cost of products purchased for resale and the cost of materials and supplies are determined principally under the weighted-average cost method. Our non-LIFO inventories are carried at the lower of cost or net realizable value. If the aggregate market value of our LIFO inventories or the aggregate net realizable value of our non-LIFO inventories is less than the related aggregate cost, we recognize a loss for the difference in our statements of income. |
Property, Plant, and Equipment | Property, Plant, and Equipment The cost of property, plant, and equipment (property assets) purchased or constructed, including betterments of property assets, is capitalized. However, the cost of repairs to and normal maintenance of property assets is expensed as incurred. Betterments of property assets are those that extend the useful life, increase the capacity or improve the operating efficiency of the asset, or improve the safety of our operations. The cost of property assets constructed includes interest and certain overhead costs allocable to the construction activities. Our operations, especially those of our refining segment, are highly capital intensive. Each of our refineries comprises a large base of property assets, consisting of a series of interconnected, highly integrated and interdependent crude oil processing facilities and supporting logistical infrastructure (Units), and these Units are continuously improved. Improvements consist of the addition of new Units and betterments of existing Units. We plan for these improvements by developing a multi-year capital program that is updated and revised based on changing internal and external factors. Depreciation of property assets used in our refining segment is recorded on a straight-line basis over the estimated useful lives of these assets primarily using the composite method of depreciation. We maintain a separate composite group of property assets for each of our refineries. We estimate the useful life of each group based on an evaluation of the property assets comprising the group, and such evaluations consist of, but are not limited to, the physical inspection of the assets to determine their condition, consideration of the manner in which the assets are maintained, assessment of the need to replace assets, and evaluation of the manner in which improvements impact the useful life of the group. The estimated useful lives of our composite groups range primarily from 25 to 30 years. Under the composite method of depreciation, the cost of an improvement is added to the composite group to which it relates and is depreciated over that group’s estimated useful life. We design improvements to our refineries in accordance with engineering specifications, design standards, and practices accepted in our industry, and these improvements have design lives consistent with our estimated useful lives. Therefore, we believe the use of the group life to depreciate the cost of improvements made to the group is reasonable because the estimated useful life of each improvement is consistent with that of the group. Also under the composite method of depreciation, the historical cost of a minor property asset (net of salvage value) that is retired or replaced is charged to accumulated depreciation and no gain or loss is recognized in income. However, a gain or loss is recognized in income for a major property asset that is retired, replaced, sold, or for an abnormal disposition of a property asset (primarily involuntary conversions). Gains and losses are reflected in depreciation and amortization expense, unless such amounts are reported separately due to materiality. Depreciation of property assets used in our ethanol segment is recorded on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the related asset. Assets acquired under capital leases are amortized on a straight-line basis over (i) the lease term if transfer of ownership does not occur at the end of the lease term or (ii) the estimated useful life of the asset if transfer of ownership does occur at the end of the lease term. |
Deferred Charges and Other Assets | Deferred Charges and Other Assets “Deferred charges and other assets, net” primarily include the following: • turnaround costs, which are incurred in connection with planned major maintenance activities at our refineries and ethanol plants and which 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, which are deferred when incurred and amortized on a straight-line basis over the estimated useful life of the specific catalyst; • income taxes receivable; • investments in joint ventures accounted for under the equity method; • intangible assets; and • goodwill. |
Impairment of Assets | Impairment of Assets Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. A long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discounted estimated net cash flows or other appropriate methods. |
Investments | We evaluate our equity method investments for impairment when there is evidence that we may not be able to recover the carrying amount of our investments or the investee is unable to sustain an earnings capacity that justifies the carrying amount. A loss in the value of an investment that is other than a temporary decline is recognized currently in income, and is based on the difference between the estimated current fair value of the investment and its carrying amount. |
Asset Retirement Obligations | Asset Retirement Obligations We record a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to retire a tangible long-lived asset at the time we incur that liability, which is generally when the asset is purchased, constructed, or leased. We record the liability when we have a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability’s fair value. We have obligations with respect to certain of our assets related to our refining and ethanol segments to clean and/or dispose of various component parts of the assets at the time they are retired. However, these component parts can be used for extended and indeterminate periods of time as long as they are properly maintained and/or upgraded. It is our practice and current intent to maintain all our assets and continue making improvements to those assets based on technological advances. As a result, we believe that our assets related to our refining and ethanol segments have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire such assets cannot reasonably be estimated at this time. We will recognize a liability at such time when sufficient information exists to estimate a date or range of potential settlement dates that is needed to employ a present value technique to estimate fair value. |
Environmental Matters | Environmental Matters Liabilities for future remediation costs are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on the completion of investigations or other studies or a commitment to a formal plan of action. Amounts recorded for environmental liabilities have not been reduced by possible recoveries from third parties and have not been measured on a discounted basis. |
Legal Contingencies | Legal Contingencies We are subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. We accrue losses associated with legal claims when such losses are probable and reasonably estimable. If we determine that a loss is probable and cannot estimate a specific amount for that loss but can estimate a range of loss, the best estimate within the range is accrued. If no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. Estimates are adjusted as additional information becomes available or circumstances change. Legal defense costs associated with loss contingencies are expensed in the period incurred. |
Foreign Currency Translation | Foreign Currency Translation Generally, our international subsidiaries use their local currency as their functional currency. Balance sheet amounts are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Income statement amounts are translated into U.S. dollars using the exchange rates in effect at the time the underlying transactions occur. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive loss. |
Revenue Recognition | Revenue Recognition Our revenues are primarily generated from contracts with customers. We generate revenue from contracts with customers from the sale of products by our refining and ethanol segments. Our VLP segment generates intersegment revenues from transportation and terminaling activities provided to our refining segment that are eliminated in consolidation. Revenues are recognized when we satisfy our performance obligation to transfer products to our customers, which typically occurs at a point in time upon shipment or delivery of the products, and for an amount that reflects the transaction price that is allocated to the performance obligation. The customer is able to direct the use of, and obtain substantially all of the benefits from, the products at the point of shipment or delivery. As a result, we consider control to have transferred upon shipment or delivery because we have a present right to payment at that time, the customer has legal title to the asset, we have transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset. Our contracts with customers state the final terms of the sale, including the description, quantity, and price for goods sold. Payment is typically due in full within two to ten days of delivery. In the normal course of business, we generally do not accept product returns. The transaction price is the consideration that we expect to be entitled to in exchange for our products. The transaction price for substantially all of our contracts is generally based on commodity market pricing (i.e., variable consideration). As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. Some of our contracts also contain variable consideration in the form of sales incentives to our customers, such as discounts and rebates. For contracts that include variable consideration, we estimate the factors that determine the variable consideration in order to establish the transaction price. We have elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer (e.g., sales tax, use tax, value-added tax, etc.). We continue to include in the transaction price excise taxes that are imposed on certain inventories in our international operations. The amount of such taxes is provided in supplemental information in a footnote on the statements of income. There are instances where we provide shipping services in relation to the goods sold to our customer. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are included in cost of materials and other. We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities rather than as a promised service and we have included these activities in cost of materials and other. We enter into certain purchase and sale arrangements with the same counterparty that are deemed to be made in contemplation of one another. We combine these transactions and present the net effect in cost of materials and other. We also enter into refined petroleum product exchange transactions to fulfill sales contracts with our customers by accessing refined petroleum products in markets where we do not operate our own refineries. These refined petroleum product exchanges are accounted for as exchanges of nonmonetary assets, and no revenues are recorded on these transactions. |
Cost Classifications | Cost Classifications “Cost of materials and other” primarily includes the cost of materials that are a component of our products sold. These costs include (i) the direct cost of materials (such as crude oil and other refinery feedstocks, refined petroleum products and blendstocks, and ethanol feedstocks and products) that are a component of our products sold; (ii) costs related to the delivery (such as shipping and handling costs) of products sold; (iii) costs related to our environmental credit obligations to comply with various governmental and regulatory programs (such as the cost of Renewable Identification Numbers (RINs) as required by the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard and emission credits under various cap-and-trade systems, as defined in Note 19 ); (iv) gains and losses on our commodity derivative instruments; and (v) certain excise taxes. “Operating expenses (excluding depreciation and amortization expense)” include costs to operate our refineries, ethanol plants, and logistics assets, except for depreciation and amortization expense. These costs primarily include employee-related expenses, energy and utility costs, catalysts and chemical costs, and repair and maintenance expenses. “Depreciation and amortization expense” associated with our operations is separately presented in our statement of income as a component of cost of sales and general and administrative expenses and is disclosed by reportable segment in Note 17 . “Other operating expenses” include costs, if any, incurred by our reportable segments that are not associated with our cost of sales. |
Environmental Compliance Program Costs | Environmental Compliance Program Costs We purchase credits in the open market to meet our obligations under various environmental compliance programs. We purchase biofuel credits (primarily RINs in the U.S.) to comply with government regulations that require us to blend a certain percentage of biofuels into the products we produce. To the degree that we are unable to blend biofuels at the required percentage, we must purchase biofuel credits to meet our obligation. We purchase greenhouse gas (GHG) emission credits to comply with government regulations concerning various GHG emission programs, including cap-and-trade systems. These programs are described in Note 20 under “Environmental Compliance Program Price Risk.” The costs of purchased biofuel credits and GHG emission credits are charged to cost of materials and other as such credits are needed to satisfy our obligation. To the extent we have not purchased enough credits to satisfy our obligation as of the balance sheet date, we charge cost of materials and other for such deficiency based on the market price of the credits as of the balance sheet date, and we record a liability for our obligation to purchase those credits. See Note 19 for disclosure of our fair value liability. |
Stock-Based Compensation | Stock-Based Compensation Compensation expense for our share-based compensation plans is based on the fair value of the awards granted and is recognized in income on a straight-line basis over the shorter of (i) the requisite service period of each award or (ii) the period from the grant date to the date retirement eligibility is achieved if that date is expected to occur during the vesting period established in the award. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by unrecognized tax benefits, if such items may be available to offset the unrecognized tax benefit. Stranded income tax effects are released from accumulated other comprehensive loss to retained earnings on an individual item basis as those items are reclassified into income. We have elected to classify any interest expense and penalties related to the underpayment of income taxes in income tax expense. We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense. |
Earnings per Common Share | Earnings per Common Share Earnings per common share is computed by dividing net income attributable to Valero stockholders by the weighted-average number of common shares outstanding for the year. Participating securities are included in the computation of basic earnings per share using the two-class method. Earnings per common share – assuming dilution is computed by dividing net income attributable to Valero stockholders by the weighted-average number of common shares outstanding for the year increased by the effect of dilutive securities. Potentially dilutive securities are excluded from the computation of earnings per common share – assuming dilution when the effect of including such shares would be antidilutive. |
Financial Instruments | Financial Instruments Our financial instruments include cash and cash equivalents, receivables, payables, debt, capital lease obligations, commodity derivative contracts, and foreign currency derivative contracts. The estimated fair values of these financial instruments approximate their carrying amounts, except for certain debt as discussed in Note 19 . |
Derivatives and Hedging | Derivatives and Hedging All derivative instruments, not designated as normal purchases or sales, are recorded in the balance sheet as either assets or liabilities measured at their fair values with changes in fair value recognized currently in income. To manage commodity price risk, we use economic hedges, which are derivative instruments not designated as fair value or cash flow hedges, and we also use fair value and cash flow hedges from time to time. The cash flow effects of all of our derivative instruments are reflected in operating activities in the statements of cash flows. |
New Accounting Pronouncements | Accounting Pronouncements Adopted During 2018 Topic 606 On January 1, 2018, we adopted the provisions of Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers,” (Topic 606). This standard clarifies the principles for recognizing revenue and supersedes previous revenue recognition requirements under “Revenue Recognition (Topic 605).” We adopted the provisions of Topic 606 using the modified retrospective method of adoption as permitted by the standard. Under this method, the cumulative effect of initially applying the standard is recognized as an adjustment to the opening balance of retained earnings, and revenues reported in the periods prior to the date of adoption are not changed. We elected to apply the transition guidance for Topic 606 only to contracts that were not completed as of the date of adoption. There was no material impact to our financial position as a result of adopting Topic 606; therefore, there was no cumulative-effect adjustment to retained earnings as of January 1, 2018, and there was no material impact to our financial statements as of and for the year ended December 31, 2018 . Our revenue recognition accounting policy described above has been updated in conjunction with our adoption of Topic 606, but our previous policy has been omitted because the adoption of Topic 606 had no material impact to us as previously described. ASU No. 2016-01 On January 1, 2018, we adopted the provisions of ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU enhances the reporting model for financial instruments regarding certain aspects of recognition, measurement, presentation, and disclosure. We adopted the provisions of this ASU using the cumulative-effect method of adoption as required by the ASU. The adoption of this ASU did not affect our financial position or our results of operations as of or for the year ended December 31, 2018 , but resulted in reduced disclosures as it eliminated the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. ASU No. 2017-04 Effective October 1, 2018, we early adopted the provisions of ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the provisions of this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill, and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the impairment charge should not exceed the carrying amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The adoption of this ASU did not affect our financial position or results of operations and did not result in additional disclosures because it is applied prospectively to impairment tests performed after the date of adoption. ASU No. 2017-09 On January 1, 2018, we adopted the provisions of ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.” This ASU reduces diversity in practice, as well as reduces cost and complexity regarding a change to the terms or conditions of a share-based payment award. The adoption of this ASU did not have an immediate effect on our financial position or results of operations as it is applied prospectively to an award modified on or after adoption. ASU No. 2018-02 On January 1, 2018, we adopted the provisions of ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” (ASU No. 2018-02). This ASU allows for the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (Tax Reform) to be reclassified from accumulated other comprehensive income to retained earnings. We elected to reclassify the stranded income tax effects resulting from Tax Reform from accumulated other comprehensive income to retained earnings as of the beginning of the interim period of adoption. The adoption of this ASU did not affect our financial position or results of operations but resulted in the reclassification of $91 million of income tax benefits related to Tax Reform from accumulated other comprehensive loss to retained earnings as of January 1, 2018 as presented in our statement of equity and in Note 11 under “ Accumulated Other Comprehensive Loss .” ASU No. 2018-05 In March 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” (ASU No. 2018-05) to amend certain SEC material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. See Note 15 for a discussion of the impact of this ASU. ASU No. 2018-13 Effective October 1, 2018, we adopted all of the provisions of ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU improves the effectiveness of disclosures in the notes to financial statements by removing, modifying, and adding certain disclosure requirements for fair value measurements. We are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but are required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain provisions of this ASU, primarily related to disclosures, require the prospective method of adoption, with the remaining provisions applied retrospectively. The early adoption of this ASU did not affect our financial position or results of operations, but resulted in revised disclosures as discussed above. ASU No. 2018-14 Effective December 31, 2018, we adopted the provisions of ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU improves the effectiveness of disclosures in the notes to financial statements by removing, modifying, and adding certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. We are no longer required to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, but we are required to (i) disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and (ii) provide an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The early adoption of this ASU did not affect our financial position or results of operations, but resulted in revised disclosures as discussed above. Accounting Pronouncements Adopted on January 1, 2019 Topic 842 In February 2016, the FASB issued ASC Topic 842, “Leases,” (Topic 842) to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. We adopted this new standard on January 1, 2019 using the optional transition method; however, we did not have a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption as noted below, but we will apply the new disclosure requirements beginning in 2019. The new standard provides a number of optional practical expedients and we elected the following: • Transition Elections . We elected the package of practical expedients that permits us to not reassess our prior conclusions about lease identification, lease classification, and initial direct costs under the new standard, as well as the practical expedient that permits us to not assess existing land easements under the new standard. • Lessee Accounting Policy Elections. We elected the short-term lease recognition exemption whereby right-of-use (ROU) assets and lease liabilities are not recognized for leasing arrangements with terms less than one year, and the practical expedient to not separate lease and non-lease components for all classes of underlying assets other than the marine transportation asset class. In preparation for the adoption of Topic 842, we enhanced our contracting and lease evaluation systems and related processes, and we developed a new lease accounting system to capture our leases and support the required disclosures. We have integrated our lease accounting system with our general ledger and modified our related procurement and payment processes. Adoption of this standard resulted in (i) the recognition of ROU assets and lease liabilities for our operating leases of approximately $1.3 billion , (ii) the derecognition of existing assets under construction of approximately $539 million related to a build-to-suit lease arrangement (see Note 10 under “ Other Commitments—MVP Terminal ”), and (iii) the presentation of new disclosures about our leasing activities beginning in the first quarter of 2019. Adoption of this standard did not impact our results of operations or liquidity and our accounting for finance leases is substantially unchanged. ASU No. 2017-12 In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” (ASU No. 2017-12) to improve and simplify accounting guidance for hedge accounting. The provisions of this ASU are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. Certain provisions of this ASU, primarily related to disclosures, require the prospective method of adoption, with the remaining provisions applied through a cumulative-effect adjustment to retained earnings as of the adoption date. The adoption of ASU No. 2017-12 effective January 1, 2019 did not affect our financial position or results of operations. Accounting Pronouncements Not Yet Adopted ASU No. 2016-13 In June 2016, the FASB issued “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (ASU No. 2016-13) to improve financial reporting by requiring the immediate recognition of credit losses on financial instruments held by a reporting entity. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. It also requires enhanced disclosures, including qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In November 2018, the FASB issued “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” (ASU 2018-19), which clarified that this guidance does not apply to receivables arising from operating leases. The provisions of this ASU are effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual reporting periods, with early adoption permitted for annual periods beginning after December 15, 2018. The provisions of this ASU should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which this ASU is effective (i.e., the modified-retrospective approach). We expect to adopt ASU No. 2016-13 effective January 1, 2020, and we do not expect such adoption to materially affect our financial position or our results of operations. ASU No. 2018-17 In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities,” (ASU No. 2018-17) to reduce the cost and complexity of financial reporting associated with consolidation of VIEs. One of the provisions of this ASU amends how a decision maker or service provider determines whether its fee is a variable interest. This guidance requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required by U.S. GAAP). The provisions of this ASU are effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within those annual reporting periods, with early adoption permitted. The provisions of this ASU should be applied on a retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the earliest period presented. We expect to adopt ASU No. 2018-17 effective January 1, 2020, and we do not expect such adoption to materially affect our financial position or our results of operations. |
Variable interest entities | We determined VLP was a VIE because the public limited partners of VLP (i.e., parties other than entities under common control with the general partner) lacked the power to direct the activities of VLP that most significantly impacted its economic performance because they did not have substantive kick-out rights over the general partner or substantive participating rights in VLP. Furthermore, we determined that we were the primary beneficiary of VLP because (i) we were the single decision maker and our general partner interest provides us with the sole power to direct the activities that most significantly impact VLP’s economic performance and (ii) our 66.2 percent limited partner interest and 2.0 percent general partner interest provides us with significant economic rights and obligations. 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. As operator, we operate the plant and perform certain day-to-day operating and management functions for DGD as an independent contractor. The operations agreement provides us (as operator) with certain power to direct the activities that most significantly impact DGD’s economic performance. Because this agreement conveys such power to us and is separate from our ownership rights, we determined that DGD was a VIE. For this reason and because we hold a 50 percent ownership interest that provides us with significant economic rights and obligations, we determined that we are the primary beneficiary of DGD. In the normal course of business, we have financial interests in certain entities that have been determined to be VIEs. We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary such that we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. In order to make this determination, we evaluated our contractual arrangements with the VIEs, including arrangements for the use of assets, purchases of products and services, debt, equity, or management of operating activities. |
Offsetting fair value amounts of commodity derivative contracts | We have elected to offset the fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty, including any related cash collateral assets or obligations as shown below; however, fair value amounts by hierarchy level are presented in the following tables on a gross basis. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet. |
Derivative instruments collateral requirements | We do not require any collateral or other security to support derivative instruments into which we enter. |
Acquisitions and Merger (Tables
Acquisitions and Merger (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of estimated fair values of assets acquired and liabilities assumed, net | The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, based on an independent appraisal that was completed in the fourth quarter of 2018 (in millions). During the third and fourth quarters of 2018, we recognized immaterial adjustments to the preliminary amounts recorded for the Peru Acquisition with a corresponding adjustment to goodwill due to the completion of the independent appraisal. These adjustments did not have a material effect on our results of operations for the year ended December 31, 2018. 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 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Receivables, net | Receivables consisted of the following (in millions): December 31, 2018 2017 Receivables from contracts with customers $ 4,673 $ 5,686 Receivables from certain purchase and sale arrangements 2,311 1,098 Commodity derivative and foreign currency contract receivables 229 102 Other receivables 166 69 Total receivables 7,379 6,955 Allowance for doubtful accounts (34 ) (33 ) Receivables, net $ 7,345 $ 6,922 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following (in millions): December 31, 2018 2017 Refinery feedstocks $ 2,292 $ 2,427 Refined petroleum products and blendstocks 3,678 3,459 Ethanol feedstocks and products 298 242 Materials and supplies 264 256 Inventories $ 6,532 $ 6,384 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Major classes of property, plant, and equipment | Major classes of property, plant, and equipment, including assets held under capital leases, consisted of the following (in millions): December 31, 2018 2017 Land $ 416 $ 411 Crude oil processing facilities 30,721 30,109 Transportation and terminaling facilities 4,935 4,335 Grain processing equipment 1,212 903 Administrative buildings 953 910 Other 2,276 2,068 Construction in progress 1,960 1,274 Property, plant, and equipment, at cost 42,473 40,010 Accumulated depreciation (13,625 ) (12,530 ) Property, plant, and equipment, net $ 28,848 $ 27,480 |
Deferred Charges and Other As_2
Deferred Charges and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of deferred charges and other assets, net | “Deferred charges and other assets, net” consisted of the following (in millions): December 31, 2018 2017 Deferred turnaround and catalyst costs, net $ 1,749 $ 1,520 Income taxes receivable 343 673 Investments in joint ventures 542 530 Intangible assets, net 307 142 Goodwill 260 — Other 431 501 Deferred charges and other assets, net $ 3,632 $ 3,366 |
Accrued Expenses and Other Lo_2
Accrued Expenses and Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued expenses and other long-term liabilities | Accrued expenses and other long-term liabilities consisted of the following (in millions): Accrued Expenses Other Long-Term Liabilities December 31, December 31, 2018 2017 2018 2017 Defined benefit plan liabilities (see Note 13) $ 43 $ 33 $ 654 $ 776 Wage and other employee-related liabilities 302 278 109 111 Uncertain income tax position liabilities (see Note 15) — — 721 723 Repatriation tax liability (see Note 15) (a) — — 603 597 Environmental liabilities (see Note 10) 29 30 327 232 Environmental credit obligations (see Note 19) 34 152 — — Accrued interest expense 93 105 — — Other accrued liabilities 129 114 453 290 Accrued expenses and other long-term liabilities $ 630 $ 712 $ 2,867 $ 2,729 __________________________ (a) The current portion of repatriation tax liability is included in income taxes payable. There was no current portion of repatriation tax liability as of December 31, 2018 and $114 million as of December 31, 2017 . |
Debt and Capital Lease Obliga_2
Debt and Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt and Capital Lease Obligations [Abstract] | |
Debt and capital lease obligations | Debt, at stated values, and capital lease obligations consisted of the following (in millions): Final Maturity December 31, 2018 2017 Credit facilities: Valero Revolver 2020 $ — $ — VLP Revolver 2020 — 410 IEnova Revolver 2028 109 — Canadian Revolver 2019 — — Accounts receivable sales facility 2019 100 100 Public debt: Valero Senior Notes 6.625% 2037 1,500 1,500 3.4% 2026 1,250 1,250 6.125% 2020 850 850 4.35 % 2028 750 — 9.375% 2019 — 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 — Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0% 2040 300 300 Debenture, 7.65% 2026 100 100 Other debt Various 50 49 Net unamortized debt issuance costs and other (80 ) (73 ) Total debt 8,503 8,310 Capital lease obligations 606 562 Total debt and capital lease obligations 9,109 8,872 Less current portion 238 122 Debt and capital lease obligations, less current portion $ 8,871 $ 8,750 |
Summary of credit facilities | We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted): December 31, 2018 Facility Amount Maturity Date Outstanding Borrowings Letters of Credit Issued Availability Committed facilities: Valero Revolver $ 3,000 November 2020 $ — $ 57 $ 2,943 Canadian Revolver C$ 150 November 2019 C$ — C$ 5 C$ 145 Accounts receivable sales facility $ 1,300 July 2019 $ 100 n/a $ 1,200 Letter of credit facility $ 100 November 2019 n/a $ — $ 100 Committed facilities of VIEs (a): VLP Revolver (b) $ 750 November 2020 $ — $ — $ 750 IEnova Revolver $ 340 February 2028 $ 109 n/a $ 231 Uncommitted facilities: Letter of credit facilities n/a n/a n/a $ 229 n/a __________________________ (a) Creditors of our VIEs do not have recourse against us. (b) The VLP Revolver was terminated on January 10, 2019 . See “VLP Revolver” above. |
Interest and debt expense, net of capitalized interest | Interest and debt expense, net of capitalized interest is comprised as follows (in millions): Year Ended December 31, 2018 2017 2016 Interest and debt expense $ 557 $ 539 $ 511 Less capitalized interest 87 71 65 Interest and debt expense, net of capitalized interest $ 470 $ 468 $ 446 |
Principal payments on debt and future minimum rentals on capital lease obligations | Principal maturities for our debt obligations and future minimum rentals on capital lease obligations as of December 31, 2018 were as follows (in millions): Debt Capital Lease Obligations 2019 $ 214 $ 69 2020 855 65 2021 15 62 2022 5 64 2023 20 65 Thereafter 7,474 957 Net unamortized debt issuance costs and other (80 ) n/a Total minimum lease payments n/a 1,282 Less amount representing interest n/a 676 Total $ 8,503 $ 606 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year | As of December 31, 2018 , our future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year were as follows (in millions): 2019 $ 359 2020 245 2021 178 2022 146 2023 123 Thereafter 514 Total minimum rental payments $ 1,565 |
Rental expense for all operating leases | Rental expense, net of sublease rental income was as follows (in millions): Year Ended December 31, 2018 2017 2016 Minimum rental expense $ 515 $ 691 $ 739 Contingent rental expense 19 21 70 Total rental expense 534 712 809 Less sublease rental income 31 54 31 Rental expense, net of sublease rental income $ 503 $ 658 $ 778 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Share activity | Activity in the number of shares of common stock and treasury stock was as follows (in millions): Common Stock Treasury Stock Balance as of December 31, 2015 673 (200 ) Transactions in connection with stock-based compensation plans — 1 Stock purchases under purchase program — (23 ) 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 ) |
Income tax effects related to components of other comprehensive income (loss) | The tax effects allocated to each component of other comprehensive income (loss) were as follows (in millions): 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 ) Before-Tax Amount Tax Expense (Benefit) Net Amount 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 Year Ended December 31, 2016: Foreign currency translation adjustment $ (415 ) $ — $ (415 ) Pension and other postretirement benefits: Loss arising during the year related to: Net actuarial loss (110 ) (34 ) (76 ) Miscellaneous gain — (8 ) 8 Amounts reclassified into income related to: Net actuarial loss 48 18 30 Prior service credit (36 ) (13 ) (23 ) Net loss on pension and other postretirement benefits (98 ) (37 ) (61 ) Other comprehensive loss $ (513 ) $ (37 ) $ (476 ) |
Changes in components of accumulated other comprehensive loss | Changes in accumulated other comprehensive loss by component, net of tax, were as follows (in millions): Foreign Currency Translation Adjustment Defined Benefit Plan Items Total Balance as of December 31, 2015 $ (605 ) $ (328 ) $ (933 ) Other comprehensive loss before reclassifications (416 ) (68 ) (484 ) Amounts reclassified from accumulated other comprehensive loss — 7 7 Other comprehensive loss (416 ) (61 ) (477 ) 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 of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) — (91 ) (91 ) Balance as of December 31, 2018 $ (1,022 ) $ (485 ) $ (1,507 ) |
Gains (losses) reclassified out of accumulated other comprehensive loss | Gains (losses) reclassified out of accumulated other comprehensive loss and into net income were as follows (in millions): Details about Accumulated Other Comprehensive Loss Components Affected Line Item in the Statement of Income Year Ended December 31, 2018 2017 2016 Amortization of items related to defined benefit pension plans: Net actuarial loss $ (63 ) $ (50 ) $ (48 ) (a) Other income, net Prior service credit 29 36 36 (a) Other income, net Curtailment and settlement (7 ) (4 ) — (a) Other income, net (41 ) (18 ) (12 ) Total before tax 9 6 5 Tax benefit Total reclassifications for the year $ (32 ) $ (12 ) $ (7 ) 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 . |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summarized balance sheet information of VIEs | The following tables present summarized balance sheet information for the significant assets and liabilities of our VIEs, which are included in our balance sheets (in millions). December 31, 2018 VLP DGD Central Mexico 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 capital lease obligations $ 27 $ 28 $ 118 $ 9 $ 182 Debt and capital lease obligations, less current portion 990 — — 34 1,024 December 31, 2017 VLP DGD Central Mexico Other Total Assets Cash and cash equivalents $ 42 $ 123 $ 1 $ 13 $ 179 Other current assets 2 66 4 — 72 Property, plant, and equipment, net 1,416 435 51 127 2,029 Liabilities Current liabilities, including current portion of debt and capital lease obligations $ 27 $ 33 $ 26 $ 9 $ 95 Debt and capital lease obligations, less current portion 905 — — 43 948 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
The changes in benefit obligation, the changes in fair value of plan assets, and the funded status of our pension plans and other postretirement benefit plans | The changes in benefit obligation related to all of our defined benefit plans, the changes in fair value of plan assets (a) , and the funded status of our defined benefit plans as of and for the years ended were as follows (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Changes in benefit obligation: Benefit obligation as of beginning of year $ 2,926 $ 2,567 $ 306 $ 302 Service cost 133 123 6 6 Interest cost 91 86 10 10 Participant contributions — — 10 9 Benefits paid (207 ) (158 ) (28 ) (28 ) Actuarial (gain) loss (285 ) 286 (9 ) 6 Other (19 ) 22 (3 ) 1 Benefit obligation as of end of year $ 2,639 $ 2,926 $ 292 $ 306 Changes in plan assets (a): Fair value of plan assets as of beginning of year $ 2,428 $ 2,097 $ — $ — Actual return on plan assets (130 ) 363 — — Valero contributions 156 110 18 19 Participant contributions — — 10 9 Benefits paid (207 ) (158 ) (28 ) (28 ) Other (11 ) 16 — — Fair value of plan assets as of end of year $ 2,236 $ 2,428 $ — $ — Reconciliation of funded status (a) : Fair value of plan assets as of end of year $ 2,236 $ 2,428 $ — $ — Less benefit obligation as of end of year 2,639 2,926 292 306 Funded status as of end of year $ (403 ) $ (498 ) $ (292 ) $ (306 ) Accumulated benefit obligation $ 2,492 $ 2,746 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. |
Schedule of amounts recognized in balance sheet | Amounts recognized in our balance sheet for our pension and other postretirement benefits plans include (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Deferred charges and other assets, net $ 2 $ 5 $ — $ — Accrued expenses (22 ) (14 ) (21 ) (19 ) Other long-term liabilities (383 ) (489 ) (271 ) (287 ) $ (403 ) $ (498 ) $ (292 ) $ (306 ) |
Projected benefit obligations in excess of fair value of plan assets | The following table presents information for our pension plans with projected benefit obligations in excess of plan assets (in millions). December 31, 2018 2017 Projected benefit obligation $ 2,564 $ 2,872 Fair value of plan assets 2,160 2,369 |
Accumulated benefit obligations in excess of fair value of plan assets | The following table presents information for our pension plans with accumulated benefit obligations in excess of plan assets (in millions). December 31, 2018 2017 Accumulated benefit obligation $ 2,253 $ 2,526 Fair value of plan assets 1,974 2,180 |
Expected benefit payments | Benefit payments that we expect to pay, including amounts related to expected future services that we expect to receive, are as follows for the years ending December 31 (in millions): Pension Benefits Other Postretirement Benefits 2019 $ 169 $ 21 2020 193 21 2021 175 21 2022 180 20 2023 194 20 2024-2028 1,043 95 |
Components of net periodic benefit costs | The components of net periodic benefit cost (credit) related to our defined benefit plans were as follows (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Service cost $ 133 $ 123 $ 111 $ 6 $ 6 $ 7 Interest cost 91 86 84 10 10 12 Expected return on plan assets (163 ) (150 ) (139 ) — — — Amortization of: Net actuarial (gain) loss 65 53 49 (2 ) (3 ) (1 ) Prior service credit (18 ) (20 ) (20 ) (11 ) (16 ) (16 ) Special charges (credits) 7 4 (7 ) — — — Net periodic benefit cost (credit) $ 115 $ 96 $ 78 $ 3 $ (3 ) $ 2 |
Pre-tax amounts recognized in other comprehensive income | Pre-tax amounts recognized in other comprehensive income (loss) were as follows (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Net gain (loss) arising during the year: Net actuarial gain (loss) $ (8 ) $ (73 ) $ (145 ) $ 9 $ (6 ) $ 35 Prior service (cost) credit 7 (4 ) — — — — Net (gain) loss reclassified into income: Net actuarial (gain) loss 65 53 49 (2 ) (3 ) (1 ) Prior service credit (18 ) (20 ) (20 ) (11 ) (16 ) (16 ) Curtailment and settlement loss 7 4 — — — — Total changes in other comprehensive income (loss) $ 53 $ (40 ) $ (116 ) $ (4 ) $ (25 ) $ 18 |
Pre-tax amounts in accumulated other comprehensive income not yet recognized | The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost (credit) were as follows (in millions): Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Net actuarial (gain) loss $ 828 $ 894 $ (64 ) $ (57 ) Prior service credit (108 ) (121 ) (31 ) (42 ) Total $ 720 $ 773 $ (95 ) $ (99 ) |
Weighted-average assumptions used to determine the benefit obligations and net periodic benefit cost | The weighted-average assumptions used to determine the benefit obligations were as follows: Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2018 2017 2018 2017 Discount rate 4.25 % 3.58 % 4.40 % 3.72 % Rate of compensation increase 3.78 % 3.86 % n/a n/a Interest crediting rate for cash balance plans 3.04 % 3.04 % n/a n/a The weighted-average assumptions used to determine the net periodic benefit cost were as follows: Pension Plans Other Postretirement Benefit Plans Year Ended December 31, Year Ended December 31, 2018 2017 2016 2018 2017 2016 Discount rate 3.59 % 4.08 % 4.45 % 3.72 % 4.26 % 4.53 % Expected long-term rate of return on plan assets 7.24 % 7.29 % 7.28 % n/a n/a n/a Rate of compensation increase 3.86 % 3.81 % 3.79 % n/a n/a n/a Interest crediting rate for cash balance plans 3.04 % 3.04 % 3.10 % n/a n/a n/a |
Assumed health care cost trend rates | The assumed health care cost trend rates were as follows: December 31, 2018 2017 Health care cost trend rate assumed for the next year 7.29 % 7.30 % 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 of pension plan assets by level of fair value hierarchy | The following tables present the fair values of the assets of our pension plans (in millions) as of December 31, 2018 and 2017 by level of the fair value hierarchy. Assets categorized in Level 1 of the hierarchy are measured at fair value using a market approach based on unadjusted quoted prices from national securities exchanges. Assets categorized in Level 2 of the hierarchy are measured at net asset value in a market that is not active. As previously noted, we do not fund or fully fund U.S. nonqualified and certain international pension plans that are not subject to funding requirements, and we do not fund our other postretirement benefit plans. Fair Value Hierarchy Total as of 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 (b) 76 — — 76 Corporate debt instruments — 284 — 284 Government securities: U.S. Treasury securities 45 — — 45 Other government securities — 138 — 138 Common collective trusts (c) — 609 — 609 Pooled separate accounts (d) — 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 ___________________________ See notes on page 110 . Fair Value Hierarchy Total as of Level 1 Level 2 Level 3 Equity securities: U.S. companies (a) $ 571 $ — $ — $ 571 International companies 187 1 — 188 Preferred stock 4 — — 4 Mutual funds: International growth 118 — — 118 Index funds (b) 85 — — 85 Corporate debt instruments — 272 — 272 Government securities: U.S. Treasury securities 45 — — 45 Other government securities — 144 — 144 Common collective trusts (c) — 621 — 621 Pooled separate accounts (d) — 192 — 192 Private funds — 101 — 101 Insurance contract — 18 — 18 Interest and dividends receivable 5 — — 5 Cash and cash equivalents 85 1 — 86 Securities transactions payable, net (22 ) — — (22 ) Total pension plan assets $ 1,078 $ 1,350 $ — $ 2,428 __________________________________ (a) Equity securities are held in a wide range of industrial sectors, including consumer goods, information technology, healthcare, industrials, and financial services. (b) This class includes primarily investments in approximately 60 percent equities and 40 percent bonds as of December 31, 2018 . As of December 31, 2017 , this class included primarily investments in approximately 70 percent equities and 30 percent bonds. (c) This class includes primarily investments in approximately 70 percent equities and 30 percent bonds as of December 31, 2018 . As of December 31, 2017 , this class included primarily investments in approximately 80 percent equities and 20 percent bonds. (d) This class includes primarily investments in approximately 50 percent equities and 50 percent bonds as of December 31, 2018 and 2017 . |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense and tax benefits | The following table reflects activity related to our stock-based compensation arrangements (in millions): Year Ended December 31, 2018 2017 2016 Stock-based compensation expense: Restricted stock $ 63 $ 58 $ 52 Performance awards 22 19 15 Stock options and other awards 1 — 1 Total stock-based compensation expense $ 86 $ 77 $ 68 Tax benefit recognized on stock-based compensation expense $ 18 $ 27 $ 24 Tax benefit realized for tax deductions resulting from exercises and vestings 32 44 33 Effect of tax deductions in excess of recognized stock-based compensation expense 20 24 22 |
Summary of restricted stock awards | The fair value of each restricted stock per share is equal to the market price of our common stock. A summary of the status of our restricted stock awards is presented in the following table. Number of Shares Weighted- Average Grant-Date Fair Value Per Share Nonvested shares as of January 1, 2018 1,401,040 $ 69.82 Granted 628,908 92.12 Vested (843,709 ) 71.26 Forfeited (9,661 ) 69.97 Nonvested shares as of December 31, 2018 1,176,578 80.70 The following table reflects activity related to our restricted stock: Year Ended December 31, 2018 2017 2016 Weighted-average grant-date fair value per share of restricted stock granted $ 92.12 $ 79.32 $ 59.00 Fair value of restricted stock vested (in millions) 80 71 46 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | The following table summarizes the components of our adjustment (in millions) to reflect the effects of Tax Reform for the years ended December 31, 2018 and 2017 , including whether such amounts were complete, provisional, or incomplete. The amounts presented for 2018 were completed during the fourth quarter of 2018. 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 ) Components of income tax expense (benefit) related to our operations were as follows (in millions): Year Ended December 31, 2018 U.S. International Total 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 U.S. International Total 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” above. (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” above. Year Ended December 31, 2016 U.S. International Total Current: Country $ 294 $ 194 $ 488 U.S. state / Canadian provincial 12 35 47 Total current 306 229 535 Deferred: Country 203 35 238 U.S. state / Canadian provincial (4 ) (4 ) (8 ) Total deferred 199 31 230 Income tax expense $ 505 $ 260 $ 765 |
Income before income tax expense from U.S. and international operations | Income before income tax expense (benefit) was as follows (in millions): Year Ended December 31, 2018 2017 2016 U.S. operations $ 3,168 $ 2,283 $ 1,733 International operations 1,064 924 1,449 Income before income tax expense (benefit) $ 4,232 $ 3,207 $ 3,182 |
Reconciliation of income tax expense related to continuing operations to income tax expense at statutory rate | Statutory income tax rates applicable to the countries in which we operate were as follows: Year Ended December 31, 2018 2017 2016 U.S. 21 % 35 % 35 % Canada 15 % 15 % 15 % U.K. 19 % 19 % 20 % Ireland 13 % 13 % 13 % Peru 30 % n/a n/a Mexico 30 % n/a n/a Aruba n/a n/a 7 % The following is a reconciliation of income tax expense (benefit) computed by applying statutory income tax rates as reflected in the preceding table to actual income tax expense (benefit) related to our operations (in millions): Year Ended December 31, 2018 U.S. International Total Amount Percent Amount Percent Amount Percent 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 67 2.1 % — — 67 1.6 % Foreign tax credits (50 ) (1.6 )% — — (50 ) (1.2 )% Effects of Tax Reform (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 U.S. International Total Amount Percent Amount Percent Amount Percent 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 (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 )% Year Ended December 31, 2016 U.S. International Total Amount Percent Amount Percent Amount Percent Income tax expense at statutory rates $ 606 35.0 % $ 256 17.7 % $ 862 27.1 % U.S. state and Canadian provincial tax expense, net of federal income tax effect 5 0.3 % 31 2.1 % 36 1.1 % Permanent differences: Manufacturing deduction (22 ) (1.3 )% — — (22 ) (0.7 )% Other (3 ) (0.2 )% (10 ) (0.7 )% (13 ) (0.4 )% Change in tax law — — (7 ) (0.5 )% (7 ) (0.2 )% Tax effects of income associated with noncontrolling interests (44 ) (2.5 )% — — (44 ) (1.4 )% Other, net (37 ) (2.1 )% (10 ) (0.7 )% (47 ) (1.5 )% Income tax expense $ 505 29.2 % $ 260 17.9 % $ 765 24.0 % |
Schedule of income taxes paid, net | Income taxes paid to U.S. and international taxing authorities were as follows (in millions): Year Ended December 31, 2018 2017 2016 U.S. $ 1,016 $ 239 $ 241 International 345 171 203 Income taxes paid, net $ 1,361 $ 410 $ 444 |
Deferred income tax assets and liabilities | The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions): December 31, 2018 2017 Deferred income tax assets: Tax credit carryforwards $ 644 $ 69 Net operating losses (NOLs) 523 492 Inventories 101 135 Compensation and employee benefit liabilities 175 179 Environmental liabilities 71 47 Other 141 112 Total deferred income tax assets 1,655 1,034 Valuation allowance (1,111 ) (498 ) Net deferred income tax assets 544 536 Deferred income tax liabilities: Property, plant, and equipment 4,589 4,545 Deferred turnaround costs 316 272 Inventories 287 243 Investments 142 77 Other 172 107 Total deferred income tax liabilities 5,506 5,244 Net deferred income tax liabilities $ 4,962 $ 4,708 |
Income tax credit and loss carryforwards | We had the following income tax credit and loss carryforwards as of December 31, 2018 (in millions): Amount Expiration U.S. state income tax credits $ 80 2019 through 2031 U.S. state income tax credits 6 Unlimited U.S. foreign tax credits 575 2027 U.S. state NOLs (gross amount) 10,039 2019 through 2038 |
Reconciliation of the change in unrecognized tax benefits | The following is a reconciliation of the change in unrecognized tax benefits, excluding related penalties and interest, (in millions): Year Ended December 31, 2018 2017 2016 Balance as of beginning of year $ 941 $ 936 $ 964 Additions based on tax positions related to the current year 23 33 36 Additions for tax positions related to prior years 28 15 11 Reductions for tax positions related to prior years (19 ) (42 ) (46 ) Reductions for tax positions related to the lapse of applicable statute of limitations (1 ) (1 ) (3 ) Settlements (2 ) — (237 ) Reclassification of uncertain tax receivable to long-term receivable from IRS — — 211 Balance as of end of year $ 970 $ 941 $ 936 |
Summary of income tax contingencies | The following is a reconciliation of unrecognized tax benefits reflected in the preceding table to our uncertain tax position liabilities that are presented in our balance sheets (in millions). December 31, 2018 2017 Unrecognized tax benefits $ 970 $ 941 Tax refund claim not presented in our balance sheets (277 ) (274 ) Other 88 77 Uncertain tax position liabilities presented in our balance sheets $ 781 $ 744 Amounts recognized in our balance sheets for uncertain tax positions include (in millions): December 31, 2018 2017 Income taxes payable $ 42 $ — Other long-term liabilities 721 723 Deferred tax liabilities 18 21 Uncertain tax position liabilities presented in our balance sheets $ 781 $ 744 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per common share, basic and diluted | Earnings per common share were computed as follows (dollars and shares in millions, except per share amounts): Year Ended December 31, 2018 2017 2016 Earnings per common share: Net income attributable to Valero stockholders $ 3,122 $ 4,065 $ 2,289 Less income allocated to participating securities 9 14 7 Net income available to common shareholders $ 3,113 $ 4,051 $ 2,282 Weighted-average common shares outstanding 426 442 461 Earnings per common share $ 7.30 $ 9.17 $ 4.94 Earnings per common share – assuming dilution: Net income attributable to Valero stockholders $ 3,122 $ 4,065 $ 2,289 Weighted-average common shares outstanding 426 442 461 Effect of dilutive securities 2 2 3 Weighted-average common shares outstanding – assuming dilution 428 444 464 Earnings per common share – assuming dilution $ 7.29 $ 9.16 $ 4.94 |
Revenues and Segment Informat_2
Revenues and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment activity, including total assets by reportable segment | Total assets by reportable segment were as follows (in millions): December 31, 2018 2017 Refining $ 42,673 $ 40,382 Ethanol 1,691 1,344 VLP 1,620 1,517 Corporate and eliminations 4,171 6,915 Total assets $ 50,155 $ 50,158 The following tables reflect information about our operating income and total expenditures for long-lived assets by reportable segment (in millions): Refining Ethanol VLP Corporate and Eliminations Total Year ended December 31, 2018: Revenues: Revenues from external customers $ 113,601 $ 3,428 $ — $ 4 $ 117,033 Intersegment revenues 14 210 546 (770 ) — Total revenues 113,615 3,638 546 (766 ) 117,033 Cost of sales: Cost of materials and other 102,489 3,008 — (765 ) 104,732 Operating expenses (excluding depreciation and amortization expense reflected below) 4,099 470 125 (4 ) 4,690 Depreciation and amortization expense 1,863 78 76 — 2,017 Total cost of sales 108,451 3,556 201 (769 ) 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 $ 5,119 $ 82 $ 345 $ (974 ) $ 4,572 Total expenditures for long-lived assets (a) $ 2,935 $ 373 $ 24 $ 44 $ 3,376 __________________________ See note on page 126 . Refining Ethanol VLP Corporate and Eliminations Total Year ended December 31, 2017: Revenues: Revenues from external customers $ 90,651 $ 3,324 $ — $ 5 $ 93,980 Intersegment revenues 6 176 452 (634 ) — Total revenues 90,657 3,500 452 (629 ) 93,980 Cost of sales: Cost of materials and other 80,865 2,804 — (632 ) 83,037 Operating expenses (excluding depreciation and amortization expense reflected below) 3,959 443 104 (2 ) 4,504 Depreciation and amortization expense 1,800 81 53 — 1,934 Total cost of sales 86,624 3,328 157 (634 ) 89,475 Other operating expenses 58 — 3 — 61 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 829 829 Depreciation and amortization expense — — — 52 52 Operating income by segment $ 3,975 $ 172 $ 292 $ (876 ) $ 3,563 Total expenditures for long-lived assets (a) $ 1,710 $ 84 $ 110 $ 44 $ 1,948 Year Ended December 31, 2016: Revenues: Revenues from external customers $ 71,968 $ 3,691 $ — $ — $ 75,659 Intersegment revenues — 210 363 (573 ) — Total revenues 71,968 3,901 363 (573 ) 75,659 Cost of sales: Cost of materials and other 63,405 3,130 — (573 ) 65,962 Operating expenses (excluding depreciation and amortization expense reflected below) 3,740 415 96 — 4,251 Depreciation and amortization expense 1,734 66 46 — 1,846 Lower of cost or market inventory valuation adjustment (697 ) (50 ) — — (747 ) Total cost of sales 68,182 3,561 142 (573 ) 71,312 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 709 709 Depreciation and amortization expense — — — 48 48 Asset impairment loss 56 — — — 56 Operating income by segment $ 3,730 $ 340 $ 221 $ (757 ) $ 3,534 Total expenditures for long-lived assets (a) $ 1,867 $ 68 $ 23 $ 38 $ 1,996 __________________________ (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. |
Operating revenues from external customers by product | The following table provides a disaggregation of revenues by reportable segment (in millions). Refining and ethanol segment revenues are disaggregated for our principal products, and VLP segment revenues are disaggregated by activity type. Year Ended December 31, 2018 2017 2016 Refining: Gasolines and blendstocks $ 46,606 $ 40,366 $ 33,450 Distillates 55,546 42,074 32,576 Other product revenues 11,463 8,217 5,942 Total refining revenues 113,615 90,657 71,968 Ethanol: Ethanol 2,912 2,940 3,315 Distillers grains 726 560 586 Total ethanol revenues 3,638 3,500 3,901 VLP: Pipeline transportation 124 101 78 Terminaling 415 348 284 Storage and other 7 3 1 Total VLP revenues 546 452 363 Corporate – other revenues 4 5 — Elimination of intersegment revenues (770 ) (634 ) (573 ) Revenues $ 117,033 $ 93,980 $ 75,659 |
Operating revenues by geographic area of customer | Revenues by geographic area are shown in the following table (in millions). The geographic area is based on location of customer and no customer accounted for 10 percent or more of our revenues. Year Ended December 31, 2018 2017 2016 U.S. $ 82,992 $ 66,614 $ 51,479 Canada 9,211 7,039 6,115 U.K. and Ireland 15,208 11,556 10,797 Other countries 9,622 8,771 7,268 Revenues $ 117,033 $ 93,980 $ 75,659 |
Geographic information by country for long-lived assets | Long-lived assets by geographic area consisted of the following (in millions): December 31, 2018 2017 U.S. $ 27,475 $ 26,083 Canada 1,798 1,915 U.K. and Ireland 1,113 1,063 Other countries 266 — Total long-lived assets $ 30,652 $ 29,061 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of cash flows, supplemental disclosures | In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in millions): Year Ended December 31, 2018 2017 2016 Decrease (increase) in current assets: Receivables, net $ (457 ) $ (870 ) $ (1,531 ) Inventories (197 ) (516 ) 771 Prepaid expenses and other (77 ) 151 47 Increase (decrease) in current liabilities: Accounts payable 304 1,842 1,556 Accrued expenses (113 ) 21 117 Taxes other than income taxes payable (73 ) 172 82 Income taxes payable (684 ) 489 (66 ) Changes in current assets and current liabilities $ (1,297 ) $ 1,289 $ 976 Cash flows related to interest and income taxes were as follows (in millions): Year Ended December 31, 2018 2017 2016 Interest paid in excess of amount capitalized $ 463 $ 457 $ 427 Income taxes paid, net 1,361 410 444 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets and liabilities measured on recurring basis | The following tables present information (in millions) about our assets and liabilities recognized at their fair values in our balance sheets categorized according to the fair value hierarchy of the inputs utilized by us to determine the fair values as of December 31, 2018 and 2017 . We have elected to offset the fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty, including any related cash collateral assets or obligations as shown below; however, fair value amounts by hierarchy level are presented in the following tables on a gross basis. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet. 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 December 31, 2017 Total Gross Fair Value Effect of Counter- party Netting Effect of Cash Collateral Netting Net Carrying Value on Balance Sheet Cash Collateral Paid or Received Not Offset Fair Value Hierarchy Level 1 Level 2 Level 3 Assets: Commodity derivative contracts $ 875 $ 19 $ — $ 894 $ (893 ) $ — $ 1 $ — Investments of certain benefit plans 65 — 8 73 n/a n/a 73 n/a Total $ 940 $ 19 $ 8 $ 967 $ (893 ) $ — $ 74 Liabilities: Commodity derivative contracts $ 955 $ 14 $ — $ 969 $ (893 ) $ (76 ) $ — $ (102 ) Environmental credit obligations — 104 — 104 n/a n/a 104 n/a Physical purchase contracts — 6 — 6 n/a n/a 6 n/a Foreign currency contracts 7 — — 7 n/a n/a 7 n/a Total $ 962 $ 124 $ — $ 1,086 $ (893 ) $ (76 ) $ 117 |
Carrying amounts and estimated fair value of financial instruments | Financial instruments that we recognize in our balance sheets at their carrying amounts are shown in the following table along with their associated fair values (in millions): December 31, 2018 December 31, 2017 Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Cash and cash equivalents Level 1 $ 2,982 $ 2,982 $ 5,850 $ 5,850 Financial liabilities: Debt (excluding capital leases) Level 2 8,503 8,986 8,310 9,795 |
Price Risk Management Activit_2
Price Risk Management Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk management activities by type of risk | As of December 31, 2018 , we had the following outstanding commodity derivative instruments that were used as economic hedges, as well as commodity derivative instruments related to the physical purchase of corn at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels, except those identified as natural gas contracts that are presented in millions of British thermal units, corn contracts that are presented in thousands of bushels, and soybean oil contracts that are presented in thousands of pounds). Notional Contract Volumes by Year of Maturity Derivative Instrument 2019 2020 Crude oil and refined petroleum products: Futures – long 149,470 224 Futures – short 143,826 671 Options – long 26,500 — Options – short 26,500 — Natural gas: Futures – long 5,000,000 — Corn: Futures – long 26,025 — Futures – short 55,395 875 Physical contracts – long 27,109 875 Soybean oil: Futures – long 137,518 — Futures – short 285,957 — |
Fair values of derivative instruments | The following tables provide information about the fair values of our derivative instruments as of December 31, 2018 and 2017 (in millions) and the line items in the balance sheets in which the fair values are reflected. See Note 19 for additional information related to the fair values of our derivative instruments. As indicated in Note 19 , we net fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty under master netting arrangements, including cash collateral assets and obligations. The following tables, however, are presented on a gross asset and gross liability basis, which results in the reflection of certain assets in liability accounts and certain liabilities in asset accounts. Balance Sheet Location December 31, 2018 December 31, 2017 Asset Liability Asset Liability Derivatives not designated as hedging instruments Commodity contracts: Futures Receivables, net $ 2,787 $ 2,681 $ 886 $ 966 Options Receivables, net 5 — 8 3 Physical purchase contracts Inventories — 5 — 6 Foreign currency contracts Receivables, net 4 — — — Foreign currency contracts Accrued expenses — 1 — 7 Total $ 2,796 $ 2,687 $ 894 $ 982 |
Effect of derivative instruments on income | The following tables provide information about the gain or loss recognized in income on our derivative instruments and the line items in the statements of income in which such gains and losses are reflected (in millions). Derivatives Used as Economic Hedges Location of Gain (Loss) Recognized in Income on Derivatives Year Ended December 31, 2018 2017 2016 Commodity contracts Cost of materials and other $ (165 ) $ (278 ) $ (86 ) Commodity contracts Operating expenses (excluding depreciation and amortization expense) 7 — — Foreign currency contracts Cost of materials and other 56 (40 ) 16 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following tables summarize quarterly financial data for the years ended December 31, 2018 and 2017 (in millions, except per share amounts). 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 2017 Quarter Ended March 31 June 30 September 30 December 31 (b) Revenues $ 21,772 $ 22,254 $ 23,562 $ 26,392 Gross profit (a) 732 1,049 1,614 1,110 Operating income 528 860 1,332 843 Net income 321 572 863 2,400 Net income attributable to Valero Energy Corporation stockholders 305 548 841 2,371 Earnings per common share 0.68 1.23 1.91 5.43 Earnings per common share – assuming dilution 0.68 1.23 1.91 5.42 ___________________________ (a) Gross profit is calculated as revenues less total cost of sales. (b) During the quarter ended December 31, 2017 , we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15 . |
Description of Business, Basi_3
Description of Business, Basis of Presentation, and Significant Accounting Policies (Details) branded_wholesale_site in Thousands, gal / yr in Millions, bbl / d in Millions, $ in Millions | Jan. 01, 2018USD ($) | Dec. 31, 2018USD ($)gal / yrbbl / drefineryethanol_plantbranded_wholesale_site | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) |
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Number of petroleum refineries owned | refinery | 15 | ||||
Combined total throughput capacity of petroleum refining (barrels per day) | bbl / d | 3.1 | ||||
Number of branded wholesale sites | branded_wholesale_site | 7 | ||||
Number of ethanol plants owned | ethanol_plant | 14 | ||||
Combined capacity of ethanol (gallons per year) | gal / yr | 1,730 | ||||
Operating expenses (excluding depreciation and amortization expense) | $ 4,690 | $ 4,504 | $ 4,251 | ||
General and administrative expenses (excluding depreciation and amortization expense) | 925 | 829 | 709 | ||
Reclassification of stranded income tax effects of Tax Reform from accumulated other comprehensive loss to retained earnings | 0 | ||||
Derecognition of existing assets under construction related to build-to-suit lease arrangement | $ (42,473) | (40,010) | |||
Minimum [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Property, plant, and equipment, useful life | 25 years | ||||
Typical post-delivery payment terms (in days) | 2 days | ||||
Maximum [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Property, plant, and equipment, useful life | 30 years | ||||
Typical post-delivery payment terms (in days) | 10 days | ||||
Accounting Standards Update 2017-07 [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Operating expenses (excluding depreciation and amortization expense) | 42 | 44 | |||
General and administrative expenses (excluding depreciation and amortization expense) | $ (6) | $ (6) | |||
Accounting Standards Update 2018-02 [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Reclassification of stranded income tax effects of Tax Reform from accumulated other comprehensive loss to retained earnings | $ 91 | ||||
Topic 842 [Member] | Subsequent Event [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
ROU assets for operating leases | $ 1,300 | ||||
Lease liabilities for operating leases | 1,300 | ||||
Topic 842 [Member] | Subsequent Event [Member] | MVP Terminal [Member] | |||||
Basis of Presentation and Summary of Significant Accounting Policies (Textual) | |||||
Derecognition of existing assets under construction related to build-to-suit lease arrangement | $ 539 |
Acquisitions and Merger (Detail
Acquisitions and Merger (Details) $ / shares in Units, gal in Millions | Jan. 10, 2019USD ($)$ / shares | Nov. 15, 2018USD ($)plantgal | May 14, 2018USD ($)MBbls | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Acquisitions and Merger (Textual) | ||||||
Amount paid from available cash on hand | $ 468,000,000 | $ 0 | $ 0 | |||
Goodwill | 260,000,000 | 0 | ||||
Ethanol Plants [Member] | ||||||
Acquisitions and Merger (Textual) | ||||||
Working capital | $ 20,000,000 | |||||
Acquisition agreement, number of ethanol plants | plant | 3 | |||||
Acquisition agreement, total cash consideration | $ 320,000,000 | $ 320,000,000 | $ 0 | $ 0 | ||
Acquisition agreement, combined ethanol production capacity per year | gal | 280 | |||||
Pure Biofuels [Member] | ||||||
Acquisitions and Merger (Textual) | ||||||
Percent equity interests acquired | 100.00% | |||||
Amount paid from available cash on hand | $ 468,000,000 | |||||
Working capital | 132,000,000 | |||||
Identifiable intangible assets | 200,000,000 | |||||
Goodwill | $ 260,000,000 | |||||
Amortization period of identifiable intangible assets | 10 years | |||||
Total amount of goodwill deductible for tax purposes | $ 0 | |||||
Pure Biofuels [Member] | Port of Callao Terminal [Member] | ||||||
Acquisitions and Merger (Textual) | ||||||
Approximate storage capacity of terminal (in thousands of barrels) | MBbls | 1,000 | |||||
Pure Biofuels [Member] | Paita Terminal [Member] | ||||||
Acquisitions and Merger (Textual) | ||||||
Approximate storage capacity of terminal (in thousands of barrels) | MBbls | 180 | |||||
VLP [Member] | Subsequent Event [Member] | ||||||
Acquisitions and Merger (Textual) | ||||||
Merger Transaction, price per common unit (in usd per unit) | $ / shares | $ 42.25 | |||||
Merger Transaction, aggregate merger consideration funded with available cash on hand | $ 950,000,000 |
Acquisitions and Merger, Fair V
Acquisitions and Merger, Fair Values of Assets Acquired and Liabilities Assumed, Net (Details) - Pure Biofuels [Member] $ in Millions | May 14, 2018USD ($) |
Fair Values of Assets Acquired, Goodwill, and Liabilities Assumed, Net | |
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 |
Aruba Disposition (Details)
Aruba Disposition (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Aruba Disposition (Textual) | ||||
Tax benefit on disposition | $ (879) | $ 949 | $ (765) | |
Asset impairment loss | $ 0 | $ 0 | 56 | |
Aruba Terminal [Member] | ||||
Aruba Disposition (Textual) | ||||
Asset impairment loss | $ 56 | |||
Refining [Member] | Aruba Terminal [Member] | ||||
Aruba Disposition (Textual) | ||||
Asset impairment loss | $ 56 | |||
Refining [Member] | Aruba Disposition [Member] | ||||
Aruba Disposition (Textual) | ||||
Tax benefit on disposition | $ 42 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables | ||
Commodity derivative and foreign currency contract receivables | $ 229 | $ 102 |
Other receivables | 166 | 69 |
Total receivables | 7,379 | 6,955 |
Allowance for doubtful accounts | (34) | (33) |
Receivables, net | 7,345 | 6,922 |
Receivables from Contracts with Customers [Member] | ||
Receivables | ||
Receivables | 4,673 | 5,686 |
Receivables from Certain Purchase and Sale Arrangements [Member] | ||
Receivables | ||
Receivables | $ 2,311 | $ 1,098 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Inventories | |||
Refinery feedstocks | $ 2,292 | $ 2,427 | |
Refined petroleum products and blendstocks | 3,678 | 3,459 | |
Ethanol feedstocks and products | 298 | 242 | |
Materials and supplies | 264 | 256 | |
Inventories | 6,532 | 6,384 | |
Inventories (Textual) | |||
Excess of market value over carrying amount of LIFO inventories | 1,500 | 3,000 | |
Inventory not valued at LIFO | 1,100 | 1,000 | |
Lower of cost or market inventory valuation adjustment (benefit) | $ 0 | $ 0 | $ (747) |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | $ 42,473 | $ 40,010 | |
Accumulated depreciation | (13,625) | (12,530) | |
Property, plant, and equipment, net | 28,848 | 27,480 | |
Property, Plant, and Equipment (Textual) | |||
Property, plant, and equipment, assets under capital leases | 711 | 635 | |
Accumulated amortization on assets under capital leases | 106 | 72 | |
Depreciation expense related to continuing operations | 1,400 | 1,300 | $ 1,300 |
Land [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 416 | 411 | |
Crude Oil Processing Facilities [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 30,721 | 30,109 | |
Transportation and Terminaling Facilities [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 4,935 | 4,335 | |
Grain Processing Equipment [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 1,212 | 903 | |
Administrative Buildings [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 953 | 910 | |
Other [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | 2,276 | 2,068 | |
Construction in Progress [Member] | |||
Property, Plant, and Equipment, Net | |||
Property, plant, and equipment, at cost | $ 1,960 | $ 1,274 |
Deferred Charges and Other As_3
Deferred Charges and Other Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Charges and Other Assets | |||
Deferred turnaround and catalyst costs, net | $ 1,749 | $ 1,520 | |
Income taxes receivable | 343 | 673 | |
Investments in joint ventures | 542 | 530 | |
Intangible assets, net | 307 | 142 | |
Goodwill | 260 | 0 | |
Other | 431 | 501 | |
Deferred charges and other assets, net | 3,632 | 3,366 | |
Deferred Charges and Other Assets (Textual) | |||
Amortization expense, deferred refinery turnaround and catalyst costs and other assets | $ 668 | $ 650 | $ 575 |
Accrued Expenses and Other Lo_3
Accrued Expenses and Other Long-Term Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued Expenses | |||
Defined benefit plan liabilities, current | $ 43,000,000 | $ 33,000,000 | |
Wage and other employee-related liabilities, current | 302,000,000 | 278,000,000 | |
Environmental liabilities, current | 29,000,000 | 30,000,000 | |
Environmental credit obligations, current | 34,000,000 | 152,000,000 | |
Accrued interest expense, current | 93,000,000 | 105,000,000 | |
Other accrued liabilities, current | 129,000,000 | 114,000,000 | |
Accrued expenses | 630,000,000 | 712,000,000 | |
Other Long-Term Liabilities | |||
Defined benefit plan liabilities, noncurrent | 654,000,000 | 776,000,000 | |
Wage and other employee-related liabilities, noncurrent | 109,000,000 | 111,000,000 | |
Uncertain tax position liabilities, noncurrent | 721,000,000 | 723,000,000 | |
Repatriation tax liability, noncurrent | [1] | 603,000,000 | 597,000,000 |
Environmental liabilities, noncurrent | 327,000,000 | 232,000,000 | |
Other accrued liabilities, noncurrent | 453,000,000 | 290,000,000 | |
Other long-term liabilities | 2,867,000,000 | 2,729,000,000 | |
Accrued Expenses and Other Long-Term Liabilities (Textual) | |||
Current portion of repatriation tax liability, included in income taxes payable | $ 0 | $ 114,000,000 | |
[1] | The current portion of repatriation tax liability is included in income taxes payable. There was no current portion of repatriation tax liability as of December 31, 2018 and $114 million as of December 31, 2017. |
Debt and Capital Lease Obliga_3
Debt and Capital Lease Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt and Capital Lease Obligations: | |||
Net unamortized debt issuance costs and other | $ (80) | $ (73) | |
Total debt | 8,503 | 8,310 | |
Capital lease obligations | 606 | 562 | |
Total debt and capital lease obligations | 9,109 | 8,872 | |
Less current portion | 238 | 122 | |
Debt and capital lease obligations, less current portion | 8,871 | 8,750 | |
Credit Facilities [Member] | Canadian Revolver [Member] | |||
Short-term Debt [Line Items] | |||
Short-term debt at stated values | 0 | 0 | |
Credit Facilities [Member] | Accounts Receivable Sales Facility [Member] | |||
Short-term Debt [Line Items] | |||
Short-term debt at stated values | 100 | 100 | |
Credit Facilities [Member] | Valero Revolver [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | 0 | 0 | |
Credit Facilities [Member] | VLP Revolver [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | 0 | 410 | |
Credit Facilities [Member] | IEnova Revolver [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | 109 | 0 | |
Senior Notes [Member] | 6.625% Valero Senior Notes Due in 2037 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 1,500 | 1,500 | |
Interest rate of notes (percent) | 6.625% | ||
Senior Notes [Member] | Valero Senior Notes Due in 2026 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 1,250 | 1,250 | |
Interest rate of notes (percent) | 3.40% | 3.40% | |
Senior Notes [Member] | Valero Senior Notes Due In 2020 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 850 | 850 | |
Interest rate of notes (percent) | 6.125% | ||
Senior Notes [Member] | Valero Senior Notes Due in 2028 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 750 | 0 | |
Interest rate of notes (percent) | 4.35% | ||
Senior Notes [Member] | Valero Senior Notes Due In 2019 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 0 | 750 | |
Interest rate of notes (percent) | 9.375% | ||
Senior Notes [Member] | Valero Senior Notes Due In 2032 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 750 | 750 | |
Interest rate of notes (percent) | 7.50% | ||
Senior Notes [Member] | Valero Senior Notes Due in 2045 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 650 | 650 | |
Interest rate of notes (percent) | 4.90% | ||
Senior Notes [Member] | Valero Senior Notes Due in 2025 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 600 | 600 | |
Interest rate of notes (percent) | 3.65% | ||
Senior Notes [Member] | Valero Senior Notes Due In 2039 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 250 | 250 | |
Interest rate of notes (percent) | 10.50% | ||
Senior Notes [Member] | Valero Senior Notes Due In 2030 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 200 | 200 | |
Interest rate of notes (percent) | 8.75% | ||
Senior Notes [Member] | Valero Senior Notes Due In 2097 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 100 | 100 | |
Interest rate of notes (percent) | 7.45% | ||
Senior Notes [Member] | 6.75% Valero Senior Notes Due In 2037 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 24 | 24 | |
Interest rate of notes (percent) | 6.75% | ||
Senior Notes [Member] | VLP Senior Notes Due in 2026 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 500 | 500 | |
Interest rate of notes (percent) | 4.375% | 4.375% | |
Senior Notes [Member] | VLP Senior Notes Due in 2028 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 500 | 0 | |
Interest rate of notes (percent) | 4.50% | ||
Revenue Bonds [Member] | Gulf Opportunity Zone Revenue Bonds Series 2010 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 300 | 300 | |
Interest rate of notes (percent) | 4.00% | ||
Debentures [Member] | Debenture Due In 2026 [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 100 | 100 | |
Interest rate of notes (percent) | 7.65% | ||
Other Debt [Member] | |||
Debt Instruments [Abstract] | |||
Long-term debt at stated values | $ 50 | $ 49 |
Debt, Credit Facilities (Detail
Debt, Credit Facilities (Details) | 9 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2018CAD ($) | Oct. 31, 2018 | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CAD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($) | |||
VLP Senior Notes Due in 2028 [Member] | Senior Notes [Member] | |||||||||||
Credit Facilities (Textual) | |||||||||||
Interest rate of notes (percent) | 4.50% | 4.50% | |||||||||
Valero Revolver [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | $ 3,000,000,000 | ||||||||||
Maturity date | Nov. 30, 2020 | Nov. 30, 2020 | |||||||||
Outstanding borrowings or letters of credit issued | 0 | ||||||||||
Availability | 2,943,000,000 | ||||||||||
Credit Facilities (Textual) | |||||||||||
Borrowings from long-term lines of credit | $ 0 | $ 0 | $ 0 | ||||||||
Repayments of long-term lines of credit | $ 0 | 0 | 0 | ||||||||
Valero Revolver Letter of Credit [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | 2,000,000,000 | ||||||||||
Outstanding borrowings or letters of credit issued | 57,000,000 | ||||||||||
Canadian Revolver [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Outstanding borrowings, short-term | $ 0 | ||||||||||
Canadian Revolver [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | $ 75,000,000 | $ 150,000,000 | |||||||||
Maturity date | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2019 | ||||||||
Availability | $ 145,000,000 | ||||||||||
Credit Facilities (Textual) | |||||||||||
Borrowings from long-term lines of credit | 0 | $ 0 | $ 0 | ||||||||
Repayments of long-term lines of credit | 0 | $ 0 | $ 0 | ||||||||
Canadian Revolver Letter of Credit [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Outstanding borrowings or letters of credit issued | $ 5,000,000 | ||||||||||
Committed Letter of Credit Facility Expires November 2019 [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | 100,000,000 | ||||||||||
Maturity date | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2019 | ||||||||
Outstanding borrowings or letters of credit issued | 0 | ||||||||||
Availability | 100,000,000 | ||||||||||
Accounts Receivable Sales Facility [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Outstanding borrowings, short-term | 100,000,000 | ||||||||||
Accounts Receivable Sales Facility [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | 1,300,000,000 | ||||||||||
Maturity date | Jul. 31, 2019 | Jul. 31, 2019 | |||||||||
Availability | $ 1,200,000,000 | ||||||||||
Credit Facilities (Textual) | |||||||||||
Borrowings from long-term lines of credit | $ 0 | $ 0 | 0 | ||||||||
Interest rate of credit facility at period end (percent) | 3.0618% | 2.0387% | 3.0618% | ||||||||
Repayments of long-term lines of credit | $ 0 | $ 0 | 0 | ||||||||
Designated pool of accounts receivable | 2,300,000,000 | $ 1,800,000,000 | |||||||||
Uncommitted Letter of Credit Facility [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Outstanding borrowings or letters of credit issued | 229,000,000 | ||||||||||
Valero Energy Partners LP [Member] | VLP Senior Notes Due in 2028 [Member] | Senior Notes [Member] | |||||||||||
Credit Facilities (Textual) | |||||||||||
Face amount of long-term debt issuance | $ 500,000,000 | ||||||||||
Interest rate of notes (percent) | 4.50% | 4.50% | |||||||||
Valero Energy Partners LP [Member] | VLP Revolver [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | 750,000,000 | $ 750,000,000 | [1],[2] | ||||||||
Maturity date | [1],[2] | Nov. 30, 2020 | Nov. 30, 2020 | ||||||||
Outstanding borrowings or letters of credit issued | [1],[2] | 0 | |||||||||
Availability | [1],[2] | 750,000,000 | |||||||||
Credit Facilities (Textual) | |||||||||||
Borrowings from long-term lines of credit | $ 380,000,000 | 349,000,000 | |||||||||
Interest rate of credit facility at period end (percent) | 2.875% | ||||||||||
Repayments of long-term lines of credit | $ 410,000,000 | $ 0 | $ 494,000,000 | ||||||||
Valero Energy Partners LP [Member] | VLP Revolver Letter of Credit [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Outstanding borrowings or letters of credit issued | [1],[2] | 0 | |||||||||
Central Mexico Terminals [Member] | IEnova Revolver [Member] | Credit Facilities [Member] | |||||||||||
Line of Credit Facility | |||||||||||
Facility amount | [1] | 340,000,000 | |||||||||
Maturity date | [1] | Feb. 28, 2028 | Feb. 28, 2028 | ||||||||
Outstanding borrowings | [1] | 109,000,000 | |||||||||
Availability | [1] | $ 231,000,000 | |||||||||
Credit Facilities (Textual) | |||||||||||
Interest rate of credit facility at period end (percent) | 6.046% | 6.046% | |||||||||
Amount borrowed | $ 109,000,000 | ||||||||||
Repayments of lines of credit | $ 0 | ||||||||||
[1] | Creditors of our VIEs do not have recourse against us. | ||||||||||
[2] | The VLP Revolver was terminated on January 10, 2019. See “VLP Revolver” above. |
Debt, Public Debt (Details)
Debt, Public Debt (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Senior Notes [Member] | Senior Notes Due In 2028 [Member] | |||
Public Debt (Textual) | |||
Face amount of long-term debt issuance | $ 750,000,000 | ||
Interest rate of notes (percent) | 4.35% | ||
Maturity date of long-term debt issuance | Jun. 1, 2028 | ||
Proceeds from issuance of senior long-term debt | $ 749,000,000 | ||
Senior Notes [Member] | Senior Notes Due In 2019 [Member] | |||
Public Debt (Textual) | |||
Interest rate of notes (percent) | 9.375% | ||
Maturity date of long-term debt issuance | Mar. 15, 2019 | ||
Early repayment of senior debt | $ 787,000,000 | ||
Early redemption fee | $ 37,000,000 | ||
Debt instrument, redemption price, percentage of principal amount redeemed (percent) | 104.90% | ||
Senior Notes [Member] | VLP Senior Notes Due in 2028 [Member] | |||
Public Debt (Textual) | |||
Interest rate of notes (percent) | 4.50% | ||
Senior Notes [Member] | Senior Notes Due in 2026 [Member] | |||
Public Debt (Textual) | |||
Face amount of long-term debt issuance | $ 1,250,000,000 | ||
Interest rate of notes (percent) | 3.40% | 3.40% | |
Maturity date of long-term debt issuance | Sep. 15, 2026 | ||
Proceeds from issuance of senior long-term debt | $ 1,246,000,000 | ||
Senior Notes [Member] | Senior Notes Due in June 2017 [Member] | |||
Public Debt (Textual) | |||
Interest rate of notes (percent) | 6.125% | ||
Maturity date of long-term debt issuance | Jun. 15, 2017 | ||
Early repayment of senior debt | $ 778,000,000 | ||
Debt instrument, redemption price, percentage of principal amount redeemed (percent) | 103.70% | ||
Senior Notes [Member] | Senior Notes Due in October 2017 [Member] | |||
Public Debt (Textual) | |||
Interest rate of notes (percent) | 7.20% | ||
Maturity date of long-term debt issuance | Oct. 15, 2017 | ||
Early repayment of senior debt | $ 213,000,000 | ||
Debt instrument, redemption price, percentage of principal amount redeemed (percent) | 106.27% | ||
Senior Notes [Member] | VLP Senior Notes Due in 2026 [Member] | |||
Public Debt (Textual) | |||
Face amount of long-term debt issuance | $ 500,000,000 | ||
Interest rate of notes (percent) | 4.375% | 4.375% | |
Maturity date of long-term debt issuance | Dec. 15, 2026 | ||
Proceeds from issuance of senior long-term debt | $ 500,000,000 | ||
Valero Energy Partners LP [Member] | Senior Notes [Member] | VLP Senior Notes Due in 2028 [Member] | |||
Public Debt (Textual) | |||
Face amount of long-term debt issuance | $ 500,000,000 | ||
Interest rate of notes (percent) | 4.50% | ||
Maturity date of long-term debt issuance | Mar. 15, 2028 | ||
Proceeds from issuance of senior long-term debt | $ 498,000,000 | ||
Valero Energy Partners LP [Member] | Subordinated Debt [Member] | VLP Subordinated Notes [Member] [Member] | |||
Public Debt (Textual) | |||
Repayments of notes payable - related party | 85,000,000 | ||
VLP Revolver [Member] | Valero Energy Partners LP [Member] | Credit Facilities [Member] | |||
Public Debt (Textual) | |||
Repayments of outstanding amounts under the VLP Revolver | $ 410,000,000 | $ 0 | $ 494,000,000 |
Debt, Interest Incurred (Detail
Debt, Interest Incurred (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest and Debt Expense, Net of Capitalized Interest | |||
Interest and debt expense | $ 557 | $ 539 | $ 511 |
Less capitalized interest | 87 | 71 | 65 |
Interest and debt expense, net of capitalized interest | $ 470 | $ 468 | $ 446 |
Debt, Other Debt, Capital Lease
Debt, Other Debt, Capital Lease Obligations, and Other Disclosures (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Principal Payments Due on Debt | ||
2,019 | $ 214 | |
2,020 | 855 | |
2,021 | 15 | |
2,022 | 5 | |
2,023 | 20 | |
Thereafter | 7,474 | |
Net unamortized debt issuance costs and other | (80) | $ (73) |
Total debt | 8,503 | 8,310 |
Future Minimum Rentals on Capital Lease Obligations | ||
2,019 | 69 | |
2,020 | 65 | |
2,021 | 62 | |
2,022 | 64 | |
2,023 | 65 | |
Thereafter | 957 | |
Total minimum lease payments | 1,282 | |
Less amount representing interest | 676 | |
Total capital lease obligations | 606 | 562 |
Capital Lease Obligations [Member] | ||
Capital Lease Obligations (Textual) | ||
Capital lease obligations incurred | 63 | 502 |
Assets Held under Capital Leases [Member] | ||
Capital Lease Obligations (Textual) | ||
Capital lease assets recognized | 63 | $ 502 |
Pure Biofuels [Member] | ||
Other Debt (Textual) | ||
Amount of debt retired | $ 137 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future Minimum Rental Payments | |||
2,019 | $ 359 | ||
2,020 | 245 | ||
2,021 | 178 | ||
2,022 | 146 | ||
2,023 | 123 | ||
Thereafter | 514 | ||
Total minimum rental payments | 1,565 | ||
Rental Expense, Net of Sublease Rental Income | |||
Minimum rental expense | 515 | $ 691 | $ 739 |
Contingent rental expense | 19 | 21 | 70 |
Total rental expense | 534 | 712 | 809 |
Less sublease rental income | 31 | 54 | 31 |
Rental expense, net of sublease rental income | $ 503 | $ 658 | $ 778 |
Commitments and Contingencies,
Commitments and Contingencies, Narrative (Details) $ in Millions | 12 Months Ended | 16 Months Ended | 22 Months Ended | 28 Months Ended | |||
Dec. 31, 2018USD ($)bbl / drenewalpropertyMBbls | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)bbl / drenewalMBbls | Jun. 30, 2019USD ($) | Jan. 01, 2020USD ($) | Jan. 01, 2019USD ($) | |
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | $ 42,473 | $ 40,010 | $ 42,473 | ||||
Contributions to MVP | 181 | 406 | $ 4 | ||||
Equity investment in MVP | 542 | 530 | $ 542 | ||||
Cost of undivided interest in pipeline | $ 212 | 72 | $ 0 | ||||
Terminalling Agreement [Member] | MVP Terminalling, LLC (MVP) [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Initial term of terminal agreement | 12 years | ||||||
Number of available automatic renewals | renewal | 2 | 2 | |||||
Automatic renewal term of terminalling agreement | 5 years | ||||||
Construction in Progress [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | $ 1,960 | $ 1,274 | $ 1,960 | ||||
MVP Terminal [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Approximate storage capacity of terminal (in thousands of barrels) | MBbls | 5,000 | 5,000 | |||||
Contributions to MVP | $ 166 | $ 247 | |||||
MVP Terminal [Member] | Subsequent Event [Member] | Topic 842 [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | $ (539) | ||||||
Long-term liability recorded | (292) | ||||||
Equity investment in MVP | $ 247 | ||||||
MVP Terminal [Member] | Magellan Midstream Partners LP (Magellan) [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Long-term liability recorded | 292 | 292 | |||||
MVP Terminal [Member] | Expected Impact [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Contributions to MVP | $ 420 | ||||||
MVP Terminal [Member] | Construction in Progress [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | $ 539 | $ 539 | |||||
MVP Terminal [Member] | Minimum [Member] | Construction in Progress [Member] | Expected Impact [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | 840 | ||||||
MVP Terminal [Member] | Maximum [Member] | Construction in Progress [Member] | Expected Impact [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
MVP Terminal construction costs | $ 1,400 | ||||||
Central Texas Pipeline [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Undivided interest in project (percent) | 40.00% | 40.00% | |||||
Pipeline capacity (barrels per day) | bbl / d | 150,000 | 150,000 | |||||
Cost of undivided interest in pipeline | $ 73 | $ 80 | |||||
Central Texas Pipeline [Member] | Expected Impact [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Cost of undivided interest in pipeline | $ 170 | ||||||
Sunrise Pipeline System [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Undivided interest in project (percent) | 20.00% | 20.00% | |||||
Pipeline capacity (barrels per day) | bbl / d | 500,000 | 500,000 | |||||
Cost of undivided interest in pipeline | $ 139 | ||||||
Colorado City Storage Tanks [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Approximate storage capacity of terminal (in thousands of barrels) | MBbls | 270 | 270 | |||||
Number of properties | property | 2 | ||||||
Valero Energy Corporation [Member] | MVP Terminal [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Approximate storage capacity of terminal (in thousands of barrels) | MBbls | 4,000 | 4,000 | |||||
Variable Interest Entity, Not Primary Beneficiary [Member] | MVP Terminalling, LLC (MVP) [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Membership interest (percent) | 50.00% | ||||||
Variable Interest Entity, Not Primary Beneficiary [Member] | MVP Terminalling, LLC (MVP) [Member] | Expected Impact [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Membership interest (percent) | 50.00% |
Equity, Stock Related Disclosur
Equity, Stock Related Disclosures (Details) - USD ($) | Jan. 24, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 23, 2018 | Sep. 21, 2016 | Sep. 16, 2016 | Jul. 13, 2015 |
Share Activity Rollforward | ||||||||
Treasury stock, beginning balance (shares) | (239,603,534) | |||||||
Treasury stock, ending balance (shares) | (255,905,051) | (239,603,534) | ||||||
Equity (Textual) | ||||||||
Preferred stock authorized (shares) | 20,000,000 | |||||||
Preferred stock par value per share (in usd per share) | $ 0.01 | |||||||
Preferred stock outstanding (shares) | 0 | 0 | ||||||
Stock repurchases under buyback program | $ 1,511,000,000 | $ 1,307,000,000 | $ 1,262,000,000 | |||||
Remaining amount authorized under stock purchase programs | $ 2,200,000,000 | |||||||
Public Offering [Member] | Valero Energy Partners LP [Member] | ||||||||
Equity (Textual) | ||||||||
Aggregate offering price under equity distribution agreement | $ 350,000,000 | |||||||
Units sold in the offering (shares) | 0 | 742,897 | 223,083 | |||||
Proceeds from issuance of Valero Energy Partners LP common units [combine with other financing] | $ 35,000,000 | $ 9,000,000 | ||||||
Subsequent Event [Member] | Dividend Declared [Member] | ||||||||
Equity (Textual) | ||||||||
Dividends payable, date declared | Jan. 24, 2019 | |||||||
Dividends payable (in usd per share) | $ 0.90 | |||||||
Dividends payable, date to be paid | Mar. 5, 2019 | |||||||
Dividends payable, date of record | Feb. 13, 2019 | |||||||
Common Stock Repurchase Programs [Member] | ||||||||
Equity (Textual) | ||||||||
Stock repurchases under buyback program | $ 1,500,000,000 | $ 1,300,000,000 | $ 1,300,000,000 | |||||
Stock Repurchase Program Approved July 2015 [Member] | ||||||||
Equity (Textual) | ||||||||
Authorized amount under stock purchase program | $ 2,500,000,000 | |||||||
Stock Repurchase Program Approved September 2016 [Member] | ||||||||
Equity (Textual) | ||||||||
Authorized amount under stock purchase program | $ 2,500,000,000 | |||||||
Stock Repurchase Program Approved January 2018 [Member] | ||||||||
Equity (Textual) | ||||||||
Authorized amount under stock purchase program | $ 2,500,000,000 | |||||||
Common Stock [Member] | ||||||||
Share Activity Rollforward | ||||||||
Common stock, beginning balance (shares) | 673,000,000 | 673,000,000 | 673,000,000 | |||||
Common stock, ending balance (shares) | 673,000,000 | 673,000,000 | 673,000,000 | |||||
Treasury Stock [Member] | ||||||||
Share Activity Rollforward | ||||||||
Treasury stock, beginning balance (shares) | (240,000,000) | (222,000,000) | (200,000,000) | |||||
Transactions in connection with stock-based compensation plans (shares) | 1,000,000 | 1,000,000 | ||||||
Stock purchases under purchase programs (shares) | (16,000,000) | (19,000,000) | (23,000,000) | |||||
Treasury stock, ending balance (shares) | (256,000,000) | (240,000,000) | (222,000,000) | |||||
Equity (Textual) | ||||||||
Stock repurchases under buyback program | $ 1,511,000,000 | $ 1,307,000,000 | $ 1,262,000,000 |
Equity, Income Tax Effects on O
Equity, Income Tax Effects on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Before-Tax Amount | ||||
Other comprehensive income (loss) before income tax expense (benefit) | $ (468) | $ 449 | $ (513) | |
Tax Expense (Benefit) | ||||
Income tax expense (benefit) related to items of other comprehensive income (loss) | 10 | (21) | (37) | |
Net Amount | ||||
Reclassification from accumulated other comprehensive income (loss), current period, net of tax | 32 | 12 | 7 | |
Other comprehensive income (loss) | (478) | 470 | (476) | |
Foreign Currency Translation Adjustment [Member] | ||||
Before-Tax Amount | ||||
Other comprehensive income (loss), before reclassifications, before tax | (517) | 514 | (415) | |
Tax Expense (Benefit) | ||||
Other comprehensive income (loss), before reclassifications, tax expense (benefit) | 0 | 0 | 0 | |
Net Amount | ||||
Other comprehensive income (loss), before reclassifications, net of tax | (517) | 514 | (415) | |
Net Actuarial Gain (Loss) [Member] | ||||
Before-Tax Amount | ||||
Other comprehensive income (loss), before reclassifications, before tax | 1 | (79) | (110) | |
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | 63 | 50 | 48 |
Tax Expense (Benefit) | ||||
Other comprehensive income (loss), before reclassifications, tax expense (benefit) | 0 | (29) | (34) | |
Reclassification from accumulated other comprehensive income (loss), current period, tax expense (benefit) | 14 | 18 | 18 | |
Net Amount | ||||
Other comprehensive income (loss), before reclassifications, net of tax | 1 | (50) | (76) | |
Reclassification from accumulated other comprehensive income (loss), current period, net of tax | 49 | 32 | 30 | |
Prior Service (Cost) Credit [Member] | ||||
Before-Tax Amount | ||||
Other comprehensive income (loss), before reclassifications, before tax | 7 | (4) | ||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | (29) | (36) | (36) |
Tax Expense (Benefit) | ||||
Other comprehensive income (loss), before reclassifications, tax expense (benefit) | 1 | (1) | ||
Reclassification from accumulated other comprehensive income (loss), current period, tax expense (benefit) | (7) | (13) | (13) | |
Net Amount | ||||
Other comprehensive income (loss), before reclassifications, net of tax | 6 | (3) | ||
Reclassification from accumulated other comprehensive income (loss), current period, net of tax | (22) | (23) | (23) | |
Miscellaneous Gain (Loss) [Member] | ||||
Before-Tax Amount | ||||
Other comprehensive income (loss), before reclassifications, before tax | 0 | 0 | ||
Tax Expense (Benefit) | ||||
Other comprehensive income (loss), before reclassifications, tax expense (benefit) | 3 | (8) | ||
Net Amount | ||||
Other comprehensive income (loss), before reclassifications, net of tax | (3) | 8 | ||
Curtailment and Settlement Loss [Member] | ||||
Before-Tax Amount | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | 7 | 4 | 0 |
Tax Expense (Benefit) | ||||
Reclassification from accumulated other comprehensive income (loss), current period, tax expense (benefit) | 2 | 1 | ||
Net Amount | ||||
Reclassification from accumulated other comprehensive income (loss), current period, net of tax | 5 | 3 | ||
Net Gain (Loss) on Pension and Other Postretirement Benefits [Member] | ||||
Before-Tax Amount | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | 41 | 18 | 12 | |
Other comprehensive income (loss) before income tax expense (benefit) | 49 | (65) | (98) | |
Tax Expense (Benefit) | ||||
Reclassification from accumulated other comprehensive income (loss), current period, tax expense (benefit) | 9 | 6 | 5 | |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 10 | (21) | (37) | |
Net Amount | ||||
Other comprehensive income (loss) | $ 39 | $ (44) | $ (61) | |
[1] | These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (credit), as discussed in Note 13. |
Equity, Changes in Accumulated
Equity, Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | |||
Beginning balance, accumulated other comprehensive income (loss), net of tax | $ 21,991 | ||
Other comprehensive income (loss) before reclassifications | (508) | $ 458 | $ (484) |
Amounts reclassified from accumulated other comprehensive loss | 32 | 12 | 7 |
Other comprehensive income (loss) | (476) | 470 | (477) |
Reclassification of stranded income tax effects of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) | 0 | ||
Ending balance, accumulated other comprehensive income (loss), net of tax | 21,667 | 21,991 | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | |||
Beginning balance, accumulated other comprehensive income (loss), net of tax | (940) | (1,410) | (933) |
Reclassification of stranded income tax effects of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) | (91) | ||
Ending balance, accumulated other comprehensive income (loss), net of tax | (1,507) | (940) | (1,410) |
Foreign Currency Translation Adjustment [Member] | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | |||
Beginning balance, accumulated other comprehensive income (loss), net of tax | (507) | (1,021) | (605) |
Other comprehensive income (loss) before reclassifications | (515) | 514 | (416) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Other comprehensive income (loss) | (515) | 514 | (416) |
Reclassification of stranded income tax effects of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) | 0 | ||
Ending balance, accumulated other comprehensive income (loss), net of tax | (1,022) | (507) | (1,021) |
Defined Benefit Plan Items Adjustment [Member] | |||
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | |||
Beginning balance, accumulated other comprehensive income (loss), net of tax | (433) | (389) | (328) |
Other comprehensive income (loss) before reclassifications | 7 | (56) | (68) |
Amounts reclassified from accumulated other comprehensive loss | 32 | 12 | 7 |
Other comprehensive income (loss) | 39 | (44) | (61) |
Reclassification of stranded income tax effects of Tax Reform to retained earnings per ASU 2018-02 (see Note 1) | (91) | ||
Ending balance, accumulated other comprehensive income (loss), net of tax | $ (485) | $ (433) | $ (389) |
Equity, Reclassification Out of
Equity, Reclassification Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Gains (losses) reclassified out of accumulated other comprehensive income (loss) | ||||
Net of tax | $ (32) | $ (12) | $ (7) | |
Net Actuarial Gain (Loss) [Member] | ||||
Amortization of items related to defined benefit pension plans: | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | (63) | (50) | (48) |
Tax benefit | 14 | 18 | 18 | |
Gains (losses) reclassified out of accumulated other comprehensive income (loss) | ||||
Net of tax | (49) | (32) | (30) | |
Prior Service (Cost) Credit [Member] | ||||
Amortization of items related to defined benefit pension plans: | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | 29 | 36 | 36 |
Tax benefit | (7) | (13) | (13) | |
Gains (losses) reclassified out of accumulated other comprehensive income (loss) | ||||
Net of tax | 22 | 23 | 23 | |
Curtailment and Settlement Loss [Member] | ||||
Amortization of items related to defined benefit pension plans: | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | [1] | (7) | (4) | 0 |
Tax benefit | 2 | 1 | ||
Gains (losses) reclassified out of accumulated other comprehensive income (loss) | ||||
Net of tax | (5) | (3) | ||
Net Gain (Loss) on Pension and Other Postretirement Benefits [Member] | ||||
Amortization of items related to defined benefit pension plans: | ||||
Reclassification from accumulated other comprehensive income (loss), current period, before tax | (41) | (18) | (12) | |
Tax benefit | $ 9 | $ 6 | $ 5 | |
[1] | These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (credit), as discussed in Note 13. |
Variable Interest Entities, Con
Variable Interest Entities, Consolidated (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($)refinery | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Assets | ||||
Cash and cash equivalents | $ 2,982 | $ 5,850 | $ 4,816 | $ 4,114 |
Property, plant, and equipment, net | 28,848 | 27,480 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 10,724 | 11,071 | ||
Debt and capital lease obligations, less current portion | $ 8,871 | 8,750 | ||
Variable Interest Entity (Textual) | ||||
Number of refineries impacted by VLP operations | refinery | 10 | |||
Variable Interest Entity, Primary Beneficiary [Member] | ||||
Assets | ||||
Cash and cash equivalents | $ 235 | 179 | ||
Other current assets | 198 | 72 | ||
Property, plant, and equipment, net | 2,254 | 2,029 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 182 | 95 | ||
Debt and capital lease obligations, less current portion | 1,024 | 948 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Valero Energy Partners LP [Member] | ||||
Assets | ||||
Cash and cash equivalents | 152 | 42 | ||
Other current assets | 2 | 2 | ||
Property, plant, and equipment, net | 1,409 | 1,416 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 27 | 27 | ||
Debt and capital lease obligations, less current portion | 990 | 905 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Diamond Green Diesel Holdings LLC [Member] | ||||
Assets | ||||
Cash and cash equivalents | 65 | 123 | ||
Other current assets | 112 | 66 | ||
Property, plant, and equipment, net | 576 | 435 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 28 | 33 | ||
Debt and capital lease obligations, less current portion | $ 0 | 0 | ||
Variable Interest Entity (Textual) | ||||
Ownership interest (percent) | 50.00% | |||
Variable interest entity, maximum percentage of construction costs financed | 60.00% | |||
Variable Interest Entity, Primary Beneficiary [Member] | Central Mexico Terminals [Member] | ||||
Assets | ||||
Cash and cash equivalents | $ 0 | 1 | ||
Other current assets | 20 | 4 | ||
Property, plant, and equipment, net | 156 | 51 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 118 | 26 | ||
Debt and capital lease obligations, less current portion | 0 | 0 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Other Variable Interest Entities [Member] | ||||
Assets | ||||
Cash and cash equivalents | 18 | 13 | ||
Other current assets | 64 | 0 | ||
Property, plant, and equipment, net | 113 | 127 | ||
Liabilities | ||||
Current liabilities, including current portion of debt and capital lease obligations | 9 | 9 | ||
Debt and capital lease obligations, less current portion | $ 34 | $ 43 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Limited Partner [Member] | Valero Energy Partners LP [Member] | ||||
Variable Interest Entity (Textual) | ||||
Ownership interest (percent) | 66.20% | |||
Variable Interest Entity, Primary Beneficiary [Member] | General Partner [Member] | Valero Energy Partners LP [Member] | ||||
Variable Interest Entity (Textual) | ||||
Ownership interest (percent) | 2.00% | |||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member] | Other Variable Interest Entities [Member] | ||||
Variable Interest Entity (Textual) | ||||
Ownership interest (percent) | 50.00% | |||
Variable Interest Entity, Not Primary Beneficiary [Member] | Limited Partner [Member] | Valero Energy Partners LP [Member] | ||||
Variable Interest Entity (Textual) | ||||
Ownership interest (percent) | 31.80% |
Variable Interest Entities, Non
Variable Interest Entities, Non-Consolidated (Details) - MVP Terminalling, LLC (MVP) [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)member | |
Variable Interest Entity, Not Primary Beneficiary [Member] | |
Variable Interest Entity (Textual) | |
Ownership interest (percent) | 50.00% |
Number of members | member | 2 |
Maximum exposure to loss | $ 247 |
VLO equity investment in MVP | $ 247 |
Variable Interest Entity, Primary Beneficiary [Member] | Magellan Midstream Partners LP (Magellan) [Member] | |
Variable Interest Entity (Textual) | |
Ownership interest (percent) | 50.00% |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | ||||||
Accrued expenses | $ (43) | $ (33) | ||||
Other long-term liabilities | (654) | (776) | ||||
Pension Plans [Member] | ||||||
Defined Benefit Plan, Change in Benefit Obligation Rollforward | ||||||
Benefit obligation at beginning of year | 2,926 | [1] | 2,567 | |||
Service cost | 133 | 123 | $ 111 | |||
Interest cost | 91 | 86 | 84 | |||
Participant contributions | 0 | 0 | ||||
Benefits paid | (207) | (158) | ||||
Actuarial (gain) loss | (285) | 286 | ||||
Other | (19) | 22 | ||||
Benefit obligation at end of year | 2,639 | [1] | 2,926 | [1] | 2,567 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets Rollforward | ||||||
Fair value of plan assets at beginning of year | [1] | 2,428 | 2,097 | |||
Actual return on plan assets | [1] | (130) | 363 | |||
Valero contributions | [1] | 156 | 110 | |||
Participant contributions | [1] | 0 | 0 | |||
Benefits paid | [1] | (207) | (158) | |||
Other | [1] | (11) | 16 | |||
Fair value of plan assets as of end of year | [1] | 2,236 | 2,428 | $ 2,097 | ||
Reconciliation of funded status: | ||||||
Funded status as of end of year | [1] | (403) | (498) | |||
Accumulated benefit obligation | 2,492 | 2,746 | ||||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | ||||||
Deferred charges and other assets, net | 2 | 5 | ||||
Accrued expenses | (22) | (14) | ||||
Other long-term liabilities | (383) | (489) | ||||
Amounts recognized in balance sheet for defined benefit plans | $ (403) | $ (498) | ||||
Actuarial Gain (Loss), Discount Rates (Textual) | ||||||
Discount rate | 4.25% | 3.58% | 4.08% | |||
Other Postretirement Benefit Plans [Member] | ||||||
Defined Benefit Plan, Change in Benefit Obligation Rollforward | ||||||
Benefit obligation at beginning of year | $ 306 | [1] | $ 302 | |||
Service cost | 6 | 6 | $ 7 | |||
Interest cost | 10 | 10 | 12 | |||
Participant contributions | 10 | 9 | ||||
Benefits paid | (28) | (28) | ||||
Actuarial (gain) loss | (9) | 6 | ||||
Other | (3) | 1 | ||||
Benefit obligation at end of year | 292 | [1] | 306 | [1] | 302 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets Rollforward | ||||||
Fair value of plan assets at beginning of year | [1] | 0 | 0 | |||
Actual return on plan assets | [1] | 0 | 0 | |||
Valero contributions | [1] | 18 | 19 | |||
Participant contributions | [1] | 10 | 9 | |||
Benefits paid | [1] | (28) | (28) | |||
Other | [1] | 0 | 0 | |||
Fair value of plan assets as of end of year | [1] | 0 | 0 | $ 0 | ||
Reconciliation of funded status: | ||||||
Funded status as of end of year | [1] | (292) | (306) | |||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | ||||||
Deferred charges and other assets, net | 0 | 0 | ||||
Accrued expenses | (21) | (19) | ||||
Other long-term liabilities | (271) | (287) | ||||
Amounts recognized in balance sheet for defined benefit plans | $ (292) | $ (306) | ||||
Actuarial Gain (Loss), Discount Rates (Textual) | ||||||
Discount rate | 4.40% | 3.72% | ||||
[1] | 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. |
Employee Benefit Plans, Project
Employee Benefit Plans, Projected Benefit Obligations in Excess of Plan Assets (Details) - Pension Plans [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Information About Pension Plans in which the Projected Benefit Obligation Exceeded the Fair Value of Plan Assets | ||
Projected benefit obligation | $ 2,564 | $ 2,872 |
Fair value of plan assets | $ 2,160 | $ 2,369 |
Employee Benefit Plans, Accumul
Employee Benefit Plans, Accumulated Benefit Obligations in Excess of Plan Assets (Details) - Pension Plans [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Information About Pension Plans in which the Accumulated Benefit Obligation Exceeded the Fair Value of Plan Assets | ||
Accumulated benefit obligation | $ 2,253 | $ 2,526 |
Fair value of plan assets | $ 1,974 | $ 2,180 |
Employee Benefit Plans, Benefit
Employee Benefit Plans, Benefit Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Pension Plans [Member] | |
Estimated Future Benefit Payments | |
2,019 | $ 169 |
2,020 | 193 |
2,021 | 175 |
2,022 | 180 |
2,023 | 194 |
2024-2028 | 1,043 |
Employee Benefit Plans (Textual) | |
Future employer contributions to pension and other postretirement plans | 35 |
Other Postretirement Benefit Plans [Member] | |
Estimated Future Benefit Payments | |
2,019 | 21 |
2,020 | 21 |
2,021 | 21 |
2,022 | 20 |
2,023 | 20 |
2024-2028 | 95 |
Employee Benefit Plans (Textual) | |
Future employer contributions to pension and other postretirement plans | $ 21 |
Employee Benefit Plans, Compone
Employee Benefit Plans, Components of Net Periodic Benefit Cost (Credit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Benefit Plans (Textual) | |||
The percentage of the higher of the projected benefit obligation or market-related value of plan assets in excess of which net actuarial (gains) losses are amortized | 10.00% | ||
Pension Plans [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | $ 133 | $ 123 | $ 111 |
Interest cost | 91 | 86 | 84 |
Expected return on plan assets | (163) | (150) | (139) |
Amortization of: | |||
Net actuarial (gain) loss | 65 | 53 | 49 |
Prior service credit | (18) | (20) | (20) |
Special charges (credits) | 7 | 4 | (7) |
Net periodic benefit cost (credit) | 115 | 96 | 78 |
Other Postretirement Benefit Plans [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | 6 | 6 | 7 |
Interest cost | 10 | 10 | 12 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of: | |||
Net actuarial (gain) loss | (2) | (3) | (1) |
Prior service credit | (11) | (16) | (16) |
Special charges (credits) | 0 | 0 | 0 |
Net periodic benefit cost (credit) | $ 3 | $ (3) | $ 2 |
Employee Benefit Plans, Pre-Tax
Employee Benefit Plans, Pre-Tax Amounts Recognized in Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net (gain) loss reclassified into income: | |||
Total changes in other comprehensive income (loss) | $ 49 | $ (65) | $ (98) |
Pension Plans [Member] | |||
Net gain (loss) arising during the year: | |||
Net actuarial gain (loss) | (8) | (73) | (145) |
Prior service (cost) credit | 7 | (4) | 0 |
Net (gain) loss reclassified into income: | |||
Net actuarial (gain) loss | 65 | 53 | 49 |
Prior service credit | (18) | (20) | (20) |
Curtailment and settlement loss | 7 | 4 | 0 |
Total changes in other comprehensive income (loss) | 53 | (40) | (116) |
Other Postretirement Benefit Plans [Member] | |||
Net gain (loss) arising during the year: | |||
Net actuarial gain (loss) | 9 | (6) | 35 |
Prior service (cost) credit | 0 | 0 | 0 |
Net (gain) loss reclassified into income: | |||
Net actuarial (gain) loss | (2) | (3) | (1) |
Prior service credit | (11) | (16) | (16) |
Curtailment and settlement loss | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | $ (4) | $ (25) | $ 18 |
Employee Benefit Plans, Pre-T_2
Employee Benefit Plans, Pre-Tax Amounts in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Pension Plans [Member] | ||
Pension and Other Postretirement Benefit Plans Accumulated Other Comprehensive Income (Loss), before Tax | ||
Net actuarial (gain) loss | $ 828 | $ 894 |
Prior service credit | (108) | (121) |
Total | 720 | 773 |
Other Postretirement Benefit Plans [Member] | ||
Pension and Other Postretirement Benefit Plans Accumulated Other Comprehensive Income (Loss), before Tax | ||
Net actuarial (gain) loss | (64) | (57) |
Prior service credit | (31) | (42) |
Total | $ (95) | $ (99) |
Employee Benefit Plans, Weighte
Employee Benefit Plans, Weighted-Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum [Member] | |||
Employee Benefit Plans (Textual) | |||
Yield curve maturities | 6 months | ||
Maximum [Member] | |||
Employee Benefit Plans (Textual) | |||
Yield curve maturities | 99 years | ||
Pension Plans [Member] | |||
Weighted Average Assumptions Used to Determine Benefit Obligation | |||
Discount rate | 4.25% | 3.58% | 4.08% |
Rate of compensation increase | 3.78% | 3.86% | |
Interest crediting rate for cash balance plans | 3.04% | 3.04% | |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Discount rate | 3.59% | 4.08% | 4.45% |
Expected long-term rate of return on plan assets | 7.24% | 7.29% | 7.28% |
Rate of compensation increase | 3.86% | 3.81% | 3.79% |
Interest crediting rate for cash balance plans | 3.04% | 3.04% | 3.10% |
Other Postretirement Benefit Plans [Member] | |||
Weighted Average Assumptions Used to Determine Benefit Obligation | |||
Discount rate | 4.40% | 3.72% | |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | |||
Discount rate | 3.72% | 4.26% | 4.53% |
Employee Benefit Plans, Health
Employee Benefit Plans, Health Care Cost Trend Rate (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assumed Health Care Cost Trend Rates | ||
Health care cost trend rate assumed for the next year | 7.29% | 7.30% |
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 | 2,026 | 2,026 |
Employee Benefit Plans, Fair Va
Employee Benefit Plans, Fair Value of Pension Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Percentage of equity securities in target allocations for plan assets | 70.00% | |||
Debt Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Percentage of equity securities in target allocations for plan assets | 30.00% | |||
Pension Plans [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [1] | $ 2,236 | $ 2,428 | $ 2,097 |
Pension Plans [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 909 | 1,078 | ||
Pension Plans [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 1,327 | 1,350 | ||
Pension Plans [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | US Companies [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [2] | 497 | 571 | |
Pension Plans [Member] | US Companies [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [2] | 497 | 571 | |
Pension Plans [Member] | US Companies [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [2] | 0 | 0 | |
Pension Plans [Member] | US Companies [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [2] | 0 | 0 | |
Pension Plans [Member] | International Companies [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 160 | 188 | ||
Pension Plans [Member] | International Companies [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 159 | 187 | ||
Pension Plans [Member] | International Companies [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 1 | 1 | ||
Pension Plans [Member] | International Companies [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Preferred Stock [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 4 | 4 | ||
Pension Plans [Member] | Preferred Stock [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 4 | 4 | ||
Pension Plans [Member] | Preferred Stock [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Preferred Stock [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | International Growth [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 97 | 118 | ||
Pension Plans [Member] | International Growth [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 97 | 118 | ||
Pension Plans [Member] | International Growth [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | International Growth [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Index Funds [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [3] | 76 | 85 | |
Pension Plans [Member] | Index Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [3] | 76 | 85 | |
Pension Plans [Member] | Index Funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [3] | 0 | 0 | |
Pension Plans [Member] | Index Funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [3] | $ 0 | $ 0 | |
Pension Plans [Member] | Index Fund - Equity Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 60.00% | 70.00% | ||
Pension Plans [Member] | Index Fund - Debt Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 40.00% | 30.00% | ||
Pension Plans [Member] | Corporate Debt Instruments [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | $ 284 | $ 272 | ||
Pension Plans [Member] | Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 284 | 272 | ||
Pension Plans [Member] | Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | US Treasury Securities [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 45 | 45 | ||
Pension Plans [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 45 | 45 | ||
Pension Plans [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Other Government Securities [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 138 | 144 | ||
Pension Plans [Member] | Other Government Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Other Government Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 138 | 144 | ||
Pension Plans [Member] | Other Government Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Defined Benefit Plan, Common Collective Trust [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [4] | 609 | 621 | |
Pension Plans [Member] | Defined Benefit Plan, Common Collective Trust [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [4] | 0 | 0 | |
Pension Plans [Member] | Defined Benefit Plan, Common Collective Trust [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [4] | 609 | 621 | |
Pension Plans [Member] | Defined Benefit Plan, Common Collective Trust [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [4] | $ 0 | $ 0 | |
Pension Plans [Member] | Common Collective Trusts - Equity Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 70.00% | 80.00% | ||
Pension Plans [Member] | Common Collective Trusts - Debt Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 30.00% | 20.00% | ||
Pension Plans [Member] | Pooled Separate Accounts [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [5] | $ 190 | $ 192 | |
Pension Plans [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [5] | 0 | 0 | |
Pension Plans [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [5] | 190 | 192 | |
Pension Plans [Member] | Pooled Separate Accounts [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | [5] | $ 0 | $ 0 | |
Pension Plans [Member] | Pooled Separate Accounts - Equity Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 50.00% | 50.00% | ||
Pension Plans [Member] | Pooled Separate Accounts - Debt Securities [Member] | ||||
Employee Benefit Plans (Textual) | ||||
Defined benefit plan, actual plan asset allocations | 50.00% | 50.00% | ||
Pension Plans [Member] | Private Funds [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | $ 87 | $ 101 | ||
Pension Plans [Member] | Private Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Private Funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 87 | 101 | ||
Pension Plans [Member] | Private Funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Insurance Contract [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 18 | 18 | ||
Pension Plans [Member] | Insurance Contract [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Insurance Contract [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 18 | 18 | ||
Pension Plans [Member] | Insurance Contract [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Interest and Dividends Receivable [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 5 | 5 | ||
Pension Plans [Member] | Interest and Dividends Receivable [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 5 | 5 | ||
Pension Plans [Member] | Interest and Dividends Receivable [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Interest and Dividends Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Cash and Cash Equivalents [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 40 | 86 | ||
Pension Plans [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 40 | 85 | ||
Pension Plans [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 1 | ||
Pension Plans [Member] | Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Securities Transactions Payable, Net [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | (14) | (22) | ||
Pension Plans [Member] | Securities Transactions Payable, Net [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | (14) | (22) | ||
Pension Plans [Member] | Securities Transactions Payable, Net [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | 0 | 0 | ||
Pension Plans [Member] | Securities Transactions Payable, Net [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Values of Qualified Pension Plan Assets | ||||
Fair value of qualified pension plan assets | $ 0 | $ 0 | ||
[1] | 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. | |||
[2] | Equity securities are held in a wide range of industrial sectors, including consumer goods, information technology, healthcare, industrials, and financial services. | |||
[3] | This class includes primarily investments in approximately 60 percent equities and 40 percent bonds as of December 31, 2018. As of December 31, 2017, this class included primarily investments in approximately 70 percent equities and 30 percent bonds. | |||
[4] | This class includes primarily investments in approximately 70 percent equities and 30 percent bonds as of December 31, 2018. As of December 31, 2017, this class included primarily investments in approximately 80 percent equities and 20 percent bonds. | |||
[5] | This class includes primarily investments in approximately 50 percent equities and 50 percent bonds as of December 31, 2018 and 2017. |
Employee Benefit Plans, Defined
Employee Benefit Plans, Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Benefit Plans (Textual) | |||
Contributions to defined contribution plans | $ 74 | $ 70 | $ 67 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based Compensation Arrangements Activity | |||
Stock-based compensation expense | $ 86 | $ 77 | $ 68 |
Tax benefit recognized on stock-based compensation expense | 18 | 27 | 24 |
Tax benefit realized for tax deductions resulting from exercises and vestings | 32 | 44 | 33 |
Effect of tax deductions in excess of recognized stock-based compensation expense | 20 | 24 | 22 |
Restricted Stock [Member] | |||
Stock-based Compensation Arrangements Activity | |||
Stock-based compensation expense | $ 63 | $ 58 | $ 52 |
Number of Shares | |||
Beginning balance (shares) | 1,401,040 | ||
Granted (shares) | 628,908 | ||
Vested (shares) | (843,709) | ||
Forfeited (shares) | (9,661) | ||
Ending balance (shares) | 1,176,578 | 1,401,040 | |
Weighted- Average Grant-Date Fair Value Per Share | |||
Beginning balance (in usd per share) | $ 69.82 | ||
Granted (in usd per share) | 92.12 | $ 79.32 | $ 59 |
Vested (in usd per share) | 71.26 | ||
Forfeited (in usd per share) | 69.97 | ||
Ending balance (in usd per share) | $ 80.70 | $ 69.82 | |
Vested Awards Other Than Options Rollforward | |||
Fair value of restricted stock vested (in millions) | $ 80 | $ 71 | $ 46 |
Stock Based Compensation (Textual) | |||
Vesting period of stock-based payment awards granted | 3 years | ||
Unrecognized share-based compensation cost related to outstanding unvested awards | $ 56 | ||
Weighted-average period of recognition for unrecognized compensation costs on nonvested awards | 2 years | ||
Restricted Stock Awards - Nonemployee [Member] | |||
Stock Based Compensation (Textual) | |||
Vesting period of stock-based payment awards granted | 3 years | ||
Performance Awards [Member] | |||
Stock-based Compensation Arrangements Activity | |||
Stock-based compensation expense | $ 22 | 19 | 15 |
Stock Options and Other Awards [Member] | |||
Stock-based Compensation Arrangements Activity | |||
Stock-based compensation expense | $ 1 | $ 0 | $ 1 |
Omnibus Stock Incentive Plan [Member] | Stock Compensation Plan [Member] | |||
Stock Based Compensation (Textual) | |||
Number of shares of common stock available to be awarded under stock-based compensation plans (shares) | 8,532,542 | ||
Formerly Maintained Plans [Member] | Stock Compensation Plan [Member] | |||
Stock Based Compensation (Textual) | |||
Number of shares of common stock available to be awarded under stock-based compensation plans (shares) | 0 |
Income Taxes, Narrative (Detail
Income Taxes, Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2015 | |
Income Tax Narrative (Textual) | ||||||
Applicable statutory income tax rate (percent) | 19.60% | 29.80% | 27.10% | |||
Income tax benefit resulting from effect of tax reform adjustments, including components for which we recorded a provisional amount and components that were incomplete | $ 1,862 | |||||
Income tax benefit from the remeasurement of U.S. deferred income tax assets and liabilities | 2,643 | $ 2,643 | ||||
Tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries | 734 | |||||
Cumulative undistributed earnings and profits of international subsidiaries | 4,700 | |||||
Recognition of foreign withholding tax, net of U.S. federal tax benefit | 47 | 47 | ||||
Overall income tax benefit with respect to Tax Reform | $ 12 | |||||
Increase in valuation allowance | 613 | |||||
Increase in one-time transition tax for completion of accounting | $ 6 | 6 | ||||
Foreign tax credit related to one-time transition tax | 32 | 32 | ||||
Cash and cash equivalents | 2,982 | 2,982 | 5,850 | $ 4,816 | 2,982 | $ 4,114 |
Undistributed earnings of international subsidiaries | 5,300 | 5,300 | 5,300 | |||
Tax refund claim not presented in our balance sheets | 277 | 277 | 274 | 277 | ||
Income tax benefits if recognized that would impact the effective tax rate | 807 | 807 | 793 | 807 | ||
Interest expense and penalties accrued | 88 | $ 88 | $ 77 | 88 | ||
U.S. [Member] | ||||||
Income Tax Narrative (Textual) | ||||||
Applicable statutory income tax rate (percent) | 21.00% | 35.00% | 35.00% | |||
International Subsidiaries [Member] | ||||||
Income Tax Narrative (Textual) | ||||||
Cash and cash equivalents | 2,400 | $ 2,400 | 2,400 | |||
U.S. foreign [Member] | ||||||
Income Tax Narrative (Textual) | ||||||
Applicable statutory income tax rate (percent) | 15.30% | 17.10% | 17.70% | |||
Excess tax credits related to limitation income | $ 575 | $ 575 | $ 575 |
Income Taxes, Details of the Ta
Income Taxes, Details of the Tax Reform Adjustment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Details of the Tax Reform Adjustment | ||||
Income tax benefit from the remeasurement of U.S. deferred income tax assets and liabilities, accounting complete | $ (2,643) | $ (2,643) | ||
Tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries, provisional | 734 | |||
Tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries, measurement period adjustment | $ 6 | $ 6 | ||
Tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries, accounting complete | 740 | |||
Recognition of foreign withholding tax, net of U.S. federal tax benefit, accounting complete | 47 | 47 | ||
Deductibility of certain executive compensation expense, incomplete accounting | 0 | |||
Deductibility of certain executive compensation expense, measurement period adjustment | 5 | |||
Deductibility of certain executive compensation expense, accounting complete | 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 accounting | 0 | |||
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, measurement period adjustment | 9 | |||
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, accounting complete | 9 | |||
Foreign tax credit available to offset the tax on deemed repatriation of the accumulated earnings and profits of our international subsidiaries, incomplete accounting | 0 | |||
Foreign tax credit available to offset the tax on deemed repatriation of the accumulated earnings and profits of our international subsidiaries, measurement period adjustment | $ (32) | (32) | ||
Foreign tax credit available to offset the tax on deemed repatriation of the accumulated earnings and profits of our international subsidiaries, accounting complete | (32) | |||
Tax Reform benefit, incomplete accounting | $ (1,862) | |||
Tax Reform benefit, measurement period adjustment | $ (12) | |||
Tax Reform benefit, accounting complete | $ (1,874) |
Income Taxes, Income Statement
Income Taxes, Income Statement Components of Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of Income Tax Expense (Benefit) | |||
U.S. operations | $ 3,168 | $ 2,283 | $ 1,733 |
International operations | 1,064 | 924 | 1,449 |
Income before income tax expense (benefit) | $ 4,232 | $ 3,207 | $ 3,182 |
Income Taxes, Schedule of Statu
Income Taxes, Schedule of Statutory Tax Rates (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 19.60% | 29.80% | 27.10% |
U.S. [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 21.00% | 35.00% | 35.00% |
Canada [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 15.00% | 15.00% | 15.00% |
U.K. [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 19.00% | 19.00% | 20.00% |
Ireland [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 13.00% | 13.00% | 13.00% |
Peru [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 30.00% | ||
Mexico [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 30.00% | ||
Aruba [Member] | |||
Statutory Tax Rates | |||
Applicable statutory income tax rate (percent) | 7.00% |
Income Taxes, Reconciliation of
Income Taxes, Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Amount | ||||
Income tax expense at statutory rates, amount | $ 828 | $ 957 | $ 862 | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 124 | 83 | 36 | |
Permanent differences: | ||||
Manufacturing deduction | (42) | (22) | ||
Other | (9) | (9) | (13) | |
GILTI tax | 67 | |||
Foreign tax credits | (50) | |||
Effects of Tax Reform/Change in tax law | $ (1,900) | (12) | (1,862) | (7) |
Tax effects of income associated with noncontrolling interests | (49) | (31) | (44) | |
Other, net | (20) | (45) | (47) | |
Income tax expense (benefit) | $ 879 | $ (949) | $ 765 | |
Effective Income Tax Rate Reconciliation, Percent | ||||
Income tax expense at statutory rates (percent) | 19.60% | 29.80% | 27.10% | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect (percent) | 2.90% | 2.60% | 1.10% | |
Permanent differences: | ||||
Manufacturing deduction (percent) | (1.30%) | (0.70%) | ||
Other (percent) | (0.20%) | (0.30%) | (0.40%) | |
GILTI tax (percent) | 1.60% | |||
Foreign tax credits (percent) | (1.20%) | |||
Effects of Tax Reform/Change in tax law (percent) | (0.30%) | (58.10%) | (0.20%) | |
Tax effects of income associated with noncontrolling interests (percent) | (1.20%) | (1.00%) | (1.40%) | |
Other, net (percent) | (0.50%) | (1.40%) | (1.50%) | |
Income tax expense (benefit) (percent) | 20.70% | (29.70%) | 24.00% | |
U.S. [Member] | ||||
Effective Income Tax Rate Reconciliation, Amount | ||||
Income tax expense at statutory rates, amount | $ 665 | $ 799 | $ 606 | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 44 | 37 | 5 | |
Permanent differences: | ||||
Manufacturing deduction | (42) | (22) | ||
Other | (9) | (9) | (3) | |
GILTI tax | 67 | |||
Foreign tax credits | (50) | |||
Effects of Tax Reform/Change in tax law | (12) | (1,862) | 0 | |
Tax effects of income associated with noncontrolling interests | (49) | (31) | (44) | |
Other, net | (23) | (52) | (37) | |
Income tax expense (benefit) | $ 633 | $ (1,160) | $ 505 | |
Effective Income Tax Rate Reconciliation, Percent | ||||
Income tax expense at statutory rates (percent) | 21.00% | 35.00% | 35.00% | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect (percent) | 1.40% | 1.60% | 0.30% | |
Permanent differences: | ||||
Manufacturing deduction (percent) | (1.80%) | (1.30%) | ||
Other (percent) | (0.30%) | (0.40%) | (0.20%) | |
GILTI tax (percent) | 2.10% | |||
Foreign tax credits (percent) | (1.60%) | |||
Effects of Tax Reform/Change in tax law (percent) | (0.40%) | (81.60%) | 0.00% | |
Tax effects of income associated with noncontrolling interests (percent) | (1.50%) | (1.40%) | (2.50%) | |
Other, net (percent) | (0.70%) | (2.30%) | (2.10%) | |
Income tax expense (benefit) (percent) | 20.00% | (50.90%) | 29.20% | |
International [Member] | ||||
Effective Income Tax Rate Reconciliation, Amount | ||||
Income tax expense at statutory rates, amount | $ 163 | $ 158 | $ 256 | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 80 | 46 | 31 | |
Permanent differences: | ||||
Manufacturing deduction | 0 | 0 | ||
Other | 0 | 0 | (10) | |
GILTI tax | 0 | |||
Foreign tax credits | 0 | |||
Effects of Tax Reform/Change in tax law | 0 | 0 | (7) | |
Tax effects of income associated with noncontrolling interests | 0 | 0 | 0 | |
Other, net | 3 | 7 | (10) | |
Income tax expense (benefit) | $ 246 | $ 211 | $ 260 | |
Effective Income Tax Rate Reconciliation, Percent | ||||
Income tax expense at statutory rates (percent) | 15.30% | 17.10% | 17.70% | |
U.S. state and Canadian provincial tax expense, net of federal income tax effect (percent) | 7.50% | 5.00% | 2.10% | |
Permanent differences: | ||||
Manufacturing deduction (percent) | (0.00%) | (0.00%) | ||
Other (percent) | 0.00% | 0.00% | (0.70%) | |
GILTI tax (percent) | 0.00% | |||
Foreign tax credits (percent) | (0.00%) | |||
Effects of Tax Reform/Change in tax law (percent) | 0.00% | 0.00% | (0.50%) | |
Tax effects of income associated with noncontrolling interests (percent) | (0.00%) | (0.00%) | (0.00%) | |
Other, net (percent) | 0.30% | 0.80% | (0.70%) | |
Income tax expense (benefit) (percent) | 23.10% | 22.90% | 17.90% |
Income Taxes, Components of Inc
Income Taxes, Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |||
Current: | ||||||
Country | $ 573 | $ 1,499 | $ 488 | |||
U.S. state / Canadian provincial | 103 | 95 | 47 | |||
Total current | 676 | 1,594 | 535 | |||
Deferred: | ||||||
Country | 170 | (2,551) | 238 | |||
U.S. state / Canadian provincial | 33 | 8 | (8) | |||
Total deferred | 203 | (2,543) | 230 | |||
Income tax expense (benefit) | 879 | (949) | 765 | |||
Deferred income tax expense (benefit) included in tax reform | (2,643) | $ (2,643) | ||||
U.S. [Member] | ||||||
Current: | ||||||
Country | 432 | 1,305 | 294 | |||
U.S. state / Canadian provincial | 37 | 34 | 12 | |||
Total current | 469 | [1] | 1,339 | [1] | 306 | |
Deferred: | ||||||
Country | 145 | (2,522) | 203 | |||
U.S. state / Canadian provincial | 19 | 23 | (4) | |||
Total deferred | 164 | [2] | (2,499) | [2] | 199 | |
Income tax expense (benefit) | 633 | (1,160) | 505 | |||
Current income tax expense (benefit) included in tax reform adjustment | (21) | 781 | ||||
Deferred income tax expense (benefit) included in tax reform | 9 | (2,600) | ||||
International [Member] | ||||||
Current: | ||||||
Country | 141 | 194 | 194 | |||
U.S. state / Canadian provincial | 66 | 61 | 35 | |||
Total current | 207 | 255 | 229 | |||
Deferred: | ||||||
Country | 25 | (29) | 35 | |||
U.S. state / Canadian provincial | 14 | (15) | (4) | |||
Total deferred | 39 | (44) | 31 | |||
Income tax expense (benefit) | $ 246 | $ 211 | $ 260 | |||
[1] | 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” above. | |||||
[2] | 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” above. Year Ended December 31, 2016 U.S. International TotalCurrent: Country$294 $194 $488U.S. state / Canadian provincial12 35 47Total current306 229 535Deferred: Country203 35 238U.S. state / Canadian provincial(4) (4) (8)Total deferred199 31 230Income tax expense$505 $260 $765 |
Income Taxes, Schedule of Incom
Income Taxes, Schedule of Income Taxes Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes Paid, Net | |||
Income taxes paid, net | $ 1,361 | $ 410 | $ 444 |
U.S. [Member] | |||
Income Taxes Paid, Net | |||
Income taxes paid, net | 1,016 | 239 | 241 |
International [Member] | |||
Income Taxes Paid, Net | |||
Income taxes paid, net | $ 345 | $ 171 | $ 203 |
Income Taxes, Deferred Income T
Income Taxes, Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred income tax assets: | ||
Tax credit carryforwards | $ 644 | $ 69 |
Net operating losses (NOLs) | 523 | 492 |
Inventories | 101 | 135 |
Compensation and employee benefit liabilities | 175 | 179 |
Environmental liabilities | 71 | 47 |
Other | 141 | 112 |
Total deferred income tax assets | 1,655 | 1,034 |
Valuation allowance | (1,111) | (498) |
Net deferred income tax assets | 544 | 536 |
Deferred income tax liabilities: | ||
Property, plant, and equipment | 4,589 | 4,545 |
Deferred turnaround costs | 316 | 272 |
Inventories | 287 | 243 |
Investments | 142 | 77 |
Other | 172 | 107 |
Total deferred income tax liabilities | 5,506 | 5,244 |
Net deferred income tax liabilities | $ 4,962 | $ 4,708 |
Income Taxes, Tax Credits and L
Income Taxes, Tax Credits and Loss Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
U.S. state [Member] | |
Operating Loss Carryforwards | |
NOLs (gross amount) | $ 10,039 |
U.S. foreign [Member] | |
Operating Loss Carryforwards | |
Income tax credits | $ 575 |
Income tax credits, expiration | Dec. 31, 2027 |
U S State Income Tax Credits Limited [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
Income tax credits | $ 80 |
U S State Income Tax Credits Unlimited [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
Income tax credits | $ 6 |
Minimum [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
NOLs, expiration | Dec. 31, 2019 |
Minimum [Member] | U S State Income Tax Credits Limited [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
Income tax credits, expiration | Dec. 31, 2019 |
Maximum [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
NOLs, expiration | Dec. 31, 2038 |
Maximum [Member] | U S State Income Tax Credits Limited [Member] | U.S. state [Member] | |
Operating Loss Carryforwards | |
Income tax credits, expiration | Dec. 31, 2031 |
Income Taxes, Unrecognized Tax
Income Taxes, Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized Tax Benefits [Roll Forward] | |||
Balance as of beginning of year | $ 941 | $ 936 | $ 964 |
Additions based on tax positions related to the current year | 23 | 33 | 36 |
Additions for tax positions related to prior years | 28 | 15 | 11 |
Reductions for tax positions related to prior years | (19) | (42) | (46) |
Reductions for tax positions related to the lapse of applicable statute of limitations | (1) | (1) | (3) |
Settlements | (2) | 0 | (237) |
Reclassification of uncertain tax receivable to long-term receivable from IRS | 0 | 0 | 211 |
Balance as of end of year | $ 970 | $ 941 | $ 936 |
Income Taxes, Reconciliation _2
Income Taxes, Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Unrecognized Tax Benefits | ||||
Unrecognized tax benefits | $ 970 | $ 941 | $ 936 | $ 964 |
Tax refund claim not presented in our balance sheets | (277) | (274) | ||
Other | 88 | 77 | ||
Uncertain tax position liabilities presented in our balance sheets | $ 781 | $ 744 |
Income Taxes, Unrecognized Ta_2
Income Taxes, Unrecognized Tax Benefits Recognized in Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts Recognized in Balance Sheets for Uncertain Tax Positions | ||
Other long-term liabilities and Deferred tax liabilities | $ 721 | $ 723 |
Uncertain tax position liabilities presented in our balance sheets | 781 | 744 |
Income Taxes Payable [Member] | ||
Amounts Recognized in Balance Sheets for Uncertain Tax Positions | ||
Income taxes payable | 42 | 0 |
Other Long-term Liabilities [Member] | ||
Amounts Recognized in Balance Sheets for Uncertain Tax Positions | ||
Other long-term liabilities and Deferred tax liabilities | 721 | 723 |
Deferred Tax Liabilities[Member] | ||
Amounts Recognized in Balance Sheets for Uncertain Tax Positions | ||
Other long-term liabilities and Deferred tax liabilities | $ 18 | $ 21 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings per common share: | ||||||||||||
Net income attributable to Valero stockholders | $ 952 | $ 856 | $ 845 | $ 469 | $ 2,371 | $ 841 | $ 548 | $ 305 | $ 3,122 | $ 4,065 | $ 2,289 | |
Less income allocated to participating securities | 9 | 14 | 7 | |||||||||
Net income available to common shareholders | $ 3,113 | $ 4,051 | $ 2,282 | |||||||||
Weighted-average common shares outstanding (shares) | 426 | 442 | 461 | |||||||||
Earnings per common share (in usd per share) | $ 7.30 | $ 9.17 | $ 4.94 | |||||||||
Earnings per common share – assuming dilution: | ||||||||||||
Net income attributable to Valero stockholders | $ 952 | $ 856 | $ 845 | $ 469 | $ 2,371 | $ 841 | $ 548 | $ 305 | $ 3,122 | $ 4,065 | $ 2,289 | |
Weighted-average common shares outstanding (shares) | 426 | 442 | 461 | |||||||||
Effect of dilutive securities (shares) | 2 | 2 | 3 | |||||||||
Weighted-average common shares outstanding – assuming dilution (shares) | 428 | 444 | 464 | |||||||||
Earnings per common share – assuming dilution (in usd per share) | $ 7.29 | $ 9.16 | $ 4.94 | |||||||||
[1] | During the quarter ended December 31, 2017, we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15. |
Revenues and Segment Informat_3
Revenues and Segment Information, Activity (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2018USD ($)refineryethanol_plant | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | [1] | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)refineryethanol_plantsegment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | $ 28,730 | $ 30,849 | $ 31,015 | $ 26,439 | $ 26,392 | $ 23,562 | $ 22,254 | $ 21,772 | $ 117,033 | [2] | $ 93,980 | [2] | $ 75,659 | [2] | ||
Cost of sales: | ||||||||||||||||
Cost of materials and other | 104,732 | 83,037 | 65,962 | |||||||||||||
Operating expenses (excluding depreciation and amortization expense reflected below) | 4,690 | 4,504 | 4,251 | |||||||||||||
Depreciation and amortization expense | 2,017 | 1,934 | 1,846 | |||||||||||||
Lower of cost or market inventory valuation adjustment | 0 | 0 | (747) | |||||||||||||
Total cost of sales | 111,439 | 89,475 | 71,312 | |||||||||||||
Other operating expenses | 45 | 61 | 0 | |||||||||||||
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 925 | 829 | 709 | |||||||||||||
Depreciation and amortization expense | 52 | 52 | 48 | |||||||||||||
Asset impairment loss | 0 | 0 | 56 | |||||||||||||
Operating income by segment | $ 1,299 | $ 1,219 | $ 1,253 | $ 801 | $ 843 | $ 1,332 | $ 860 | $ 528 | 4,572 | 3,563 | 3,534 | |||||
Total expenditures for long-lived assets | [3] | $ 3,376 | 1,948 | 1,996 | ||||||||||||
Segment Information (Textual) | ||||||||||||||||
Number of reportable segments | segment | 3 | |||||||||||||||
Number of petroleum refineries | refinery | 15 | 15 | ||||||||||||||
Number of ethanol plants | ethanol_plant | 14 | 14 | ||||||||||||||
Corporate, Reconciling Items, and Eliminations[Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | $ (766) | (629) | (573) | |||||||||||||
Cost of sales: | ||||||||||||||||
Operating income by segment | (974) | (876) | (757) | |||||||||||||
Corporate [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 4 | 5 | 0 | |||||||||||||
Cost of sales: | ||||||||||||||||
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 925 | 829 | 709 | |||||||||||||
Depreciation and amortization expense | 52 | 52 | 48 | |||||||||||||
Asset impairment loss | 0 | |||||||||||||||
Total expenditures for long-lived assets | [3] | 44 | 44 | 38 | ||||||||||||
Intersegment Eliminations [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | (770) | (634) | (573) | |||||||||||||
Cost of sales: | ||||||||||||||||
Cost of materials and other | (765) | (632) | (573) | |||||||||||||
Operating expenses (excluding depreciation and amortization expense reflected below) | (4) | (2) | 0 | |||||||||||||
Depreciation and amortization expense | 0 | 0 | 0 | |||||||||||||
Total cost of sales | (769) | (634) | (573) | |||||||||||||
Other operating expenses | 0 | 0 | ||||||||||||||
Refining [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 113,601 | 90,651 | 71,968 | |||||||||||||
Refining [Member] | Operating Segments [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 113,615 | 90,657 | 71,968 | |||||||||||||
Cost of sales: | ||||||||||||||||
Cost of materials and other | 102,489 | 80,865 | 63,405 | |||||||||||||
Operating expenses (excluding depreciation and amortization expense reflected below) | 4,099 | 3,959 | 3,740 | |||||||||||||
Depreciation and amortization expense | 1,863 | 1,800 | 1,734 | |||||||||||||
Lower of cost or market inventory valuation adjustment | (697) | |||||||||||||||
Total cost of sales | 108,451 | 86,624 | 68,182 | |||||||||||||
Other operating expenses | 45 | 58 | ||||||||||||||
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 0 | 0 | 0 | |||||||||||||
Depreciation and amortization expense | 0 | 0 | 0 | |||||||||||||
Asset impairment loss | 56 | |||||||||||||||
Operating income by segment | 5,119 | 3,975 | 3,730 | |||||||||||||
Total expenditures for long-lived assets | [3] | 2,935 | 1,710 | 1,867 | ||||||||||||
Refining [Member] | Intersegment Eliminations [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 14 | 6 | 0 | |||||||||||||
Ethanol [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 3,428 | 3,324 | 3,691 | |||||||||||||
Ethanol [Member] | Operating Segments [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 3,638 | 3,500 | 3,901 | |||||||||||||
Cost of sales: | ||||||||||||||||
Cost of materials and other | 3,008 | 2,804 | 3,130 | |||||||||||||
Operating expenses (excluding depreciation and amortization expense reflected below) | 470 | 443 | 415 | |||||||||||||
Depreciation and amortization expense | 78 | 81 | 66 | |||||||||||||
Lower of cost or market inventory valuation adjustment | (50) | |||||||||||||||
Total cost of sales | 3,556 | 3,328 | 3,561 | |||||||||||||
Other operating expenses | 0 | 0 | ||||||||||||||
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 0 | 0 | 0 | |||||||||||||
Depreciation and amortization expense | 0 | 0 | 0 | |||||||||||||
Asset impairment loss | 0 | |||||||||||||||
Operating income by segment | 82 | 172 | 340 | |||||||||||||
Total expenditures for long-lived assets | [3] | 373 | 84 | 68 | ||||||||||||
Ethanol [Member] | Intersegment Eliminations [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 210 | 176 | 210 | |||||||||||||
VLP [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||||
VLP [Member] | Operating Segments [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | 546 | 452 | 363 | |||||||||||||
Cost of sales: | ||||||||||||||||
Cost of materials and other | 0 | 0 | 0 | |||||||||||||
Operating expenses (excluding depreciation and amortization expense reflected below) | 125 | 104 | 96 | |||||||||||||
Depreciation and amortization expense | 76 | 53 | 46 | |||||||||||||
Lower of cost or market inventory valuation adjustment | 0 | |||||||||||||||
Total cost of sales | 201 | 157 | 142 | |||||||||||||
Other operating expenses | 0 | 3 | ||||||||||||||
General and administrative expenses (excluding depreciation and amortization expense reflected below) | 0 | 0 | 0 | |||||||||||||
Depreciation and amortization expense | 0 | 0 | 0 | |||||||||||||
Asset impairment loss | 0 | |||||||||||||||
Operating income by segment | 345 | 292 | 221 | |||||||||||||
Total expenditures for long-lived assets | [3] | 24 | 110 | 23 | ||||||||||||
VLP [Member] | Intersegment Eliminations [Member] | ||||||||||||||||
Segment Information for our Reportable Segments | ||||||||||||||||
Revenues | $ 546 | $ 452 | $ 363 | |||||||||||||
[1] | During the quarter ended December 31, 2017, we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15. | |||||||||||||||
[2] | Includes excise taxes on sales by certain of our international operations of $5,626 million, $5,573 million, and $5,493 million for the years ended December 31, 2018, 2017, and 2016. | |||||||||||||||
[3] | Total expenditures for long-lived assets includes amounts related to capital expenditures, deferred turnaround and catalyst costs, and property, plant, and equipment for acquisitions. |
Revenues and Segment Informat_4
Revenues and Segment Information, Revenue by Product (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | $ 28,730 | $ 30,849 | $ 31,015 | $ 26,439 | $ 26,392 | $ 23,562 | $ 22,254 | $ 21,772 | $ 117,033 | [2] | $ 93,980 | [2] | $ 75,659 | [2] | |
Corporate [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 4 | 5 | 0 | ||||||||||||
Intersegment Eliminations [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | (770) | (634) | (573) | ||||||||||||
Other Revenues [Member] | Corporate [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 4 | 5 | 0 | ||||||||||||
Refining [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 113,601 | 90,651 | 71,968 | ||||||||||||
Refining [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 113,615 | 90,657 | 71,968 | ||||||||||||
Refining [Member] | Intersegment Eliminations [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 14 | 6 | 0 | ||||||||||||
Refining [Member] | Gasoline and Blendstocks [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 46,606 | 40,366 | 33,450 | ||||||||||||
Refining [Member] | Distillates [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 55,546 | 42,074 | 32,576 | ||||||||||||
Refining [Member] | Other Product Revenues [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 11,463 | 8,217 | 5,942 | ||||||||||||
Ethanol [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 3,428 | 3,324 | 3,691 | ||||||||||||
Ethanol [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 3,638 | 3,500 | 3,901 | ||||||||||||
Ethanol [Member] | Intersegment Eliminations [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 210 | 176 | 210 | ||||||||||||
Ethanol [Member] | Ethanol [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 2,912 | 2,940 | 3,315 | ||||||||||||
Ethanol [Member] | Distillers Grains [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 726 | 560 | 586 | ||||||||||||
VLP [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||||
VLP [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 546 | 452 | 363 | ||||||||||||
VLP [Member] | Intersegment Eliminations [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 546 | 452 | 363 | ||||||||||||
VLP [Member] | Pipeline Transportation [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 124 | 101 | 78 | ||||||||||||
VLP [Member] | Terminaling [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | 415 | 348 | 284 | ||||||||||||
VLP [Member] | Storage and Other [Member] | Operating Segments [Member] | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Revenues | $ 7 | $ 3 | $ 1 | ||||||||||||
[1] | During the quarter ended December 31, 2017, we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15. | ||||||||||||||
[2] | Includes excise taxes on sales by certain of our international operations of $5,626 million, $5,573 million, and $5,493 million for the years ended December 31, 2018, 2017, and 2016. |
Revenues and Segment Informat_5
Revenues and Segment Information, Geographic Information by Country for Revenue and Long-Lived Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Operating Revenues by Geographic Area | |||||||||||||||
Revenues | $ 28,730 | $ 30,849 | $ 31,015 | $ 26,439 | $ 26,392 | [1] | $ 23,562 | $ 22,254 | $ 21,772 | $ 117,033 | [2] | $ 93,980 | [2] | $ 75,659 | [2] |
Geographic Information by Country for Long-Lived Assets | |||||||||||||||
Long-lived assets | 30,652 | 29,061 | 30,652 | 29,061 | |||||||||||
U.S. [Member] | |||||||||||||||
Operating Revenues by Geographic Area | |||||||||||||||
Revenues | 82,992 | 66,614 | 51,479 | ||||||||||||
Geographic Information by Country for Long-Lived Assets | |||||||||||||||
Long-lived assets | 27,475 | 26,083 | 27,475 | 26,083 | |||||||||||
Canada [Member] | |||||||||||||||
Operating Revenues by Geographic Area | |||||||||||||||
Revenues | 9,211 | 7,039 | 6,115 | ||||||||||||
Geographic Information by Country for Long-Lived Assets | |||||||||||||||
Long-lived assets | 1,798 | 1,915 | 1,798 | 1,915 | |||||||||||
U.K.and Ireland [Member] | |||||||||||||||
Operating Revenues by Geographic Area | |||||||||||||||
Revenues | 15,208 | 11,556 | 10,797 | ||||||||||||
Geographic Information by Country for Long-Lived Assets | |||||||||||||||
Long-lived assets | 1,113 | 1,063 | 1,113 | 1,063 | |||||||||||
Other Countries [Member] | |||||||||||||||
Operating Revenues by Geographic Area | |||||||||||||||
Revenues | 9,622 | 8,771 | $ 7,268 | ||||||||||||
Geographic Information by Country for Long-Lived Assets | |||||||||||||||
Long-lived assets | $ 266 | $ 0 | $ 266 | $ 0 | |||||||||||
[1] | During the quarter ended December 31, 2017, we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15. | ||||||||||||||
[2] | Includes excise taxes on sales by certain of our international operations of $5,626 million, $5,573 million, and $5,493 million for the years ended December 31, 2018, 2017, and 2016. |
Revenues and Segment Informat_6
Revenues and Segment Information, Total Assets by Reportable Segments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Total Assets by Reportable Segments | ||
Reportable segment assets | $ 50,155 | $ 50,158 |
Equity Method Investments (Textual): | ||
Investments in joint ventures | 542 | 530 |
Refining [Member] | ||
Equity Method Investments (Textual): | ||
Investments in joint ventures | 542 | 530 |
Operating Segments [Member] | Refining [Member] | ||
Total Assets by Reportable Segments | ||
Reportable segment assets | 42,673 | 40,382 |
Operating Segments [Member] | Ethanol [Member] | ||
Total Assets by Reportable Segments | ||
Reportable segment assets | 1,691 | 1,344 |
Operating Segments [Member] | VLP [Member] | ||
Total Assets by Reportable Segments | ||
Reportable segment assets | 1,620 | 1,517 |
Corporate and Eliminations [Member] | ||
Total Assets by Reportable Segments | ||
Reportable segment assets | $ 4,171 | $ 6,915 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Decrease (increase) in current assets: | |||
Receivables, net | $ (457) | $ (870) | $ (1,531) |
Inventories | (197) | (516) | 771 |
Prepaid expenses and other | (77) | 151 | 47 |
Increase (decrease) in current liabilities: | |||
Accounts payable | 304 | 1,842 | 1,556 |
Accrued expenses | (113) | 21 | 117 |
Taxes other than income taxes payable | (73) | 172 | 82 |
Income taxes payable | (684) | 489 | (66) |
Changes in current assets and current liabilities | (1,297) | 1,289 | 976 |
Cash Flows Related to Interest and Income Taxes | |||
Interest paid in excess of amount capitalized | 463 | 457 | 427 |
Income taxes paid, net | 1,361 | 410 | 444 |
Supplemental Cash Flow Elements (Textual) | |||
Payment of long-term liability to joint venture partner | 15 | (20) | 178 |
MVP Terminal [Member] | |||
Supplemental Cash Flow Elements (Textual) | |||
Terminal obligations incurred | 198 | 94 | |
Capital Lease Obligations [Member] | |||
Supplemental Cash Flow Elements (Textual) | |||
Capital lease obligations incurred | 63 | 502 | |
Assets Held under Capital Leases [Member] | |||
Supplemental Cash Flow Elements (Textual) | |||
Capital lease assets recognized | 63 | 502 | |
Construction in Progress [Member] | MVP Terminal [Member] | |||
Supplemental Cash Flow Elements (Textual) | |||
Terminal assets recognized | $ 198 | $ 94 | |
Owner-Method Joint Venture Investment [Member] | |||
Supplemental Cash Flow Elements (Textual) | |||
Payment of long-term liability to joint venture partner | $ 137 |
Fair Value Measurements, Recurr
Fair Value Measurements, Recurring (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Investments of certain benefit plans | $ 69 | $ 73 |
Total gross fair value, assets | 2,865 | 967 |
Effect of Counter- party Netting | (2,669) | (893) |
Effect of Cash Collateral Netting | (34) | 0 |
Net Carrying Value on Balance Sheet, Assets | 162 | 74 |
Liabilities: | ||
Environmental credit obligations | 13 | 104 |
Total gross fair value, liabilities | 2,700 | 1,086 |
Effect of Counter- party Netting | (2,669) | (893) |
Effect of Cash Collateral Netting | (12) | (76) |
Net Carrying Value on Balance Sheet, Liabilities | 19 | 117 |
Commodity Contracts [Member] | ||
Assets: | ||
Derivative contracts | 2,792 | 894 |
Effect of Counter- party Netting | (2,669) | (893) |
Effect of Cash Collateral Netting | (34) | 0 |
Derivative contracts, net assets | 89 | 1 |
Cash Collateral Received Not Offset | 0 | 0 |
Liabilities: | ||
Derivative contracts | 2,681 | 969 |
Effect of Counter- party Netting | (2,669) | (893) |
Effect of Cash Collateral Netting | (12) | (76) |
Derivative contracts, net liabilities | 0 | 0 |
Cash Collateral Paid Not Offset | (136) | (102) |
Foreign Currency Contracts [Member] | ||
Assets: | ||
Derivative contracts | 4 | |
Derivative contracts, net assets | 4 | |
Liabilities: | ||
Derivative contracts | 1 | 7 |
Derivative contracts, net liabilities | 1 | 7 |
Physical Purchase Contracts [Member] | ||
Liabilities: | ||
Derivative contracts | 5 | 6 |
Derivative contracts, net liabilities | 5 | 6 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Investments of certain benefit plans | 60 | 65 |
Total gross fair value, assets | 2,856 | 940 |
Liabilities: | ||
Environmental credit obligations | 0 | 0 |
Total gross fair value, liabilities | 2,682 | 962 |
Fair Value, Inputs, Level 1 [Member] | Commodity Contracts [Member] | ||
Assets: | ||
Derivative contracts | 2,792 | 875 |
Liabilities: | ||
Derivative contracts | 2,681 | 955 |
Fair Value, Inputs, Level 1 [Member] | Foreign Currency Contracts [Member] | ||
Assets: | ||
Derivative contracts | 4 | |
Liabilities: | ||
Derivative contracts | 1 | 7 |
Fair Value, Inputs, Level 1 [Member] | Physical Purchase Contracts [Member] | ||
Liabilities: | ||
Derivative contracts | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Investments of certain benefit plans | 0 | 0 |
Total gross fair value, assets | 0 | 19 |
Liabilities: | ||
Environmental credit obligations | 13 | 104 |
Total gross fair value, liabilities | 18 | 124 |
Fair Value, Inputs, Level 2 [Member] | Commodity Contracts [Member] | ||
Assets: | ||
Derivative contracts | 0 | 19 |
Liabilities: | ||
Derivative contracts | 0 | 14 |
Fair Value, Inputs, Level 2 [Member] | Foreign Currency Contracts [Member] | ||
Assets: | ||
Derivative contracts | 0 | |
Liabilities: | ||
Derivative contracts | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Physical Purchase Contracts [Member] | ||
Liabilities: | ||
Derivative contracts | 5 | 6 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Investments of certain benefit plans | 9 | 8 |
Total gross fair value, assets | 9 | 8 |
Liabilities: | ||
Environmental credit obligations | 0 | 0 |
Total gross fair value, liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Commodity Contracts [Member] | ||
Assets: | ||
Derivative contracts | 0 | 0 |
Liabilities: | ||
Derivative contracts | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Foreign Currency Contracts [Member] | ||
Assets: | ||
Derivative contracts | 0 | |
Liabilities: | ||
Derivative contracts | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Physical Purchase Contracts [Member] | ||
Liabilities: | ||
Derivative contracts | $ 0 | $ 0 |
Fair Value Measurements, Nonrec
Fair Value Measurements, Nonrecurring (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurements (Textual) | ||||
Asset impairment loss | $ 0 | $ 0 | $ 56,000,000 | |
Fair Value, Measurements, Nonrecurring [Member] | ||||
Fair Value Measurements (Textual) | ||||
Assets measured at fair value, nonrecurring | 0 | 0 | ||
Liabilities measured at fair value, nonrecurring | $ 0 | $ 0 | ||
Aruba Terminal [Member] | ||||
Fair Value Measurements (Textual) | ||||
Asset impairment loss | $ 56,000,000 |
Fair Value Measurements, Other
Fair Value Measurements, Other Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets: | ||||
Cash and cash equivalents, at carrying amount | $ 2,982 | $ 5,850 | $ 4,816 | $ 4,114 |
Financial liabilities: | ||||
Debt (excluding capital leases), at carrying amount | 8,503 | 8,310 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents, at fair value | 2,982 | 5,850 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Financial liabilities: | ||||
Debt (excluding capital leases), at fair value | $ 8,986 | $ 9,795 |
Price Risk Management Activit_3
Price Risk Management Activities (Details) lb in Thousands, bu in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)MMBTUlbMBblsbu | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Price Risk Management Activities (Textual) | |||
Compliance program costs | $ | $ 104,732 | $ 83,037 | $ 65,962 |
Environmental Compliance Program Price Risk [Member] | |||
Price Risk Management Activities (Textual) | |||
Compliance program costs | $ | 536 | $ 942 | $ 749 |
Foreign Currency Contracts [Member] | |||
Price Risk Management Activities (Textual) | |||
Monetary notional amount of derivative liabilities | $ | $ 441 | ||
Foreign currency commitments maturity date | Jan. 31, 2019 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 149,470 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Long (Purchases) [Member] | Natural Gas (in millions of British thermal units) [Member] | |||
Volume of Outstanding Contracts | |||
Derivative, nonmonetary notional amount, energy measure | MMBTU | 5,000,000 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Long (Purchases) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 26,025 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Long (Purchases) [Member] | Soybean Oil (in pounds) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, mass | lb | 137,518 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 143,826 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Short (Sales) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 55,395 | ||
Economic Hedges [Member] | Future, 2019 Maturity [Member] | Short (Sales) [Member] | Soybean Oil (in pounds) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, mass | lb | 285,957 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 224 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Long (Purchases) [Member] | Natural Gas (in millions of British thermal units) [Member] | |||
Volume of Outstanding Contracts | |||
Derivative, nonmonetary notional amount, energy measure | MMBTU | 0 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Long (Purchases) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 0 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Long (Purchases) [Member] | Soybean Oil (in pounds) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, mass | lb | 0 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 671 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Short (Sales) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 875 | ||
Economic Hedges [Member] | Future, 2020 Maturity [Member] | Short (Sales) [Member] | Soybean Oil (in pounds) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, mass | lb | 0 | ||
Economic Hedges [Member] | Options, 2019 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 26,500 | ||
Economic Hedges [Member] | Options, 2019 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 26,500 | ||
Economic Hedges [Member] | Options, 2020 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 0 | ||
Economic Hedges [Member] | Options, 2020 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | 0 | ||
Economic Hedges [Member] | Physical Contracts, 2019 Maturity [Member] | Long (Purchases) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 27,109 | ||
Economic Hedges [Member] | Physical Contracts, 2020 Maturity [Member] | Long (Purchases) [Member] | Corn (in bushels) [Member] | |||
Volume of Outstanding Contracts | |||
Nonmonetary notional amount of price risk derivatives, volume | bu | 875 |
Price Risk Management Activit_4
Price Risk Management Activities, Hedging Instruments by Consolidated Balance Sheet Location (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Values of Derivative Instruments | ||
Derivative asset, fair value, gross asset | $ 2,796 | $ 894 |
Derivative liability, fair value, gross liability | 2,687 | 982 |
Commodity Future [Member] | Receivables, Net [Member] | ||
Fair Values of Derivative Instruments | ||
Derivative asset, fair value, gross asset | 2,787 | 886 |
Derivative asset, fair value, gross liability | 2,681 | 966 |
Commodity Option [Member] | Receivables, Net [Member] | ||
Fair Values of Derivative Instruments | ||
Derivative asset, fair value, gross asset | 5 | 8 |
Derivative asset, fair value, gross liability | 0 | 3 |
Physical Purchase Contracts [Member] | Inventories [Member] | ||
Fair Values of Derivative Instruments | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative asset, fair value, gross liability | 5 | 6 |
Foreign Currency Contracts [Member] | Receivables, Net [Member] | ||
Fair Values of Derivative Instruments | ||
Derivative asset, fair value, gross asset | 4 | 0 |
Derivative asset, fair value, gross liability | 0 | 0 |
Foreign Currency Contracts [Member] | Accrued Expenses [Member] | ||
Fair Values of Derivative Instruments | ||
Derivative liability, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | $ 1 | $ 7 |
Price Risk Management Activit_5
Price Risk Management Activities, Gain (Loss) by Income Statement Location (Details) - Economic Hedges [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commodity Contracts [Member] | Cost of Materials and Other [Member] | |||
Effect of Derivative Instruments on Income | |||
Gain (loss) recognized in income on derivatives | $ (165) | $ (278) | $ (86) |
Commodity Contracts [Member] | Operating Expenses (Excluding Depreciation and Amortization Expense) [Member] | |||
Effect of Derivative Instruments on Income | |||
Gain (loss) recognized in income on derivatives | 7 | 0 | 0 |
Foreign Currency Contracts [Member] | Cost of Materials and Other [Member] | |||
Effect of Derivative Instruments on Income | |||
Gain (loss) recognized in income on derivatives | $ 56 | $ (40) | $ 16 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||
Quarterly Financial Data | ||||||||||||||||
Revenues | $ 28,730 | $ 30,849 | $ 31,015 | $ 26,439 | $ 26,392 | [1] | $ 23,562 | $ 22,254 | $ 21,772 | $ 117,033 | [2] | $ 93,980 | [2] | $ 75,659 | [2] | |
Gross profit | [3] | 1,546 | 1,451 | 1,535 | 1,062 | 1,110 | [1] | 1,614 | 1,049 | 732 | ||||||
Operating income | 1,299 | 1,219 | 1,253 | 801 | 843 | [1] | 1,332 | 860 | 528 | 4,572 | 3,563 | 3,534 | ||||
Net income | 1,022 | 874 | 875 | 582 | 2,400 | [1] | 863 | 572 | 321 | 3,353 | 4,156 | 2,417 | ||||
Net income attributable to Valero Energy Corporation stockholders | $ 952 | $ 856 | $ 845 | $ 469 | $ 2,371 | [1] | $ 841 | $ 548 | $ 305 | $ 3,122 | $ 4,065 | $ 2,289 | ||||
Earnings per common share (in usd per share) | $ 2.26 | $ 2.01 | $ 1.96 | $ 1.09 | $ 5.43 | [1] | $ 1.91 | $ 1.23 | $ 0.68 | $ 7.30 | $ 9.17 | $ 4.94 | ||||
Earnings per common share – assuming dilution (in usd per share) | $ 2.24 | $ 2.01 | $ 1.96 | $ 1.09 | $ 5.42 | [1] | $ 1.91 | $ 1.23 | $ 0.68 | $ 7.29 | $ 9.16 | $ 4.94 | ||||
Quarterly Financial Data (Textual) | ||||||||||||||||
Income tax benefit related to Tax Reform | $ 1,900 | $ 12 | $ 1,862 | $ 7 | ||||||||||||
[1] | During the quarter ended December 31, 2017, we recognized an income tax benefit of $1.9 billion related to Tax Reform as described in Note 15. | |||||||||||||||
[2] | Includes excise taxes on sales by certain of our international operations of $5,626 million, $5,573 million, and $5,493 million for the years ended December 31, 2018, 2017, and 2016. | |||||||||||||||
[3] | Gross profit is calculated as revenues less total cost of sales. |