2025 Valero Report on Guiding Principles - Flipbook - Page 76
Adjusted Net Cash Provided by Operating Activities and Payout Ratio
Valero de昀椀nes adjusted net cash provided by operating activities as net cash provided by operating activities excluding the items
noted below. Valero believes adjusted net cash provided by operating activities is an important measure of its ongoing 昀椀nancial
performance to better assess its ability to generate cash to fund Valero's investing and 昀椀nancing activities. The basis for Valero's
belief with respect to each excluded item is provided below.
• Changes in current assets and current liabilities - Current assets net of current liabilities represents Valero's operating liquidity.
Valero believes that the change in its operating liquidity from period to period does not represent cash generated by Valero's
operations that is available to fund Valero's investing and 昀椀nancing activities.
• DGD's adjusted net cash provided by operating activities attributable to the other joint venture member's ownership interest
in DGD - Valero is a 50% joint venture member in DGD and consolidates DGD's 昀椀nancial statements; as a result, all of DGD's
net cash provided by operating activities (or operating cash 昀氀ow) is included in Valero's consolidated net cash provided
by operating activities. DGD's members use DGD's operating cash 昀氀ow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD's operating
cash 昀氀ow is effectively attributable to each member and only 50% of DGD's operating cash 昀氀ow should be attributed to Valero's
net cash provided by operating activities. Therefore, net cash provided by operating activities has been adjusted for the portion
of DGD's operating cash 昀氀ow attributable to the other joint venture member's ownership interest because Valero believes that it
more accurately re昀氀ects the operating cash 昀氀ow available to Valero to fund Valero's investing and 昀椀nancing activities.
Payout Ratio is the sum of dividends and stock buybacks, including a 1% excise tax that commenced in 2023, divided by adjusted net
cash provided by operating activities.
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Net Cash Provided by Operating Activities
(in millions)
Year Ended December 31,
2015
2016
2017
2018
2019
$5,611
$4,820
$5,482
$4,371
$5,531
Changes in current assets and current
liabilities
(1,306)
976
1,289
(1,297)
DGD's adjusted net cash provided by
operating activities attributable to the
other joint venture member
81
83
41
$6,836
$3,761
$4,152
Net cash provided by operating activities
2020
2021
2022
2023
2024
$948
$5,859
$12,574
$9,229
$6,683
294
(345)
2,225
(1,626)
(2,326)
795
175
390
338
381
436
512
371
$5,493
$4,847
$955
$3,253
$13,764
$11,043
$5,517
Exclude:
Adjusted net cash provided by
operating activities (A)
Reconciliation of Purchases of Common Stock for Treasury and Common Stock Dividends to Payout Ratio
(in millions)
Year Ended December 31,
2015
2016
2017
2018
$2,838
$1,336
$1,372
$1,708
$777
$156
848
1,111
1,242
1,369
1,492
Total payout (B)
$3,686
$2,447
$2,614
$3,077
Payout ratio (B/A)
54%
65%
63%
56%
Purchases of common stock for treasury*
Common stock dividends
2019
2020
2021
2022
2023
2024
$27
$4,577
$5,188
$2,903
1,600
1,602
1,562
1,452
1,384
$2,269
$1,756
$1,629
$6,139
$6,640
$4,287
47%
184%
50%
45%
60%
78%
Average payout ratio (2015 - 2024)
70%
Average payout ratio, excluding 2020 (2015 - 2024)
58%
* Re昀氀ects cash payment for purchases of common stock for treasury in the respective period and includes 1% excise tax related to those purchases that commenced in 2023.
Accordingly, 2023 and 2024 include excise tax of $52 million and $28 million, respectively.
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