2025 Valero Report on Guiding Principles - Flipbook - Page 77
Introduction
Safety
Environment
Community
People
Governance
Appendix
Return on Invested Capital (ROIC)
Valero de昀椀nes return on invested capital (ROIC) as adjusted net income (loss) attributable to Valero stockholders before
adjusted net interest expense after-tax, divided by average adjusted invested capital. Valero de昀椀nes adjusted net income
attributable to Valero as net income (loss) attributable to Valero stockholders adjusted for the after-tax effect of special items
attributable to Valero that Valero believes are not indicative of its core operating performance and may obscure Valero's
underlying business results, trends and comparability between periods (see corresponding earnings release). Valero de昀椀nes
adjusted net interest expense as “interest and debt expense, net of capitalized interest” adjusted to exclude “interest and debt
expense, net of capitalized interest” attributable to noncontrolling interests. The income tax effect of adjusted net interest
expense is estimated based on the U.S. statutory income tax rate for the respective annual period. Average adjusted invested
capital is de昀椀ned as the average of total adjusted invested capital for the current and prior annual periods. Valero de昀椀nes
total adjusted invested capital as debt attributable to Valero, plus Valero stockholders' equity less adjusted cash and cash
equivalents. Debt attributable to Valero is de昀椀ned as the current portion of debt and 昀椀nance lease obligations, plus “debt and
昀椀nance lease obligations, less current portion”, less total debt and 昀椀nance lease obligations attributable to consolidated VIEs.
Debt attributable to Valero for the year ended December 31, 2014 includes an adjustment to re昀氀ect the retrospective adoption
of ASU No. 2015-15 subtopic 835-30, which resulted in the reclassi昀椀cation of certain debt issuance costs from “deferred charges
and other assets, net” to “debt and 昀椀nance lease obligations, less current portion.” Adjusted cash and cash equivalents is
de昀椀ned as cash and cash equivalents adjusted to exclude cash and cash equivalents of consolidated VIEs. Debt and cash
attributable to consolidated VIEs are excluded because amounts are only available to fund the operations of the VIEs and the
creditors do not have recourse against Valero.
Return on Invested Capital (ROIC)
(in millions)
Year Ended December 31,
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
$3,990
$2,289
$4,065
$3,122
$2,422
($1,421)
$930
$11,528
$8,835
$2,770
Total effect of special items attributable to
VLO after-tax
624
(565)
(1,783)
113
(61)
238
233
65
15
(31)
Adjusted net income (loss) attributable
to VLO
4,614
1,724
2,282
3,235
2,361
(1,183)
1,163
11,593
8,850
2,739
Plus: adjusted net interest expense after-tax
274
283
295
357
355
442
464
410
394
401
Adjusted net income (loss) attributable to
VLO before adjusted net interest expense
after-tax (A)
4,888
2,007
2,577
3,592
2,716
(741)
1,627
12,003
9,244
3,140
Numerator:
Net income (loss) attributable to VLO
stockholders
Denominator:
Current portion of debt
$606
$127
$115
$122
$238
$494
$723
$1,264
$1,109
$1,406
$743
Debt and 昀椀nance leases, less current
portion
5,780
7,208
7,886
8,750
8,871
9,178
13,954
12,606
10,526
10,118
9,720
Less: debt issue costs - non-bank debt (ASU
2015-15)
(33)
-
-
-
-
-
-
-
-
-
-
Less: debt and 昀椀nance leases attributable
to VIEs
(29)
(193)
(576)
(954)
(1,138)
(384)
(630)
(1,107)
(1,618)
(1,725)
(727)
6,324
7,142
7,425
7,918
7,971
9,288
14,047
12,763
10,017
9,799
9,736
VLO stockholders’ equity
20,677
20,527
20,024
21,991
21,667
21,803
18,801
18,430
23,561
26,346
24,512
Less: adjusted cash and cash equivalents
(3,419)
(3,982)
(4,563)
(5,671)
(2,747)
(2,473)
(3,152)
(4,086)
(4,713)
(5,164)
(4,283)
$23,582
$23,687
$22,886
$24,238
$26,891
$28,618
$29,696
$27,107
$28,865
$30,981
$29,965
$23,635
$23,287
$23,562
$25,565
$27,755
$29,157
$28,401
$27,986
$29,923
$30,473
21%
9%
11%
14%
10%
-3%
6%
43%
31%
10%
Debt attributable to VLO
Total adjusted invested capital
Average adjusted invested capital (B)
ROIC (A / B)
ROIC (10-year average)
15%
Valero Report on Guiding Principles •
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