ESG Report - Report - Page 79
Non-GAAP Disclosures
Capital investments attributable to Valero
Year ended
December 31,
2022
Reconciliation of Total Capital Investments to Capital
Investments Attributable to Valero (in millions)
Capital investments attributable to Valero is a non-GAAP financial
measure that reflects our net share of capital investments and
is defined as all capital expenditures, deferred turnaround and
catalyst cost expenditures, and investments in nonconsolidated
joint ventures, excluding the portion of DGD’s capital investments
attributable to the other joint venture member and all of the capital
expenditures of other consolidated variable interest entities (VIEs).
Capital expenditures (excluding VIEs)
$ 788
Capital expenditures of VIEs:
We are a 50 percent joint venture member in DGD and consolidate
its financial statements. As a result, all of DGD’s net cash provided
by operating activities (or operating cash flow) is included in our
consolidated net cash provided by operating activities. DGD’s
members use DGD’s operating cash flow (excluding changes in its
current assets and current liabilities) to fund its capital investments
rather than distribute all of that cash to themselves. Because DGD’s
operating cash flow is effectively attributable to each member, only
50 percent of DGD’s capital investments should be attributed to our
net share of capital investments. We also exclude all of the capital
expenditures of other VIEs that we consolidate because we do not
operate those VIEs. We believe capital investments attributable to
Valero is an important measure because it more accurately reflects
our capital investments.
DGD
$ 853
Other VIEs
$
40
Deferred turnaround and catalyst cost expenditures
(excluding VIEs)
$ 1,030
Deferred turnaround and catalyst cost expenditures of
DGD
$
26
Investments in nonconsolidated joint ventures
$
1
Total capital investments
$ 2,738
Adjustments:
Capital investments attributable to Valero should not be considered
as an alternative to capital investments, which is the most
comparable GAAP measure, nor should it be considered in isolation
or as a substitute for an analysis of our cash flows as reported under
GAAP. In addition, this non-GAAP measure may not be comparable to
similarly titled measures used by other companies because we may
define it differently, which may diminish its utility. See page 58 of 2022
Form 10-K for more information.
DGD's capital investments attributable to our joint
venture member
$(439)
Capital expenditures of other VIEs
$ (40)
$2,259
Capital investments attributable to Valero
Free Cash Flow
Valero defines free cash flow as net cash provided by operating activities less capital expenditures of Valero and DGD, deferred turnaround and
catalyst cost expenditures, investments in joint ventures, and changes in current assets and liabilities. Valero believes that the presentation of
free cash flow provides useful information to investors in assessing Valero’s ability to cover ongoing costs and Valero’s ability to generate cash
returns to stockholders. The GAAP measures most directly comparable to free cash flow are net cash provided by operating activities and net
cash used in investing activities.
Reconciliation of Net Cash Provided by Operating Activities Under GAAP to Free Cash Flow (in millions)
Year Ended December 31,
Net cash provided by operating
activities
Less: Capital expenditures of VLO and
DGD
Less: Deferred turnaround and
catalyst cost expenditures
Less: Investments in joint ventures
Less: Changes in current assets and
current liabilities
Free cash flow
Total free cash flow, 2012 – 2022
2012
2013
2014
2015
2016
2017
2018
2019
$5,270
$5,564
$4,241
$5,611
$4,820
$5,482
$4,371
$5,531
2,931
2,121
2,153
1,618
1,278
1,353
1,628
479
634
649
673
718
523
57
76
14
141
4
(302)
922
(1,810)
(1,306)
$2,105
$1,811
$3,235
$4,485
2020
2021
2022
$948
$5,859
$12,574
1,769
1,537
1,555
1,641
915
780
648
793
1,056
406
181
164
54
9
1
976
1,289
(1,297)
294
(345)
2,225
(1,626)
$1,844
$1,911
$2,944
$2,524
($946)
$1,277
$11,502
$32,692
11
Number of years
Average free cash flow, 2012 – 2022
$2,972
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT •
79
