2024 ESG Report FINAL - Report - Page 82
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 percent 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 percent 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
Net cash provided by operating activities
2016
2017
2018
2019
$5,611
$4,820
$5,482
$4,371
$5,531
(1,306)
976
1,289
(1,297)
81
83
41
$6,836
$3,761
$4,152
2020
2021
2022
2023
$948
$5,859
$12,574
$9,229
294
(345)
2,225
(1,626)
(2,326)
175
390
338
381
436
512
$5,493
$4,847
$955
$3,253
$13,764
$11,043
Exclude:
Changes in current assets and current
liabilities
DGD's adjusted net cash provided by
operating activities attributable to the other
joint venture member
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
Purchases of common stock for treasury*
2016
2017
2018
2019
2020
2021
2022
2023
$2,838
$1,336
$1,372
$1,708
$777
$156
$27
$4,577
$5,188
848
1,111
1,242
1,369
1,492
1,600
1,602
1,562
1,452
Total payout (B)
$3,686
$2,447
$2,614
$3,077
$2,269
$1,756
$1,629
$6,139
$6,640
Payout ratio (B/A)
54%
65%
63%
56%
47%
184%
50%
45%
60%
Common stock dividends
* "Purchases of common stock for treasury" includes 1% excise tax commencing in 2023. Accordingly, 2023 includes excise tax of $52 million.
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