2024 ESG Report FINAL - Report - Page 83
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 that may obscure Valero's underlying business
results and trends (see corresponding earnings release for each year). 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 annual period and total adjusted invested capital for the prior annual period. 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
$3,990
$2,289
$4,065
$3,122
$2,422
($1,421)
$930
$11,528
$8,835
624
(565)
(1,783)
113
(61)
238
221
48
(9)
4,614
1,724
2,282
3,235
2,361
(1,183)
1,151
11,576
8,826
Plus: adjusted net interest expense after-tax
274
283
295
357
355
442
464
410
394
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)
1,615
11,986
9,220
606
127
115
122
238
494
723
1,264
1,109
1,406
5,780
7,208
7,886
8,750
8,871
9,178
13,954
12,606
10,526
10,118
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)
6,324
7,142
7,425
7,918
7,971
9,288
14,047
12,763
10,017
9,799
VLO stockholders’ equity
20,677
20,527
20,024
21,991
21,667
21,803
18,801
18,430
23,561
26,346
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)
$23,582
$23,687
$22,886
$24,238
$26,891
$28,618
$29,696
$27,107
$28,865
$30,981
$23,635
$23,287
$23,562
$25,656
$27,755
$29,157
$28,401
$27,986
$29,923
21%
9%
11%
14%
10%
-3%
6%
43%
31%
Numerator:
Net income (loss) attributable to VLO
stockholders
Total effect of special items attributable to
VLO after-tax
Adjusted net income (loss) attributable
to VLO
Denominator:
Current portion of debt
Debt and 昀椀nance leases, less current
portion
Debt attributable to VLO
Total adjusted invested capital
Average adjusted invested capital (B)
ROIC (A / B)
ROIC (9-year average)
16%
Environmental, Social and Governance Report •
83
