10-Q 1 vlo-20220331.htm 10-Q vlo-20220331
VALERO ENERGY CORP/TX0001035002FALSE2022Q1--12-31Includes excise taxes on sales by certain of our foreign operations of $1,423 million and $1,120 million for the three months ended March 31, 2022 and 2021, 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 001-13175
vlo-20220331_g1.jpg
VALERO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware74-1828067
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
One Valero Way
San Antonio, Texas
(Address of principal executive offices)
78249
(Zip Code)
(210345-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockVLONew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
The number of shares of the registrant’s only class of common stock, $0.01 par value, outstanding as of April 22, 2022 was 408,096,416.



VALERO ENERGY CORPORATION
TABLE OF CONTENTS
Page


i


PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALERO ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(millions of dollars, except par value)
March 31,
2022
December 31,
2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$2,638 $4,122 
Receivables, net13,080 10,378 
Inventories7,174 6,265 
Prepaid expenses and other421 400 
Total current assets23,313 21,165 
Property, plant, and equipment, at cost49,488 49,072 
Accumulated depreciation(18,612)(18,225)
Property, plant, and equipment, net30,876 30,847 
Deferred charges and other assets, net6,213 5,876 
Total assets$60,402 $57,888 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and finance lease obligations$1,295 $1,264 
Accounts payable15,236 12,495 
Accrued expenses1,140 1,253 
Taxes other than income taxes payable1,482 1,461 
Income taxes payable632 378 
Total current liabilities19,785 16,851 
Debt and finance lease obligations, less current portion11,866 12,606 
Deferred income tax liabilities4,971 5,210 
Other long-term liabilities3,370 3,404 
Commitments and contingencies
Equity:
Valero Energy Corporation stockholders’ equity:
Common stock, $0.01 par value; 1,200,000,000 shares authorized;
673,501,593 and 673,501,593 shares issued
7 7 
Additional paid-in capital6,832 6,827 
Treasury stock, at cost;
265,399,517 and 264,305,955 common shares
(15,794)(15,677)
Retained earnings28,785 28,281 
Accumulated other comprehensive loss(1,009)(1,008)
Total Valero Energy Corporation stockholders’ equity18,821 18,430 
Noncontrolling interests1,589 1,387 
Total equity20,410 19,817 
Total liabilities and equity$60,402 $57,888 
See Condensed Notes to Consolidated Financial Statements.

1


VALERO ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(millions of dollars, except per share amounts)
(unaudited)
Three Months Ended
March 31,
20222021
Revenues (a)$38,542 $20,806 
Cost of sales:
Cost of materials and other34,949 18,992 
Operating expenses (excluding depreciation and amortization
expense reflected below)
1,379 1,656 
Depreciation and amortization expense595 566 
Total cost of sales36,923 21,214 
Other operating expenses19 38 
General and administrative expenses (excluding depreciation and
amortization expense reflected below)
205 208 
Depreciation and amortization expense11 12 
Operating income (loss)1,384 (666)
Other income (expense), net(20)45 
Interest and debt expense, net of capitalized interest(145)(149)
Income (loss) before income tax expense (benefit)1,219 (770)
Income tax expense (benefit)252 (148)
Net income (loss)967 (622)
Less: Net income attributable to noncontrolling interests62 82 
Net income (loss) attributable to Valero Energy Corporation
stockholders
$905 $(704)
Earnings (loss) per common share$2.21 $(1.73)
Weighted-average common shares outstanding (in millions)408 407 
Earnings (loss) per common share – assuming dilution$2.21 $(1.73)
Weighted-average common shares outstanding –
assuming dilution (in millions)
408 407 
__________________________
Supplemental information:
(a) Includes excise taxes on sales by certain of our foreign
operations
$1,423 $1,120 

See Condensed Notes to Consolidated Financial Statements.

2


VALERO ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
20222021
Net income (loss)$967 $(622)
Other comprehensive income (loss):
Foreign currency translation adjustment13 76 
Net gain on pension and other postretirement
benefits
8 15 
Net gain (loss) on cash flow hedges(45)10 
Other comprehensive income (loss) before
income tax expense
(24)101 
Income tax expense related to items of
other comprehensive income (loss)
 7 
Other comprehensive income (loss)(24)94 
Comprehensive income (loss)943 (528)
Less: Comprehensive income attributable
to noncontrolling interests
39 87 
Comprehensive income (loss) attributable to
Valero Energy Corporation stockholders
$904 $(615)

See Condensed Notes to Consolidated Financial Statements.

3


VALERO ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(millions of dollars)
(unaudited)
Valero Energy Corporation Stockholders’ Equity
Common
Stock
Additional
Paid-in
Capital
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
TotalNon-
controlling
Interests
Total
Equity
Balance as of December 31, 2021$7 $6,827 $(15,677)$28,281 $(1,008)$18,430 $1,387 $19,817 
Net income— — — 905 — 905 62 967 
Dividends on common stock
($0.98 per share)
— — — (401)— (401)— (401)
Stock-based compensation
expense
— 32 — — — 32 — 32 
Transactions in connection
with stock-based
compensation plans
— (27)9 — — (18)— (18)
Open market stock purchases
— — (126)— — (126)— (126)
Contributions from noncontrolling
interests
— — — — — — 165 165 
Distributions to noncontrolling
interests
— — — — — — (2)(2)
Other comprehensive loss— — — — (1)(1)(23)(24)
Balance as of March 31, 2022$7 $6,832 $(15,794)$28,785 $(1,009)$18,821 $1,589 $20,410 
Balance as of December 31, 2020$7 $6,814 $(15,719)$28,953 $(1,254)$18,801 $841 $19,642 
Net income (loss)— — — (704)— (704)82 (622)
Dividends on common stock
($0.98 per share)
— — — (400)— (400)— (400)
Stock-based compensation
expense
— 28 — — — 28 — 28 
Transactions in connection
with stock-based
compensation plans
— (32)19 — — (13)— (13)
Distributions to noncontrolling
interests
— — — — — — (2)(2)
Other comprehensive income— — — — 89 89 5 94 
Balance as of March 31, 2021$7 $6,810 $(15,700)$27,849 $(1,165)$17,801 $926 $18,727 

See Condensed Notes to Consolidated Financial Statements.

4


VALERO ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions of dollars)
(unaudited)
Three Months Ended
March 31,
20222021
Cash flows from operating activities:
Net income (loss)$967 $(622)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization expense606 578 
Loss on early retirement of debt50  
Deferred income tax benefit(234)(239)
Changes in current assets and current liabilities(722)184 
Changes in deferred charges and credits and other operating activities, net(79)47 
Net cash provided by (used in) operating activities588 (52)
Cash flows from investing activities:
Capital expenditures (excluding variable interest entities (VIEs))(152)(160)
Capital expenditures of VIEs:
Diamond Green Diesel Holdings LLC (DGD)(219)(153)
Other VIEs(13)(26)
Deferred turnaround and catalyst cost expenditures (excluding VIEs)(453)(230)
Deferred turnaround and catalyst cost expenditures of DGD(6)(1)
Investments in nonconsolidated joint ventures (12)
Other investing activities, net2 2 
Net cash used in investing activities(841)(580)
Cash flows from financing activities:
Proceeds from debt issuances and borrowings (excluding VIEs)939  
Proceeds from borrowings of VIEs:
DGD99  
Other VIEs28 8 
Repayments of debt and finance lease obligations (excluding VIEs)(1,738)(31)
Repayments of debt and finance lease obligations of VIEs:
DGD(102) 
Other VIEs(16)(1)
Premiums on early retirement of debt(48) 
Purchases of common stock for treasury(144)(14)
Common stock dividend payments(401)(400)
Contributions from noncontrolling interests165  
Other financing activities, net(10)(1)
Net cash used in financing activities(1,228)(439)
Effect of foreign exchange rate changes on cash(3)12 
Net decrease in cash and cash equivalents(1,484)(1,059)
Cash and cash equivalents at beginning of period4,122 3,313 
Cash and cash equivalents at end of period$2,638 $2,254 

See Condensed Notes to Consolidated Financial Statements.

5





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
General
The terms “Valero,” “we,” “our,” and “us,” as used in this report, may refer to Valero Energy Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole. The term “DGD,” as used in this report, may refer to Diamond Green Diesel Holdings LLC, its wholly owned consolidated subsidiary, or both of them taken as a whole.

These unaudited financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of our results for the three months ended March 31, 2022 have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The financial statements presented herein should be read in conjunction with the financial statements included in our annual report on Form 10-K for the year ended December 31, 2021.

The balance sheet as of December 31, 2021 has been derived from our audited financial statements as of that date. For further information, refer to our financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2021.

Significant Accounting Policy
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.


6





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.    UNCERTAINTIES

Developments with respect to the uncertainties described below are occurring at a rapid pace and cannot be predicted. Their overall economic impact and resulting impact on us also cannot be predicted with certainty at this time. However, we are proactively responding to and actively monitoring the known impacts of the Russia-Ukraine conflict and the COVID-19 pandemic on our business, to the extent practicable, and we will strive to continue to do so, but there can be no assurance that our response or other measures we may take will be fully effective.

Russia-Ukraine Conflict
In late February 2022, Russia began an invasion and military attack on Ukraine. This has resulted in many countries, including the U.S., imposing economic and financial sanctions on Russia and providing humanitarian and military aid to Ukraine. In addition, on March 8, 2022, the U.S. presidential administration issued an Executive Order that, among other matters, banned the import of Russian crude oil and other petroleum and energy products to the U.S. The ban on Russian energy imports took effect immediately, but companies were granted (through issuance of a General License published by the U.S. Office of Foreign Assets Control (OFAC)) 45 days to import petroleum products secured under pre-existing contracts.

As allowed by OFAC’s General License, we took delivery of certain feedstocks (procured under contracts entered into prior to the invasion) before the General License’s expiration on April 22, 2022. We currently do not anticipate any significant future feedstock sourcing disruptions resulting from the U.S. ban on Russian crude oil and other petroleum and energy product imports, as we obtain crude oil and other feedstocks from many other sources.

The conflict and responsive actions taken by the U.S. and other countries have created uncertainty for both domestic and international financial and commodity markets. Crude oil and consumer fuel prices significantly increased in March 2022 and remain volatile, as change in trade flows in Russian crude oil, other feedstocks, and energy products have impacted the global supply markets. Also, the continued increases in fuel prices have the potential to negatively impact the demand for our products. Thus, the implications of the Russia-Ukraine conflict on our financial position and results of operations remain uncertain.

Impact of the COVID-19 Pandemic
At the onset of the COVID-19 pandemic in March 2020, governmental authorities around the world imposed restrictions, such as stay-at-home orders and other social distancing measures, to slow the spread of COVID-19. These measures resulted in significant economic disruption globally as reduced economic activity negatively impacted many businesses, including our business. Although we have continued to experience improvements in our business, compared to the significant negative effects from the pandemic in 2020, the implications of the pandemic on our financial position and results of operations remain uncertain.


7





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.    INVENTORIES

Inventories consisted of the following (in millions):
March 31,
2022
December 31,
2021
Refinery feedstocks$2,068 $1,995 
Refined petroleum products and blendstocks
4,199 3,567 
Renewable diesel feedstocks and products
245 135 
Ethanol feedstocks and products364 273 
Materials and supplies298 295 
Inventories$7,174 $6,265 

As of March 31, 2022 and December 31, 2021, the replacement cost (market value) of last-in, first-out (LIFO) inventories exceeded their LIFO carrying amounts by $9.3 billion and $5.2 billion, respectively. Our non-LIFO inventories accounted for $1.6 billion and $1.4 billion of our total inventories as of March 31, 2022 and December 31, 2021, respectively.
4.    DEBT

Public Debt
In February 2022, we issued $650 million of 4.000 percent Senior Notes due June 1, 2052. Proceeds from this debt issuance totaled $639 million before deducting the underwriting discount and other debt issuance costs. The proceeds and cash on hand were used to repurchase and retire the following notes in connection with cash tender offers that we publicly announced and completed in February 2022 (in millions):
Debt Repurchased and RetiredPrincipal
Amount
3.65% Senior Notes due 2025
$72 
2.850% Senior Notes due 2025
507 
4.375% VLP Senior Notes due 2026
168 
3.400% Senior Notes due 2026
653 
Total$1,400 

In connection with the early debt retirement activity described above, we recognized a charge of $50 million in “other income (expense), net” primarily comprised of $48 million of premiums paid.

During the three months ended March 31, 2021, there was no issuance or redemption activity related to our public debt.


8





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Credit Facilities
We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):
March 31, 2022
Facility
Amount
Maturity DateOutstanding
Borrowings
Letters of Credit
Issued (a)
Availability
Committed facilities:
Valero Revolver$4,000 March 2024$ $615 $3,385 
Canadian RevolverC$150 November 2022C$ C$5 C$145 
Accounts receivable
sales facility
$1,300 July 2022$ n/a$1,300 
Letter of credit facility$50 November 2022n/a$ $50 
Committed facilities of
VIEs (b):
DGD Revolver (c)$400 March 2024$100 $15 $285 
DGD Loan Agreement (d)$25 April 2023$25 n/a$ 
IEnova Revolver (e)$830 February 2028$692 n/a$138 
Uncommitted facilities:
Letter of credit facilitiesn/an/an/a$834 n/a
________________________
(a)Letters of credit issued as of March 31, 2022 expire at various times in 2022 through 2023.
(b)Creditors of the VIEs do not have recourse against us.
(c)The variable interest rate on the DGD Revolver was 2.140 percent and 1.860 percent as of March 31, 2022 and December 31, 2021, respectively.
(d)In March 2022, the maturity date of this facility was extended to April 2023. The amounts shown for this facility represent the facility amount available from, and borrowings outstanding to, the noncontrolling member as any transactions between DGD and us under this facility are eliminated in consolidation. The variable interest rate on the DGD Loan Agreement was 2.735 percent and 2.603 percent as of March 31, 2022 and December 31, 2021, respectively.
(e)The variable interest rate on the IEnova Revolver was 3.864 percent and 3.781 percent as of March 31, 2022 and December 31, 2021, respectively.

Activity under our credit facilities was as follows (in millions):
Three Months Ended
March 31,
20222021
Borrowings:
Accounts receivable sales facility$300 $ 
DGD Revolver99  
IEnova Revolver28 8 
Repayments:
Accounts receivable sales facility(300) 
DGD Revolver(99) 
IEnova Revolver(15) 

9





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other Disclosures
“Interest and debt expense, net of capitalized interest” is comprised as follows (in millions):
Three Months Ended
March 31,
20222021
Interest and debt expense$157 $164 
Less: Capitalized interest12 15 
Interest and debt expense, net of
capitalized interest
$145 $149 

5.    EQUITY

Treasury Stock
We purchase shares of our outstanding common stock as authorized under our stock purchase program and with respect to our employee stock-based compensation plans. During the three months ended March 31, 2022, we made open market purchases of 1,334,550 shares for $126 million in connection with our stock purchase program. No open market purchases were made during the three months ended March 31, 2021. As of March 31, 2022, we had $1.2 billion remaining available for purchase under our stock purchase program, which has no expiration date.

Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss by component, net of tax, were as follows (in millions):
Three Months Ended March 31,
20222021
Foreign
Currency
Translation
Adjustment
Defined
Benefit
Plans
Items
Gains
(Losses)
on
Cash Flow
Hedges
TotalForeign
Currency
Translation
Adjustment
Defined
Benefit
Plans
Items
Gains
(Losses)
on
Cash Flow
Hedges
Total
Balance as of beginning
of period
$(562)$(441)$(5)$(1,008)$(515)$(737)$(2)$(1,254)
Other comprehensive
income (loss) before
reclassifications
13 (3)(64)(54)76 1 (5)72 
Amounts reclassified
from accumulated
other comprehensive
loss
 7 46 53  8 9 17 
Other comprehensive
income (loss)
13 4 (18)(1)76 9 4 89 
Balance as of end of
period
$(549)$(437)$(23)$(1,009)$(439)$(728)$2 $(1,165)

10





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6.    VARIABLE INTEREST ENTITIES

Consolidated VIEs
We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary. As of March 31, 2022, the significant consolidated VIEs included:

DGD, a joint venture with a subsidiary of Darling Ingredients Inc. that owns and operates a plant that processes waste and renewable feedstocks (predominately animal fats, used cooking oils, and inedible distillers corn oils) into renewable diesel; and

Central Mexico Terminals, a collective group of three subsidiaries of Infraestructura Energetica Nova, S.A.P.I. de C.V. (IEnova), which is a Mexican company and indirect subsidiary of Sempra Energy, a U.S. public company. We have terminaling agreements with Central Mexico Terminals that represent variable interests. We do not have an ownership interest in Central Mexico Terminals.

The assets of the consolidated VIEs can only be used to settle their own obligations and the creditors of the consolidated VIEs have no recourse to our other assets. We generally do not provide financial guarantees to the VIEs. Although we have provided credit facilities to some of the VIEs in support of their construction or acquisition activities, these transactions are eliminated in consolidation. Our financial position, results of operations, and cash flows are impacted by the performance of the consolidated VIEs, net of intercompany eliminations, to the extent of our ownership interest in each VIE.

The following tables present summarized balance sheet information for the significant assets and liabilities of the consolidated VIEs, which are included in our balance sheets (in millions):
DGDCentral
Mexico
Terminals
OtherTotal
March 31, 2022
Assets
Cash and cash equivalents$142 $ $15 $157 
Other current assets702 11 17 730 
Property, plant, and equipment, net2,854 659 92 3,605 
Liabilities
Current liabilities, including current portion
of debt and finance lease obligations
$470 $716 $8 $1,194 
Debt and finance lease obligations,
less current portion
261  19 280 

11





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DGDCentral
Mexico
Terminals
OtherTotal
December 31, 2021
Assets
Cash and cash equivalents$21 $ $15 $36 
Other current assets558 10 13 581 
Property, plant, and equipment, net2,629 676 91 3,396 
Liabilities
Current liabilities, including current portion
of debt and finance lease obligations
$398 $729 $9 $1,136 
Debt and finance lease obligations,
less current portion
264  20 284 

Nonconsolidated VIEs
We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. These nonconsolidated VIEs are not material to our financial position or results of operations and are accounted for as equity investments.

7.    EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost related to our defined benefit plans were as follows (in millions):
Pension PlansOther Postretirement
Benefit Plans
2022202120222021
Three months ended March 31
Service cost$38 $40 $2 $2 
Interest cost21 18 2 2 
Expected return on plan assets(48)(48)  
Amortization of:
Net actuarial loss13 20   
Prior service credit(4)(4)(1)(2)
Net periodic benefit cost
$20 $26 $3 $2 

The components of net periodic benefit cost other than the service cost component (i.e., the non-service cost components) are included in “other income (expense), net.”


12





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8.    EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per common share was computed as follows (dollars and shares in millions, except per share amounts):
Three Months Ended
March 31,
20222021
Earnings (loss) per common share:
Net income (loss) attributable to Valero stockholders$905 $(704)
Less: Income allocated to participating securities3 1 
Net income (loss) available to common stockholders$902 $(705)
Weighted-average common shares outstanding408 407 
Earnings (loss) per common share$2.21 $(1.73)
Earnings (loss) per common share – assuming dilution:
Net income (loss) attributable to Valero stockholders$905 $(704)
Less: Income allocated to participating securities3 1 
Net income (loss) available to common stockholders$902 $(705)
Weighted-average common shares outstanding408 407 
Effect of dilutive securities  
Weighted-average common shares outstanding –
assuming dilution
408 407 
Earnings (loss) per common share – assuming dilution$2.21 $(1.73)

Participating securities include restricted stock and performance awards granted under our 2020 Omnibus Stock Incentive Plan (OSIP) or our 2011 OSIP. Dilutive securities include participating securities as well as outstanding stock options.

9.    REVENUES AND SEGMENT INFORMATION

Revenue from Contracts with Customers
Disaggregation of Revenue
Revenue is presented in the table below under “Segment Information” disaggregated by product because this is the level of disaggregation that management has determined to be beneficial to users of our financial statements.

13





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contract Balances
Contract balances were as follows (in millions):
March 31,
2022
December 31,
2021
Receivables from contracts with customers,
included in receivables, net
$8,395 $6,228 
Contract liabilities, included in accrued expenses164 78 

During the three months ended March 31, 2022 and 2021, we recognized as revenue $69 million and $37 million that was included in contract liabilities as of December 31, 2021 and 2020, respectively.

Remaining Performance Obligations
We have spot and term contracts with customers, the majority of which are spot contracts with no remaining performance obligations. We do not disclose remaining performance obligations for contracts that have terms of one year or less. The transaction price for our remaining term contracts includes a fixed component and variable consideration (i.e., a commodity price), both of which are allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation. The fixed component is not material and the variable consideration is highly uncertain. Therefore, as of March 31, 2022, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations.

Segment Information
We have three reportable segments — Refining, Renewable Diesel, and Ethanol. Each segment is a strategic business unit that offers different products and services by employing unique technologies and marketing strategies and whose operations and operating performance are managed and evaluated separately. Operating performance is measured based on the operating income generated by the segment, which includes revenues and expenses that are directly attributable to the management of the respective segment. Intersegment sales are generally derived from transactions made at prevailing market rates. The following is a description of each segment’s business operations.

The Refining segment includes the operations of our petroleum refineries, the associated activities to market our refined petroleum products, and the logistics assets that support our refining operations. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks, distillates, and other products.

The Renewable Diesel segment represents the operations of DGD, a consolidated joint venture as discussed in Note 6, and the associated activities to market renewable diesel. The principal product manufactured by DGD and sold by this segment is renewable diesel. This segment sells some renewable diesel to the Refining segment, which is then sold to that segment’s customers.

The Ethanol segment includes the operations of our ethanol plants and the associated activities to market our ethanol and co-products. The principal products manufactured by our ethanol plants are ethanol and distillers grains. This segment sells some ethanol to the Refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product.


14





VALERO ENERGY CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Operations that are not included in any of the reportable segments are included in the corporate category.

The following tables reflect information about our operating income (loss) by reportable segment (in millions):
RefiningRenewable
Diesel
EthanolCorporate
and
Eliminations
Total
Three months ended March 31, 2022
Revenues:
Revenues from external customers
$36,813 $595 $1,134 $ $38,542 
Intersegment revenues
4 386 127 (517)— 
Total revenues
36,817 981 1,261 (517)38,542 
Cost of sales:
Cost of materials and other (a)33,606