Valero 2015 Annual Report Download - page 29

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Table of Contents
OVERVIEW AND OUTLOOK

For the year ended December 31, 2015, we reported net income attributable to Valero stockholders from continuing operations of
$4.0 billion, or $7.99 per share (assuming dilution), compared to $3.7 billion, or $6.97 per share (assuming dilution), for the year ended
December 31, 2014. Included in our 2015 results was a noncash charge for a lower of cost or market inventory valuation adjustment
recorded in December 2015 of $790 million ($624 million after taxes, or $1.25 per share (assuming dilution)), of which $740 million
was attributable to our refining segment and $50 million was attributable to our ethanol segment. This matter is more fully described in
Note 6 of Notes to Consolidated Financial Statements. Included in our 2014 results was a last-in, first-out (LIFO) inventory gain of
$233 million ($151 million after taxes, or $0.29 per share (assuming dilution)) primarily related to our refining segment.
Our operating income increased $456 million from 2014 to 2015 as outlined by business segment in the following table (in millions):
Year Ended December 31,
2015
2014
Change
Operating income (loss) by business segment:
Refining
$ 6,973
$ 5,884
$ 1,089
Ethanol
142
786
(644)
Corporate
(757)
(768)
11
Total
$ 6,358
$ 5,902
$ 456
However, excluding the effect of the lower of cost or market inventory valuation adjustment and the LIFO gain discussed above, total
operating income for 2015 and 2014 was $7.1 billion and $5.7 billion, respectively, reflecting a $1.4 billion favorable increase between
the years, with refining segment operating income of $7.7 billion and $5.6 billion, respectively, (a favorable increase of $2.1 billion)
and ethanol segment operating income of $192 million and $782 million, (an unfavorable decrease of $590 million).
The $2.1 billion increase in refining segment operating income in 2015 compared to 2014 was due to higher margins on gasoline and
other refined products (e.g., petroleum coke, propane, sulfur, and lubes), partially offset by lower discounts for most sweet and sour
crude oils relative to Brent crude oil and lower distillate margins. Our ethanol segment operating income decreased $590 million in
2015 compared to 2014 due to lower ethanol margins that resulted from lower ethanol and co-product prices, partially offset by lower
corn feedstock costs.
Additional details and analysis of the changes in the operating income of our business segments and other components of net income
attributable to Valero stockholders are provided below under “RESULTS OF OPERATIONS.”
In March 2015, we issued $600 million of 3.65 percent senior notes due March 15, 2025 and $650 million of 4.9 percent senior notes
d u e March 15, 2045, and our consolidated subsidiary, VLP, borrowed $200 million under its revolving credit facility (the VLP
Revolver), as further described in Note 10 of Notes to Consolidated Financial Statements. On July 1, 2015, VLP repaid $25 million of
the amount borrowed under the VLP Revolver.
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