Valero 2015 Annual Report Download - page 70

Table of Contents
VALERO ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
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General
As used in this report, the terms “Valero,” “we,” “us,” or “our” may refer to Valero Energy Corporation, one or more of its consolidated
subsidiaries, or all of them taken as a whole. We are an independent petroleum refining and marketing company and own 15 refineries
with a combined throughput capacity of approximately 3.0 million barrels per day (BPD) as of December 31, 2015. We market branded
and unbranded refined products on a wholesale basis in the United States (U.S.), Canada, the Caribbean, the United Kingdom (U.K.),
and Ireland through an extensive bulk and rack marketing network and through approximately 7,500 outlets that carry the Valero ®,
Diamond Shamrock®, Shamrock®, Ultramar®, Beacon®, and Texaco® brand names. We also own 11 ethanol plants in the U.S. that
primarily produce ethanol with a combined production capacity of approximately 1.4 billion gallons per year as of December 31, 2015.
Our operations are affected by:
• company-specific factors, primarily refinery utilization rates and refinery maintenance turnarounds;
• seasonal factors, such as the demand for refined products during the summer driving season and heating oil during the winter
season; and
• industry factors, such as movements in and the level of crude oil prices including the effect of quality differentials between
grades of crude oil, the demand for and prices of refined products, industry supply capacity, and competitor refinery
maintenance turnarounds.
Reclassifications
Certain amounts reported as of and for the year ended December 31, 2014 have been reclassified to conform to the 2015 presentation.
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Principles of Consolidation
These financial statements include the accounts of Valero, its subsidiaries, and entities in which Valero has a controlling financial
interest. The ownership of noncontrolling investors are recorded as noncontrolling interests. Intercompany balances and transactions
have been eliminated in consolidation. Investments in significant noncontrolled entities are accounted for using the equity method.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (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.
Cash and Temporary Cash Investments
Our temporary cash investments are highly liquid, low-risk debt instruments that have a maturity of three months or less when acquired.
Receivables
Trade receivables are carried at original invoice amount. We maintain an allowance for doubtful accounts, which is adjusted based on
management’s assessment of our customers’ historical collection experience, known credit risks, and industry and economic conditions.
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