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Table of Contents
VALERO ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. INVENTORIES
Inventories consisted of the following (in millions):
December 31,
2015
2014
Refinery feedstocks $ 2,404
$ 2,269
Refined products and blendstocks 3,774
3,926
Ethanol feedstocks and products 242
195
Materials and supplies 244
233
Inventories, before lower of cost or market
inventory valuation reserve 6,664
6,623
Lower of cost or market inventory valuation reserve (766)
—
Inventories $ 5,898
$ 6,623
The market value of our LIFO inventory held as of December 31, 2015 fell below our historical LIFO inventory costs. As a result, we
recorded a lower of cost or market inventory valuation adjustment of $790 million for the year ended December 31, 2015. The income
statement effect differs from the balance sheet reserve due to the foreign currency effect of inventories held for our international
operations. As of December 31, 2014, the market value of LIFO inventories exceeded their LIFO carrying amounts by approximately
$857 million.
During the year ended December 31, 2013, we had net liquidations of LIFO inventory layers that decreased cost of sales by
$17 million. As of December 31, 2015 and 2014, our non-LIFO inventories accounted for $668 million and $906 million, respectively,
of our total inventories.
76