Valero 2015 Annual Report Download - page 91

Table of Contents
VALERO ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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Hartford Matters
We are involved, together with several other companies, in an environmental cleanup in the Village of Hartford, Illinois (the Village)
and recently, one of these companies assumed the ongoing remediation in the Village pursuant to a federal court order. We had
previously conducted an initial response in the Village, along with other companies, pursuant to an administrative order issued by the
U.S. Environmental Protection Agency (EPA). The parties involved in the initial response may have further claims between themselves
for costs already incurred. We also continue to be engaged in site assessment and interim measures at the adjacent shutdown refinery
site, which we acquired as part of an acquisition in 2005, and we are in litigation with the Illinois EPA and other potentially responsible
parties relating to the remediation of the site. In each of these matters, we have various defenses and rights for contribution from the
other responsible parties. We have recorded a liability for our own expected contribution obligations. However, because of the
unpredictable nature of these cleanups, the methodology for allocation of liabilities and the state of Illinois’ failure to directly sue third
parties responsible for historic contamination at the site, it is reasonably possible that we could incur a loss in a range of $0 to
$200 million in excess of the amount of our accrual to ultimately resolve these matters. Factors underlying this estimated range are
expected to change from time to time, and actual results may vary significantly from this estimate.
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We are party to claims and legal proceedings arising in the ordinary course of business. We have not recorded a loss contingency
liability with respect to some of these matters because we have determined that it is remote that a loss has been incurred. For other
matters, we have recorded a loss contingency liability where we have determined that it is probable that a loss has been incurred and
that the loss is reasonably estimable. These loss contingency liabilities are not material to our financial position. We re-evaluate and
update our loss contingency liabilities as matters progress over time, and we believe that any changes to the recorded liabilities will not
be material to our financial position, results of operations, or liquidity.
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We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty,
sales/use, gross receipts, and value-added taxes), payroll taxes, franchise taxes, withholding taxes, and ad valorem taxes. New tax laws
and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in
increased expenditures for tax liabilities in the future. Many of these liabilities are subject to periodic audits by the respective taxing
authority. Subsequent changes to our tax liabilities as a result of these audits may subject us to interest and penalties.
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We are self-insured for certain medical and dental, workers’ compensation, automobile liability, general liability, and property liability
claims up to applicable retention limits. Liabilities are accrued for self-insured claims, or when estimated losses exceed coverage limits,
and when sufficient information is available to reasonably estimate the amount of the loss. These liabilities are included in accrued
expenses and other long-term liabilities.
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