Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Valero Energy Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss)	9,149)	11,879)	1,288)	(1,107)	2,784)
Depreciation and amortization expense	2,701)	2,473)	2,405)	2,351)	2,255)
(Gain) loss on early redemption and retirement of debt, net	(11)	(14)	193)	—)	—)
LCM inventory valuation adjustment	—)	—)	—)	(19)	—)
Asset impairment loss	—)	61)	—)	—)	—)
Gain on sale of assets	—)	—)	(62)	—)	—)
Deferred income tax expense (benefit)	103)	50)	(126)	158)	234)
Receivables, net	(387)	(1,619)	(4,382)	2,773)	(1,468)
Inventories	(684)	(672)	(253)	1,007)	(385)
Prepaid expenses and other	(34)	(180)	(22)	101)	427)
(Increase) decrease in current assets	(1,105)	(2,471)	(4,657)	3,881)	(1,426)
Accounts payable	(169)	521)	6,301)	(4,068)	1,534)
Accrued expenses	(50)	(5)	253)	48)	(27)
Taxes other than income taxes payable	(226)	98)	104)	37)	60)
Income taxes payable	(776)	231)	224)	(243)	153)
Increase (decrease) in current liabilities	(1,221)	845)	6,882)	(4,226)	1,720)
Changes in current assets and current liabilities	(2,326)	(1,626)	2,225)	(345)	294)
Changes in deferred charges and credits and other operating activities, net	(387)	(249)	(64)	(90)	(36)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	80)	695)	4,571)	2,055)	2,747)
Net cash provided by operating activities	9,229)	12,574)	5,859)	948)	5,531)
Capital expenditures, excluding variable interest entities (VIEs)	(665)	(788)	(513)	(1,014)	(1,627)
Diamond Green Diesel Holdings LLC (DGD)	(235)	(853)	(1,042)	(523)	(142)
Other VIEs	(11)	(40)	(110)	(251)	(225)
Capital expenditures of VIEs	(246)	(893)	(1,152)	(774)	(367)
Deferred turnaround and catalyst cost expenditures, excluding VIEs	(946)	(1,030)	(787)	(623)	(762)
Deferred turnaround and catalyst cost expenditures of DGD	(59)	(26)	(6)	(25)	(18)
Purchases of available-for-sale (AFS) debt securities	(276)	(100)	—)	—)	—)
Proceeds from sales and maturities of AFS debt securities	314)	5)	—)	—)	—)
Proceeds from sale of assets	—)	32)	270)	—)	—)
Investments in nonconsolidated joint ventures	—)	(1)	(9)	(54)	(164)
Other investing activities, net	13)	(4)	38)	65)	(63)
Net cash used in investing activities	(1,865)	(2,805)	(2,159)	(2,425)	(3,001)
Proceeds from debt issuances and borrowings, excluding VIEs	1,750)	2,239)	1,446)	4,320)	1,892)
DGD	550)	809)	301)	—)	—)
Other VIEs	120)	105)	81)	250)	239)
Proceeds from borrowings of VIEs	670)	914)	382)	250)	239)
Repayments of debt and finance lease obligations, excluding VIEs	(2,125)	(5,067)	(2,849)	(490)	(1,805)
DGD	(480)	(823)	(180)	—)	—)
Other VIEs	(77)	(73)	(6)	(5)	(6)
Repayments of debt and finance lease obligations of VIEs	(557)	(896)	(186)	(5)	(6)
Premiums on early redemption and retirement of debt	(5)	(56)	(179)	—)	—)
Purchases of common stock for treasury	(5,136)	(4,577)	(27)	(156)	(777)
Common stock dividend payments	(1,452)	(1,562)	(1,602)	(1,600)	(1,492)
Acquisition of VLP publicly held common units	—)	—)	—)	—)	(950)
Contributions from noncontrolling interests	75)	265)	189)	—)	—)
Distributions to noncontrolling interests	(164)	(93)	(2)	(208)	(70)
Other financing activities, net	3)	(16)	(18)	(34)	(28)
Net cash provided by (used in) financing activities	(6,941)	(8,849)	(2,846)	2,077)	(2,997)
Effect of foreign exchange rate changes on cash	139)	(180)	(45)	130)	68)
Net increase (decrease) in cash and cash equivalents	562)	740)	809)	730)	(399)
Cash and cash equivalents at beginning of year	4,862)	4,122)	3,313)	2,583)	2,982)
Cash and cash equivalents at end of year	5,424)	4,862)	4,122)	3,313)	2,583)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Net Income Trends: Net income showed significant volatility across the years, with a notable loss in 2020 (-$1,107 million) following a strong profit in 2019 ($2,784 million). Subsequently, net income rebounded in 2021 and surged substantially in 2022 to $11,879 million before moderating to $9,149 million in 2023.
Depreciation and Amortization Expense: This expense steadily increased every year from $2,255 million in 2019 to $2,701 million in 2023, indicating ongoing capital investment and asset utilization.
Adjustments Related to Debt and Asset Changes: Gains or losses on early redemption of debt showed small fluctuations and were negative in recent years (-$14 million in 2022 and -$11 million in 2023). Asset impairment loss appeared only in 2022 ($61 million). Gains on sale of assets were recorded only in 2021 (-$62 million, representing a gain). Deferred income tax expense/benefit varied with a benefit seen in 2021 (-$126 million) and higher expenses in 2022 and 2023, suggesting taxation impacts related to earnings fluctuations.
Changes in Working Capital: Receivables, inventories, and prepaid expenses showed considerable fluctuations, impacting current assets changes. Notably, receivables experienced a wide swing with large negative and positive values, causing instability in working capital. Current liabilities similarly fluctuated, with accounts payable and accrued expenses demonstrating inconsistent trends, contributing to variable net working capital changes.
Operating Cash Flow and Adjustments: Net cash provided by operating activities varied, dropping sharply in 2020 to $948 million from $5,531 million in 2019 but rebounding strongly to $12,574 million in 2022, followed by a decline to $9,229 million in 2023. Adjustments to reconcile net income to operating cash flows were highest in 2021 at $4,571 million and decreased thereafter.
Capital Expenditures and Investing Activities: Capital expenditures excluding VIEs decreased significantly from $1,627 million in 2019 to $665 million in 2023, indicating reduced investment in fixed assets. Corresponding capital expenditures related to VIEs showed a similar declining trend. Deferred turnaround and catalyst costs generally increased until 2022 but slightly decreased in 2023. Purchases and proceeds of available-for-sale debt securities show limited activity, with some purchases occurring in later years. Net cash used in investing activities remained negative across all years, though the magnitude decreased slightly by 2023.
Financing Activities and Debt Management: Proceeds from debt issuances excluding VIEs peaked in 2020 at $4,320 million and decreased thereafter, while repayments of debt showed a large spike in 2022 ($5,067 million), then decreased in 2023. Treasury stock purchases dramatically increased in 2022 and 2023 ($4,577 million and $5,136 million respectively), indicating aggressive share repurchase activities. Dividend payments remained relatively steady over the period. Financing cash flows swung from negative $2,997 million in 2019 to positive $2,077 million in 2020, then reverted to negative territory, reaching negative $6,941 million in 2023.
Cash Position and Liquidity: Cash and cash equivalents increased consistently each year from $2,583 million at the end of 2019 to $5,424 million by the end of 2023, reflecting positive net increases annually despite fluctuations in operating and financing cash flows.
Summary: The company experienced significant earnings volatility with a remarkable rebound post-2020. Operating cash flows generally improved after the downturn, supported by stable depreciation expenses and working capital adjustments. Capital spending decreased over time, possibly reflecting a conservative investment approach. Financing activities showed aggressive debt repayments and substantial share repurchases, contributing to negative financing cash flows in recent years. Overall liquidity strengthened consistently, demonstrating sound cash management despite operational and financing volatility.

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Valero Energy Corp. (NYSE:VLO)

Cash Flow Statement