Analysis of Geographic Areas
Valero Energy Corp. operates in 5 regions: U.S.; Canada; U.K. and Ireland; Mexico and Peru; and Other countries.
Area Asset Turnover
Valero Energy Corp., asset turnover by geographic area
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| U.S. | 3.61 | 4.31 | 2.91 | 1.60 | 2.81 |
| Canada | 6.32 | 7.19 | 3.56 | 2.29 | 4.20 |
| U.K. and Ireland | 12.00 | 13.70 | 8.71 | 6.85 | 11.03 |
| Mexico and Peru | 7.69 | 9.76 | — | — | — |
| Other countries | — | — | 12.96 | 8.37 | 19.42 |
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).
A synchronized fluctuation in asset turnover ratios is observed across all geographic segments between 2019 and 2023. A systemic decline occurred in 2020, followed by a sustained recovery that peaked in 2022, before a general moderate correction in 2023. The magnitude of efficiency varies significantly by region, with European and miscellaneous international operations demonstrating substantially higher asset turnover than the North American markets.
- North American Operations (U.S. and Canada)
- The United States exhibited a volatile trend, dropping from 2.81 in 2019 to a low of 1.60 in 2020, before reaching a peak of 4.31 in 2022 and settling at 3.61 in 2023. Canadian operations followed a similar trajectory but maintained higher overall efficiency, rising from 4.20 in 2019 to a peak of 7.19 in 2022, and ending at 6.32 in 2023.
- European Operations (U.K. and Ireland)
- This region consistently maintained higher asset turnover ratios than North American segments. After a decline to 6.85 in 2020, the ratio recovered to 8.71 in 2021 and reached its highest point of 13.70 in 2022, before declining slightly to 12.00 in 2023.
- Latin American Operations (Mexico and Peru)
- Data for this region appears in the latter part of the period, showing an initial ratio of 9.76 in 2022, which subsequently decreased to 7.69 by the end of 2023.
- Other International Operations
- The most extreme volatility and highest efficiency ratios were observed in the other countries category, starting at 19.42 in 2019, plummeting to 8.37 in 2020, and recovering to 12.96 in 2021, with no subsequent data available.
The overarching pattern indicates that while 2020 acted as a universal trough for asset utilization efficiency, the 2022 peak suggests a period of maximum revenue generation relative to the asset base across all reporting regions. The subsequent decline in 2023 suggests a normalization of asset productivity.
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Area Asset Turnover: U.S.
Valero Energy Corp.; U.S.; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 104,208) | 126,722) | 82,940) | 45,174) | 77,173) |
| Long-lived assets | 28,868) | 29,378) | 28,518) | 28,184) | 27,485) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 3.61 | 4.31 | 2.91 | 1.60 | 2.81 |
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).
1 2023 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 104,208 ÷ 28,868 = 3.61
The financial performance regarding U.S. asset utilization between 2019 and 2023 is characterized by significant revenue volatility juxtaposed against a highly stable base of long-lived assets. This relationship resulted in substantial fluctuations in the area asset turnover ratio over the five-year period.
- Revenue Trends
- Revenues experienced a sharp decline in 2020, falling from US$ 77,173 million to US$ 45,174 million. A subsequent and aggressive recovery occurred, with revenues climbing to US$ 82,940 million in 2021 and peaking at US$ 126,722 million in 2022. A moderate correction followed in 2023, with revenues settling at US$ 104,208 million, which still represents a notable increase over pre-2020 levels.
- Long-Lived Asset Stability
- The investment in long-lived assets remained remarkably consistent throughout the analysis period. Values shifted marginally from US$ 27,485 million in 2019 to a peak of US$ 29,378 million in 2022, before ending the period at US$ 28,868 million in 2023. This suggests that changes in revenue generation were driven by operational or market factors rather than significant expansions or contractions of the physical asset base.
- Area Asset Turnover Efficiency
- The asset turnover ratio mirrors the volatility of revenues due to the static nature of the asset base. The ratio reached a period low of 1.60 in 2020, coinciding with the revenue slump. Efficiency improved rapidly thereafter, peaking at 4.31 in 2022. Although the ratio moderated to 3.61 in 2023, it remains elevated compared to the 2.81 ratio recorded in 2019, indicating an overall improvement in the ability to generate revenue per unit of long-lived asset.
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Area Asset Turnover: Canada
Valero Energy Corp.; Canada; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 10,107) | 11,743) | 6,597) | 4,294) | 7,915) |
| Long-lived assets | 1,598) | 1,634) | 1,855) | 1,877) | 1,886) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 6.32 | 7.19 | 3.56 | 2.29 | 4.20 |
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).
1 2023 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 10,107 ÷ 1,598 = 6.32
The Canadian operational segment exhibited significant volatility in revenue generation between 2019 and 2023, which directly influenced the efficiency of asset utilization. While the long-lived asset base contracted steadily over the five-year period, revenues experienced a sharp decline followed by a period of substantial growth and subsequent stabilization.
- Revenue Trends
- Annual revenues showed a sharp contraction in 2020, falling from US$ 7,915 million to US$ 4,294 million. This was followed by a consistent recovery trajectory, peaking in 2022 at US$ 11,743 million before moderating to US$ 10,107 million in 2023.
- Long-lived Asset Base
- A consistent downward trend is observed in long-lived assets, which decreased from US$ 1,886 million in 2019 to US$ 1,598 million in 2023. This gradual reduction suggests a decrease in the capital intensity or a depreciation of the regional asset base over the analyzed period.
- Area Asset Turnover Efficiency
- The asset turnover ratio fluctuated in alignment with revenue movements. A cyclical low of 2.29 was recorded in 2020, coinciding with the revenue trough. The ratio reached a peak of 7.19 in 2022, driven by the convergence of record revenues and a diminished asset base. By 2023, the ratio remained elevated at 6.32, which represents a significant improvement over the 2019 baseline of 4.20, indicating higher operational efficiency in generating sales relative to the assets employed.
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Area Asset Turnover: U.K. and Ireland
Valero Energy Corp.; U.K. and Ireland; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 16,148) | 17,822) | 13,307) | 9,268) | 13,584) |
| Long-lived assets | 1,346) | 1,301) | 1,528) | 1,353) | 1,232) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 12.00 | 13.70 | 8.71 | 6.85 | 11.03 |
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).
1 2023 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 16,148 ÷ 1,346 = 12.00
The analysis of the U.K. and Ireland geographic area reveals a period of significant volatility in asset utilization and revenue generation between 2019 and 2023. The efficiency of long-lived assets in generating revenue experienced a sharp contraction followed by a robust recovery and a subsequent slight moderation.
- Revenue Performance
- Annual revenues exhibited substantial fluctuations, decreasing from $13,584 million in 2019 to a period low of $9,268 million in 2020. A strong recovery followed, with revenues climbing to a peak of $17,822 million in 2022 before experiencing a moderate decline to $16,148 million in 2023.
- Long-lived Asset Trends
- The asset base remained relatively stable throughout the period, showing limited variance compared to the volatility of revenues. Long-lived assets increased from $1,232 million in 2019 to a peak of $1,528 million in 2021, subsequently stabilizing at $1,346 million by the end of 2023.
- Area Asset Turnover Efficiency
- The asset turnover ratio mirrored the trends seen in revenue, falling from 11.03 in 2019 to 6.85 in 2020. This decline indicates a temporary reduction in the efficiency of assets in generating sales. Efficiency improved consistently thereafter, reaching a peak ratio of 13.70 in 2022, the highest level of asset utilization in the five-year period. The ratio closed at 12.00 in 2023, remaining higher than the 2019 baseline despite the slight year-over-year decrease.
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Area Asset Turnover: Mexico and Peru
Valero Energy Corp.; Mexico and Peru; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 6,438) | 8,396) | —) | —) | —) |
| Long-lived assets | 837) | 860) | —) | —) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 7.69 | 9.76 | — | — | — |
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).
1 2023 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 6,438 ÷ 837 = 7.69
The financial performance for the Mexico and Peru geographic areas between 2022 and 2023 indicates a decline in operational efficiency regarding asset utilization. While the asset base remained relatively stable, a significant contraction in revenue led to a reduction in the area asset turnover ratio.
- Revenue Trends
- Revenues experienced a substantial decrease, falling from 8,396 million USD in 2022 to 6,438 million USD in 2023, representing a decline of approximately 23.2%.
- Long-lived Assets
- The value of long-lived assets remained nearly constant over the period, with a marginal decrease from 860 million USD in 2022 to 837 million USD in 2023.
- Area Asset Turnover
- The area asset turnover ratio declined from 9.76 in 2022 to 7.69 in 2023. This downward trend is directly attributable to the disproportionate drop in revenues relative to the stable level of long-lived assets, signaling a reduced capacity to generate sales from the existing asset investment in these regions.
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Area Asset Turnover: Other countries
Valero Energy Corp.; Other countries; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 7,865) | 11,700) | 11,133) | 6,176) | 9,652) |
| Long-lived assets | —) | —) | 859) | 738) | 497) |
| Area Activity Ratio | |||||
| Area asset turnover1 | — | — | 12.96 | 8.37 | 19.42 |
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).
1 2023 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 7,865 ÷ 0 = —
The financial performance for the Other countries segment is characterized by significant revenue volatility and a fluctuating asset utilization efficiency between 2019 and 2023. While revenues peaked in 2022, the period was marked by a sharp contraction in 2020 followed by a partial recovery and a subsequent decline in the final year of the analysis.
- Revenue Trends
- Revenues exhibited substantial variance over the five-year period. A significant decline occurred in 2020, with revenues dropping from 9,652 million USD to 6,176 million USD. This was followed by a strong upward trajectory, reaching a peak of 11,700 million USD in 2022, before retreating to 7,865 million USD by the end of 2023.
- Long-lived Asset Growth
- From 2019 to 2021, there was a consistent increase in long-lived assets allocated to other countries. The asset base grew from 497 million USD in 2019 to 738 million USD in 2020, and further increased to 859 million USD in 2021, representing a steady expansion of the capital base during those three years.
- Area Asset Turnover Analysis
- The area asset turnover ratio reflects the efficiency of the company in generating revenue from its long-lived assets. In 2019, the ratio was high at 19.42, indicating very high asset productivity. This ratio plummeted to 8.37 in 2020, a result of the simultaneous decrease in revenues and increase in the asset base. By 2021, the ratio improved to 12.96, demonstrating a recovery in operational efficiency, although it remained below the 2019 levels.
The convergence of increasing asset investments and fluctuating revenue streams led to a period of unstable asset turnover. The recovery observed in 2021 suggests an improved ability to leverage the expanded asset base, although the most recent revenue data for 2023 indicates a renewed downward trend in top-line performance for this geographic area.
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Revenues
Valero Energy Corp., revenues by geographic area
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| U.S. | 104,208) | 126,722) | 82,940) | 45,174) | 77,173) |
| Canada | 10,107) | 11,743) | 6,597) | 4,294) | 7,915) |
| U.K. and Ireland | 16,148) | 17,822) | 13,307) | 9,268) | 13,584) |
| Mexico and Peru | 6,438) | 8,396) | —) | —) | —) |
| Other countries | 7,865) | 11,700) | 11,133) | 6,176) | 9,652) |
| Total | 144,766) | 176,383) | 113,977) | 64,912) | 108,324) |
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).
Total revenues exhibited significant volatility between 2019 and 2023, characterized by a sharp contraction in 2020 followed by a period of aggressive growth peaking in 2022. Total revenue fell from 108,324 million USD in 2019 to 64,912 million USD in 2020, before recovering to 113,977 million USD in 2021 and reaching a high of 176,383 million USD in 2022. A subsequent moderation occurred in 2023, with total revenues settling at 144,766 million USD.
- United States Market Dominance
- The U.S. segment serves as the primary revenue driver, consistently representing the largest portion of total earnings. This region mirrored the global trend, experiencing a steep decline in 2020 to 45,174 million USD, followed by a significant expansion to 126,722 million USD by 2022. By 2023, U.S. revenues adjusted to 104,208 million USD.
- Analysis of Canadian and European Operations
- Revenues from Canada and the U.K. and Ireland followed similar cyclical patterns. The U.K. and Ireland segment demonstrated relative stability, with 2021 revenues returning to near 2019 levels (13,307 million USD compared to 13,584 million USD). Canadian operations saw a notable peak in 2022 at 11,743 million USD, nearly double the revenue recorded in 2021.
- Emerging Geographic Segments
- A new revenue stream from Mexico and Peru appeared in the reporting for 2022, contributing 8,396 million USD. This contribution decreased to 6,438 million USD in 2023, suggesting either a normalization of operations or market-driven volatility in those specific regions.
- Other International Revenue Trends
- Revenues from other countries exhibited a peak in 2022 at 11,700 million USD. However, this segment experienced a sharper decline in 2023, falling to 7,865 million USD, which represents a return to levels similar to those seen in 2019.
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Long-lived assets
Valero Energy Corp., long-lived assets by geographic area
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| U.S. | 28,868) | 29,378) | 28,518) | 28,184) | 27,485) |
| Canada | 1,598) | 1,634) | 1,855) | 1,877) | 1,886) |
| U.K. and Ireland | 1,346) | 1,301) | 1,528) | 1,353) | 1,232) |
| Mexico and Peru | 837) | 860) | —) | —) | —) |
| Other countries | —) | —) | 859) | 738) | 497) |
| Total | 32,649) | 33,173) | 32,760) | 32,152) | 31,100) |
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).
Total long-lived assets demonstrated a period of moderate growth between 2019 and 2022, rising from US$ 31,100 million to a peak of US$ 33,173 million, followed by a slight contraction to US$ 32,649 million by the end of 2023. The overall trajectory suggests a stable asset base with limited volatility in total valuation over the five-year period.
- United States Asset Dominance
- The United States represents the primary concentration of long-lived assets, consistently accounting for the vast majority of the total portfolio. Assets in this region grew steadily from US$ 27,485 million in 2019 to US$ 29,378 million in 2022, before experiencing a modest decline to US$ 28,868 million in 2023.
- Canadian and European Asset Trends
- A consistent downward trend is observed in Canadian assets, which decreased every year from US$ 1,886 million in 2019 to US$ 1,598 million in 2023. In contrast, assets in the U.K. and Ireland exhibited more fluctuation, peaking at US$ 1,528 million in 2021 before settling at US$ 1,346 million by the end of 2023.
- Geographic Reporting Shifts
- A structural change in geographic reporting is evident starting in 2022. Assets previously categorized under "Other countries," which had grown from US$ 497 million in 2019 to US$ 859 million in 2021, were removed from the reporting. Simultaneously, a new category for Mexico and Peru appeared in 2022 with US$ 860 million, ending 2023 at US$ 837 million, suggesting a reclassification of international assets or targeted regional acquisitions.
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