Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

The changes in benefit obligation, the changes in fair value of plan assets, and the funded status of our pension plans and other postretirement benefit plans

The changes in benefit obligation related to all of our defined benefit plans, the changes in fair value of plan assets^(a), and the funded status of our defined benefit plans as of and for the years ended December 31, 2012 and 2011 were as follows (in millions):



	Pension Plans						Other Postretirement Benefit Plans
	2012			2011			2012			2011
Changes in benefit obligation:
Benefit obligation at beginning of year	$	1,881		$	1,626		$	438		$	426
Service cost	140			104			12			11
Interest cost	93			85			21			22
Participant contributions	—			—			14			12
Plan amendments	9			4			—			—
Curtailment gain	(16		)	—			—			—
Benefits paid	(90		)	(117		)	(35		)	(30		)
Actuarial (gain) loss	289			179			(17		)	(9		)
Other	1			—			3			6
Benefit obligation at end of year	$	2,307		$	1,881		$	436		$	438

Changes in plan assets^(a):
Fair value of plan assets at beginning of year	$	1,487		$	1,362		$	—		$	—
Actual return on plan assets	167			(2		)	—			—
Valero contributions	164			244			19			15
Participant contributions	—			—			14			12
Benefits paid	(90		)	(117		)	(35		)	(30		)
Other	1			—			2			3
Fair value of plan assets at end of year	$	1,729		$	1,487		$	—		$	—

Reconciliation of funded status^(a):
Fair value of plan assets at end of year	$	1,729		$	1,487		$	—		$	—
Less benefit obligation at end of year	2,307			1,881			436			438
Funded status at end of year	$	(578	)	$	(394	)	$	(436	)	$	(438	)

Accumulated benefit obligation	$	1,857		$	1,550		n/a			n/a

Benefit obligations in excess of fair value of plan assets

The accumulated benefit obligations for certain of our pension plans exceed the fair values of the assets of those plans. For those plans, the table below presents the total projected benefit obligation, accumulated benefit obligation, and fair value of the plan assets (in millions).



	December 31,
	2012		2011
Projected benefit obligation	$	250	$	244
Accumulated benefit obligation	191		189
Fair value of plan assets	31		40

Expected benefit payments

Benefit payments that we expect to pay, including amounts related to expected future services, and the anticipated Medicare subsidies that we expect to receive are as follows for the years ending December 31 (in millions):



	Pension Benefits		Other Postretirement Benefits
2013	$	93	$	21
2014	116		22
2015	108		24
2016	117		25
2017	129		26
2018-2022	840		143

Components of net periodic benefit costs

The components of net periodic benefit cost were as follows for the years ended December 31, 2012, 2011, and 2010 (in millions):



	Pension Plans									Other Postretirement Benefit Plans
	2012			2011			2010			2012			2011			2010
Components of net periodic benefit cost:
Service cost	$	140		$	104		$	88		$	12		$	11		$	10
Interest cost	93			85			83			21			22			26
Expected return on plan assets	(125		)	(112		)	(112		)	—			—			—
Amortization of:
Prior service cost (credit)	3			2			3			(23		)	(23		)	(20		)
Net actuarial loss	33			12			2			1			2			4
Net periodic benefit cost before special charges	144			91			64			11			12			20
Special charges (credits)	(3		)	4			8			—			4			—
Net periodic benefit cost	$	141		$	95		$	72		$	11		$	16		$	20

Amounts recognized in other comprehensive income

Pre-tax amounts recognized in other comprehensive income for the years ended December 31, 2012, 2011, and 2010 were as follows (in millions):



	Pension Plans									Other Postretirement Benefit Plans
	2012			2011			2010			2012			2011			2010
Net loss (gain) arising during the year:
Net actuarial loss (gain)	$	245		$	294		$	68		$	(17	)	$	(9	)	$	(28	)
Prior service cost (credit)	9			4			—			—			—			(31		)

Net gain (loss) reclassified into income:
Net actuarial loss	(33		)	(12		)	(2		)	(1		)	(2		)	(4		)
Prior service (cost) credit	(3		)	(2		)	(3		)	23			23			20
Curtailment and settlement	(12		)	(4		)	(4		)	—			—			—
Total changes in other comprehensive (income) loss	$	206		$	280		$	59		$	5		$	12		$	(43	)

Amounts in accumulated other comprehensive income not yet recognized

The pre-tax amounts in accumulated other comprehensive income as of December 31, 2012 and 2011 that have not yet been recognized as components of net periodic benefit cost were as follows (in millions):



	Pension Plans				Other Postretirement Benefit Plans
	2012		2011		2012			2011
Prior service cost (credit)	$	21	$	16	$	(81	)	$	(103	)
Net actuarial loss	882		681		34			50
Total	$	903	$	697	$	(47	)	$	(53	)

Amounts in accumulated other comprehensive income to be recognized in the next fiscal year

The following pre-tax amounts included in accumulated other comprehensive income as of December 31, 2012 are expected to be recognized as components of net periodic benefit cost during the year ending December 31, 2013 (in millions):



	Pension Plans		Other Postretirement Benefit Plans
Amortization of prior service cost (credit)	$	3	$	(13	)
Amortization of net actuarial loss	57		—
Total	$	60	$	(13	)

Weighted-average assumptions used to determine the benefit obligations and net periodic benefit cost

The weighted-average assumptions used to determine the net periodic benefit cost for the years ended December 31, 2012, 2011, and 2010 were as follows:



	Pension Plans						Other Postretirement Benefit Plans
	2012		2011		2010		2012		2011		2010
Discount rate	5.08	%	5.40	%	5.80	%	4.97	%	5.22	%	5.68	%
Expected long-term rate of return on plan assets	7.67	%	7.69	%	7.71	%	—	%	—	%	—	%
Rate of compensation increase	3.68	%	3.56	%	4.18	%	—	%	—	%	—	%

The weighted-average assumptions used to determine the benefit obligations as of December 31, 2012 and 2011 were as follows:



	Pension Plans				Other Postretirement Benefit Plans
	2012		2011		2012		2011
Discount rate	4.28	%	5.08	%	4.19	%	4.97	%
Rate of compensation increase	3.73	%	3.68	%	—	%	—	%

Assumed health care cost trend rates

The assumed health care cost trend rates as of December 31, 2012 and 2011 were as follows:



	2012		2011
Health care cost trend rate assumed for the next year	7.32	%	7.43	%
Rate to which the cost trend rate was assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2018

Effect of one percentage-point change in assumed health care cost trend rates

A one percentage-point change in assumed health care cost trend rates would have the following effects on other postretirement benefits (in millions):



	1% Increase		1% Decrease
Effect on total of service and interest cost components	$	1	$	(1	)
Effect on accumulated postretirement benefit obligation	20		(17		)

Fair value of pension plan assets by level of fair value hierarchy

The tables below present the fair values of the assets of our pension plans (in millions) as of December 31, 2012 and 2011 by level of the fair value hierarchy. Assets categorized in Level 1 of the hierarchy are measured at fair value using a market approach based on quotations from national securities exchanges. Assets categorized in Level 2 of the hierarchy are measured at net asset value as a practical expedient for fair value. As previously noted, we do not fund or fully fund U.S. nonqualified and certain international pension plans that are not subject to funding requirements, and we do not fund our other postretirement benefit plans.



	Fair Value Measurements Using
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total as of December 31, 2012
Equity securities:
U.S. companies^(a)	$	441	$	—	$	—	$	441
International companies	135		—		—		135
Preferred stock	2		1		—		3
Mutual funds:
International growth	127		—		—		127
Index funds^(b)	117		—		—		117
Corporate debt instruments	—		290		—		290
Government securities:
U.S. Treasury securities	107		—		—		107
Other government securities	3		65		—		68
Common collective trusts	—		294		—		294
Insurance contracts	—		17		—		17
Interest and dividends receivable	5		—		—		5
Cash and cash equivalents	98		27		—		125
Total	$	1,035	$	694	$	—	$	1,729

______________________

See notes on page 102.



	Fair Value Measurements Using
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total as of December 31, 2011
Equity securities:
Valero Energy Corporation common stock	$	5	$	—	$	—	$	5
Other U.S. companies^(a)	375		—		—		375
International companies	120		—		—		120
Preferred stock	2		—		—		2
Mutual funds:
International growth	102		—		—		102
Index funds^(b)	63		—		—		63
Corporate debt instruments	—		246		—		246
Government securities:
U.S. Treasury securities	67		—		—		67
Other government securities	—		84		—		84
Common collective trusts	—		247		—		247
Insurance contracts	—		17		—		17
Interest and dividends receivable	5		—		—		5
Cash and cash equivalents	153		1		—		154
Total	$	892	$	595	$	—	$	1,487