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Debt and Capital Lease Obligations | 9 Months Ended
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Sep. 30, 2016
Debt Disclosure [Abstract] |
DEBT AND CAPITAL LEASE OBLIGATIONS |
4. | DEBT AND CAPITAL LEASE OBLIGATIONS
Credit Facilities Revolver We have a $3 billion revolving credit facility (the Revolver) that matures in November 2020. We have the option to increase the aggregate commitments under the Revolver to $4.5 billion, subject to certain conditions. The Revolver also provides for the issuance of letters of credit of up to $2.0 billion. No amounts were outstanding under the Revolver as of September 30, 2016 or December 31, 2015, and we had no borrowings under the Revolver during the nine months ended September 30, 2016 and 2015. VLP Revolver VLP has a $750 million senior unsecured revolving credit facility (the VLP Revolver) that matures in November 2020. The VLP Revolver is available only to the operations of VLP, and creditors of VLP do not have recourse against Valero. VLP has the option to increase the aggregate commitments under the VLP Revolver to $1.0 billion, subject to certain conditions. The VLP Revolver also provides for the issuance of letters of credit of up to $100 million. Outstanding borrowings under the VLP Revolver bear interest at a variable rate, which was 1.8125 percent as of September 30, 2016. During the nine months ended September 30, 2016, VLP borrowed $139 million and $210 million under the VLP Revolver in connection with VLP’s acquisitions from us of the McKee Terminal Services Business in April 2016 and the Meraux and Three Rivers Terminal Services Business in September 2016, respectively, and made no repayments under the VLP Revolver. During the nine months ended September 30, 2015, VLP borrowed $200 million under the VLP Revolver in connection with VLP’s acquisition from us of the Houston and St. Charles Terminal Services Business and repaid $25 million on the VLP Revolver. Borrowings outstanding under the VLP Revolver were $524 million and $175 million as of September 30, 2016 and December 31, 2015, respectively. Canadian Revolver One of our Canadian subsidiaries has a C$50 million committed revolving credit facility (the Canadian Revolver) that matures in November 2016. No amounts were outstanding under the Canadian Revolver as of September 30, 2016 or December 31, 2015, and we had no borrowings under the Canadian Revolver during the nine months ended September 30, 2016 and 2015. Accounts Receivable Sales Facility We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell eligible trade receivables on a revolving basis. In July 2016, we amended our agreement to decrease the facility from $1.4 billion to $1.3 billion and extended the maturity date to July 2017. Proceeds from the sale of receivables under this facility are reflected as debt. Under this program, one of our marketing subsidiaries (Valero Marketing) sells eligible receivables, without recourse, to another of our subsidiaries (Valero Capital), whereupon the receivables are no longer owned by Valero Marketing. Valero Capital, in turn, sells an undivided percentage ownership interest in the eligible receivables, without recourse, to the third-party entities and financial institutions. To the extent that Valero Capital retains an ownership interest in the receivables it has purchased from Valero Marketing, such interest is included in our financial statements solely as a result of the consolidation of the financial statements of Valero Capital with those of Valero Energy Corporation; the receivables are not available to satisfy the claims of the creditors of Valero Marketing or Valero Energy Corporation. During the nine months ended September 30, 2016 and 2015, we had no proceeds from or repayments under the accounts receivable sales facility. Summary of Credit Facilities We had outstanding borrowings, letters of credit issued, and availability under our revolving credit facilities as follows (in millions):
|  |  |  |  |  | September 30, 2016
|  | Facility Amount |  | Maturity Date |  | Outstanding Borrowings |  | Letters of Credit |  | Availability
Committed facilities: |  |  |  |  |  |  |  |  |  |
Revolver |  | $ | 3,000 |  |  | November 2020 |  | $ | — |  |  | $ | 53 |  |  | $ | 2,947 |
VLP Revolver |  | $ | 750 |  |  | November 2020 |  | $ | 524 |  |  | $ | — |  |  | $ | 226 |
Canadian Revolver |  | C$ | 50 |  |  | November 2016 |  | C$ | — |  |  | C$ | 10 |  |  | C$ | 40 |
Accounts receivable sales facility (a) |  | $ | 1,300 |  |  | July 2017 |  | $ | 100 |  |  | $ | — |  |  | $ | 1,051 |
Letter of credit facilities |  | $ | 275 |  |  | November 2016 and June 2017 |  | $ | — |  |  | $ | — |  |  | $ | 275 |
Uncommitted facilities: |  |  |  |  |  |  |  |  |  |
Letter of credit facilities |  | $ | 650 |  |  | N/A |  | $ | — |  |  | $ | 185 |  |  | $ | 465 |
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(a) | As of September 30, 2016, the actual availability under the accounts receivable sales facility fell below the facility borrowing capacity to $1.2 billion primarily due to a decrease in eligible trade receivables as a result of the current market price environment for the finished products that we produce.
Non-Bank Debt During the nine months ended September 30, 2016, we issued $1.25 billion of 3.4 percent senior notes due September 15, 2026. Proceeds from this debt issuance totaled $1.246 billion. We also incurred $10 million of debt issuance costs. During the nine months ended September 30, 2016, we had no repayments under our non-bank debt. In October 2016, we redeemed our 6.125 percent senior notes with a maturity date of June 15, 2017 for$778 million, or 103.70 percent of stated value, and our 7.2 percent senior notes with a maturity date of October 15, 2017 for $213 million, or 106.27 percent of stated value. During the nine months ended September 30, 2015, we issued $600 million of 3.65 percent senior notes due March 15, 2025 and $650 million of 4.9 percent senior notes due March 15, 2045. Proceeds from these debt issuances totaled $1.246 billion. We also incurred $12 million of debt issuance costs. In addition, we made scheduled debt repayments of $400 million related to our 4.5 percent senior notes and $75 million related to our 8.75 percent debentures. Other Debt In June 2016, a joint venture in Canada that we consolidate entered into a C$72 million senior secured credit facility. This non-revolving credit facility bears interest at a fixed rate (as defined by the lender) plus the applicable margin and matures in June 2023. During the nine months ended September 30, 2016, borrowings under this facility totaled C$72 million and debt repayments totaled C$2 million. As of September 30, 2016, the effective interest rate of this facility was 3.85 percent. Capitalized Interest Capitalized interest was $14 million and $18 million for the three months ended September 30, 2016 and 2015, respectively, and $53 million and $50 million for the nine months ended September 30, 2016 and 2015, respectively. Capital Lease Obligations In October 2016, we entered into agreements under which we expect to lease storage tanks located at three of our refineries. The leases will not commence until certain required regulatory permitting occurs. The lease agreements will be accounted for as capital leases and we expect to recognize capital lease assets and related obligations of approximately $490 million. These capital lease agreements have initial terms of 10 years each and each agreement has successive 10-year automatic renewal terms.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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