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Debt and Capital Lease Obligations | 12 Months Ended
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Dec. 31, 2017
Debt and Capital Lease Obligations [Abstract] |
DEBT AND CAPITAL LEASE OBLIGATIONS |
8. | DEBT AND CAPITAL LEASE OBLIGATIONS
Debt, at stated values, and capital lease obligations consisted of the following (in millions):
| Final Maturity |  | December 31,
|  | 2017 |  | 2016
Bank credit facilities: |  |  |  |  |
Valero Revolver | 2020 |  | $ | — |  |  | $ | — |
VLP Revolver | 2020 |  | 410 |  |  | 30 |
Canadian Revolver | 2018 |  | — |  |  | — |
Accounts receivable sales facility | 2018 |  | 100 |  |  | 100 |
Non-bank debt: |  |  |  |  |
Valero Senior Notes |  |  |  |  |
6.625% | 2037 |  | 1,500 |  |  | 1,500 |
3.4% | 2026 |  | 1,250 |  |  | 1,250 |
6.125% | 2020 |  | 850 |  |  | 850 |
9.375% | 2019 |  | 750 |  |  | 750 |
7.5% | 2032 |  | 750 |  |  | 750 |
4.9% | 2045 |  | 650 |  |  | 650 |
3.65% | 2025 |  | 600 |  |  | 600 |
10.5% | 2039 |  | 250 |  |  | 250 |
8.75% | 2030 |  | 200 |  |  | 200 |
7.45% | 2097 |  | 100 |  |  | 100 |
6.75% | 2037 |  | 24 |  |  | 24 |
VLP Senior Notes, 4.375% | 2026 |  | 500 |  |  | 500 |
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0% | 2040 |  | 300 |  |  | 300 |
Debenture, 7.65% | 2026 |  | 100 |  |  | 100 |
Other debt | 2023 |  | 49 |  |  | 51 |
Net unamortized debt issuance costs and other |  |  | (73 | ) |  | (79 | )
Total debt |  |  | 8,310 |  |  | 7,926 |
Capital lease obligations |  |  | 562 |  |  | 75 |
Total debt and capital lease obligations |  |  | 8,872 |  |  | 8,001 |
Less current portion |  |  | 122 |  |  | 115 |
Debt and capital lease obligations, less current portion |  |  | $ | 8,750 |  |  | $ | 7,886 |
Bank Credit Facilities Valero Revolver We have a $3 billion revolving credit facility (the Valero Revolver) with a group of financial institution lenders that matures in November 2020. We have the option to increase the aggregate commitments under the Valero Revolver to $4.5 billion and we may request two additional one-year extensions, subject to certain conditions. The Valero Revolver also provides for the issuance of letters of credit of up to $2.0 billion. Outstanding borrowings under the Valero Revolver bear interest, at our option, at either (a) the adjusted LIBO rate (as defined in the Valero Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (b) the alternate base rate (as defined in the Valero Revolver) plus the applicable margin. The Valero Revolver also requires payments for customary fees, including facility fees, letter of credit participation fees, and administrative agent fees. The interest rate and facility fees under the Valero Revolver are subject to adjustment based upon the credit ratings assigned to our senior unsecured debt. We had no borrowings or repayments under the Valero Revolver during the years ended December 31, 2017, 2016, and 2015. VLP Revolver VLP has a $750 million senior unsecured revolving credit facility (the VLP Revolver) with a group of lenders 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 and VLP may request two additional one-year extensions, subject to certain conditions. VLP may terminate the VLP Revolver with notice to the lenders of at least three business days prior to termination. The VLP Revolver also provides for the issuance of letters of credit of up to $100 million. As a result of VLP obtaining an investment grade rating with respect to its issuance of senior notes in December 2016, VLP’s directly owned subsidiary, Valero Partners Operating Co. LLC, was released of its guarantee under the VLP Revolver. Outstanding borrowings under the VLP Revolver bear interest, at VLP’s option, at either (a) the adjusted LIBO rate (as defined in the VLP Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (b) the alternate base rate (as defined in the VLP Revolver) plus the applicable margin. As of December 31, 2017 and 2016, the variable rate was 2.875 percent and 2.3125 percent, respectively. The VLP Revolver requires payments for customary fees, including commitment fees, letter of credit participation fees, and administrative agent fees. The VLP Revolver contains certain restrictive covenants, including a covenant that requires VLP to maintain a ratio of total debt to EBITDA (as defined in the VLP Revolver) for the prior four fiscal quarters of not greater than 5.0 to 1.0 as of the last day of each fiscal quarter, and limitations on VLP’s ability to pay distributions to its unitholders. During the year ended December 31, 2017, VLP borrowed $118 million and $262 million under the VLP Revolver in connection with VLP’s acquisitions from us of Parkway Pipeline LLC and Valero Partners Port Arthur, LLC, respectively, and had no repayments under the VLP Revolver. During the year ended December 31, 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 and the Meraux and Three Rivers Terminal Services Business, respectively, and repaid $494 million on the VLP Revolver. During the year ended December 31, 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. Canadian Revolver In October 2017, one of our Canadian subsidiaries amended its committed revolving credit facility (the Canadian Revolver) to increase the borrowing capacity from C$25 million to C$75 million under which it may borrow and obtain letters of credit and to extend the maturity date from November 2017 to November 2018. We had no borrowings or repayments under the Canadian Revolver during the years ended December 31, 2017, 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 up to $1.3 billion of eligible trade receivables on a revolving basis. In July 2017, we amended our agreement to extend the maturity date to July 2018. 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. As of December 31, 2017 and 2016, $2.3 billion and $2.0 billion, respectively, of our accounts receivable composed the designated pool of accounts receivable included in the program. All amounts outstanding under the accounts receivable sales facility are reflected as debt on our balance sheets and proceeds and repayments are reflected as cash flows from financing activities on the statements of cash flows. As of December 31, 2017 and 2016, the variable interest rate on the accounts receivable sales facility was 2.0387 percent and 1.3422 percent, respectively. During the years ended December 31, 2017, 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 credit facilities as follows (in millions):
|  |  |  |  |  | December 31, 2017
|  | Facility Amount |  | Maturity Date |  | Outstanding Borrowings |  | Letters of Credit Issued |  | Availability
Committed facilities: |  |  |  |  |  |  |  |  |  |
Valero Revolver |  | $ | 3,000 |  |  | November 2020 |  | $ | — |  |  | $ | 54 |  |  | $ | 2,946 |
VLP Revolver |  | $ | 750 |  |  | November 2020 |  | $ | 410 |  |  | $ | — |  |  | $ | 340 |
Canadian Revolver |  | C$ | 75 |  |  | November 2018 |  | C$ | — |  |  | C$ | 10 |  |  | C$ | 65 |
Accounts receivable sales facility |  | $ | 1,300 |  |  | July 2018 |  | $ | 100 |  |  | n/a |  |  | $ | 1,200 |
Letter of credit facility |  | $ | 100 |  |  | November 2018 |  | n/a |  |  | $ | — |  |  | $ | 100 |
Uncommitted facilities: |  |  |  |  |  |  |  |  |  |
Letter of credit facilities |  | n/a |  |  | n/a |  | n/a |  |  | $ | 249 |  |  | n/a |
Letters of credit issued as of December 31, 2017 expire at various times in 2018 through 2020. In June 2017, one of our committed letter of credit facilities with a borrowing capacity of $125 million expired and was not renewed. In November 2017, the remaining committed letter of credit facility with a borrowing capacity of $100 million was amended to extend the maturity date from November 2017 to November 2018. We are charged letter of credit issuance fees under our various uncommitted short-term bank credit facilities. These uncommitted credit facilities have no commitment fees or compensating balance requirements. Non-Bank Debt There was no issuance or redemption activity related to our non-bank debt during the year ended December 31, 2017. During the year ended December 31, 2016, the following activity occurred:
• | 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.
• | 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.
• | We redeemed our 7.2 percent Senior Notes with a maturity date of October 15, 2017 for $213 million, or 106.27 percent of stated value.
• | VLP issued $500 million of 4.375 percent Senior Notes due December 15, 2026. Proceeds from this debt issuance totaled $500 million. Debt issuance costs totaled $4 million.
During the year ended December 31, 2015, the following activity occurred:
• | 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.
• | 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.
Capital Lease Obligations We have capital lease obligations that mature at various dates through 2046 for storage tanks, terminal facilities, and other assets that are used in our refining operations. In January 2017, we recognized capital lease assets and related obligations totaling approximately $490 million for the lease of storage tanks located at three of our refineries. These lease agreements have initial terms of 10 years each with successive 10-year automatic renewals. Other Disclosures Interest and debt expense, net of capitalized interest is comprised as follows (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Interest and debt expense | $ | 539 |  |  | $ | 511 |  |  | $ | 504 |
Less capitalized interest | 71 |  |  | 65 |  |  | 71 |
Interest and debt expense, net of capitalized interest | $ | 468 |  |  | $ | 446 |  |  | $ | 433 |
Our credit facilities and other debt arrangements contain various customary restrictive covenants, including cross-default and cross-acceleration clauses. Principal maturities for our debt obligations and future minimum rentals on capital lease obligations as of December 31, 2017 were as follows (in millions):
| Debt |  | Capital Lease Obligations
2018 | $ | 106 |  |  | $ | 55 |
2019 | 756 |  |  | 55 |
2020 | 1,266 |  |  | 53 |
2021 | 6 |  |  | 52 |
2022 | 6 |  |  | 54 |
Thereafter | 6,243 |  |  | 969 |
Net unamortized debt issuance costs and other | (73 | ) |  | n/a |
Total minimum lease payments | n/a |  |  | 1,238 |
Less amount representing interest | n/a |  |  | 676 |
Total | $ | 8,310 |  |  | $ | 562 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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