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Debt and Finance Lease Obligations | 12 Months Ended
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Dec. 31, 2021
Debt and Lease Obligation [Abstract] |
DEBT AND FINANCE LEASE OBLIGATIONS | 10. DEBT AND FINANCE LEASE OBLIGATIONS Debt, at stated values, and finance lease obligations consisted of the following (in millions):
| Final Maturity |  | December 31,
|  | 2021 |  | 2020
Credit facilities: |  |  |  |  |
Valero Revolver | 2024 |  | $ | — |  |  | $ | — |
Canadian Revolver | 2022 |  | — |  |  | — |
Accounts Receivable Sales Facility | 2022 |  | — |  |  | — |
364-Day Revolving Credit Facility | 2021 |  | — |  |  | — |
DGD Revolver | 2024 |  | 100 |  |  | — |
DGD Loan Agreement | 2022 |  | 25 |  |  | — |
IEnova Revolver | 2028 |  | 679 |  |  | 598 |
Public debt: |  |  |  |  |
Valero Senior Notes |  |  |  |  |
6.625% | 2037 |  | 1,500 |  |  | 1,500 |
3.400% | 2026 |  | 1,250 |  |  | 1,250 |
2.850% | 2025 |  | 1,050 |  |  | 1,050 |
4.000% | 2029 |  | 1,000 |  |  | 1,000 |
3.650% | 2051 |  | 950 |  |  | — |
4.350% | 2028 |  | 750 |  |  | 750 |
7.5% | 2032 |  | 750 |  |  | 750 |
4.90% | 2045 |  | 650 |  |  | 650 |
2.150% | 2027 |  | 600 |  |  | 600 |
2.800% | 2031 |  | 500 |  |  | — |
3.65% | 2025 |  | 324 |  |  | 600 |
8.75% | 2030 |  | 200 |  |  | 200 |
1.200% | 2024 |  | 169 |  |  | 925 |
10.500% | 2039 |  | 113 |  |  | 250 |
7.45% | 2097 |  | 100 |  |  | 100 |
6.75% | 2037 |  | 24 |  |  | 24 |
2.700% | 2023 |  | — |  |  | 850 |
Floating Rate Notes at 1.3665% | 2023 |  | — |  |  | 575 |
VLP Senior Notes |  |  |  |  |
4.500% | 2028 |  | 500 |  |  | 500 |
4.375% | 2026 |  | 376 |  |  | 500 |
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.00% | 2040 |  | 300 |  |  | 300 |
Debenture, 7.65% | 2026 |  | 100 |  |  | 100 |
Other debt | 2023 |  | 26 |  |  | 31 |
Net unamortized debt issuance costs and other |  |  | (86) |  |  | (90) |
Total debt |  |  | 11,950 |  |  | 13,013 |
Finance lease obligations (see Note 6) |  |  | 1,920 |  |  | 1,664 |
Total debt and finance lease obligations |  |  | 13,870 |  |  | 14,677 |
Less: Current portion |  |  | 1,264 |  |  | 723 |
Debt and finance lease obligations, less current portion |  |  | $ | 12,606 |  |  | $ | 13,954 |
Credit Facilities Valero Revolver We have a revolving credit facility (the Valero Revolver) with a borrowing capacity of $4 billion that matures in March 2024. The Valero Revolver also provides for the issuance of letters of credit of up to $2.4 billion. Outstanding borrowings under the Valero Revolver bear interest, at our option, at either (i) 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 (ii) 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. Canadian Revolver In November 2021, one of our Canadian subsidiaries amended its committed revolving credit facility (the Canadian Revolver) of C$150 million to extend the maturity date from November 2021 to November 2022. The Canadian Revolver also provides for the issuance of letters of credit. 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 2021, we extended the maturity date of this facility to July 2022 and increased the facility amount from $1.0 billion to $1.3 billion. 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, 2021 and 2020, $2.8 billion and $1.4 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. 364-Day Revolving Credit Facility In April 2020, we entered into an $875 million 364-Day Credit Agreement (the 364-Day Revolving Credit Facility) with several lenders. This facility provided for a revolving credit facility in an aggregate principal amount of up to $875 million. No borrowings were made under this facility prior to its maturity on April 12, 2021 and the facility was not renewed. DGD Revolver In March 2021, DGD, as described in Note 13, entered into a $400 million unsecured revolving credit facility (the DGD Revolver) with a syndicate of financial institutions that matures in March 2024. DGD has the option to increase the aggregate commitments under the DGD Revolver to $550 million, subject to certain restrictions. Initially, the DGD Revolver also provided for the issuance of letters of credit of up to $10 million. In September 2021, the DGD Revolver was amended to increase the letter of credit sublimit from $10 million to $50 million and to limit DGD’s indebtedness arising under other letters of credit that DGD may obtain up to $25 million at any one time outstanding. This restriction does not impact Valero’s letter of credit facilities. The DGD Revolver is only available to fund the operations of DGD. DGD’s lenders do not have recourse against us. As of December 31, 2021, all outstanding borrowings under this revolver are reflected in current portion of debt as payment is expected to occur in 2022. Outstanding borrowings under the DGD Revolver generally bear interest, at DGD’s option, at either (i) an alternate base rate plus the applicable margin or (ii) an adjusted London Interbank Offered Rate (LIBOR) for the applicable interest period in effect from time to time plus the applicable margin. As of December 31, 2021, the variable interest rate on the DGD Revolver was 1.860 percent. The DGD Revolver also requires payments for customary fees, including unused commitment fees, letter of credit fees, and administrative agent fees. DGD Loan Agreement DGD has a $50 million unsecured revolving loan agreement (the DGD Loan Agreement) with its members (Darling Ingredients Inc. (Darling) and us) that matures on April 29, 2022, unless extended by agreement of the parties. Each member has committed $25 million, resulting in aggregate commitments of $50 million. The DGD Loan Agreement is only available to fund the operations of DGD. Any outstanding borrowings under this revolver represent loans made by the noncontrolling member as any transactions between DGD and us under this revolver are eliminated in consolidation. Outstanding borrowings under the DGD Loan Agreement bear interest at the LIBO Rate (as defined in the DGD Loan Agreement) for the applicable interest period in effect from time to time plus the applicable margin. As of December 31, 2021, the variable interest rate on the DGD Loan Agreement was 2.603 percent. Principal and accrued interest are due on the last day of the calendar month unless DGD provides at least two days prior written notice of their election to extend repayment to the next calendar month end. As of December 31, 2021, outstanding borrowings under this revolver are reflected in current portion of debt. IEnova Revolver Central Mexico Terminals, as described in Note 13, has a combined unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 13) that matures in February 2028. In 2020, the borrowing capacity under the IEnova Revolver was increased from $491 million to $660 million, and during the year ended December 31, 2021, it was increased to $830 million. IEnova may terminate this revolver at any time and demand repayment of all outstanding amounts; therefore, all outstanding borrowings are reflected in current portion of debt. The IEnova Revolver is only available to the operations of Central Mexico Terminals, and the creditors of Central Mexico Terminals do not have recourse against us. Outstanding borrowings under the IEnova Revolver bear interest at the three-month LIBOR for the applicable interest period in effect from time to time plus the applicable margin. The interest rate under this revolver is subject to adjustment, with agreement by both parties, based upon changes in market conditions. As of December 31, 2021 and 2020, the variable interest rate was 3.781 percent and 3.870 percent, respectively. Summary of Credit Facilities We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):
|  |  |  |  |  | December 31, 2021
|  | Facility Amount |  | Maturity Date |  | Outstanding Borrowings |  | Letters of Credit Issued (a) |  | Availability
Committed facilities: |  |  |  |  |  |  |  |  |  |
Valero Revolver |  | $ | 4,000 |  |  | March 2024 |  | $ | — |  |  | $ | 288 |  |  | $ | 3,712 |
Canadian Revolver |  | C$ | 150 |  |  | November 2022 |  | C$ | — |  |  | C$ | 5 |  |  | C$ | 145 |
Accounts receivable sales facility |  | $ | 1,300 |  |  | July 2022 |  | $ | — |  |  | n/a |  | $ | 1,300 |
Letter of credit facility |  | $ | 50 |  |  | November 2022 |  | n/a |  | $ | — |  |  | $ | 50 |
Committed facilities of VIEs (b): |  |  |  |  |  |  |  |  |  |
DGD Revolver |  | $ | 400 |  |  | March 2024 |  | $ | 100 |  |  | $ | — |  |  | $ | 300 |
DGD Loan Agreement (c) |  | $ | 25 |  |  | April 2022 |  | $ | 25 |  |  | n/a |  | $ | — |
IEnova Revolver |  | $ | 830 |  |  | February 2028 |  | $ | 679 |  |  | n/a |  | $ | 151 |
Uncommitted facilities: |  |  |  |  |  |  |  |  |  |
Letter of credit facilities |  | n/a |  | n/a |  | n/a |  | $ | 331 |  |  | n/a
________________________ (a)Letters of credit issued as of December 31, 2021 expire at various times in 2022 through 2023. (b)Creditors of the VIEs do not have recourse against us. (c)The amounts shown for this facility represent the facility amount available from, and borrowings outstanding to, the noncontrolling member as any transactions between DGD and us under this facility are eliminated in consolidation. 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. Activity under our credit facilities was as follows (in millions):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Borrowings: |  |  |  |  |
Accounts receivable sales facility | $ | — |  |  | $ | 300 |  |  | $ | 900 |
DGD Revolver | 276 |  |  | — |  |  | — |
DGD Loan Agreement | 25 |  |  | — |  |  | — |
IEnova Revolver | 81 |  |  | 250 |  |  | 239 |
Repayments: |  |  |  |  |
Accounts receivable sales facility | — |  |  | (400) |  |  | (900) |
DGD Revolver | (176) |  |  | — |  |  | — |
Public Debt During the year ended December 31, 2021, the following activity occurred: •In November 2021, we issued $500 million of 2.800 percent Senior Notes due December 1, 2031 and $950 million of 3.650 percent Senior Notes due December 1, 2051. Proceeds from these debt issuances totaled $1.446 billion before deducting the underwriting discounts and other debt issuance costs. In November and December 2021, these proceeds and cash on hand were used to repurchase and retire, or redeem the following notes in connection with our cash tender offers that were publicly announced on November 18, 2021 and updated on December 3, 2021 (in millions):
Debt Repurchased and Retired, or Redeemed |  | Principal Amount |  |  |  |
2.700% Senior Notes due 2023 |  | $ | 850 |  |  |  |  |
1.200% Senior Notes due 2024 |  | 756 |  |  |  |  |
3.65% Senior Notes due 2025 |  | 276 |  |  |  |  |
4.375% VLP Senior Notes due 2026 |  | 124 |  |  |  |  |
10.500% Senior Notes due 2039 |  | 137 |  |  |  |  |
Total |  | $ | 2,143 |  |  |  |  |
In connection with the early debt redemption and retirement activity described above, we recognized a charge of $193 million in “other income, net” comprised of $179 million of premiums paid, $10 million of unamortized debt discounts and deferred debt costs, and $4 million of bank fees. •In September 2021, we redeemed our Floating Rate Senior Notes due September 15, 2023 (the Floating Rate Notes) for $575 million. During the year ended December 31, 2020, the following activity occurred: •In September 2020, we issued the following senior notes: ◦the Floating Rate Notes, which bore interest at a rate of three-month LIBOR plus 1.150 percent per annum, subject to certain adjustments set forth in the terms of the Floating Rate Notes; ◦$925 million of 1.200 percent Senior Notes due March 15, 2024; ◦$400 million of 2.850 percent Senior Notes due April 15, 2025 that constitute an additional issuance of our 2.850 percent Senior Notes due April 15, 2025 that were issued in April 2020 (see below); and ◦$600 million of 2.150 percent Senior Notes due September 15, 2027. •In April 2020, we issued $850 million of 2.700 percent Senior Notes due April 15, 2023 and $650 million of 2.850 percent Senior Notes due April 15, 2025. Proceeds from the April and September 2020 debt issuances totaled $4.020 billion before deducting the underwriting discount and other debt issuance costs. During the year ended December 31, 2019, the following activity occurred: •We issued $1.0 billion of 4.000 percent Senior Notes due April 1, 2029. Proceeds from this debt issuance totaled $992 million before deducting the underwriting discount and other debt issuance costs. The proceeds were used to redeem our 6.125 percent Senior Notes due February 1, 2020 for $871 million, which included an early debt redemption premium of $21 million that is reflected in “other income, net.” •In connection with the completion of the Merger Transaction described in Note 3, Valero Energy Corporation, the parent company, entered into a guarantee agreement to fully and unconditionally guarantee the prompt payment, when due, of the following debt issued by VLP, one of its wholly owned subsidiaries, that was outstanding upon completion of the Merger Transaction: ◦$500 million of 4.375 percent Senior Notes due December 15, 2026; and ◦$500 million of 4.500 percent Senior Notes due March 15, 2028. Effective March 31, 2020, we early applied the SEC’s Final Rule Release No. 33-10762, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities. This rule allowed us to cease providing the previously required condensed consolidating financial information in our periodic reports while the senior notes issued by VLP noted above are outstanding, as VLP’s reporting obligation was suspended on January 22, 2019 in connection with the completion of the Merger Transaction. On February 7, 2022 we issued $650 million of 4.000 percent Senior Notes due June 1, 2052. Proceeds from this debt issuance totaled $639 million before deducting the underwriting discount and other debt issuance costs. On February 17, 2022, the proceeds and cash on hand were used to repurchase and retire the following notes in connection with our cash tender offers that were publicly announced on February 2, 2022 and updated on February 16, 2022 (in millions):
Debt Repurchased and Retired |  | Principal Amount
3.65% Senior Notes due 2025 |  | $ | 72 |
2.850% Senior Notes due 2025 |  | 507 |
4.375% VLP Senior Notes due 2026 |  | 168 |
3.400% Senior Notes due 2026 |  | 653 |
Total |  | $ | 1,400 |
In connection with the early debt retirement activity described above, $48 million of premiums were paid. Other Disclosures “Interest and debt expense, net of capitalized interest” is comprised as follows (in millions):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Interest and debt expense | $ | 651 |  |  | $ | 638 |  |  | $ | 544 |
Less: Capitalized interest | 48 |  |  | 75 |  |  | 90 |
Interest and debt expense, net of capitalized interest | $ | 603 |  |  | $ | 563 |  |  | $ | 454 |
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 as of December 31, 2021 were as follows (in millions):
2022 (a) | $ | 1,110 |
2023 | 20 |
2024 | 169 |
2025 | 1,374 |
2026 | 1,726 |
Thereafter | 7,637 |
Net unamortized debt issuance costs and other | (86) |
Total debt | $ | 11,950 |
________________________ (a)Maturities for 2022 include the DGD Revolver, the DGD Loan Agreement, the IEnova Revolver, and our 4.00 percent Gulf Opportunity Zone Revenue Bonds Series 2010 (GO Zone Bonds). Our GO Zone Bonds are due December 1, 2040, but they are subject to mandatory tender on June 1, 2022 (the Mandatory Tender Date) at a price equal to par plus accrued and unpaid interest up to, but excluding, the Mandatory Tender Date, and are reflected in current portion of debt and finance lease obligations as of December 31, 2021.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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