Reference no: EM132476115

Valero Energy Corporation and Subsidiaries

Consolidated Statements of Income

(Millions of Dollars)                                              2016                                   2015

Operating revenues                                      $ 75,659                          $ 87,804

Costs and expenses:

Cost of sales                                                65,962                               73,861

Refining expenses                                         (747)                                   790

Retail expenses                                            4,207                                   4,243

Ethanol expenses                                           715                                         710

General and administrative expenses                 1,894                                     1,842

Depreciation and amortization expense                56                                          0

Asset impairment losses

Total costs and expenses                                  72,087                                   81,446

Operating income                                               3,572                                    6,358

Other income, net                                               56                                               46

Interest and debt expense                               (446)                                           (433)

Income from continuing operations before income tax

expense                                                          3,182                                         5,971

Income tax expense                                           765                                           1,870

Net income (loss)                                                2,417                                       4,101

Less: Net income (loss) attributable to noncontrolling

interests                                                              128                                         111

Net income attributable to Valero Energy stockholders 2,289 3,990

VALERO ENERGY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Millions of Dollars)                                                                2016                                       2015

Cash and temporary cash investments                          $ 4,816                             $ 4,114

Receivables, net                                                        5,901                                   4,464

Inventories                                                               5,709                                    5,898

Income taxes receivable                                                58                                        218

Prepaid expenses and other                                            316                                       204

Total current assets                                                      16,800                               14,898

Property, plant and equipment, net                                  26,472                                   26,703

Deferred charges and other assets, net                            2,901                                      2,626

Total assets                                                                  46,173                                  44,227

Current portion of debt and capital lease obligations               115                                      127

Accounts payable                                                            6,357                                    4,907

Accrued expenses                                                            694                                   554

Taxes other than income taxes                                          1,084                                 1,069

Income taxes payable                                                      78                                          337

Total current liabilities                                                     8,328                                       6,994

Debt and capital lease obligations, less current portion           7,886                                       7,208

Deferred income taxes                                                      7,361                                        7,060

Other long-term liabilities                                                  1,744                                          1,611

Total liabilities                                                                   25,319                                      22,873

Common stock                                                                   7                                                7

Additional paid-in capital                                                   7,088                                          7,064

Treasury stock                                                                 (12,027)                                   (10,799)

Retained earnings                                                            26,366                                            25,188

Accumulated other comprehensive income (loss)                       (1,410)                                         (933)

Total Valero Energy stockholders' equity                                     20,024                                        20,527

Noncontrolling interest                                                               830                                               827

Total equity                                                                        20,854                                             21,354

Total liabilities and stockholders' equity                                 $ 46,173                                                 44,227

Question 1: Compute Valero's return on equity (ROE) for 2016 and 2015. Valero Energy stockholders' equity in 2014 was $20,677 million.