VALERO ENERGY CORPTX

Previous wording

•anticipated trends in the supply of, and demand for, crude oil and other feedstocks and refined petroleum products, renewable diesel, and ethanol and corn related co-products in the regions where we operate, as well as globally;

Current wording

•anticipated trends in the supply of, and demand for, crude oil and other feedstocks, refined petroleum products, renewable diesel, sustainable aviation fuel (SAF)1, ethanol, and corn related co-products in the regions where we operate, as well as globally;

Previous wording

•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, and ethanol industry fundamentals;

Current wording

•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, SAF, and ethanol industry fundamentals;

Previous wording

•demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, and ethanol and corn related co-products;

Current wording

•demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, SAF, ethanol, and corn related co-products;

Previous wording

•acts of terrorism aimed at either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, ethanol, or corn related co-products, to receive feedstocks, or otherwise operate efficiently;

Current wording

•acts of terrorism aimed at either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, SAF, ethanol, or corn related co-products, to receive feedstocks, or otherwise operate efficiently;

Previous wording

•the effects of war or hostilities, and political and economic conditions, in countries that produce crude oil or other feedstocks or consume refined petroleum products, renewable diesel, ethanol or corn related co-products;

Current wording

•the effects of war or hostilities, and political and economic conditions, in countries that produce crude oil or other feedstocks or consume refined petroleum products, renewable diesel, SAF, ethanol, or corn related co-products;

Previous wording

•pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, ethanol, or corn related co-products;

Current wording

•pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, or corn related co-products;

Previous wording

•earthquakes, hurricanes, tornadoes, winter storms, droughts, floods, wildfires, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, waste and renewable feedstocks, corn, and other feedstocks, critical supplies, refined petroleum products, renewable diesel, and ethanol;

Current wording

•earthquakes, hurricanes, tornadoes, winter storms, droughts, floods, wildfires, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, waste and renewable feedstocks, corn, and other feedstocks, critical supplies, refined petroleum products, renewable diesel, SAF, and ethanol;

Previous wording

•legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, introduction of a global minimum tax, windfall taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2, actions implemented under the Renewable and Low-Carbon Fuel Programs and other environmental emissions programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business or operations;

Current wording

•legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, introduction of a global minimum tax, windfall taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2 and related regulation, actions implemented under the Renewable and Low-Carbon Fuel Programs and other environmental emissions programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business or operations;

Previous wording

Our results for the second quarter and first six months of 2024 were favorably impacted by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained. This global supply and demand imbalance contributed to strong refining margins for the first six months of 2024.

Current wording

Our results for the third quarter and first nine months of 2024 were supported by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained. Our results for the third quarter, however, were also impacted by lower product margins and heavy maintenance activities.

Previous wording

The strong demand for our products and continued strength in refining margins were the primary contributors to us reporting $880 million and $2.1 billion of net income attributable to Valero stockholders for the second quarter of 2024 and the first six months of 2024, respectively. Our operating results, including operating results by segment, are described in the following summary under “Second Quarter Results” and “First Six Months Results,” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 42.

Current wording

We reported $364 million and $2.5 billion of net income attributable to Valero stockholders for the third quarter of 2024 and the first nine months of 2024, respectively. Our operating results, including operating results by segment, are described in the following summary under “Third Quarter Results” and “First Nine Months Results,” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 42.

Previous wording

Our operations generated $4.3 billion of cash during the first six months of 2024. This cash, along with cash on hand, was used to make $1.1 billion of capital investments in our business and return $2.8 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we reduced our outstanding debt during the first six months of 2024 through the repayment of the $167 million outstanding principal balance of our 1.200 percent Senior Notes that matured in March 2024. As a result of this and other activity, our cash, cash equivalents, and restricted cash decreased by $10 million during the first six months of 2024 to $5.4 billion as of June 30, 2024. We had $10.1 billion in liquidity as of June 30, 2024. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 58.

Current wording

Our operations generated $5.6 billion of cash during the first nine months of 2024. This cash, along with cash on hand, was used to make $1.5 billion of capital investments in our business and return $3.7 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we reduced our outstanding debt during the first nine months of 2024 through the repayment of the $167 million outstanding principal balance of our 1.200 percent Senior Notes that matured in March 2024. As a result of this and other activity, our cash, cash equivalents, and restricted cash decreased by $70 million during the first nine months of 2024 to $5.4 billion as of September 30, 2024. We had $10.3 billion in liquidity as of September 30, 2024. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 58.

Previous wording

For the second quarter of 2024, we reported net income attributable to Valero stockholders of $880 million compared to $1.9 billion for the second quarter of 2023. The decrease of $1.1 billion was primarily due to a decrease in operating income of $1.5 billion, partially offset by a decrease in income tax expense of $318 million. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (c) beginning on page 56.

Current wording

For the third quarter of 2024, we reported net income attributable to Valero stockholders of $364 million compared to $2.6 billion for the third quarter of 2023. The decrease of $2.3 billion was primarily due to a decrease in operating income of $3.0 billion, partially offset by a decrease in income tax expense of $717 million. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (a) beginning on page 55.

Previous wording

While our operating income decreased by $1.5 billion in the second quarter of 2024 compared to the second quarter of 2023, adjusted operating income also decreased by $1.5 billion primarily due to the following:

Current wording

While our operating income decreased by $3.0 billion in the third quarter of 2024 compared to the third quarter of 2023, adjusted operating income also decreased by $3.0 billion primarily due to the following:

Previous wording

•Refining segment. Refining segment adjusted operating income decreased by $1.2 billion primarily due to lower gasoline and distillate (primarily diesel) margins and a decline in crude oil differentials.

Current wording

•Refining segment. Refining segment adjusted operating income decreased by $2.9 billion primarily due to lower gasoline and distillate (primarily diesel) margins and a decline in crude oil differentials, partially offset by higher margins on other products and lower operating expenses (excluding depreciation and amortization expense).

Previous wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $328 million primarily due to a lower product prices (primarily renewable diesel) and a decrease in sales volumes, partially offset by lower feedstock costs.

Current wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $88 million primarily due to lower product prices (primarily renewable diesel), partially offset by lower feedstock costs and an increase in sales volumes.

Previous wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $25 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices.

Current wording

•Ethanol segment. Ethanol segment operating income decreased by $44 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices and an increase in production volumes.

Previous wording

For the first six months of 2024, we reported net income attributable to Valero stockholders of $2.1 billion compared to $5.0 billion for the first six months of 2023. The decrease of $2.9 billion was primarily due to a decrease in operating income of $3.9 billion, partially offset by a decrease in income tax expense of $845 million. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (c) beginning on page 56.

Current wording

For the first nine months of 2024, we reported net income attributable to Valero stockholders of $2.5 billion compared to $7.6 billion for the first nine months of 2023. The decrease of $5.1 billion was primarily due to a decrease in operating income of $6.9 billion, partially offset by a decrease in income tax expense of $1.6 billion. The details of our operating income and adjusted operating income by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustment reflected in the tables in note (a) beginning on page 55.

Previous wording

While our operating income decreased by $3.9 billion in the first six months of 2024 compared to the first six months of 2023, adjusted operating income also decreased by $3.9 billion primarily due to the following:

Current wording

While our operating income decreased by $6.9 billion in the first nine months of 2024 compared to the first nine months of 2023, adjusted operating income also decreased by $6.9 billion primarily due to the following:

Previous wording

•Refining segment. Refining segment adjusted operating income decreased by $3.5 billion primarily due to lower margins for gasoline, distillate (primarily diesel), and other products; a decline in crude oil differentials; and a decrease in throughput volumes.

Current wording

•Refining segment. Refining segment adjusted operating income decreased by $6.4 billion primarily due to lower gasoline and distillate (primarily diesel) margins, a decline in crude oil differentials, and a decrease in throughput volumes, partially offset by lower operating expenses (excluding depreciation and amortization expense).

Previous wording

•Renewable Diesel segment. Renewable Diesel operating income decreased by $343 million primarily due to lower product prices (primarily renewable diesel), partially offset by lower feedstock costs.

Current wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $431 million primarily due to lower product prices (primarily renewable diesel), partially offset by lower feedstock costs and an increase in sales volumes.

Previous wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $25 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices and an increase in production volumes.

Current wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $69 million primarily due to lower ethanol and corn related co-product prices, partially offset by lower corn prices and an increase in production volumes.

Previous wording

Many uncertainties remain with respect to the supply and demand balances in petroleum-based products market worldwide. While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Condensed Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the third quarter of 2024.

Current wording

Many uncertainties remain with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Condensed Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the fourth quarter of 2024.

Previous wording

•Gasoline and diesel demand have returned to pre-pandemic levels and are expected to follow typical seasonal patterns. Jet fuel demand continues to improve and is approaching pre-pandemic levels in the U.S.

Current wording

•Gasoline and diesel demand have exceeded pre-pandemic levels and are expected to follow typical seasonal patterns. Jet fuel demand continues to improve and is approaching pre-pandemic levels in the U.S.

Previous wording

•Combined light product (gasoline, diesel, and jet fuel) inventories in the U.S. and Europe remain below historical levels reflecting tight petroleum-based product balances.

Current wording

•Combined light product (gasoline, diesel, and jet fuel) inventories in the U.S. and Europe are expected to remain comparable to recent historical levels.

Previous wording

•Crude oil differentials are expected to remain relatively stable as increased availability of sour crude oils from Latin America are expected to offset the impact of extended production cuts by OPEC+ suppliers and the start-up of the Trans Mountain Pipeline extension. However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil differentials.

Current wording

•Crude oil differentials are expected to remain relatively stable as a result of increased availability of sour crude oils from Latin America and the potential increase in production by OPEC+ suppliers. However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil differentials.

Previous wording

The following table includes selected financial data for the total company, corporate, and other for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Current wording

The following table includes selected financial data for the total company, corporate, and other for the third quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

While revenues decreased by $19 million in the second quarter of 2024 compared to the second quarter of 2023, cost of sales increased by $1.5 billion primarily due to increases in crude oil and other feedstock costs. These changes resulted in a $1.5 billion decrease in operating income, from $2.8 billion in the second quarter of 2023 to $1.2 billion in the second quarter of 2024.

Current wording

Revenues decreased by $5.5 billion in the third quarter of 2024 compared to the third quarter of 2023 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenues was partially offset by a decrease in cost of sales of $2.5 billion primarily due to decreases in crude oil and other feedstock costs. These changes resulted in a $3.0 billion decrease in operating income, from $3.5 billion in the third quarter of 2023 to $507 million in the third quarter of 2024.

Previous wording

Adjusted operating income also decreased by $1.5 billion, from $2.8 billion in the second quarter of 2023 to $1.2 billion in the second quarter of 2024. The components of this $1.5 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.

Current wording

Adjusted operating income also decreased by $3.0 billion, from $3.5 billion in the third quarter of 2023 to $510 million in the third quarter of 2024. The components of this $3.0 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.

Previous wording

Income tax expense decreased by $318 million in the second quarter of 2024 compared to the second quarter of 2023 primarily as a result of a decrease in income before income tax expense.

Current wording

Income tax expense decreased by $717 million in the third quarter of 2024 compared to the third quarter of 2023 primarily as a result of lower income before income tax expense.

Previous wording

The following table includes selected financial and operating data of our Refining segment for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Current wording

The following table includes selected financial and operating data of our Refining segment for the third quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

Refining segment operating income decreased by $1.2 billion in the second quarter of 2024 compared to the second quarter of 2023. Refining segment adjusted operating income, which excludes the adjustment in the table in note (c), also decreased by $1.2 billion in the second quarter of 2024 compared to the second quarter of 2023 primarily due to a decrease in Refining segment margin of $1.2 billion.

Current wording

Refining segment operating income decreased by $2.9 billion in the third quarter of 2024 compared to the third quarter of 2023. Refining segment adjusted operating income, which excludes the adjustment in the table in note (a), also decreased by $2.9 billion in the third quarter of 2024 compared to the third quarter of 2023. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.

Previous wording

Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 44 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the second quarter of 2024 compared to the second quarter of 2023.

Current wording

Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 44 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the third quarter of 2024 compared to the third quarter of 2023.

Previous wording

•A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $195 million.

Current wording

◦A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $2.0 billion.

Previous wording

•A decrease in gasoline margins had an unfavorable impact of approximately $1.3 billion.

Current wording

◦A decrease in gasoline margins had an unfavorable impact of approximately $1.2 billion.

Previous wording

•A decline in crude oil differentials had an unfavorable impact of approximately $235 million.

Current wording

◦A decline in crude oil differentials had an unfavorable impact of approximately $189 million.

Previous wording

•A decrease in margins for other products had an unfavorable impact of approximately $215 million.

Current wording

◦An increase in margins for other products had a favorable impact of approximately $319 million.

Previous wording

The following table includes selected financial and operating data of our Renewable Diesel segment for the second quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Current wording

The following table includes selected financial and operating data of our Renewable Diesel segment for the third quarter of 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 45 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the second quarter of 2024 compared to the second quarter of 2023.

Current wording

Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 45 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the third quarter of 2024 compared to the third quarter of 2023.

Previous wording

•A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $413 million.

Current wording

◦A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $599 million.

Previous wording

•A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $214 million.

Current wording

◦A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $486 million.