VALERO ENERGY CORP/TX

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, profits, windfall, margin, or other 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, 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, financial condition, results of operations, and liquidity;

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, profits, procedures, windfall, margin, or other 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, 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, financial condition, results of operations, and liquidity;

Previous wording

•changing economic, regulatory, and political environments and related events in the various countries in which we operate or otherwise do business, including trade restrictions, expropriation or impoundment of assets, failure of foreign governments and state-owned entities to honor their contracts, property disputes, economic instability, restrictions on the transfer of funds, duties and tariffs and their effects on trading relationships, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, and other actions, policies, and initiatives by federal, state, local, and other jurisdictions applicable to us;

Current wording

•changing economic, regulatory, and political environments and related events in the various countries in which we operate or otherwise do business, including trade restrictions, expropriation or impoundment of assets, failure of foreign governments and state-owned entities to honor their contracts, property disputes, economic instability, restrictions on the transfer of funds, duties and tariffs and their effects on trading relationships, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, government shutdowns, and other actions, policies, and initiatives by federal, state, local, and other jurisdictions applicable to us;

Previous wording

The following discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” include references to financial measures that are not defined under GAAP. These non-GAAP financial measures include adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining, Renewable Diesel, and Ethanol segment margin; and capital investments attributable to Valero. We have included these non-GAAP financial measures to help facilitate the comparison of operating results between periods, to help assess our cash flows, and because we believe they provide useful information as discussed further below. See the tables in note (b) beginning on page 57 for reconciliations of adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) and Refining, Renewable Diesel, and Ethanol segment margin to their most directly comparable GAAP financial measures. Also in note (b), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 63 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 62, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

Current wording

The following discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” include references to financial measures that are not defined under GAAP. These non-GAAP financial measures include Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining segment adjusted operating expenses (excluding depreciation and amortization expense); and capital investments attributable to Valero. We have included these non-GAAP financial measures to help facilitate the comparison of operating results between periods, to help assess our cash flows, and because we believe they provide useful information as discussed further below. See the tables in note (c) beginning on page 57 for reconciliations of Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); and adjusted Refining operating expenses (excluding depreciation and amortization expense) to their most directly comparable GAAP financial measures. Also in note (c), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 64 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 63, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

Previous wording

Our results for the second quarter and first six months of 2025 were supported by strong worldwide demand for petroleum-based transportation fuels, while worldwide supply of those products was constrained. However, our results were also impacted by the asset impairment loss of $1.1 billion ($877 million after taxes) associated with our operations in California, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.

Current wording

Our results for the third quarter and first nine months of 2025 were supported by strong worldwide demand for petroleum-based transportation fuels, while worldwide supply of those products remained constrained. Our results for the first nine months of 2025, however, were also impacted by the asset impairment loss of $1.1 billion ($877 million after taxes) associated with our operations in California, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.

Previous wording

We reported $714 million and $119 million of net income attributable to Valero stockholders for the second quarter of 2025 and the first six months of 2025, 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 43.

Current wording

We reported $1.1 billion and $1.2 billion of net income attributable to Valero stockholders for the third quarter of 2025 and the first nine months of 2025, 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 43.

Previous wording

Our operations generated $1.9 billion of cash during the first six months of 2025. In addition, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030 during the first six months of 2025, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations, along with the net proceeds from our debt issuance and cash on hand, was used to make $1.1 billion of capital investments in our business, return $1.3 billion to our stockholders through purchases of common stock for treasury and dividend payments, and repay $440 million of our public debt that matured in the first six months of 2025. As a result of this and other activity, our cash, cash equivalents, and restricted cash decreased by $117 million during the first six months of 2025 to $4.7 billion as of June 30, 2025. We had $9.6 billion in liquidity as of June 30, 2025. 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 60.

Current wording

Our operations generated $3.8 billion of cash during the first nine months of 2025. In addition, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030 during the first nine months of 2025, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations, along with the net proceeds from our debt issuance and cash on hand, was used to make $1.5 billion of capital investments in our business, return $2.6 billion to our stockholders through purchases of common stock for treasury and dividend payments, and repay $440 million of our public debt that matured in the first nine months of 2025. As a result of this and other activity, our cash, cash equivalents, and restricted cash increased by $112 million during the first nine months of 2025 to $4.9 billion as of September 30, 2025. We had $9.9 billion in liquidity as of September 30, 2025. 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 61.

Previous wording

For the second quarter of 2025, we reported net income attributable to Valero stockholders of $714 million compared to $880 million for the second quarter of 2024. The decrease of $166 million was primarily due to a decrease in operating income of $224 million, partially offset by a decrease in net income (loss) attributable to noncontrolling interest of $97 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (b) beginning on page 57.

Current wording

For the third quarter of 2025, we reported net income attributable to Valero stockholders of $1.1 billion compared to $364 million for the third quarter of 2024. The increase of $731 million was primarily due to an increase in operating income of $1.0 billion, partially offset by an increase in income tax expense of $294 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (c) beginning on page 57.

Previous wording

While our operating income decreased by $224 million in the second quarter of 2025 compared to the second quarter of 2024, adjusted operating income decreased by $223 million primarily due to the following:

Current wording

While our operating income increased by $1.0 billion in the third quarter of 2025 compared to the third quarter of 2024, adjusted operating income increased by $1.1 billion primarily due to the following:

Previous wording

•Refining segment. Refining segment adjusted operating income increased by $41 million primarily due to higher gasoline and distillate (primarily diesel) margins, partially offset by a decline in crude oil differentials, a decrease in throughput volumes, and increases in operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense.

Current wording

•Refining segment. Refining segment adjusted operating income increased by $1.1 billion primarily due to higher gasoline and distillate (primarily diesel) margins and an increase in throughput volumes, partially offset by a decline in crude oil and other feedstock differentials and increases in adjusted operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense.

Previous wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $191 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel).

Current wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $63 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel).

Previous wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $68 million primarily due to higher corn prices, lower corn related co-product prices, and higher operating expenses (excluding depreciation and amortization expense); partially offset by higher ethanol prices and an increase in production volumes.

Current wording

•Ethanol segment. Ethanol segment operating income increased by $30 million primarily due to higher ethanol and corn related co-product prices and an increase in production volumes, partially offset by higher corn prices and an increase in operating expenses (excluding depreciation and amortization expense).

Previous wording

For the first six months of 2025, we reported net income attributable to Valero stockholders of $119 million compared to $2.1 billion for the first six months of 2024. The decrease of $2.0 billion was primarily due to a decrease in operating income of $2.8 billion, partially offset by a decrease in income tax expense of $616 million and a decrease in net income (loss) attributable to noncontrolling interest of $239 million. The details of our operating income and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (b) beginning on page 57.

Current wording

For the first nine months of 2025, we reported net income attributable to Valero stockholders of $1.2 billion compared to $2.5 billion for the first nine months of 2024. The decrease of $1.3 billion was primarily due to a decrease in operating income of $1.8 billion, partially offset by a decrease in income tax expense of $322 million and a decrease in net income attributable to noncontrolling interests of $297 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (c) beginning on page 57.

Previous wording

While our operating income decreased by $2.8 billion in the first six months of 2025 compared to the first six months of 2024, adjusted operating income decreased by $1.7 billion primarily due to the following:

Current wording

While our operating income decreased by $1.8 billion in the first nine months of 2025 compared to the first nine months of 2024, adjusted operating income decreased by $647 million primarily due to the following:

Previous wording

•Refining segment. Refining segment adjusted operating income decreased by $1.1 billion primarily due to a decline in crude oil and other feedstock differentials, lower distillate (primarily diesel) margins, and increases in operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense; partially offset by higher margins on other products.

Current wording

•Refining segment. Refining segment adjusted operating income decreased by $7 million primarily due to a decline in crude oil and other feedstock differentials and increases in adjusted operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, partially offset by higher gasoline, distillate (primarily diesel), and other product margins and an increase in throughput volumes.

Previous wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $522 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel).

Current wording

•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $585 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel) and a decrease in operating expenses (excluding depreciation and amortization expense).

Previous wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $49 million primarily due to lower ethanol prices, higher corn prices, and higher operating expenses (excluding depreciation and amortization expense); partially offset by an increase in production volumes.

Current wording

•Ethanol segment. Ethanol segment adjusted operating income decreased by $38 million primarily due to higher corn prices and an increase in operating expenses (excluding depreciation and amortization expense), partially offset by higher ethanol prices and an increase in production volumes.

Previous 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 resulting impact on product supply and demand, including the effects of tariffs thereon, we have noted several factors below that have impacted or may impact our results of operations during the third quarter of 2025.

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 resulting impact on product supply and demand, including the effects of tariffs thereon, we have noted several factors below that have impacted or may impact our results of operations during the fourth quarter of 2025.

Previous wording

•Combined light product (gasoline, diesel, and jet fuel) inventories across the U.S. and Europe are low. Expected reductions in refining capacity in 2025 should continue to support utilization of refining capacity.

Current wording

•Combined light product (gasoline, diesel, and jet fuel) inventories across the U.S. and Europe remain low. Expected reductions in refining capacity in both regions, unplanned outages at Russian refineries due to the Russia-Ukraine conflict, and a prolonged ramp-up of new capacity in emerging markets continue to support utilization of remaining global refining capacity.

Previous wording

•Crude oil differentials are expected to remain relatively stable. However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and an increase in sour crude production from OPEC+ suppliers could result in increased volatility in the crude oil market and potentially impact crude oil differentials.

Current wording

•Crude oil differentials are expected to widen as a result of an increase in sour crude oil production from OPEC+ suppliers. However, potential sanction adjustments related to Iran, Russia, and Venezuela and the Russia-Ukraine conflict could result in increased volatility in the crude oil market and potentially impact crude oil differentials.

Previous wording

The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (b) beginning on page 57, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 57 through 59.

Current wording

The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (c) beginning on page 57, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 57 through 60.

Previous wording

The following table includes selected financial data for the total company, corporate, and other for the second quarter of 2025 and 2024. 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 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

Revenues decreased by $4.6 billion in the second quarter of 2025 compared to the second quarter of 2024 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 $4.4 billion primarily due to decreases in crude oil and other feedstock costs.

Current wording

Revenues decreased by $708 million in the third quarter of 2025 compared to the third quarter of 2024 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 more than offset by a decrease in cost of sales of $1.7 billion primarily due to decreases in crude oil and other feedstock costs.

Previous wording

Operating income decreased by $224 million in the second quarter of 2025; however, adjusted operating income, which excludes the adjustment in the table in note (b), decreased by $223 million, from $1.2 billion in the second quarter of 2024 to $1.0 billion in the second quarter of 2025. The components of this $223 million decrease in adjusted operating income are discussed by segment in the segment analyses that follow.

Current wording

Operating income increased by $1.0 billion in the third quarter of 2025; however, adjusted operating income, which excludes the adjustments in the table in note (c), increased by $1.1 billion, from $510 million in the third quarter of 2024 to $1.6 billion in the third quarter of 2025. The components of this $1.1 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.

Previous wording

The following table includes selected financial and operating data of our Refining segment for the second quarter of 2025 and 2024. 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 2025 and 2024. 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 increased by $42 million in the second quarter of 2025; however, Refining segment adjusted operating income, which excludes the adjustment in the table in note (b), increased by $41 million in the second quarter of 2025 compared to the second quarter of 2024. The components of this increase in the adjusted results, along with the reasons for the changes in those components, are outlined below.

Current wording

Refining segment operating income increased by $1.0 billion in the third quarter of 2025; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (c), increased by $1.1 billion in the third quarter of 2025 compared to the third quarter of 2024. The components of this increase 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 45 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the second quarter of 2025 compared to the second quarter of 2024.

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 45 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

◦A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $410 million.

Current wording

◦An increase in distillate (primarily diesel) margins had a favorable impact of approximately $1.1 billion.

Previous wording

◦An increase in gasoline margins had a favorable impact of approximately $390 million.

Current wording

◦An increase in gasoline margins had a favorable impact of approximately $330 million.

Previous wording

◦A decrease in throughput volumes of 88,000 barrels per day had an unfavorable impact of approximately $100 million.

Current wording

◦An increase in throughput volumes of 203,000 barrels per day had a favorable impact of approximately $250 million.

Previous wording

◦A decline in crude oil differentials had an unfavorable impact of approximately $450 million.

Current wording

◦A decline in crude oil differentials had an unfavorable impact of approximately $210 million.

Previous wording

◦A decline in differentials for other feedstocks had an unfavorable impact of approximately $270 million.

Current wording

◦A decline in differentials for other feedstocks had an unfavorable impact of approximately $230 million.

Previous wording

•Refining segment depreciation and amortization expense increased by$103 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.

Current wording

•Refining segment depreciation and amortization expense increased by$139 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.

Previous wording

The following table includes selected financial and operating data of our Renewable Diesel segment for the second quarter of 2025 and 2024. 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 2025 and 2024. 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 prices for the renewable fuels that we sell and the cost of the feedstocks that we process. The table on page 46 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell and the cost of the feedstocks that we process. The table on page 46 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $260 million.

Current wording

•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $210 million.

Previous wording

•A decrease in sales volumes of 760,000 gallons per day had an unfavorable impact of approximately $110 million. The decrease in sales volumes was primarily due to reduced production driven by unfavorable economic conditions in the second quarter of 2025.

Current wording

•A decrease in sales volumes of 827,000 gallons per day had an unfavorable impact of approximately $100 million. The decrease in sales volumes was primarily due to reduced production driven by unfavorable economic conditions in the third quarter of 2025.

Previous wording

•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $180 million.

Current wording

•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $240 million.

Previous wording

The following table includes selected financial and operating data of our Ethanol segment for the second quarter of 2025 and 2024. 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 Ethanol segment for the third quarter of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 46 reflects market reference prices that we believe impacted our Ethanol segment margin in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 46 reflects market reference prices that we believe impacted our Ethanol segment margin in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

The decrease in Ethanol segment margin was primarily due to the following:

Current wording

The increase in Ethanol segment margin was primarily due to the following: