VALERO ENERGY CORP/TX

Previous wording

This report, including without limitation our disclosures below under “OVERVIEW AND OUTLOOK,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “ambition,” “could,” “would,” “should,” “may,” “strive,” “seek,” “pursue,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” “evaluate,” and similar expressions.

Current wording

This report, including without limitation our disclosures below under “OVERVIEW AND OUTLOOK,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “could,” “would,” “should,” “may,” “strive,” “seek,” “pursue,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” “evaluate,” and similar expressions.

Previous wording

•expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, transportation costs, and operating expenses;

Current wording

•expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, transportation costs, and operating expenses (including natural gas, electricity, and water availability and prices);

Previous wording

•our plans, actions, assets, and operations in California and expected timing and cost of obligations and other financial statement impacts;

Current wording

•our plans, actions, assets, and operations in California and expected timing and cost of obligations and other financial statement, operational, or strategic impacts;

Previous wording

•our anticipated level of capital investments, including deferred turnaround and catalyst cost expenditures, our expected allocation between, and/or within, growth capital expenditures and sustaining capital expenditures, capital expenditures for environmental and other purposes, and joint venture investments, the expected costs and timing applicable to such capital investments and any related projects, and the effect of those capital investments on our business, financial condition, results of operations, and liquidity;

Current wording

•our anticipated level of capital investments, including deferred turnaround and catalyst cost and other capital expenditures, our expected allocation between, and/or within, growth capital expenditures and sustaining capital expenditures, capital expenditures for environmental and other purposes, and joint venture investments, the expected costs and timing applicable to such capital investments and any related projects, as well as any insurance proceeds related thereto, and the effect of those capital investments on our business, financial condition, results of operations, and liquidity;

Previous wording

•our ability to meet future cash and credit requirements, whether from funds generated from our operations or our ability to access financial markets effectively, and expectations regarding our liquidity;

Current wording

•our ability to meet future cash and credit requirements, whether from funds generated from our operations or our ability to access financial markets effectively, and expectations regarding our liquidity and future sources and uses of cash;

Previous wording

•our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities;

Current wording

•our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities, including the use of proceeds from any debt offering;

Previous wording

•expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in Notes 2 and 8 of Condensed Notes to Consolidated Financial Statements and under “PART II, ITEM 1. LEGAL PROCEEDINGS,” the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated or potential effects thereof on our business, financial condition, results of operations, and liquidity;

Current wording

•expectations regarding environmental, tax, and other legal or regulatory matters, including the matters discussed in Note 2 of Condensed Notes to Consolidated Financial Statements, the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, tariffs and refund claims, and the anticipated or potential effects thereof on our business, financial condition, results of operations, and liquidity;

Previous wording

•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, SAF, 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, as well as our capital allocation;

Previous wording

•expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address greenhouse gas (GHG) emissions and the percentage of low-carbon fuels in the transportation fuel mix, including, but not limited to, the Renewable and Low-Carbon Fuel Programs, blending and tax credits, efficiency standards, or other benefits or incentives that impact the demand for low-carbon fuels; and

Current wording

•expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address greenhouse gas (GHG) emissions and the percentage of low-carbon fuels in the transportation fuel mix, including, but not limited to, the Renewable and Low-Carbon Fuel Programs, blending and tax credits, efficiency standards, or other waivers, benefits, or incentives that impact the demand for low-carbon fuels; and

Previous wording

•expectations regarding our low-carbon fuels strategy, publicly announced GHG emissions reduction/displacement targets and long-term ambition, and our current, former, and any future low-carbon projects.

Current wording

•expectations regarding our low-carbon fuels strategy, publicly disclosed GHG emissions reductions/displacements target, and our current, former, and any future low-carbon projects.

Previous wording

•the effects arising out of global geopolitical and other conflicts and tensions, including with respect to changes in trade flows and impacts to crude oil and other markets;

Current wording

•the effects arising out of global geopolitical and other conflicts and tensions, including with respect to changes in trade flows and impacts to crude oil and other markets, as well as actions in response to supply and demand imbalances for refined petroleum products;

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, SAF, ethanol, or corn-related co-products;

Current wording

•the effects of war or hostilities, and political and economic conditions, in or affecting geographic areas that produce crude oil or other feedstocks, are key areas for crude oil and refined petroleum product transportation, or consume refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products;

Previous wording

•the levels of government subsidies for, and executive orders, mandates, or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies or initiatives, including those related to carbon capture, carbon sequestration, and low-carbon fuels, or affecting the price of natural gas and/or electricity;

Current wording

•the levels of government subsidies for, and executive orders, mandates, or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies or initiatives, including those related to carbon sequestration, carbon capture and storage, and low-carbon fuels, including ethanol blending levels, or affecting the price of natural gas, electricity, and/or water;

Previous wording

•severe weather events, such as storms, hurricanes, 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, ethanol, and corn-related co-products;

Current wording

•natural disasters/acts of nature and severe weather events, such as earthquakes, storms, hurricanes, droughts, floods, wildfires, and other similar 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, ethanol, and corn-related co-products;

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, government shutdowns, 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 tariffs, duties, and other trade restrictions, including any refunds related thereto, de-globalized supply chains or the diversification of historic trade patterns, 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 operating, financing, and distribution decisions of our joint ventures or other joint venture members, and other consolidated VIEs, that we do not control;

Current wording

•the operating, financing, and distribution decisions of our joint ventures, other joint venture members, and other consolidated VIEs that we do not control;

Previous wording

•the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow or our ability to borrow or access financial markets;

Current wording

•the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow, cash requirements, or our ability to borrow or access financial markets;

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 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.

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); 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. Refer to the tables in note (b), beginning on page 44, for the reconciliations of Refining, Renewable Diesel, and Ethanol segment margin and adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) 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 49 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 48, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

Previous 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.

Current wording

The strong demand for our products and continued strength in refining margins are the primary contributors to us reporting $1.3 billion of net income attributable to Valero stockholders for the first quarter of 2026. Our operating results, including operating results by segment, are described in the following summary under “First Quarter Results” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 37.

Previous 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.

Current wording

Our operations generated $1.4 billion of cash during the first quarter of 2026. Also, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036 during the first quarter of 2026, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations was used to make $448 million of capital investments in our business and return $932 million to our stockholders through purchases of common stock for treasury and dividend payments. As a result of these items, along with the net proceeds from our debt issuance and other activities, our cash, cash equivalents, and restricted cash increased by $1.0 billion during the first quarter of 2026 to $5.9 billion as of March 31, 2026. We had $10.8 billion in liquidity as of March 31, 2026. 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 46.

Previous 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.

Current wording

For the first quarter of 2026, we reported net income attributable to Valero stockholders of $1.3 billion compared to a net loss of $595 million for the first quarter of 2025. The increase of $1.9 billion was primarily due to an increase in operating income of $2.6 billion, partially offset by an increase in income tax expense of $666 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 44.

Previous 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:

Current wording

While our operating income increased by $2.6 billion in the first quarter of 2026 compared to the first quarter of 2025, adjusted operating income increased by $1.5 billion primarily due to the following:

Previous 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.

Current wording

•Refining segment. Refining segment adjusted operating income increased by $1.2 billion primarily due to higher distillate (primarily diesel) margins, an increase in crude oil differentials, and an increase in throughput volumes, partially offset by lower gasoline margins and an increase in depreciation and amortization expense.

Previous 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).

Current wording

•Renewable Diesel segment. Renewable Diesel segment operating income increased by $280 million primarily due to higher product prices (primarily renewable diesel) and an increase in clean fuel production credits recognized on qualifying sales, partially offset by higher feedstock prices.

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 fourth quarter of 2025.

Current wording

Many uncertainties exist with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic and geopolitical activity and the resulting impact on product supply and demand, we have noted several factors below that have impacted or may impact our results of operations during the second quarter of 2026.

Previous wording

•Renewable diesel demand is expected to remain consistent with current levels.

Current wording

•Renewable diesel demand is expected to rise driven by an increase in the renewable volume obligations (RVOs) imposed by the EPA for 2026 and 2027, particularly with respect to biomass-based diesel.

Previous 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.

Current 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 44, 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 44 through 46.

Previous 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.

Current wording

The following table includes selected financial data for the total company, corporate, and other for the first quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Previous wording

Revenues decreased by $6.8 billion in the first nine months of 2025 compared to the first nine months 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, along with the effect of an asset impairment loss of $1.1 billion in the first nine months of 2025 (see note (b)), was partially offset by a decrease in cost of sales of $6.2 billion primarily due to decreases in crude oil and other feedstock costs.

Current wording

Revenues increased by $2.1 billion in the first quarter of 2026 compared to the first quarter of 2025 primarily due to increases in product prices for the petroleum-based transportation fuels (primarily diesel) associated with sales made by our Refining segment. This increase in revenues, along with the effect of an asset impairment loss of $1.1 billion in the first quarter of 2025 (see note (a)), was partially offset by an increase in cost of sales of $578 million primarily due to increases in crude oil and other feedstock costs.

Previous 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.

Current wording

Operating income increased by $2.6 billion in the first quarter of 2026; however, adjusted operating income, which excludes the adjustments in the table in note (b), increased by $1.5 billion, from $235 million in the first quarter of 2025 to $1.8 billion in the first quarter of 2026. The primary components of this $1.5 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.

Previous wording

Income tax expense increased by $294 million in the third quarter of 2025 compared to the third quarter of 2024 primarily as a result of higher income before income tax expense.

Current wording

Income tax expense increased by $666 million in the first quarter of 2026 compared to the first quarter of 2025 primarily as a result of higher income before income tax expense.

Previous 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.

Current wording

The following table includes selected financial and operating data of our Refining segment for the first quarter of 2026 and 2025. 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 $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.

Current wording

Refining segment operating income increased by $2.3 billion in the first quarter of 2026; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (b), increased by $1.2 billion in the first quarter of 2026 compared to the first quarter of 2025. The primary 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 third quarter of 2025 compared to the third 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 39 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first quarter of 2026 compared to the first quarter of 2025.

Previous wording

◦An increase in gasoline margins had a favorable impact of approximately $340 million.

Current wording

◦A decrease in gasoline margins had an unfavorable impact of approximately $340 million.

Previous 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.

Current wording

•Refining segment depreciation and amortization expense increased by$138 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to idle the processing units and 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 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.

Current wording

The following table includes selected financial and operating data of our Renewable Diesel segment for the first quarter of 2026 and 2025. 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 third quarter of 2025 compared to the third quarter of 2024.

Current wording

Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of the feedstocks that we process. The table on page 40 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first quarter of 2026 compared to the first quarter of 2025.

Previous wording

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

Current wording

•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $380 million.

Previous wording

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

Current wording

•An increase in the cost of the feedstocks we process had an unfavorable impact of approximately $190 million.