VALERO ENERGY CORP/TX
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 30, 2026
VLO$346.45-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001628280-26-028690
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001628280-26-050937
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 222 current paragraphs.
110 unchanged; 62 reworded; 30 added; 8 removed; 1 previous and 20 current paragraphs rearranged.
Tables are not compared: 17 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Second Quarter Results
Current report
•Refining segment. Refining segment adjusted operating income increased by $3.2 billion primarily due to higher gasoline and distillate (primarily diesel) margins, partially offset by a decline in sweet crude oil differentials.
Current report
First Six Months Results
Current report
While our operating income increased by $6.8 billion in the first six months of 2026 compared to the first six months of 2025, adjusted operating income increased by $5.7 billion primarily due to the following:
Current report
•Ethanol segment. Ethanol segment operating income increased by $334 million primarily due to the recognition of clean fuel production credits in 2026, higher ethanol and corn-related co-product prices, and lower corn prices.
Current report
Net income attributable to noncontrolling interests increased by $404 million in the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 7 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis on page 48.
Current report
Refining segment operating income increased by $3.2 billion in the second quarter of 2026. Refining segment adjusted operating income, which excludes the adjustments in the table in note (c), also increased by $3.2 billion in the second quarter of 2026 compared to the second quarter of 2025 primarily due to an increase in Refining segment margin of $3.1 billion.
Current report
•A decline in sweet crude oil differentials had an unfavorable impact of approximately $780 million.
Current report
Renewable Diesel segment operating income increased by $796 million in the second quarter of 2026 compared to the second quarter of 2025 primarily due to an increase in Renewable Diesel margin of $825 million.
Current report
Ethanol segment operating income increased by $264 million in the second quarter of 2026 compared to the second quarter of 2025 primarily due to an increase in Ethanol segment margin of $272 million.
Current report
•The recognition of clean fuel production credits had a favorable impact of $99 million. Provisions of the One Big Beautiful Bill Act (OBBB) became effective on January 1, 2026, making certain ethanol produced and sold by us eligible for the clean fuel production credit. During the second quarter of 2026, updated emissions modeling methodologies were released and additional actions were taken that increased the amount of clean fuel production credits generated from qualifying ethanol sales. Accordingly, we recognized clean fuel production credits on qualifying sales of ethanol in the second quarter of 2026, along with an amount related to qualifying sales in the first quarter of 2026.
Current report
•An increase in ethanol prices had a favorable impact of approximately $90 million.
Current report
•An increase in prices for the corn-related co-products that we produce, primarily dry distillers grains (DDGs) and inedible DCOs, had a favorable impact of approximately $50 million.
Current report
Total Company, Corporate, and Other
Current report
Net income attributable to noncontrolling interests increased by $520 million in the first six months of 2026 compared to the first six months of 2025 primarily due to higher earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 7 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis on page 55.
Current report
Refining Segment Results
Current report
The following table includes selected financial and operating data of our Refining segment for the first six months of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Refining segment operating income increased by $5.5 billion in the first six months of 2026 compared to the first six months of 2025; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (c), increased by $4.4 billion in the first six months of 2026 compared to the first six months of 2025 primarily due to an increase in Refining segment margin of $4.5 billion.
Current report
•A decline in sweet crude oil differentials had an unfavorable impact of approximately $580 million.
Current report
Renewable Diesel Segment Results
Current report
The following table includes selected financial and operating data of our Renewable Diesel segment for the first six months of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Renewable Diesel segment operating income increased by $1.1 billion in the first six months of 2026 compared to the first six months of 2025 primarily due to an increase in Renewable Diesel segment margin of $1.1 billion.
Current report
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 53 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first six months of 2026 compared to the first six months of 2025.
Current report
Ethanol Segment Results
Current report
The following table includes selected financial and operating data of our Ethanol segment for the first six months of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report
Ethanol segment operating income increased by $334 million in the first six months of 2026 compared to the first six months of 2025 primarily due to an increase in Ethanol segment margin of $352 million.
Current report
•An increase in ethanol prices had a favorable impact of approximately $90 million.
Current report
•An increase in prices for the corn-related co-products that we produce, primarily DDGs and inedible DCOs, had a favorable impact of approximately $50 million.
Current report
(a)Cost of materials and other for the three and six months ended June 30, 2026 includes a benefit of $44 million related to the liquidation of certain LIFO inventory layers attributable to our Refining segment. Inventory levels for our California refining operations decreased during the six months ended June 30, 2026 due to the phased idling of processing units and cessation of refining operations at our Benicia Refinery, which was completed by the end of April 2026. As a result, inventory levels at December 31, 2026 are expected to remain below those at December 31, 2025.
Current report
We expect both capital investments and capital investments attributable to Valero in 2026 to be approximately $2.0 billion, which includes estimated capital investments of $250 million related to the March 2026 incident at our Port Arthur Refinery, as described in Note 5 of Condensed Notes to Consolidated Financial Statements. We anticipate that a substantial portion of the capital expenditures resulting from the March 2026 incident at our Port Arthur Refinery will be covered by insurance, subject to our self-insured retention. Approximately $1.7 billion is allocated to sustaining the business, with the remainder directed toward growth projects.
Removed paragraphs (8)
Previous report
First Quarter Results
Previous report
•On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery’s distillate hydrotreater units, which is more fully discussed in Note 5 of Condensed Notes to Consolidated Financial Statements. As of the date of this quarterly report on Form 10-Q, the Port Arthur Refinery has resumed operations at reduced capacity. For the second quarter of 2026, we expect throughput volumes for our Gulf Coast region to range between 1.690 to 1.740 million barrels per day, which reflects the anticipated reduction in volumes for our Port Arthur Refinery.
Previous report
•Refining segment margin increased by $1.4 billion in the first quarter of 2026 compared to the first quarter of 2025.
Previous report
•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 report
Renewable Diesel segment operating income increased by $280 million in the first quarter of 2026 compared to the first quarter of 2025 primarily due to an increase in Renewable Diesel segment margin of $297 million.
Previous report
Ethanol segment operating income increased by $70 million in the first quarter of 2026 compared to the first quarter of 2025 primarily due to an increase in Ethanol segment margin of $80 million.
Previous report
•An increase in production volumes of 153,000 gallons per day had a favorable impact of approximately $10 million.
Previous report
See Note 5 of Condensed Notes to Consolidated Financial Statements for information regarding the potential impact to our capital expenditures resulting from an incident at the Port Arthur Refinery during the first quarter of 2026, as well as the related potential effect on capital investments attributable to Valero during 2026.
Reworded paragraphs (62)
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 waivers, 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, tax credits, efficiency standards, or other waivers, benefits, or incentives that impact the demand for low-carbon fuels; and
Previous wording
•the ability of the members of the Organization of Petroleum Exporting Countries (OPEC), and other petroleum-producing nations that collectively make up OPEC+, to agree on and to maintain crude oil price and production controls;
Current wording
•the ability of the members of the Organization of the Petroleum Exporting Countries (OPEC) and other petroleum-producing nations to collectively maintain crude oil price and production controls;
Previous wording
•delay of, cancellation of, or failure to implement planned capital or other strategic projects and realize the various assumptions and benefits projected for such projects or cost overruns in executing such planned projects;
Current wording
•delay of, cancellation of, or failure to implement planned capital or other strategic projects and realize the various assumptions and benefits projected for such projects or cost overruns in executing such projects;
Previous wording
Our results for the first quarter of 2026 benefited from strong global demand for petroleum-based transportation fuels amid constrained worldwide supply. Geopolitical developments disrupted global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand. These conditions led to higher market prices for petroleum-based transportation fuels, as well as increased prices for crude oil and other feedstocks used in their production. Despite higher feedstock costs, the spread between product prices and input costs resulted in strong refining margins during the first quarter of 2026. However, refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results.
Current wording
Our results for the second quarter and first six months of 2026 benefited from strong global demand for petroleum-based transportation fuels amid constrained worldwide supply. Geopolitical developments continued to disrupt global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand. These conditions led to higher market prices for petroleum-based transportation fuels, as well as increased prices for crude oil and other feedstocks used in their production. Despite higher feedstock costs, the spread between product prices and input costs resulted in strong refining margins during the second quarter and first six months of 2026. However, refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results.
Previous wording
Our results for the first quarter of 2026 were also impacted by actions taken under our plan with respect to the operations of our Benicia Refinery. During the quarter, we began idling the processing units through a phased approach and ceased operation of the fuel production units. In accordance with our plan, full idling of all processing units was completed in April 2026. See Note 2 of Condensed Notes to Consolidated Financial Statements for additional information related to our Benicia Refinery.
Current wording
Our results for the second quarter and first six months of 2026 were also impacted by the phased idling of processing units and cessation of refining operations at our Benicia Refinery, which was completed by the end of April. See Note 2 of Condensed Notes to Consolidated Financial Statements for additional information related to our Benicia Refinery.
Previous wording
In addition, on March 23, 2026, our Port Arthur Refinery experienced a fire in one of its distillate hydrotreater units, which prompted a full shut-down of the refinery. As of the date of this quarterly report on Form 10-Q, the refinery has resumed operations at reduced capacity. This incident did not have a material effect on our results of operations for the first quarter of 2026. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to this event.
Current wording
In addition, on March 23, 2026, our Port Arthur Refinery experienced a fire in one of its distillate hydrotreater units, which prompted a full shut-down of the refinery. The refinery resumed operations in April 2026 at reduced throughput rates and returned to normal throughput rates during the second quarter. As a result of the outage and the phased restart of the processing units, the refinery’s throughput volumes during the second quarter of 2026 were lower than typical throughput rates. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to this incident.
Previous 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.
Current wording
The strong demand for our products and continued strength in refining margins are the primary contributors to us reporting $3.7 billion and $5.0 billion of net income attributable to Valero stockholders for the second quarter of 2026 and the first six months of 2026, 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.
Previous 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.
Current wording
Our operations generated $7.0 billion of cash during the first six months of 2026. Also, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036 during the first six months of 2026, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations was used to make $798 million of capital investments in our business and return $3.6 billion 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 $3.2 billion during the first six months of 2026 to $8.1 billion as of June 30, 2026. We had $12.7 billion in liquidity as of June 30, 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 60.
Previous 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.
Current wording
For the second quarter of 2026, we reported net income attributable to Valero stockholders of $3.7 billion compared to $714 million for the second quarter of 2025. The increase of $3.0 billion was primarily due to an increase in operating income of $4.2 billion, partially offset by an increase in income tax expense of $815 million and an increase in net income attributable to noncontrolling interests of $404 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 (c) beginning on page 57.
Previous 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:
Current wording
While our operating income increased by $4.2 billion in the second quarter of 2026 compared to the second quarter of 2025, adjusted operating income also increased by $4.2 billion primarily due to the following:
Previous wording
•Ethanol segment. Ethanol segment operating income increased by $70 million primarily due to lower corn prices, the recognition of clean fuel production credits in 2026, and an increase in production volumes.
Current wording
•Ethanol segment. Ethanol segment operating income increased by $264 million primarily due to the recognition of clean fuel production credits in 2026, higher ethanol and corn-related co-product prices, and lower corn prices.
Previous 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.
Current wording
•Refining segment. Refining segment adjusted operating income increased by $4.4 billion primarily due to higher gasoline and distillate (primarily diesel) margins and an increase in throughput volumes, partially offset by a decline in sweet crude oil differentials.
Previous 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.
Current wording
•Renewable Diesel segment. Renewable Diesel segment operating income increased by $1.1 billion 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 costs.
Previous 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.
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 third quarter of 2026.
Previous wording
•Global demand for gasoline, diesel, and jet fuel remains strong; however, demand growth has moderated amid market disruptions related to conflict in the Middle East.
Current wording
•Although global demand for gasoline, diesel, and jet fuel has been resilient, demand growth has moderated amid market disruptions related to ongoing conflict in the Middle East.
Previous wording
•Crude oil differentials are expected to remain volatile as reductions in Middle Eastern sour crude oil production are expected to be only partially offset by incremental crude oil supply from other regions. In addition, ongoing conflict in the Middle East continues to disrupt global transportation routes, resulting in higher freight costs that could contribute to further volatility in the crude oil market.
Current wording
•Crude oil differentials are expected to remain volatile as ongoing conflict in the Middle East continues to disrupt global transportation routes. However, use of alternative transportation routes that partially bypass the Strait of Hormuz, coordinated releases from strategic petroleum reserves, and increased crude oil production from other regions could mitigate supply disruptions and ease volatility in the crude oil market.
Previous 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.
Current wording
•Renewable diesel demand is expected to remain strong as a result of the 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 (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.
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 59.
Previous 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.
Current wording
The following table includes selected financial data for the total company, corporate, and other for the second 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 $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.
Current wording
Adjusted operating income, which excludes the adjustments in the table in note (c), also increased by $4.2 billion, from $1.0 billion in the second quarter of 2025 to $5.2 billion in the second quarter of 2026. The primary components of this $4.2 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.
Previous 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.
Current wording
Income tax expense increased by $815 million in the second quarter of 2026 compared to the second 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 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.
Current wording
The following table includes selected financial and operating data of our Refining segment for the second 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 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.
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 second quarter of 2026 compared to the second quarter of 2025.
Previous wording
◦An increase in distillate (primarily diesel) margins had a favorable impact of approximately $1.1 billion.
Current wording
•An increase in distillate (primarily diesel) margins had a favorable impact of approximately $2.9 billion.
Previous wording
◦A decrease in gasoline margins had an unfavorable impact of approximately $340 million.
Current wording
•An increase in gasoline margins had a favorable impact of approximately $980 million.
Previous 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.
Current wording
The following table includes selected financial and operating data of our Renewable Diesel segment for the second 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, 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.
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 46 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the second quarter of 2026 compared to the second quarter of 2025.
Previous wording
•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $380 million.
Current wording
•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $1.0 billion.
Previous wording
•An increase in the cost of the feedstocks we process had an unfavorable impact of approximately $190 million.
Current wording
•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $200 million.
Previous wording
The following table includes selected financial and operating data of our Ethanol 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.
Current wording
The following table includes selected financial and operating data of our Ethanol segment for the second 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
Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of corn that we process. The table on page 40 reflects market reference prices that we believe impacted our Ethanol segment margin in the first quarter of 2026 compared to the first quarter of 2025.
Current wording
Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell, the recognition of clean fuel production credits on qualifying sales, 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 2026 compared to the second quarter of 2025.
Previous wording
•A decrease in corn prices had a favorable impact of approximately $40 million.
Current wording
•A decrease in corn prices had a favorable impact of approximately $30 million.
Previous 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.
Current wording
Revenues increased by $16.7 billion in the first six months of 2026 compared to the first six months of 2025 primarily due to increases in product prices for the petroleum-based transportation fuels 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 six months of 2025 (see note (b)), was partially offset by an increase in cost of sales of $10.9 billion primarily due to increases in crude oil and other feedstock costs.
Previous 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.
Current wording
Operating income increased by $6.8 billion in the first six months of 2026; however, adjusted operating income, which excludes the adjustments in the table in note (c), increased by $5.7 billion, from $1.2 billion in the first six months of 2025 to $6.9 billion in the first six months of 2026. The primary components of this $5.7 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.
Previous wording
◦An increase in throughput volumes of 86,000 barrels per day had a favorable impact of approximately $120 million. As discussed in “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 34 and in Note 2 of Condensed Notes to Consolidated Financial Statements, we began idling the processing units through a phased approach and ceased operation of the fuel production units at our Benicia Refinery during the first quarter of 2026. While these actions resulted in lower volumes at our Benicia Refinery, the overall impact was more than offset by increased volumes at our other refineries, resulting in higher aggregate volumes in the first quarter of 2026 compared to the first quarter of 2025.
Current wording
•An increase in throughput volumes of 57,000 barrels per day had a favorable impact of approximately $200 million. During the first six months of 2026, we idled the processing units and ceased operation of the fuel production units at our Benicia Refinery, which was completed by the end of April 2026. In addition, in March 2026, an incident at our Port Arthur Refinery prompted a full shutdown of the refinery followed by a phased restart of the processing units by the end of the second quarter of 2026. These events, which are discussed in “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 39 and in Notes 2 and 5 of Condensed Notes to Consolidated Financial Statements, resulted in lower volumes at our
Previous wording
•An increase in clean fuel production credits recognized on qualifying sales had a favorable impact of $127 million.
Current wording
•An increase in clean fuel production credits recognized on qualifying sales had a favorable impact of $164 million.
Previous wording
◦An increase in crude oil differentials had a favorable impact of approximately $390 million.
Current wording
•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $390 million.
Previous wording
•The recognition of clean fuel production credits had a favorable impact of $20 million. Provisions of the One Big Beautiful Bill Act became effective on January 1, 2026, making certain ethanol produced and sold by us eligible for the clean fuel production credit. Accordingly, we recognized clean fuel production credits on qualifying sales of ethanol during the three months ended March 31, 2026.
Current wording
•The recognition of clean fuel production credits had a favorable impact of $119 million. Provisions of the OBBB became effective on January 1, 2026, making certain ethanol produced and sold by us eligible for the clean fuel production credit. Accordingly, we recognized clean fuel production credits on qualifying sales of ethanol in the first six months of 2026.
Previous wording
The following notes relate to references on pages 37 through 43.
Current wording
The following notes relate to references on pages 43 through 56.
Previous wording
(a)In March 2025, we approved a plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, we evaluated the assets of the Benicia and Wilmington refineries for impairment as of March 31, 2025 and concluded that the carrying values of these assets were not recoverable. Therefore, we reduced the carrying values of the Benicia and Wilmington refineries to their estimated fair values and recognized a combined asset impairment loss of $1.1 billion in the three months ended March 31, 2025.
Current wording
(b)In March 2025, we approved a plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, we evaluated the assets of the Benicia and Wilmington refineries for impairment as of March 31, 2025 and concluded that the carrying values of these assets were not recoverable. Therefore, we reduced the carrying values of the Benicia and Wilmington refineries to their estimated fair values and recognized a combined asset impairment loss of $1.1 billion in the six months ended June 30, 2025.
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Current report — wording carried from elsewhere
•Renewable Diesel segment. Renewable Diesel segment operating income increased by $796 million primarily due to higher product prices (primarily renewable diesel), partially offset by higher feedstock costs.
Current report — wording carried from elsewhere
For the first six months of 2026, we reported net income attributable to Valero stockholders of $5.0 billion compared to $119 million for the first six months of 2025. The increase of $4.9 billion was primarily due to an increase in operating income of $6.8 billion, partially offset by an increase in income tax expense of $1.5 billion and an increase in net income attributable to noncontrolling interests of $520 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 (c) beginning on page 57.
Current report — wording carried from elsewhere
Revenues increased by $14.6 billion in the second quarter of 2026 compared to the second quarter of 2025 primarily due to increases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This increase in revenues was partially offset by an increase in cost of sales of $10.4 billion primarily due to increases in crude oil and other feedstock costs. These changes resulted in a $4.2 billion increase in operating income, from $997 million in the second quarter of 2025 to $5.2 billion in the second quarter of 2026.
Current report — wording carried from elsewhere
Financial Highlights by Segment and Total Company
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Financial Highlights by Segment and Total Company (continued)
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Average Market Reference Prices and Differentials
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Average Market Reference Prices and Differentials (continued)
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The following table includes selected financial data for the total company, corporate, and other for the first six months of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Current report — wording carried from elsewhere
Income tax expense increased by $1.5 billion in the first six months of 2026 compared to the first six months of 2025 primarily as a result of higher income before income tax expense.
Current report — wording carried from elsewhere
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 52 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first six months of 2026 compared to the first six months of 2025.
Current report — wording carried from elsewhere
The increase in Refining segment margin was primarily due to the following:
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•An increase in distillate (primarily diesel) margins had a favorable impact of approximately $3.9 billion.
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•An increase in gasoline margins had a favorable impact of approximately $630 million.
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Benicia Refinery and our Port Arthur Refinery during the first six months of 2026; however, the overall impact was more than offset by increased volumes at our other refineries, resulting in higher aggregate volumes in the first six months of 2026 compared to the first six months of 2025.
Current report — wording carried from elsewhere
The increase in Renewable Diesel segment margin was primarily due to the following:
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•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $1.4 billion.
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Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of corn that we process. The table on page 53 reflects market reference prices that we believe impacted our Ethanol segment margin in the first six months of 2026 compared to the first six months of 2025.
Current report — wording carried from elsewhere
The increase in Ethanol segment margin was primarily due to the following:
Current report — wording carried from elsewhere
•A decrease in corn prices had a favorable impact of approximately $80 million.
Current report — wording carried from elsewhere
Consolidated Financial Statements for additional information regarding contractual obligations for our Benicia Refinery.
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Previous report — wording carried elsewhere
$146 million aggregate principal amount of the 4.375 percent Senior Notes due December 15, 2026 issued by Valero Energy Partners LP and guaranteed by us.