VALERO ENERGY CORP/TX

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

General

The terms “Valero,” “we,” “our,” and “us,” as used in this report, may refer to Valero Energy Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole. The term “DGD,” as used in this report, may refer to Diamond Green Diesel Holdings LLC, its wholly owned consolidated subsidiary, or both of them taken as a whole.

These interim unaudited financial statements were prepared in conformity with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these interim unaudited financial statements reflect all adjustments considered necessary for a fair statement of our results for the interim periods presented. All such adjustments are of a normal recurring nature unless otherwise disclosed. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These interim unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2025.

The balance sheet as of December 31, 2025, has been derived from our audited financial statements as of that date. For further information, refer to our audited financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2025.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2026 presentation. The changes were due to the separate presentation of (i) taxes other than income taxes, which were previously included in cost of materials and other in our statements of income and (ii) changes in deferred charges and other assets and changes in long-term liabilities, which were previously included in “changes in deferred charges and credits and other operating activities, net” in our statements of cash flows. In addition, prior year amounts that were presented separately for activities related to investments in available-for-sale (AFS) debt securities have been reclassified to “other investing activities, net” in our statements of cash flows.

Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in these interim unaudited financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Accounting Pronouncement Not Yet Adopted

ASU 2026-02

In May 2026, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which provides guidance on the accounting for environmental credit assets and related obligations. This ASU establishes recognition, measurement, presentation, and disclosure requirements for entities that generate, purchase, or receive environmental credits or have regulatory compliance obligations that may be settled with such credits. We expect to adopt this ASU effective January 1, 2028. We are currently evaluating the effect that adopting this ASU will have on our financial position, results of operations, and related disclosures.

2. IMPAIRMENT AND OTHER MATTERS

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 of these actions, the following impacts were recorded in our Refining segment:

•During the first quarter of 2025, we evaluated the Benicia and Wilmington refineries for potential impairment and concluded that their carrying values were not recoverable as of March 31, 2025. Therefore, we recognized a combined asset impairment loss of $1.1 billion.

•Included in the recoverability assessments discussed above was the recognition of expected asset retirement obligations of $337 million. During the three and nine months ended September 30, 2026, we settled approximately $19 million and $189 million, respectively, of the asset retirement obligation related to our Benicia Refinery.

•We shortened the estimated useful life of the Benicia Refinery, and as a result, have depreciated the revised carrying value of the net property, plant, and equipment and other noncurrent assets since April 2025 to the estimated salvage value. Accordingly, we recorded incremental depreciation of approximately $133 million in the nine months ended September 30, 2026, and approximately $100 million and $200 million in the three and nine months ended September 30, 2025, respectively, in depreciation and amortization expense.

•We implemented a transition plan for the affected employees of the Benicia Refinery, which included retention incentive payments and separation benefits. During the third quarter of 2025, we recognized a liability of $50 million for these one-time costs, which was included in operating expenses (excluding depreciation and amortization expense). Substantially all of this amount has been paid to eligible employees as of September 30, 2026.

•During the second quarter of 2026, we reduced certain inventory levels related to our California operations that resulted in the liquidation of last-in, first-out (LIFO) inventory layers with historical costs that were lower than current replacement costs. As a result, cost of materials and other includes a benefit of $44 million in the nine months ended September 30, 2026. Similar reductions in inventory levels occurred during the fourth quarter of 2025, which increased cost of materials and other by $37 million in the year ended December 31, 2025.

During the first quarter of 2026, we began idling the processing units through a phased approach and ceased operation of the fuel production units at our Benicia Refinery. In accordance with our plan, full idling of all processing units was completed in April 2026. While we continue to evaluate potential redevelopment options for the future use of the refinery property, we plan to maintain all required operating permits and keep the facilities in a safe, clean, and idled condition. In addition, we expect to continue to fulfill our contractual obligations to customers in the Northern California market through imports or other alternative supply arrangements. Effective in the second quarter of 2026, activities associated with the decommissioning and redevelopment of our Benicia Refinery are reported within other corporate expenses in our segment information, as disclosed in Note 10.

3. INVENTORIES

Inventories consisted of the following (in millions):

During the nine months ended September 30, 2026, we recognized a $44 million benefit in cost of materials and other resulting from the liquidation of LIFO inventory layers established in prior years at costs lower than current replacement costs. As discussed in Note 2, LIFO inventory levels related to our California operations declined during 2026 due to the phased idling of processing units and cessation of refining operations at the Benicia Refinery, which was completed by the end of April 2026. Consequently, inventory levels at December 31, 2026, are expected to remain below those at December 31, 2025.

As of September 30, 2026 and December 31, 2025, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $11.9 billion and $2.6 billion, respectively. Our non-LIFO inventories accounted for $1.5 billion and $1.2 billion of our total inventories as of September 30, 2026 and December 31, 2025, respectively.

4. DEBT

Public Debt

In March 2026, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036. Proceeds from this debt issuance totaled $850 million before deducting the underwriting discount and other debt issuance costs. We used a portion of the net proceeds to repay the $100 million outstanding principal balance of our 7.65 percent Debentures that matured on July 1, 2026 and the $426 million outstanding principal balance of our 3.400 percent Senior Notes that matured on September 15, 2026.

In February 2025, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030. Proceeds from this debt issuance totaled $649 million before deducting the underwriting discount and other debt issuance costs. We used a portion of the net proceeds to repay the $189 million outstanding principal balance of our 3.65 percent Senior Notes that matured on March 15, 2025 and the $251 million outstanding principal balance of our 2.850 percent Senior Notes that matured on April 15, 2025.

Credit Facilities

We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (in millions):

(a)Letters of credit issued as of September 30, 2026 expire at various times in 2026 through 2029.

(b)Creditors of the VIEs do not have recourse against us.

(c)In February 2026, DGD amended this unsecured revolving credit facility with a syndicate of financial institutions (the DGD Revolver) to (i) extend the maturity date to February 2029 and (ii) modify the reference interest rates from an adjusted term SOFR, a Secured Overnight Financing Rate (SOFR), to the term SOFR, and from an adjusted daily simple SOFR to the daily simple SOFR.

(d)In February 2026, DGD amended its unsecured revolving loan agreement with its members (the DGD Loan Agreement) to extend the maturity date to June 2029. The amounts shown for the DGD Loan Agreement represent the facility amount available from, and borrowings outstanding to, the noncontrolling member as any transactions between DGD and us under this facility are eliminated in consolidation.

(e)Central Mexico Terminals (defined in Note 7) has an unsecured revolving credit facility (the IEnova Revolver) with IEnova (defined in Note 7). The variable interest rate on the IEnova Revolver was 7.575 percent and 7.835 percent as of September 30, 2026 and December 31, 2025, respectively.

Activity under our credit facilities was as follows (in millions):

Other Disclosures

“Interest and debt expense, net of capitalized interest” was as follows (in millions):

5. COMMITMENTS AND CONTINGENCIES

Port Arthur Refinery Fire

On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery’s distillate hydrotreater units that 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. We have completed our assessment of the damages and efforts to complete necessary repairs and replacements are in progress. We expect that a substantial portion of the cost of repairs and capital expenditures in 2026 resulting from the incident will be covered by insurance, subject to our self-insured retention. Insurance proceeds may be received in periods different from those in which the related repair costs or capital expenditures are incurred. Uncertainties remain with respect to the ultimate outcomes from this incident and the resulting impact on our financial position, results of operations, and cash flows.

During the three and nine months ended September 30, 2026, we recorded an insurance recovery receivable of $21 million and $99 million, respectively, to offset losses that we believe are probable of recovery. Any insurance recoveries attributable to property damage in excess of recognized losses represent a gain contingency and will be recognized when realized or realizable. No insurance proceeds were received during the three and nine months ended September 30, 2026.

In addition, during the three and nine months ended September 30, 2026, we incurred $4 million and $19 million, respectively, of repair costs directly attributable to the incident that may be recoverable through the insurance claims process. These costs are included in other operating expenses within our Refining segment.

As a result of this incident, we have received a number of lawsuits, including a proposed class action lawsuit, alleging personal injury, property damage, and nuisance in the adjacent community. Several of these actions seek unspecified damages in excess of $1 million. While we intend to vigorously defend against such pending actions, the ultimate outcomes and impacts thereof are currently uncertain and the full extent of any potential losses or damages cannot be reasonably estimated at this time. In addition, we continue to work cooperatively with various regulatory authorities reviewing the incident and discussions are ongoing. During the third quarter of 2026, we received proposed citations and penalties from certain regulatory enforcement agencies associated with this incident. We intend to contest the alleged violations and proposed penalties. Current regulatory enforcement actions or proceedings, and those that may arise in the future, if any, are currently uncertain and we are unable to make any reasonable estimates with respect thereto at this time.

Trade and Other Policy Matters

The U.S. federal government under the current administration implemented new or revised tariffs that negatively impacted our business, particularly our Renewable Diesel segment, during 2025 and 2026, including those implemented pursuant to the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA were invalid. On April 20, 2026, U.S. Customs and Border Protection (CBP) launched a system that was developed to process IEEPA tariff refund claims. Based on the eligibility parameters established by CBP for Phase 1 of the refund process, DGD prepared and filed a refund claim of $51 million, which was accepted by CBP. In accordance with the accounting for gain contingencies, we recorded a receivable for this amount in

April 2026, which resulted in a decrease in cost of materials and other for our Renewable Diesel segment. As of September 30, 2026, substantially all of the Phase 1 refund claim has been received. DGD may be eligible to participate in future phases of the refund process; however, the timing, amount, and ultimate recoverability of any additional refunds remain uncertain. Accordingly, no amounts have been recognized with respect to such potential future claims. We continue to monitor developments related to trade and tariff-related matters and evaluate their potential effects on our business, financial position, results of operations, and cash flows.

6. EQUITY

Treasury Stock

We purchase shares of our outstanding common stock as authorized by our board of directors (Board), including under share purchase programs (described in the table below) and with respect to our employee stock-based compensation plans. We purchased for treasury 9,056,938 shares and 5,667,134 shares for the three months ended September 30, 2026 and 2025, respectively, and 20,395,132 shares and 10,309,669 shares for the nine months ended September 30, 2026 and 2025, respectively.

Our Board authorized us to purchase shares of our outstanding common stock under various programs with no expiration dates as follows (in millions):

On October 27, 2026, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $10.0 billion with no expiration date, which is in addition to the amount remaining under the July 2026 Program.

Common Stock Dividends

On October 27, 2026, our Board declared a quarterly cash dividend of $1.20 per common share payable on December 21, 2026 to holders of record at the close of business on November 24, 2026.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of tax, were as follows (in millions):

7. VARIABLE INTEREST ENTITIES

Consolidated VIEs

We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary. As of September 30, 2026, the significant consolidated VIEs included:

•DGD, a joint venture with a subsidiary of Darling Ingredients Inc. that owns and operatestwo plants that process waste and renewable feedstocks (predominantly animal fats, used cooking oils, vegetable oils, and inedible distillers corn oils (DCOs)) into renewable diesel, renewable naphtha, and neat sustainable aviation fuel (SAF)1; and

•Central Mexico Terminals, a collective group ofthree subsidiaries of Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova), which is a Mexican company and indirect subsidiary of Sempra, a U.S. public company. We have terminaling agreements with Central Mexico Terminals that represent variable interests. We do not have an ownership interest in Central Mexico Terminals.

The assets of the consolidated VIEs can only be used to settle their own obligations and the creditors of the consolidated VIEs have no recourse to our other assets. We generally do not provide financial guarantees to the VIEs. Although we have provided credit facilities to some of the VIEs in support of their construction or acquisition activities and working capital requirements, these transactions are eliminated in consolidation. Our financial position, results of operations, and cash flows are impacted by the performance of the consolidated VIEs, net of intercompany eliminations, to the extent of our ownership interest in each VIE.

The following tables present summarized balance sheet information for the significant assets and liabilities of the consolidated VIEs, which are included in our balance sheets (in millions):

1 DGD produces synthetic paraffinic kerosene (SPK), a renewable blending component, using the Hydrotreated Esters and Fatty Acids (HEFA) process. SPK is also commonly referred to as “neat SAF.” Current aviation regulations allow SPK to be blended up to 50 percent with conventional jet fuel for use in an aircraft. This blend is commonly referred to as “blended SAF” or “SAF.”

Nonconsolidated VIEs

We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. These nonconsolidated VIEs are not material to our financial position or results of operations and are accounted for as equity investments.

8. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost related to our defined benefit plans were as follows (in millions):

The components of net periodic benefit cost other than the service cost component (i.e., the non-service cost components) are included in “other income, net.”

9. EARNINGS PER COMMON SHARE

Earnings per common share was computed as follows (dollars and shares in millions, except per share amounts):

Participating securities include restricted stock and performance awards granted under our 2020 Omnibus Stock Incentive Plan. Dilutive securities include participating securities. For the three and nine months ended September 30, 2026 and 2025, we computed earnings per common share – assuming dilution using the two-class method for all dilutive securities.

10. REVENUES AND SEGMENT INFORMATION

Revenue from Contracts with Customers

Disaggregation of Revenue

Revenue is presented in the table below under “Segment Information” disaggregated by product because this is the level of disaggregation that management has determined to be beneficial to users of our financial statements.

Contract Balances

Contract balances were as follows (in millions):

Remaining Performance Obligations

We have spot and term contracts with customers, the majority of which are spot contracts with no remaining performance obligations. We do not disclose remaining performance obligations for contracts that have terms of one year or less. The transaction price for our remaining term contracts includes a fixed component and variable consideration (i.e., a commodity price), both of which are allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation. The fixed component is not material and the variable consideration is highly uncertain. Therefore, as of September 30, 2026, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations. See Note 2 for additional information regarding contractual obligations related to our Benicia Refinery.

Segment Information

We have three reportable segments—Refining, Renewable Diesel, and Ethanol. Each segment is a strategic business unit that offers different products and services by employing unique technologies and marketing strategies and whose operations and operating performance are managed and evaluated separately. Operating performance is measured based on the operating income (loss) generated by the segment, which includes revenues and expenses that are directly attributable to the management of the respective segment. Intersegment sales are generally derived from transactions made at prevailing market rates. The following is a description of each segment’s business operations.

•The Refining segment includes the operations of our petroleum refineries, the associated activities to market our refined petroleum products, and the logistics assets that support our refining operations. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks, distillates, and other products.

•The Renewable Diesel segment includes the operations of DGD, a consolidated joint venture as discussed in Note 7, and the associated activities to market low-carbon fuels. The principal products manufactured by DGD and sold by this segment are renewable diesel, renewable naphtha, and neat SAF. This segment sells some renewable diesel and neat SAF to the Refining segment for blending into petroleum-based diesel and conventional jet fuel, respectively, which are then sold to that segment’s customers as finished products.

•The Ethanol segment includes the operations of our ethanol plants and the associated activities to market our ethanol and co-products. The principal products manufactured by our ethanol plants are ethanol and distillers grains. This segment sells some ethanol to the Refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product.

Operations that are not included in any of the reportable segments are included in the corporate and other category. As discussed in Note 2, effective in the second quarter of 2026, activities associated with the decommissioning and redevelopment of our Benicia Refinery are reported within other corporate expenses.

Our chief operating decision maker (CODM) is our Chairman of the Board, Chief Executive Officer and President. Our CODM uses operating income (loss) by segment to allocate resources (including employees, property, and financial or capital resources) for each segment primarily during the annual budget process. On a monthly basis, our CODM considers budget-to-actual variances for operating income (loss) by segment when evaluating the operating performance of each segment.

The following tables reflect information about our reportable segments and include the reconciliation to our consolidated income before income tax expense (in millions):

(a)Cost of materials and other is net of the clean fuel production credit on qualifying sales of certain low-carbon transportation fuels of $150 million and $206 million for the three months ended September 30, 2026 and 2025, respectively, and $505 million and $397 million for the nine months ended September 30, 2026 and 2025, respectively, for our Renewable Diesel segment and $92 million and $211 million for the three and nine months ended September 30, 2026, respectively, for our Ethanol segment.

(b)Other corporate expenses include general and administrative expenses and depreciation and amortization expense, as reflected in our consolidated statements of income on page 2. Effective in the second quarter of 2026, other corporate expenses also include expenses associated with the decommissioning and redevelopment of our Benicia Refinery.

(c)Total expenditures for long-lived assets include amounts related to capital expenditures and deferred turnaround and catalyst costs.

Total assets for reportable segments reconciled to our consolidated assets were as follows (in millions):

Expenditures for long-lived assets for reportable segments reconciled to our consolidated expenditures for long-lived assets were as follows (in millions):

The following table provides a disaggregation of revenues from external customers for our principal products by reportable segment (in millions):

As of September 30, 2026 and December 31, 2025, our investments in nonconsolidated joint ventures accounted for under the equity method were $675 million and $684 million, respectively, all of which related to the Refining segment and are reflected in “deferred charges and other assets, net” in our balance sheets.

11. SUPPLEMENTAL CASH FLOW INFORMATION

In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in millions):

Changes in current assets and current liabilities for the nine months ended September 30, 2026 were primarily due to the following:

•The increase in receivables was primarily due to an increase in refined petroleum product prices in September 2026 compared to December 2025;

•The increase in accounts payable was primarily due to an increase in crude oil and other feedstock prices in September 2026 compared to December 2025; and

•The increase in income taxes payable was primarily due to higher income before income tax expense in the third quarter of 2026.

Changes in current assets and current liabilities for the nine months ended September 30, 2025 were primarily due to the following:

•The decrease in receivables was due to a decrease in refined petroleum product sales volumes in September 2025 compared to December 2024 and the collection of $246 million for a blender’s tax credit receivable, partially offset by an increase in related prices in September 2025 compared to December 2024;

•The decrease in inventories was primarily due to lower inventory levels in September 2025 compared to December 2024; and

•The decrease in accounts payable was due to a decrease in crude oil and other feedstock prices combined with a decrease in related volumes purchased in September 2025 compared to December 2024.

Cash flows related to interest and income taxes were as follows (in millions):

Supplemental cash flow information related to our operating and finance leases was as follows (in millions):

There were no significant noncash investing and financing activities during the nine months ended September 30, 2026, except as noted in the table above. Noncash investing activities for the nine months ended September 30, 2025 included the recognition of expected asset retirement obligations of $337 million, as described in Note 2. There were no other significant noncash investing and financing activities during the nine months ended September 30, 2025, except as noted in the table above.

12. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following tables present information (in millions) about our assets and liabilities recognized at their fair values in our balance sheets categorized according to the fair value hierarchy of the inputs utilized by us to determine the fair values as of September 30, 2026 and December 31, 2025.

We have elected to offset the fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty, including any related cash collateral assets or obligations as shown below; however, fair value amounts by hierarchy level are presented in the following tables on a gross basis. We have no derivative contracts that are subject to master netting arrangements that are reflected gross in our balance sheets.

A description of our assets and liabilities recognized at fair value along with the valuation methods and inputs we used to develop their fair value measurements is as follows:

•Commodity derivative contracts consist primarily of exchange-traded futures, which are used to reduce the impact of price volatility on our results of operations and cash flows as discussed in Note 13. These contracts are measured at fair value using a market approach based on quoted prices from the commodity exchange and are categorized in Level 1 of the fair value hierarchy.

•Physical purchase contracts represent the fair value of fixed-price corn purchase contracts. The fair values of these purchase contracts are measured using a market approach based on quoted prices from the commodity exchange or an independent pricing service and are categorized in Level 2 of the fair value hierarchy.

•Clean fuel production credits represent the fair value of the tax credits that DGD intends to sell on behalf of the other joint venture member. These tax credits are categorized in Level 3 of the fair value hierarchy and are measured at fair value using a market approach based on historical sales prices and third-party consultant estimates. Significant unobservable inputs used in the valuation include the expected market discount per $1.00 of credit value.

•Investments of certain benefit plans consist of investment securities held by trusts for the purpose of satisfying a portion of our obligations under certain U.S. nonqualified benefit plans. The plan assets categorized in Level 1 of the fair value hierarchy are measured at fair value using a market approach based on quoted prices from national securities exchanges. The plan assets categorized in Level 3 of the fair value hierarchy represent insurance contracts, the fair value of which is provided by the insurer.

•Investments in AFS debt securities consist primarily of commercial paper and U.S. government Treasury bills and have maturities within one year. The securities categorized in Level 1 are measured at fair value using a market approach based on quoted prices from national securities exchanges and the securities categorized in Level 2 are measured at fair value using a market approach based on quoted prices from independent pricing services. The amortized cost basis of the securities approximates fair value. Realized and unrealized gains and losses were de minimis for the three and nine months ended September 30, 2026 and 2025.

•Blending program obligations represent our liability for the purchase of compliance credits needed to satisfy our blending obligations under various government and regulatory blending programs, such as the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard (LCFS), Canada Clean Fuel Regulations, U.K. Renewable Transport Fuel Obligation, and similar programs in other jurisdictions in which we operate (collectively, the Renewable and Low-Carbon Fuel Programs). The blending program obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based on quoted prices from an independent pricing service.

•Foreign currency contracts consist of foreign currency exchange and purchase contracts related to our foreign operations to manage our exposure to exchange rate fluctuations on transactions denominated in currencies other than the local (functional) currencies of our operations. These contracts are measured at fair value using a market approach based on quoted foreign currency exchange rates and are categorized in Level 1 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

There wereno assets or liabilities that were measured at fair value on a nonrecurring basis as of September 30, 2026 and December 31, 2025.

Financial Instruments

Our financial instruments include cash and cash equivalents, restricted cash, receivables, investments of certain benefit plans, investments in AFS debt securities, payables, debt obligations, operating and finance lease obligations, commodity derivative contracts, and foreign currency contracts. The estimated fair values of cash and cash equivalents, restricted cash, receivables, payables, and operating and finance lease obligations approximate their carrying amounts; the carrying value and fair value of debt are shown in the table below (in millions).

Investments of certain benefit plans, investments in AFS debt securities, commodity derivative contracts, and foreign currency contracts are recognized at their fair values as shown in “Recurring Fair Value Measurements” above.

13. PRICE RISK MANAGEMENT ACTIVITIES

General

We are exposed to market risks primarily related to the volatility in the price of commodities, the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs, and foreign currency exchange rates. We enter into derivative instruments to manage some of these risks, including derivative instruments related to the various commodities we purchase or produce, and foreign currency exchange and purchase contracts, as described below under “Risk Management Activities by Type of Risk.” These derivative instruments are recorded as either assets or liabilities measured at their fair values (see Note 12), as summarized below under “Fair Values of Derivative Instruments.” The effect of these derivative instruments on our income and other comprehensive income (loss) is summarized below under “Effect of Derivative Instruments on Income and Other Comprehensive Income (Loss).”

Risk Management Activities by Type of Risk

Commodity Price Risk

We are exposed to market risks related to the volatility in the price of feedstocks (primarily crude oil, waste and renewable feedstocks, and corn); the products we produce; and natural gas and electricity used in our operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, such as futures and options. Our positions in commodity derivative instruments are monitored and managed on a daily basis by our risk control group to ensure compliance with our stated risk management policy that is periodically reviewed with our Board and/or relevant Board committee.

We primarily use commodity derivative instruments that are either designated as cash flow hedges or entered into for economic hedging purposes. While both types of derivatives are used to manage exposure to commodity price risk, they differ in their risk management focus and accounting treatment, as described below.

•Cash flow hedges– Cash flow hedges are derivative instruments that are formally designated and qualify for hedge accounting. The objective of these hedges is to reduce variability in cash flows by locking in the price of forecasted purchases and/or product sales at market prices.

•Economic hedges – Economic hedges are derivative instruments that are not designated as hedging instruments for accounting purposes. These derivatives are primarily used to manage exposure to commodity price volatility associated with certain feedstock and product inventories and, in some cases, forecasted purchases and/or product sales. Although economic hedges may achieve similar economic risk management objectives as cash flow hedges, changes in their fair value are recognized currently in our statements of income.

As of September 30, 2026, we had the following outstanding commodity derivative instruments that were used as cash flow hedges and economic hedges, as well as commodity derivative instruments related to the physical purchase of corn at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels, except corn contracts that are presented in thousands of bushels).

Renewable and Low-Carbon Fuel Programs Price Risk

We are exposed to market risk related to the volatility in the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. To manage this risk, we enter into contracts to purchase these credits. Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values. The Renewable and Low-Carbon Fuel Programs require us to blend a certain volume of renewable and low-carbon fuels into the petroleum- based transportation fuels we produce in, or import into, the respective jurisdiction to be consumed therein based on annual quotas. To the degree we are unable to blend at the required quotas, we must purchase compliance credits (primarily Renewable Identification Numbers (RINs)). The cost of meeting our credit obligations under the Renewable and Low-Carbon Fuel Programs was $658 million and $431 million for the three months ended September 30, 2026 and 2025, respectively, and $2.0 billion and $1.2 billion for the nine months ended September 30, 2026 and 2025, respectively. These amounts are reflected in cost of materials and other.

Foreign Currency Risk

We are exposed to exchange rate fluctuations on transactions related to our foreign operations that are denominated in currencies other than the local (functional) currencies of our operations. To manage our exposure to these exchange rate fluctuations, we often use foreign currency contracts. These contracts are not designated as hedging instruments for accounting purposes and therefore are classified as economic hedges. As of September 30, 2026, we had foreign currency contracts to purchase $675 million of U.S. dollars. These commitments matured on or before October 27, 2026.

Fair Values of Derivative Instruments

The following table provides information about the fair values of our derivative instruments as of September 30, 2026 and December 31, 2025 (in millions) and the line items in our balance sheets in which the fair values are reflected. See Note 12 for additional information related to the fair values of our derivative instruments.

As indicated in Note 12, we net fair value amounts recognized for multiple similar derivative contracts executed with the same counterparty under master netting arrangements, including cash collateral assets and obligations. The following table, however, is presented on a gross asset and gross liability basis, which results in the reflection of certain assets in liability accounts and certain liabilities in asset accounts:

Market Risk

Our price risk management activities involve the receipt or payment of fixed price commitments into the future. These transactions give rise to market risk, which is the risk that future changes in market conditions may make an instrument less valuable. We closely monitor and manage our exposure to market risk on a daily basis in accordance with policies that are periodically reviewed with our Board and/or relevant Board committee. Market risks are monitored by our risk control group to ensure compliance with our stated risk management policy. We do not require any collateral or other security to support derivative instruments into which we enter. We also do not have any derivative instruments that require us to maintain a minimum investment-grade credit rating.

Effect of Derivative Instruments on Income and Other Comprehensive Income (Loss)

The following table provides information about the loss recognized in income and other comprehensive income (loss) due to fair value adjustments of our cash flow hedges (in millions):

For cash flow hedges, no component of any derivative instrument’s gain or loss was excluded from the assessment of hedge effectiveness for the three and nine months ended September 30, 2026 and 2025. For the three and nine months ended September 30, 2026 and 2025, cash flow hedges related to forecasted sales of renewable diesel and neat SAF. As of September 30, 2026, the estimated deferred after-tax loss that is expected to be reclassified into revenues within the next 12 months was not material. The changes in accumulated other comprehensive loss by component, net of tax, for the three and nine months ended September 30, 2026 and 2025 are described in Note 6.

The following table provides information about the gain (loss) recognized in income on our derivative instruments with respect to our economic hedges and our foreign currency hedges and the line items in our statements of income in which such gains (losses) are reflected (in millions):