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What changed in Valero Energy's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Valero Energy's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+343 added−327 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Valero Energy's 2025 10-K

343 paragraphs added · 327 removed · 249 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

115 edited+45 added−49 removed35 unchanged
Biggest changeWe have operations, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in any of these markets, including due to actual or alleged violations of law; expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; differential treatment of state-owned entities; property disputes; economic instability; currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar; restrictions on the transfer of funds; duties and tariffs; fees; taxes or penalties; transportation delays; import and export controls; labor unrest; security issues; government decisions, orders, mandates, investigations, regulations, and issuances or revocations of permits and authorizations; the effects of military conflicts; and changing regulatory, judicial, and political environments, including changes impacting foreign trade and related matters.
Biggest changeWe have operations and business activities, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in or otherwise affecting any of these markets, including due to actual or alleged violations of laws or regulations (such as anti-bribery, anti-corruption, anti-money laundering, and foreign corrupt practices violations); expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; differential treatment or goals of state-owned entities; property disputes; economic or political instability; currency exchange rates; restrictions on the transfer of funds; tariffs, duties, and sanctions; fees; taxes or penalties; transportation delays; import and export controls; price controls; labor unrest; security issues; government decisions (including designations with respect to terrorist organizations), orders, mandates, investigations, regulations, and issuances or revocations of permits and authorizations; global geopolitical and other conflicts and tensions; changing regulatory, judicial, and political environments (such as recent changes in Mexico’s federal judiciary, hydrocarbon laws and regulations, and procedures for challenging tax authority rulings); developments with respect to policies, standards, and incentives impacting low-carbon fuels; and other developments impacting foreign trade and related matters (including any de-globalized supply chains or the diversification of historic trade patterns).
Such liabilities and costs could materially and adversely affect our business, financial condition, results of operations, and liquidity. We are subject to risks arising from litigation, government action, and mandatory disclosure rules related to climate-related and other sustainability-related matters, or aimed at the fossil fuel industry. We could face increased climate‐related litigation with respect to our operations, disclosures, or products.
Such liabilities and costs could materially and adversely affect our business, financial condition, results of operations, and liquidity. We are subject to risks arising from litigation, government action, and mandatory disclosure rules related to climate- and other sustainability-related matters, or aimed at the fossil fuel industry. We could face increased climate‐related litigation with respect to our operations, disclosures, or products.
These factors could adversely impact and limit our ability to obtain favorable credit and financing, raise our cost of capital, or require us to provide collateral or other forms of security, which would increase our costs and restrict operational and financial flexibility.
These factors could adversely impact and limit our ability to obtain favorable credit and financing, raise our cost of capital, or require us to provide collateral or other forms of security, which would increase our costs and restrict our operational and financial flexibility.
Governments and private parties are also increasingly filing lawsuits or initiating regulatory action based on allegations that certain public statements and disclosures by companies regarding climate-related matters and other sustainability-related matters are false or misleading “greenwashing” that violate deceptive trade practices, consumer protection statutes, or other similar laws and regulations, or are fraudulent or misleading under applicable corporate or securities laws and regulations.
Governments and private parties are also increasingly filing lawsuits or initiating regulatory action based on allegations that certain public statements and disclosures by companies regarding climate- and other sustainability-related matters are false or misleading “greenwashing” that violate deceptive trade practices, consumer protection statutes, or other similar laws and regulations, or are fraudulent or misleading under certain corporate or securities laws and regulations.
Increased risks of such attacks and disruptions also exist because of global geopolitical and other conflicts and tensions. A breach may also result in legal claims or proceedings against us by our stockholders, employees, customers, vendors, and government authorities.
Increased risks of such attacks and disruptions also exist because of global geopolitical and other conflicts and tensions. A breach may also result in legal claims or proceedings against us by our stockholders, employees, customers, vendors, suppliers, and government authorities.
Unstable or illiquid market conditions and periods of prolonged high interest rates could also negatively impact our pension plans’ assets and funding requirements. From time to time, we may also need to supplement our cash generated from operations with proceeds from financing activities or obtain letters of credit in certain commercial transactions.
Unstable or illiquid financial market conditions and periods of prolonged high interest rates could also negatively impact our pension plans’ assets and funding requirements. From time to time, we may also need to supplement our cash generated from operations with proceeds from financing activities or obtain letters of credit in certain transactions.
If the ability of the logistics assets used to transport our feedstocks or products is disrupted, or there are increased prices or costs with respect thereto, whether because of labor issues, weather events, dock availability, water levels of key waterways for trade, pipeline, rail, trucking, or maritime disruptions, cybersecurity incidents, accidents, derailments, collisions, fires, explosions, natural catastrophes, spills, public health crises, terrorism, hostilities, rate increases, or other government or third-party actions (including protests and human error), it could have a material adverse effect on our business, financial condition, results of operations, and liquidity.
If the ability of the logistics assets used to transport our feedstocks or products is disrupted, or there are increased prices or costs with respect thereto, whether because of labor issues; weather events; dock or port availability; water levels of key waterways for trade; pipeline, rail, trucking, or maritime disruptions; cybersecurity incidents; accidents; derailments; collisions; fires; explosions; natural catastrophes; spills; public health crises; terrorism; hostilities; rate increases; or other government or third-party actions (including protests and human error), 20 Table of Contents it could have a material adverse effect on our business, financial condition, results of operations, and liquidity.
New developments may alter consumer fuel or energy preferences or make alternative fuel vehicles more affordable or desirable, including improvements in battery and storage technology, increases in driving ranges, increased availability of charging stations and other infrastructure, expanded and more reliable supply chains, improvements in hydrogen fuel cell technology, and other technological changes.
New developments may alter consumer fuel or energy preferences or make alternative fuel vehicles more affordable or desirable, including improvements in battery and storage technology, increases in driving ranges, increased availability of charging stations and other infrastructure, expanded and more reliable supply chains, autonomous driving capabilities, improvements in hydrogen fuel cell technology, and other technological changes.
Because environmental, health, and safety laws and regulations have become more complex and stringent and new or revised laws and regulations are continuously being enacted or proposed, and are being interpreted and applied in new and controversial ways, the level of costs required for such matters has increased and may continue to increase.
Because environmental, health, and safety laws and regulations have become more complex and stringent and new or revised laws and regulations are continuously being enacted or proposed, and are being interpreted and applied in evolving ways, the level of costs required for such matters has increased and may continue to increase.
Although several refinery closures have recently been announced and others are expected in the future, there have also been recent additions to global refining capacity, which create risks and uncertainties related to product margins, volatility, and market perceptions of the refining industry.
Although several refinery closures have recently been announced or are in process and others are expected in the future, there have also been recent additions to global refining capacity, which create risks and uncertainties related to product margins, volatility, and market perceptions of the refining industry.
Growing electrification and rapidly developing and increasing technology use (such as artificial intelligence (AI), computer processing, cryptocurrency mining, and cloud storage, and the data centers and power supplies required to support these activities) will also likely increase the intermittency and decrease the reliability of electricity supplies, particularly for grids highly dependent upon wind and solar power, which would exacerbate the foregoing challenges, including increasing costs.
Growing electrification and rapidly developing and increasing technology use (such as artificial intelligence (AI), computer processing, cryptocurrency mining, and cloud storage, as well as the data centers and power supplies required to support these activities) will also likely increase the intermittency and decrease the reliability of electricity supplies, particularly for grids highly dependent upon wind and solar power, which exacerbate the foregoing challenges, including by increasing costs.
Emissions Trading Scheme, the Renewable and Low-Carbon Fuel Programs, the South Coast Air Quality Management District’s Rule 1109.1 – Emissions of Oxides of Nitrogen from Petroleum Refineries and Related Operations, CARB’s Control Measure for Ocean-Going Vessels At Berth Rule and its Airborne Toxic Control Measure for Commercial Harbor Craft, reductions in the National Ambient Air Quality Standards, bans or restrictions on certain chemicals, feedstocks, products, or processes (such as hydrofluoric acid alkylation), and other laws related to climate, GHG emissions, or environmental, health, or safety matters, have in certain instances resulted in, and are expected to continue to result in, increased costs and capital expenditures that impact our ability to effectively and profitably operate and maintain our facilities.
Emissions Trading Scheme; the Renewable and Low-Carbon Fuel Programs; the South Coast Air Quality Management District’s Rule 1109.1 – Emissions of Oxides of Nitrogen from Petroleum Refineries and Related Operations; CARB’s Control Measure for Ocean-Going Vessels At Berth Rule and its Airborne Toxic Control Measure for Commercial Harbor Craft; reductions in the National Ambient Air Quality Standards; bans or restrictions on certain chemicals, feedstocks, products, or processes (such as hydrofluoric acid alkylation); and other laws and regulations concerning climate- and environmental-related matters (including GHG emissions), as well as health- and safety-related matters (such as industrial safety ordinances), have in certain instances resulted in, and are expected to continue to result in, increased costs and capital expenditures that impact our ability to effectively and profitably operate and maintain our facilities.
The U.S. federal government under the current presidential administration has also implemented and indicated the potential for new or revised tariffs, duties, sanctions, and other actions with respect to U.S. and foreign trade, manufacturing, and investment, and some foreign governments have in turn implemented or indicated the potential for similar responses impacting U.S. goods and/or foreign operations and businesses dealings of U.S. companies.
The U.S. federal government under the current administration has also implemented and indicated the potential for new or revised tariffs, duties, sanctions, and other actions with respect to U.S. and foreign trade, manufacturing, and investment, and some foreign governments have in turn implemented or indicated the potential for similar responses impacting U.S. goods and/or foreign operations and business dealings of U.S. companies.
Federal Trade Commission has adopted rules requiring the reporting of certain data breaches. As the implementation, interpretation, and enforcement of such laws continues to progress and evolve, there may also be developments that amplify such risks. Any failure by us to comply with these laws and regulations could expose us to litigation and regulatory enforcement.
The U.S. Federal Trade Commission has also adopted rules requiring the reporting of certain data breaches. As the implementation, interpretation, and enforcement of such laws continues to progress and evolve, there may also be developments that amplify such risks. Any failure by us to comply with these laws and regulations could expose us to litigation and enforcement.
Such competitors are at times able to offset or avoid losses or decreased profitability from downstream operations generally, or in challenging regions, with such other operations, and may be better positioned to withstand periods of depressed product margins or feedstock disruptions.
Such competitors are at times able to offset or avoid losses or decreased profitability from downstream operations, or in challenging regions, with such other operations, and may be better positioned to withstand periods of reduced product margins or feedstock disruptions.
These legal, regulatory, and political developments, as well as other similarly focused laws and regulations, such as, among others, the California, Quebec and other cap-and-trade programs, the U.K.
These legal, regulatory, and political developments, as well as other similarly focused laws and regulations, such as the California, Quebec and other cap-and-trade programs; the U.K.
A reduction in the demand for our products could result from events and trends such as increases in fuel efficiency, decreases in travel or fuel consumption levels, and a transition by consumers to alternative fuel vehicles, such as electric vehicles (EVs) and hybrid vehicles, in each case, whether as a result of government mandates or incentives, industry developments, societal changes, or sentiment or perception with respect to our products, or fossil fuels and GHG emissions generally.
A reduction in the demand for our products could result from events and trends such as increases in fuel efficiency, decreases in travel or fuel consumption levels, and a transition by consumers to alternative fuel vehicles, such as electric vehicles and hybrid vehicles, in each case, whether as a result of government mandates, incentives, or actions (including foreign dumping), industry developments, societal changes, or sentiment or perception with respect to our products, or fossil fuels and GHG emissions generally.
Additionally, U.S. federal and many state regulatory agencies have become increasingly aggressive in the scope and frequency of, and the magnitude and type of the relief sought by, the enforcement and investigative actions they have pursued under applicable environmental, hea lth, and safety laws and regulations, particularly with respect to fossil fuel companies. This has been particularly acute in California.
Additionally, many U.S. state and local regulatory agencies have been aggressive in the scope and frequency of, and the magnitude and type of the relief sought by, the enforcement and investigative actions they have pursued under applicable environmental, hea lth, and safety laws and regulations, particularly with respect to fossil fuel companies. This has been especially acute in California.
Any such developments could increase consumer acceptance and result in greater market penetration of alternative fuel vehicles or otherwise decrease the demand for our products.
Any such developments could increase consumer acceptance and result in greater 22 Table of Contents market penetration of alternative fuel vehicles or otherwise decrease the demand for our products.
Some of our competitors also have materially greater financial and other resources than we have and may have a greater ability to bear the economic risks inherent to our industry. We are subject to risks arising from an interruption in any of our refineries or plants.
Some of our competitors also have materially greater financial and other resources than we have and may have a greater ability to respond to the inherent volatility of our industry. We are subject to risks arising from an interruption in any of our refineries or plants.
However, as our business, strategy, low-carbon projects, market and financial conditions, and/or applicable methodologies, standards, or requirements continue to develop and evolve, we may significantly revise or cease reporting or using certain such disclosures and methodologies if we determine that they are no longer advisable or appropriate, or we are otherwise required to do so.
However, as our business, strategy, low-carbon projects, market and financial conditions, and/or applicable methodologies, standards, or requirements continue to develop and evolve, we may revise or cease reporting or using any or all such disclosures and methodologies if we determine that they are no longer appropriate, or we are otherwise required to do so.
These matters present a high degree of uncertainty regarding the extent to which fossil fuel companies face an increased risk of liability and reputational damage stemming from alleged climate-related and other sustainability-related matters.
These matters present a high degree of uncertainty, including due to legal viability, regarding the extent to which fossil fuel companies face an increased risk of liability and reputational damage stemming from alleged climate- and other sustainability-related matters.
The compliant processing of this data domestically and transferring of this data across international borders continues to increase in complexity, which has, and will likely continue, to impose increased strains on company resources for compliance functions related thereto.
The compliant processing of this data domestically and transferring of this data across international borders continue to increase in complexity, which has, and will likely continue, to impose increased efforts and costs on company resources for compliance functions related thereto.
Our operations could also be subject to significant interruption if any of our refineries or plants were to experience a major accident or mechanical failure, be damaged by severe weather or natural disasters (such as hurricanes), or man-made disruptions (such as cybersecurity incidents, terrorism, protests, or human error), or otherwise be forced to shut down or curtail operations.
Our operations could also be subject to significant interruption if any of our refineries or plants were to experience a major accident or mechanical failure; be damaged by severe weather and natural disasters/acts of nature (such as hurricanes, winter storms, and earthquakes); or man-made disruptions (such as cybersecurity incidents, terrorism, protests, or human error); or otherwise be forced to shut down or curtail operations.
Our financial results are affected by the relationship, or margin, between our product prices and the prices for crude oil, corn, and other feedstocks that we purchase, which can vary based on global and regional market conditions, as well as by type and class of product or feedstock.
Our financial results are affected by the margin (i.e., the difference) between our product prices and the prices for crude oil, corn, and other feedstocks that we purchase, which can vary greatly based on global and regional market conditions, as well as by type and class of product or feedstock.
For example, in September 2022, California adopted the Oil Refinery Cost Disclosure Act (SB 1322), which requires refineries in California to report monthly on the volume and cost of the crude oil they buy, the quantity and price of the wholesale gasoline they sell, and the gross gasoline margin per barrel, among other information.
For example, California’s Oil Refinery Cost Disclosure Act (SB 1322) requires refineries in California to report monthly on the volume and cost of the crude oil they buy, the quantity and price of the wholesale gasoline they sell, and the gross gasoline margin per barrel, among other information.
Our refineries, DGD Plants, and ethanol plants are our principal operating assets and are subject to planned and unplanned downtime and interruptions.
Our refineries and plants are our principal operating assets and are subject to planned and unplanned downtime and interruptions.
Despite our efforts to maintain safe and environmentally responsible operations, in certain instances we have faced, and may continue to face, changing regulatory interpretations, fines or penalties, and liability for personal injury, property, and natural resource damage, environmental justice impacts, and assessment and remediation costs due to actual or alleged emissions, pollution, discharges, and/or contamination.
Despite our efforts to maintain safe and environmentally responsible operations, in certain instances we have faced, and may continue to face, changing regulatory interpretations, costs, and liability for personal injury, property, and natural resource damage; community impacts; and assessment and remediation costs due to actual or alleged noncompliance, emissions, pollution, discharges, and/or contamination.
The methodologies, standards, and requirements for tracking and reporting GHG emissions and other sustainability-related matters have not been standardized or harmonized, and many continue to evolve. Our interpretations of various voluntary or required reporting standards may also differ from those of others.
The methodologies, standards, and requirements for tracking and reporting many climate- and other sustainability-related matters, such as GHG emissions, have not been standardized or harmonized, and many continue to evolve. Our interpretations of various reporting standards may also differ from those of others.
However, such events could adversely restrict or affect our refining and marketing operations and limit our profitability; cause us to make changes with respect to our business plan, strategy, operations, and assets, including our current financial and accounting estimates and assumptions; cause a reduction in demand for our products; and result in negative publicity, litigation, and regulatory enforcement; each of which could materially and adversely affect our business, financial condition, results of operations, and liquidity.
However, such events could adversely restrict or affect our refining and marketing operations and limit our profitability; cause us to make changes to our business, strategy, operations, and assets, as well as our current financial and accounting estimates and assumptions; cause a reduction in demand for our products; and result in negative publicity, litigation, and enforcement, each of which could materially and adversely affect our business, financial condition, results of operations, and liquidity.
Although the risks are organized by headings and each risk is discussed separately, many are interrelated. Risks Related to Our Business, Industry, and Operations Our financial results are affected by volatile margins, which are dependent upon factors beyond our control, including the price of feedstocks and the market price at which we can sell our products.
Although the risks are organized by headings and each risk is discussed separately, many are interrelated. BUSINESS, INDUSTRY, AND OPERATIONS RISKS Our financial results are affected by volatile margins, which are dependent upon factors beyond our control, including the prices we pay to acquire feedstocks and the market prices at which we can sell our products.
The continuing and evolving threat of cybersecurity incidents (including through AI) has resulted in increased regulatory focus on prevention and disclosure, such as the directive issued by the U.S. Transportation Security Administration following the Colonial Pipeline cybersecurity incident, the obligations imposed by the U.S.
The continuing and evolving threat of cybersecurity incidents (including through AI) has resulted in increased regulatory focus on prevention and disclosure, such as the directive issued by the U.S. Transportation Security Administration following the Colonial Pipeline cybersecurity incident, the obligations imposed by the U.S. Cyber Incident Reporting for Critical Infrastructure Act .
These include things such as (i) restrictions on certain refinery operations, (ii) and requirements to modify our operations or install new emissions controls or other equipment, and (iii) costs to administer our obligations under the Renewable and Low-Carbon Fuel Programs.
These include things such as (i) restrictions on certain refinery operations, (ii) requirements to modify our operations or install new emissions controls or other equipment, and (iii) costs to administer our obligations under the Renewable and Low-Carbon Fuel Programs. Such risks remain particularly acute in California.
In turn, the demand for and consumption of our products, and also our revenues, margins, growth prospects, and capital allocation decisions have been and could again be negatively impacted. 17 Ta ble o f Conten t s A significant portion of our profitability is derived from the ability to purchase and process crude oil feedstocks that historically have been cheaper than benchmark crude oils.
In turn, the demand for and consumption of our products, and also our revenues, margins, growth prospects, and capital allocation decisions have been and could again be negatively impacted. A significant portion of our profitability is derived from the ability to purchase and process crude oil feedstocks that historically have been cheaper than benchmark crude oils.
These attacks could also result in (i) a loss of intellectual property, proprietary information, or employee, customer, supplier, or vendor data, (ii) public disclosure of sensitive information, (iii) systems interruption, (iv) disruption of our business operations, (v) remediation 29 Ta ble o f Conten t s costs and repairs of system damage, (vi) reputational damage that adversely affects customer, supplier, or investor confidence, and (vii) damage to our business and competitiveness.
These attacks could also result in (i) a loss of intellectual property, proprietary information, or employee, customer, vendor, or supplier data; (ii) public disclosure of sensitive information; (iii) systems interruption; (iv) disruption of our business operations; (v) remediation costs and repairs of system damage; (vi) reputational damage that adversely affects 29 Table of Contents customer, supplier, or investor confidence; and (vii) damage to our business and competitiveness.
Factors outside of our control, such as economic, legal, regulatory, and political uncertainties, global geopolitical and other conflicts and tensions, inflation (and the potential for increased prices to reduce demand), prolonged periods of high interest rates, and public health crises (such as the COVID-19 pandemic) have negatively affected, and many such factors could continue to negatively affect, economic activity and growth levels of the U.S. and other countries.
Factors outside of our control, such as economic, legal, regulatory, and political uncertainties; global geopolitical and other conflicts and tensions; inflation (and the potential for increased prices to reduce demand); prolonged periods of high interest rates; and public health crises (such as pandemics or epidemics) have negatively affected, and many such factors could continue to negatively affect, economic activity and growth levels of the U.S. 17 Table of Contents and other countries.
Data Protection Act 2018, Quebec’s Bill 64, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and various other comprehensive privacy laws passed by other U.S. states. We also operate in other jurisdictions (such as Mexico and Peru) that have issued, or are considering issuing, data privacy laws and regulations. Additionally, the U.S.
Data Protection Act 2018, Quebec’s Bill 64, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and various other comprehensive privacy laws passed by other U.S. states. We also operate in other jurisdictions with comprehensive data privacy laws and regulations (such as Mexico and Peru), and other jurisdictions are considering issuing similar laws and regulations.
Our efforts to comply with these and other requests and regulations impose a strain on company resources and expose us to risk by requiring disclosure of information that (i) may be protected trade secrets and/or competitively sensitive information, (ii) exposes us to litigation and regulatory actions and investigations, (iii) is inconsistent with other government regulations or our current practices that may utilize different methodologies or standards, (iv) is subject to many assumptions and inherent calculation difficulties, such as accuracy, completeness, and dependence on third parties, and (v) may be perceived in ways that adversely impact our business relationships, credibility, and reputation.
Our efforts to comply with these laws, regulations, and requests impose a strain on company resources and expose us to risk by requiring disclosure of information that (i) may be protected trade secrets and/or competitively sensitive; (ii) exposes us to litigation and enforcement; (iii) may be inconsistent with other standards or requirements that are subject to ongoing change and uncertainty, or our current practices that may utilize different methodologies or standards; (iv) is subject to many assumptions and inherent calculation difficulties, such as accuracy, completeness, and dependence on third parties; (v) may be perceived in ways that adversely impact our business relationships, credibility, and reputation; and (vi) may be infeasible to obtain or report.
To the extent we are in negotiations for labor agreements at any time, there is no assurance an agreement will be reached without a strike, work stoppage, or other labor action, and such actions have occurred for certain periods in the past.
To the extent we are in negotiations for labor agreements at any time, there is no assurance an agreement will be reached without a strike, lockout, work stoppage, or other labor action or disruption, and such events have occurred for certain periods in the past, and may occur again in the future.
We are subject to risks related to the costs and availability of our feedstocks and other critical supplies. We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables from suppliers throughout the world.
The availability and prices of our feedstocks and other critical supplies expose us to risks. We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables, from suppliers throughout the world.
We engage in capital and other strategic projects based on many factors, including the forecasted project economics, legal, regulatory, and political environments, and the expected return on the capital to be deployed.
We engage in capital and other strategic projects based on many factors, including the forecasted project economics; legal, regulatory, and political environments; the expected return on the capital to be deployed; and the anticipated impact to our future cash flows.
Such changes or developments could also negatively impact our low-carbon projects. Other applicable environmental, health, and safety laws and regulations expose us to various risks.
Such changes or developments could also negatively impact our low-carbon projects. Certain such events have occurred and may continue. Applicable environmental, health, and safety laws and regulations expose us to various other risks.
We have been named as a co-defendant in a lawsuit in state court by a county in Oregon seeking significant damages and abatement under various tort theories (including deceptive disclosures). We intend to vigorously defend against the allegations.
We have been named as a co-defendant in a lawsuit in state court by a county in Oregon seeking significant damages and abatement under various tort theories (including deceptive disclosures).
Crop production is also affected by government policies (such as farming subsidies and low-carbon fuels incentives) and by market events (such as changes in fertilizer prices and rail disruptions).
Crop production is also affected by government policies (such as farming subsidies and the Renewable and Low-Carbon Fuel Programs), and market events (such as changes in fertilizer prices and rail disruptions).
We are exposed to the volatility in the market price of RINs, LCFS credits, and other credits, as described in Note 20 of Notes to Consolidated Financial Statements. We cannot predict the future prices of RINs, LCFS credits, or other credits.
We are also exposed to the volatility in the market price of RINs, LCFS credits, and other credits, as described in Note 20 of Notes to Consolidated Financial Statements.
Uncertainty and illiquidity in financial markets and periods of prolonged high interest rates could have an adverse impact on the costs or availability of the financial and commercial arrangements provided by such parties, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. We are subject to risks arising from severe weather events.
Uncertainty and illiquidity in financial markets and periods of prolonged high interest rates could have an adverse impact on the costs or availability of the financial and commercial arrangements provided by such parties, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity.
If we are unable to obtain adequate or optimal volumes, or are able to obtain such volumes only at increased prices or costs, our business, financial condition, results of operations, and liquidity could be materially and adversely affected, including from reduced product sales volumes or higher operating costs.
If we are unable to obtain adequate or optimal supplies, or are able to do so only at unfavorable prices or costs, our business, financial condition, results of operations, and liquidity could be materially and adversely affected, including from reduced product sales volumes, curtailed production, lower product margins, and higher operating costs.
In addition, the cost and availability of debt and equity financing or commercial arrangements may be adversely impacted by prolonged periods of high interest 30 Ta ble o f Conten t s rates, inflation, unstable or illiquid market conditions, or adverse changes in our credit profile or to our credit ratings.
In addition, the cost and availability of debt and equity 30 Table of Contents financing or commercial arrangements may be adversely impacted by prolonged periods of high interest rates, inflation, unstable or illiquid financial market conditions, or adverse changes in our credit profile or to our credit ratings.
We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels. As described under “ITEMS 1. and 2.
See also Note 2 of Notes to Consolidated Financial Statements. We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels. As described under “ITEMS 1. and 2.
We are also exposed to potential liability and costs related to regulated chemicals and other regulat ed materials, such as various perfluorinated compounds, per- and polyfluoroalkyl substances, benzene, MTBE, and petroleum hydrocarbons, at or from our current and formerly owned facilities, and new or additional regulations with respect to certain such materials have recently been adopted by the EPA and certain U.S. states, and other regulations may arise in the near 27 Ta ble o f Conten t s future.
We are also exposed to potential liability and costs related to regulated chemicals and other regulat ed materials, such as various perfluorinated compounds, per- and polyfluoroalkyl substances, benzene, and petroleum hydrocarbons, at or from our current and formerly owned facilities, and new regulations with respect to certain such materials have recently been adopted or proposed by the EPA and certain U.S. states, and other laws and regulations may continue to arise.
U.S. and other government sanctions and actions by governments and private market participants to refrain from purchasing or transporting crude oil and petroleum-based products from particular countries have impacted, and may continue to impact, trade flows, and our access to business opportunities in various countries.
U.S. and other government sanctions and actions by governments and private parties to refrain from purchasing or transporting crude oil and petroleum-based products from particular countries (such as Russia and Iran) have impacted, and may continue to impact, trade flows and our access to certain business opportunities.
Additionally, the availability and cost of natural gas and electricity have been, and could continue to be, affected by numerous events, such as government regulations, rate increases, weather (e.g., hurricanes and periods of extreme heat or cold), logistics interruptions, electric grid outages, cybersecurity incidents, intermittent electricity generation (particularly from wind and solar), hostilities, terrorism, protests, sanctions, human error, and supply and demand imbalances for natural gas and electricity.
The availability and prices of natural gas, electricity, and water have been, and could continue to be, affected by numerous events, such as (as applicable) government regulations or actions (including sanctions); rationing and curtailment; rate increases; weather (e.g., droughts, hurricanes, and periods of extreme heat or cold); logistics interruptions; electric grid outages; cybersecurity incidents; intermittent electricity generation (particularly from wind and solar); hostilities; terrorism; protests; human error; population and industry growth; infrastructure or supply mismanagement; and supply and demand imbalances.
Regarding low-carbon fuels margins, see also, among other risk factors set forth below, “ We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels .” Some of these factors can vary globally or regionally and may change quickly, adding to market volatility, while others may have longer-term effects.
Regarding low-carbon fuels margins, see also, among other risk factors set forth below, “ The availability and prices of our feedstocks and other critical supplies expose us to risks, ” and “ We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels. ” Many of these factors are interrelated, beyond our control, can vary globally and regionally, and may change quickly, adding to market volatility, while others may have longer-term effects that are uncertain.
Although we implement internal controls on the connectivity of third parties to our systems that attempt to prevent or mitigate the impact from incidents affecting third-party systems, we have limited control over ensuring that third parties themselves are consistently enforcing strong controls over their systems.
Our vendors and suppliers are also increasingly using and offering platforms powered by AI. Although we implement internal controls on the connectivity of third parties to our systems that attempt to prevent or mitigate the impact from incidents affecting third-party systems, we have limited control over ensuring that third parties themselves are consistently enforcing strong controls over their systems.
If the instruments we use to hedge our exposure to various risks are not effective or expose us to other unexpected events, we may incur losses or charges, and we have experienced such events in the past. We also have incurred, and may again incur, additional costs or charges related to changes in applicable regulations on such instruments.
If the instruments we use to hedge our exposure to various risks are not effective or expose us to other unexpected events, we may incur losses or charges, and we have experienced such events in the past.
A breach could also originate from or compromise our customers’, vendors’, suppliers’, or other third-party networks outside of our control that could impact our business and operations, as occurred with the Colonial Pipeline cybersecurity incident in May 2021.
AI may also be leveraged by threat actors to enhance the volume and sophistication of their attacks. A breach could also originate from or compromise our customers’, vendors’, suppliers’, or other third-party networks outside of our control that could impact our business and operations, as occurred with the Colonial Pipeline cybersecurity incident in May 2021.
We do not produce any of our primary feedstocks (except inedible DCOs) and we do not have a company-owned retail network. Some of our competitors, however, obtain a significant portion of their feedstocks from company-owned production, have extensive networks of retail sites, have different revenue streams (such as from chemicals or integrated operations), and operate in different regions.
Some of our competitors, however, obtain a significant portion of their feedstocks from company-owned crude oil production, have extensive networks of retail sites, have different revenue streams (such as from chemicals, midstream, or integrated operations), and operate in different regions.
Our low-carbon fuels businesses could be materially and adversely affected if (i) such regulations, policies, and standards are adversely changed or interpreted, unavailable, or discontinued, including due to adverse changes in the perception of low-carbon fuels, (ii) any of our low-carbon fuels products, or the feedstocks used in their production, do not comply therewith, or would result in reduced benefits or incentives thereunder, or (iii) we are unable to satisfy or maintain the conditions of any approved pathways or certifications thereunder, or under voluntary certifications.
Our low-carbon fuels businesses could be materially and adversely affected if (i) such regulations, policies, and standards are adversely changed or interpreted, unavailable, or discontinued, including due to adverse changes in perceptions or sentiments regarding low-carbon fuels or the feedstocks used to produce them (e.g., “food vs. fuel” and concerns regarding international supply chains perceived as vulnerable to fraud); (ii) any of our low-carbon fuels products, or the feedstocks used in their production, do not comply therewith, or would result in reduced benefits or incentives thereunder, or (iii) we or an entity in our supply chain are unable to satisfy or maintain the conditions of any approved pathways or certifications 26 Table of Contents thereunder, or under voluntary certifications.
As protection against these hazards, we maintain insurance coverage against some, but not all, potential losses and liabilities arising from such hazards, and we have experienced, and may again experience, certain uninsured or self-insured events related thereto.
While we maintain insurance coverage in amounts and types that we believe are prudent, such coverage protects against some, but not all, potential losses and liabilities arising from such hazards and incidents, and we have experienced, and may again experience, certain uninsured or self-insured events related thereto.
Reductions or delays in crop production from these or other events could reduce and disrupt the supply of, or otherwise increase our costs to obtain, corn for our Ethanol segment, and such events have occurred periodically. We are subject to risks arising from our refining and marketing operations outside of the U.S.
Reductions or delays in crop production from these and other events could negatively impact the availability and price of corn for our Ethanol segment, and such events have occurred periodically. We are subject to risks arising from our operations and business activities outside of the U.S.
In addition, challenges to or opposition of fossil fuel infrastructure projects continue to make the approval and completion of such projects more difficult and costly.
In addition, challenges to or opposition of certain fossil fuel and infrastructure projects (including pipelines), as well as certain low-carbon projects (such as carbon sequestration and carbon capture and storage), continue to make the approval and completion of such projects more difficult and costly.
These in turn depend on, among other things, global and regional production levels or capacities of suppliers and competitors, natural gas and electricity availability and costs, economic activity and growth levels (or the lack thereof), U.S. and foreign relations, political affairs, government regulations, and the events described in many of the other risk factors below.
These in turn depend on, among other things, global and regional production levels, or capacities of suppliers and competitors; operational costs and flexibility (including natural gas, electricity, and water availability and costs); transportation and logistics availability and costs; proximity and access to product and feedstock supplies and markets; economic activity and growth levels; U.S. and foreign relations (including tariffs, duties, sanctions, or other trade restrictions); political affairs; government regulations; and the events described in many of the other risk factors below.
Such projects can take many years to complete, during which time such environments or other market conditions may change from our forecast, particularly with respect to low-carbon projects such as those related to SAF and carbon capture and sequestration. Supply chain disruptions may also delay projects or increase the costs associated therewith.
Such projects can take many years to complete, during which time such environments or other market conditions may change from our forecast, as has recently occurred with certain low-carbon projects in our Renewable Diesel segment. Supply chain or other market or economic disruptions (including inflation) may also delay projects or increase the costs associated therewith.
If one or more of our supply contracts were terminated, or if political or other events were to disrupt our traditional feedstock and other critical supplies, we believe that adequate alternative supplies would be available, but it is possible that we would be unable to find adequate or optimal alternative sources of supply.
If one or more of our supply contracts were terminated, or if legal, government, political, or other developments (including global geopolitical and other conflicts and tensions) were to disrupt our traditional feedstock and other critical supplies, we believe that adequate alternative supplies would be available, but it is possible that we would be unable to obtain adequate or optimal alternative sources of supply, or would be able to do so only at unfavorable prices or costs.
The occurrence of any such event could result in the halting, curtailing, or cessation of operations at impacted facilities; commercial restrictions; delay, denial, or cancellation of projects, permits, and authorizations; and increased costs, fines, penalties, and burdens; any of which could result in a material adverse effect on our business, financial condition, results of operations, and liquidity.
Such events could result in the halting, curtailing, or cessation of operations at impacted facilities; commercial restrictions; delay, denial, or cancellation of projects, permits, and authorizations; decreased access to important business foreign opportunities and more unreliable supply chains; and increased costs, liabilities, and burdens; among other adverse impacts, and could result in a material adverse effect on our business, financial condition, results of operations, and liquidity.
Governments and private parties across the world have filed lawsuits or initiated regulatory action against fossil fuel companies. Such lawsuits and actions often allege noncompliance with applicable laws or regulations, or damages they attribute to perceived climate-related matters, and seek damages and/or abatement under various tort and other theories, including under consumer protection, human rights, or constitutional provisions.
Such lawsuits and actions often allege noncompliance with applicable laws or regulations, or personal injury or damages they attribute to perceived climate-related harms, and seek damages and/or abatement under various tort and other theories, including under consumer protection, human rights, or constitutional provisions.
Our cost to acquire feedstocks and the price at which we can ultimately sell products depend upon several factors beyond our control, including global and regional supplies, inventory levels, and availability of and demand for feedstocks (such as crude oil, waste and renewable feedstocks, and corn), liquid transportation fuels (such as gasoline, diesel, renewable diesel, SAF, and ethanol), and other products.
The prices we pay to acquire feedstocks and the market prices at which we can ultimately sell our products depend upon several factors, including global and regional supplies, inventory levels, and availability of and demand for feedstocks, liquid transportation fuels, and other products.
Although we believe we have used reasonable interpretations and assumptions in calculating our tax liabilities, the final determination of these tax audits and any related proceedings cannot be predicted with certainty.
For example, the OBBB contains significant changes to U.S. tax law. Many of these tax liabilities are subject to periodic audits by the respective taxing authorities. Although we believe we have used reasonable interpretations and assumptions in calculating our tax liabilities, the final determination of these tax audits and any related proceedings cannot be predicted with certainty.
It is also possible that future changes to tax laws or tax treaties (including the global minimum tax), or interpretations thereof, could impact our ability to realize the tax savings recorded to date and adversely affect our future effective tax rates. Cybersecurity and Privacy Related Risks We are subject to risks arising from a significant breach of our information systems.
It is also possible that future changes to tax laws or tax treaties (including the global minimum tax), or interpretations thereof, could impact our ability to realize the tax savings recorded to date and adversely affect our future effective tax rates. See also Note 15 of Notes to Consolidated Financial Statements.
While there is currently a lack of certainty around the likelihood, timing, and details of many such actions, similar events have in the past had, and could again have, an adverse effect on our ability to obtain optimal or adequate volumes of feedstocks and other critical supplies at favorable prices and costs.
While there continues to be a lack of certainty around the ongoing likelihood, timing, and details with respect to the continuation or future invalidation, expansion, revision, or implementation of such actions, as well as the impact of litigation and consequent court orders, such actions have in certain instances had, and could again have, an adverse effect on our ability to obtain optimal or adequate volumes of feedstocks and other critical supplies at favorable prices and costs.
We are subject to risks arising from compliance with and changes in tax laws. We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes; indirect taxes (e.g., excise, duty, sales, use, gross receipts, and value-added taxes); and payroll, franchise, withholding, and ad valorem taxes.
We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes; indirect taxes (e.g., excise, duty, sales, use, gross receipts, and value-added taxes); and payroll, franchise, withholding, and ad valorem taxes. New and revised tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future.
The adoption of any “eRIN” program could also increase RIN price volatility and result in other adverse impacts that cannot be fully predicted at this time. 26 Ta ble o f Conten t s The Renewable and Low-Carbon Fuel Programs and the U.S. federal tax incentives related to low-carbon fuels (such as the IRA) are complex, can be subject to interpretative uncertainty, often have different or conflicting requirements or methodologies, and are frequently evolving, requiring us to periodically update our systems and controls for compliance, and imposing strains on company resources.
The Renewable and Low-Carbon Fuel Programs and the U.S. federal tax incentives related to low-carbon fuels (such as the OBBB) are complex, can be subject to interpretative uncertainty, often have different or conflicting requirements or methodologies, and are frequently evolving, requiring us to periodically update our systems and controls for compliance, and imposing strains on company resources.
Such risks are particularly acute in California due to the pace and scope of anti-fossil fuel developments there. 25 Ta ble o f Conten t s Many of these matters and developments (including SBx 1-2 and ABx 2-1) are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, pending or future legal challenges, and potential or future changes in law, regulation, or policy, as noted above, and it is not currently possible to predict the ultimate effects thereof on us.
Many of these matters and developments are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, legal challenges, and changes in law, 24 Table of Contents regulation, or policy, as noted above, and it is not currently possible to predict the ultimate effects thereof on us.
Increased 19 Ta ble o f Conten t s government regulations and opposition to pipeline construction and electricity generation and transmission projects have also resulted in, and could continue to result in, the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to obtain natural gas and electricity in a reliable and cost-efficient manner.
Government and private impediments and opposition to certain infrastructure projects (including pipelines) have also resulted in, and could continue to result in, the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to transport and obtain natural gas, electricity, and water in a reliable and cost-efficient manner.
However, the ultimate outcome and impact to us of such litigation cannot be predicted with certainty at this time, and we could incur substantial legal costs and reputational damage associated with defending such matter, and an adverse ruling could require us to pay significant damages. Similar lawsuits may be filed in other jurisdictions.
While we intend to vigorously defend against the allegations in those pending actions, the ultimate outcomes and impacts to us cannot be predicted with certainty at this time, we could incur substantial legal costs and reputational damage associated with defending such matters, and an adverse ruling could require us to pay significant damages.
We also purchase other commodities whose prices may vary depending on the prices of natural gas or electricity. The volatility of prices for both natural gas and electricity represent an ongoing challenge to our operating results.
We also purchase other commodities whose prices may vary depending on the prices of natural gas, electricity, and water.
If an insufficient number of RINs, LCFS credits, or other credits are available for purchase (or available only at increased prices), or if we are otherwise unable to meet our obligations under the Renewable and Low-Carbon Fuel Programs (for example, if there were to be demand destruction for gasoline, diesel, and renewable fuels resulting from displacement of internal combustion engine vehicles with EVs that results in production falling short of established RVOs, an acceleration of the “blendwall,” or other significant deviations from projected volumes), our business, financial condition, results of operations, and liquidity could be adversely affected.
If an insufficient number of RINs, LCFS credits, or other credits are available for purchase (or available only at unfavorable prices), or if we are otherwise unable to meet our obligations under the Renewable and Low-Carbon Fuel Programs , our business, financial condition, results of operations, and liquidity could be adversely affected.
Prices for RINs, LCFS credits, and other credits are dependent upon a variety of factors, including, as applicable, EPA and U.S. state regulations, regulations of other countries and jurisdictions, the availability of RINs, LCFS credits, and other credits for purchase, transportation fuel production levels (which can vary significantly each quarter), approved CI pathways, and CI scores.
We cannot predict the future prices of such credits, which depend upon numerous factors, including (as applicable) EPA and U.S. state regulations; other U.S. and foreign laws and regulations; the events discussed above with respect to DGD’s foreign feedstock supplies; the availability of such credits for purchase; transportation fuel production levels (which can vary significantly each quarter); approved CI pathways; and CI scores.
General Risk Factors Uncertainty and illiquidity in financial markets, or changes in our credit profile or ratings, can adversely affect our ability to obtain credit and capital, increase our costs, and limit our flexibility. Our ability to obtain credit and capital depends in large measure on capital markets and liquidity factors that we do not control.
Our ability to obtain credit and capital depends in large measure on capital markets and liquidity factors that we do not control.
As a result, our low-carbon fuels businesses have faced, and will likely continue to face, increased competition for feedstocks and customers. While we cannot currently predict the ultimate form, timing, or extent of these developments, any such event could materially and adversely affect our margins and sales volumes, and in turn our business, financial condition, results of operations, and liquidity.
While we cannot currently predict the ultimate form, timing, or extent of these developments, any such event could materially and adversely affect our margins and sales volumes, and in turn our business, financial condition, results of operations, and liquidity. We are subject to risks arising from climate- and other sustainability-related advocacy and pressure.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn 2024, we established a company-wide cross-functional team to preliminarily assess the risks and opportunities from conventional and generative AI and will continue these assessments in 2025. To date, there have been no cybersecurity incidents that have materially affected us, or that are reasonably likely to materially affect us, including our business strategy, financial condition, or results of operations.
Biggest changeWe continued these assessments in 2025 and expect to continue these efforts going forward. To date, there have been no cybersecurity incidents that have materially affected us, or that are reasonably likely to materially affect us, including our business strategy, financial condition, or results of operations. For additional information on the cybersecurity risks we face, see “ITEM 1A.
Typically, we (i) perform periodic tabletop exercises with a company-wide cross-functional team that are facilitated by a third-party expert and are intended to simulate a real-life security incident, (ii) conduct penetration testing as needed and annually conduct Payment Card Industry Data Security Standard testing and firewall reviews, and have periodically engaged a third-party expert to help therewith, (iii) hold annual cybersecurity awareness trainings, and (iv) periodically engage a third-party expert to conduct a review of our information security framework, which is designed to help identify existing and emerging risks, and mitigate against such risks.
Typically, we (i) perform periodic tabletop exercises with a company-wide cross-functional team that are facilitated by a third-party expert and are intended to simulate a real-life security incident, (ii) conduct penetration testing as needed and annually conduct Payment Card Industry Data Security Standard testing and firewall reviews, and have periodically engaged a third-party expert to help therewith, (iii) hold annual cybersecurity awareness trainings, and (iv) periodically engage a third-party expert to conduct a review of our information security framework, which is designed to help identify existing and emerging risks, and mitigate such risks.
Our information security program and framework comprise processes, policies, practices, systems, and technologies that are designed to identify, assess, prioritize, manage, and monitor risks to our information systems, including risks from cybersecurity threats and events and risks associated with the use of third-party service providers.
Our information security program and framework comprise processes, policies, practices, systems, and technologies that are designed to identify, assess, prioritize, manage, and monitor risks to our information systems, including risks from cybersecurity threats and risks associated with the use of third-party service providers.
Our Executive Steering Committee consists of management within our information services, internal audit, refining, renewable diesel, ethanol, legal, and logistics teams, and meets twice per year to review and discuss information security metrics and results of security assessments, among other items.
Our Executive Steering Committee consists of management within our information services, internal audit, refining, renewable diesel, ethanol, legal, and logistics teams, and typically meets twice per year to review and discuss information security metrics and results of security assessments, among other items.
The Infosec Committee reports to our Information Security Oversight Committee (Infosec Oversight Committee) and our Executive Steering Committee on cybersecurity (Executive Steering Committee). Our Infosec Oversight Committee consists of information services, refining, and internal audit personnel and meets quarterly to discuss network threats and the overall security landscape.
The Infosec Committee reports to our Information Security Oversight Committee (Infosec Oversight Committee) and our Executive Steering Committee on cybersecurity (Executive Steering Committee). Our Infosec Oversight Committee consists of information services, refining, and internal audit personnel and typically meets quarterly to discuss network threats and the overall security landscape.
Collectively, the members of our Infosec Committee, Infosec Oversight Committee, and Executive Steering Committee have decades of experience within the information technology industry and/or cybersecurity areas. On a monthly basis, our Vice President-Information Services and Technology provides executive management with an Information Security Scorecard, which includes any cybersecurity events that have occurred.
Collectively, the members of our Infosec Committee, Infosec Oversight Committee, and Executive Steering Committee have decades of experience within the information technology industry and/or cybersecurity areas. On a monthly basis, our Vice President-Information Services and Technology provides executive management with an Information Security Scorecard, which includes any cybersecurity incidents that have occurred.
The IRP includes the following major components: preparation, detection and analysis, containment, eradication, notification, recovery, reporting, and lessons learned. Specific technical and legal playbooks have also been developed for data breaches, malware, unauthorized remote access, and ransomware.
The IRP includes the following major components: preparation, detection and analysis, containment, eradication, notification, recovery, reporting, and lessons learned. Specific technical and legal playbooks have also been developed for data breaches, malware, unauthorized remote access, ransomware, and ransom-related incidents.
Management’s Role in Assessment and Management of Material Risks from Cybersecurity Threats We have an Information Security Committee (Infosec Committee) consisting of refining, renewable diesel, ethanol, logistics, and information services personnel that meets weekly to evaluate third-party exchange of data and collaborate on strategy for dealing with information security risks and other related matters.
Management’s Role in Assessment and Management of Material Risks from Cybersecurity Threats We have an Information Security Committee (Infosec Committee) consisting of refining, renewables, logistics, human resources, and information services personnel that typically meets weekly to evaluate third-party exchange of data and collaborate on strategy for dealing with information security risks and other related matters.
If a cybersecurity incident is declared under the IRP, we will evaluate whether such incident might have a material adverse impact on our business, financial condition, results of operations, or reputation, among other considerations, and communicate that discussion to executive management, who will then determine if escalation to the Board is warranted and if further disclosure is required to the SEC and/or other government agencies. 33 Ta ble o f Conten t s
If a cybersecurity incident is declared under the IRP, we will evaluate whether such incident might have a material adverse impact on our business, financial condition, results of operations, or reputation, among other considerations, and communicate that discussion to executive management, who will then determine if escalation to the Board is warranted and if further disclosure is required to the SEC, other government agencies, and/or other parties. 33 Table of Contents
RISK FACTORS—Cybersecurity and Privacy Related Risks— We are subject to risks arising from a significant breach of our information systems .” 32 Ta ble o f Conten t s GOVERNANCE Our Board’s Role in Cybersecurity Oversight Oversight of risk management, including with respect to risks from cybersecurity threats, is the responsibility of our Board, which exercises its oversight responsibilities both directly and through its committees.
RISK FACTORS—CYBERSECURITY AND PRIVACY RELATED RISKS— We are subject to risks arising from a significant breach of our information systems .” 32 Table of Contents GOVERNANCE Our Board’s Role in Cybersecurity Oversight Oversight of risk management, including with respect to risks from cybersecurity threats, is the responsibility of our Board, which exercises its oversight responsibilities both directly and through its committees.
These internal efforts and external third-party reviews also support our efforts to regularly assess our information security program and framework against emerging risks, market and industry developments and provide opportunities to make adjustments or enhancements when deemed prudent or necessary.
These internal efforts and external third-party reviews also support our efforts to regularly assess our information security program and framework against emerging risks, market and industry developments and provide opportunities to make adjustments or enhancements when deemed prudent or necessary. In 2024, we established a company-wide cross-functional team to assess the risks and opportunities from conventional and generative AI.
Removed
For additional information on the cybersecurity risks we face, see “ITEM 1A.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changePursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceeding is required. We believe proceedings less than this threshold are not material to our business and financial condition. Bay Area Air District (BAAD) (formerly known as Bay Area Air Quality Management District) (Benicia Refinery).
Biggest changeThere were no proceedings required to be disclosed in this item under SEC regulations. Pursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. We believe any such proceedings less than this threshold are not material to our business and financial condition.
LEGAL PROCEEDINGS LITIGATION We incorporate by reference into this item our disclosures made in Note 1 of Notes to Consolidated Financial Statements under “Legal Contingencies.” ENVIRONMENTAL ENFORCEMENT MATTERS We are reporting the following proceedings to comply with SEC regulations, which require us to disclose certain information about proceedings arising under federal, state, or local provisions regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment if a governmental authority is a party to such proceeding and we reasonably believe that such proceeding will result in monetary sanctions that exceed a specified threshold.
LEGAL PROCEEDINGS LITIGATION We incorporate by reference into this item our disclosures made in Note 1 of Notes to Consolidated Financial Statements under “Legal Contingencies.” ENVIRONMENTAL ENFORCEMENT MATTERS SEC regulations require us to disclose certain information about proceedings arising under federal, state, or local provisions regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment if a governmental authority is a party to such proceeding and we reasonably believe that such proceeding will result in monetary sanctions that exceed a specified threshold.
Removed
In our annual report on Form 10-K for the year ended December 31, 2023, we reported that (i) we had received a Notice of Violation (NOV) from the BAAD on March 21, 2019 related to atmospheric emissions of hydrogen commingled with non-methane organic compounds at our Benicia Refinery (the 2019 Atmospheric Emissions NOV), (ii) on December 1, 2020, we had received an NOV from the BAAD related to pressure relief devices in the Benicia Refinery’s Hydrogen Unit (the 2020 Pressure Relief Device NOV), and (iii) on June 17, 2021, October 11, 2021, and January 26, 2022, we had received certain other compliance-related NOVs related to the 2019 Atmospheric Emissions NOV and the 2020 Pressure Relief Device NOV.
Removed
We resolved the 2019 Atmospheric Emissions NOV, the 2020 Pressure Relief Device NOV, and the related 2021 and 2022 NOVs discussed above with the BAAD in the fourth quarter of 2024. BAAD (Benicia Refinery).
Removed
In our annual report on Form 10-K for the year ended December 31, 2023, we reported that on May 1, 2023, the BAAD issued a compliance-related NOV to our Benicia Refinery related to a pressure relief device.
Removed
We resolved this NOV in the fourth quarter of 2024, along with the 2019 Atmospheric Emissions NOV and the 2020 Pressure Relief Device NOV discussed above. BAAD (Benicia Refinery).
Removed
In our annual report on Form 10-K for the year ended December 31, 2023, we reported that we were in the process of working with the BAAD to resolve several other NOVs issued by the BAAD to our Benicia Refinery in 2019 and 2020, which primarily relate to various emissions and related compliance issues.
Removed
We continue to work with the BAAD to resolve these matters; however, the 2019 and 2020 NOVs discussed above have now been determined to be below the $1 million materiality threshold. BAAD (Benicia Refinery).
Removed
In our quarterly report on Form 10-Q for the quarter ended June 30, 2024, we reported that on May 29, 2024, we received an NOV from the BAAD related to leak detection and repair violations at our Benicia Refinery.
Removed
We resolved the majority of the violations in this NOV in the fourth quarter of 2024, along with the 2019 Atmospheric Emissions NOV and the 2020 Pressure Relief Device NOV discussed above.
Removed
As a result, this NOV no longer meets the $1 million materiality threshold. 34 Ta ble o f Conten t s Texas Attorney General (Texas AG) (Port Arthur Refinery).
Removed
In our annual report on Form 10-K for the year ended December 31, 2023, we reported that the Texas AG had filed suit against our Port Arthur Refinery in the 419th Judicial District Court of Travis County, Texas, Cause No. D-1-GN-19-004121, for alleged violations of the Clean Air Act seeking injunctive relief and penalties.
Removed
This suit was filed on July 19, 2019, and we continue to work with the Texas AG to resolve this matter.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

6 edited+3 added−2 removed7 unchanged
Biggest changeFraser was elected Executive Vice President and Chief Financial Officer effective July 15, 2020. Prior to that he served as Executive Vice President and General Counsel (beginning January 1, 2019). In 2018, he served as Senior Vice President overseeing Valero’s Public Policy & Strategic Planning, Governmental Affairs, Investor Relations, and External Communications functions. From November 2016 to May 2018, Mr.
Biggest changeBhullar was elected to serve as Senior Vice President and Chief Financial Officer on October 28, 2025, effective January 1, 2026. He previously served as Vice President-Investor Relations and Finance (beginning April 29, 2021) and was responsible for overseeing our investor relations and finance functions, as well as strategic communications, public relations, advertising, and community engagement.
He has held several leadership positions with Valero overseeing refining operations, supply optimization and crude and feedstock supply, and planning and economics. Mr. Riggs also previously served on the board of directors of Valero Energy Partners GP LLC (the general partner of Valero Energy Partners LP) from 2014 to 2019. Mr.
He has held several leadership positions within Valero overseeing refining operations, supply optimization and crude and feedstock supply, and planning and economics. Mr. Riggs also previously served on the board of directors of Valero Energy Partners GP LLC (the general partner of Valero Energy Partners LP) from 2014 to 2019. Mr.
He previously served as Senior Vice President, General Counsel and Secretary, (beginning April 22, 2021), and prior to that he served as Senior Vice President and General Counsel (beginning July 15, 2020). Mr. Walsh has responsibility for our legal and governmental affairs, health, safety, and environmental, fuels compliance, risk management, ESG, and compliance/ethics teams.
He previously served as Senior Vice President, General Counsel and Secretary, (beginning April 22, 2021), and prior to that he served as Senior Vice President and General Counsel (beginning July 15, 2020). Mr. Walsh has responsibility for our legal and governmental affairs, health, safety, and environmental, fuels compliance, risk management and compliance/ethics teams, and public policy and engagement.
Fisher Senior Vice President Product Supply, Trading and Wholesale 56 Mr. Riggs was elected to the additional position of Chairman of the Board as of the close of business on December 31, 2024, and was elected Chief Executive Officer and President, and as a member of our Board effective as of the close of business on June 30, 2023.
Riggs was elected to the additional position of Chairman of the Board as of the close of business on December 31, 2024, and was elected Chief Executive Officer and President, and as a member of our Board effective as of the close of business on June 30, 2023.
Name Current Position Age as of December 31, 2024 R. Lane Riggs Chairman of the Board, Chief Executive Officer and President 59 Jason W. Fraser Executive Vice President and Chief Financial Officer 56 Gary K. Simmons Executive Vice President and Chief Operating Officer 60 Richard J. Walsh Executive Vice President and General Counsel 59 Eric A.
Name Current Position Age as of December 31, 2025 R. Lane Riggs Chairman of the Board, Chief Executive Officer and President 60 Harminder S. “Homer” Bhullar Senior Vice President and Chief Financial Officer 45 Gary K. Simmons Executive Vice President and Chief Operating Officer 61 Richard J. Walsh Executive Vice President and General Counsel 60 Eric A.
He joined Valero in 1997 and has held many leadership positions within the Company, including President-Europe, Vice President-Investor and Corporate Communications, and Vice President-Investor Relations, and Marketing and Strategic Planning. 36 Ta ble o f Conten t s PART II
He joined Valero in 1997 and has held many leadership positions within the Company, including President-Europe, Vice President-Investor and Corporate Communications, and Vice President-Investor Relations, and Marketing and Strategic Planning. 35 Table of Contents PART II
Removed
Fraser served as Vice President Public Policy & Strategic Planning, and from May 2015 to November 2016, he served in London as Vice President Europe, overseeing our European commercial businesses.
Added
Fisher Senior Vice President Product Supply, Trading and Wholesale 57 34 Table of Contents Mr.
Removed
Prior to his service in London, he held various leadership positions at our San Antonio headquarters, including Senior Vice President & Deputy General Counsel and Senior Vice President Specialty Products in the Valero family of companies. 35 Ta ble o f Conten t s Mr. Simmons was elected Executive Vice President and Chief Operating Officer on July 20, 2023.
Added
Prior to that he served as Vice President Investor Relations (from January 2019 to April 29, 2021) and as Vice President Business Development (from July 2018 through December 2018). Prior to joining Valero in 2014, Mr. Bhullar was an investment banker focused on the energy sector. Mr.
Added
Simmons was elected Executive Vice President and Chief Operating Officer on July 20, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis authorization was granted on September 19, 2024. 37 Table of Contents The performance graph below is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, respectively .
Biggest changeOn February 25, 2026, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, which is in addition to the amount remaining under the September 2024 Program. 36 Table of Contents The performance graph below is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, respectively .
There can be no assurance that we will pay a dividend in the future at the rates we have paid historically, or at all. The following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of 2024.
There can be no assurance that we will pay a dividend in the future at the rates we have paid historically, or at all. The following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of 2025.
The following line graph compares the cumulative total return 4 on an investment in our common stock against the cumulative total return of the S&P 500 Composite Index and an index of peers (that we selected) for the five-year period commencing December 31, 2019 and ending December 31, 2024.
The following line graph compares the cumulative total return 4 on an investment in our common stock against the cumulative total return of the S&P 500 Composite Index and an index of peers (that we selected) for the five-year period commencing December 31, 2020 and ending December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the NYSE under the trading symbol “VLO.” As of January 31, 2025, there were 4,196 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the NYSE under the trading symbol “VLO.” As of January 31, 2026, there were 3,996 holders of record of our common stock.
Cumulative total return is based on share price appreciation plus reinvestment of dividends from December 31, 2019 through December 31, 2024. 38 Table of Contents ITEM 6. [RESERVED]
Cumulative total return is based on share price appreciation plus reinvestment of dividends from December 31, 2020 through December 31, 2025. 37 Table of Contents ITEM 6. [RESERVED]
As of December 31, 2024, we had $1.8 billion remaining available for purchase under the February 2024 Program.
As of December 31, 2025, we had $1.7 billion remaining available for purchase under the September 2024 Program.
On October 29, 2024, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date (the September 2024 Program), which is in addition to the amount remaining under the February 2024 Program.
On October 29, 2024, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date (the September 2024 Program). This authorization was granted on September 19, 2024.
(b) The average price paid per share reported in this column excludes brokerage commissions and a one percent excise tax on share purchases. (c) On February 22, 2024, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date (the February 2024 Program).
(c) On February 22, 2024, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, and we completed all authorized share purchases under that program during the fourth quarter of 2025.
Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (c) October 2024 216,412 $ 129.98 139,400 $4.6 billion November 2024 373,161 $ 138.48 349,308 $4.5 billion December 2024 1,471,278 $ 125.00 1,470,541 $4.3 billion Total 2,060,851 $ 127.96 1,959,249 $4.3 billion ________________________ (a) The shares reported in this column include 101,602 shares related to our purchases of shares from participants in our stock-based compensation plans in connection with the vesting of restricted stock and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.
Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (c) October 2025 73,565 $ 171.14 — $2.8 billion November 2025 1,612,991 $ 175.92 1,588,344 $2.5 billion December 2025 4,663,575 $ 167.86 4,659,105 $1.7 billion Total 6,350,131 $ 169.94 6,247,449 $1.7 billion ________________________ (a) The shares reported in this column include 102,682 shares related to our purchases of shares from participants in our stock-based compensation plans in connection with the vesting of restricted stock and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN 4 Among Valero, the S&P 500 Index, and Peer Group As of December 31, 2019 2020 2021 2022 2023 2024 Valero common stock $ 100.00 $ 64.40 $ 90.37 $ 158.16 $ 167.46 $ 162.57 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 65.76 100.91 168.89 182.93 166.54 4 Assumes that an investment in Valero common stock, the S&P 500 index, and our peer group was $100 on December 31, 2019.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN 4 Among Valero, the S&P 500 Index, and Peer Group As of December 31, 2020 2021 2022 2023 2024 2025 Valero common stock $ 100.00 $ 140.33 $ 245.61 $ 260.04 $ 252.46 $ 346.01 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 Peer Group 100.00 153.44 256.82 278.17 253.25 251.49 4 Assumes that an investment in Valero common stock, the S&P 500 index, and our peer group was $100 on December 31, 2020.
Added
(b) The average price paid per share reported in this column excludes brokerage commissions and a one percent excise tax on share purchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

99 edited+45 added−15 removed36 unchanged
Biggest changeFinancial Highlights by Segment and Total Company (millions of dollars) Year Ended December 31, 2024 Refining Renewable Diesel Ethanol Corporate and Eliminations Total Revenues: Revenues from external customers $ 123,853 $ 2,410 $ 3,618 $ — $ 129,881 Intersegment revenues 10 2,656 868 (3,534) — Total revenues 123,863 5,066 4,486 (3,534) 129,881 Cost of sales: Cost of materials and other 112,538 3,944 3,558 (3,524) 116,516 Operating expenses (excluding depreciation and amortization expense reflected below) 4,946 350 536 (1) 5,831 Depreciation and amortization expense 2,391 265 77 (4) 2,729 Total cost of sales 119,875 4,559 4,171 (3,529) 125,076 Other operating expenses 17 — 27 — 44 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 961 961 Depreciation and amortization expense — — — 45 45 Operating income by segment $ 3,971 $ 507 $ 288 $ (1,011) 3,755 Other income, net 499 Interest and debt expense, net of capitalized interest (556) Income before income tax expense 3,698 Income tax expense (a) 692 Net income 3,006 Less: Net income attributable to noncontrolling interests 236 Net income attributable to Valero Energy Corporation stockholders $ 2,770 46 Table of Contents Financial Highlights by Segment and Total Company (continued) (millions of dollars) Year Ended December 31, 2023 Refining Renewable Diesel Ethanol Corporate and Eliminations Total Revenues: Revenues from external customers $ 136,470 $ 3,823 $ 4,473 $ — $ 144,766 Intersegment revenues 18 3,168 1,086 (4,272) — Total revenues 136,488 6,991 5,559 (4,272) 144,766 Cost of sales: Cost of materials and other 117,401 5,550 4,395 (4,259) 123,087 Operating expenses (excluding depreciation and amortization expense reflected below) 5,208 358 515 8 6,089 Depreciation and amortization expense 2,351 231 80 (4) 2,658 Total cost of sales 124,960 6,139 4,990 (4,255) 131,834 Other operating expenses 17 — 16 — 33 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 998 998 Depreciation and amortization expense — — — 43 43 Operating income by segment $ 11,511 $ 852 $ 553 $ (1,058) 11,858 Other income, net 502 Interest and debt expense, net of capitalized interest (592) Income before income tax expense 11,768 Income tax expense 2,619 Net income 9,149 Less: Net income attributable to noncontrolling interests 314 Net income attributable to Valero Energy Corporation stockholders $ 8,835 47 Table of Contents Average Market Reference Prices and Differentials Year Ended December 31, 2024 2023 Refining Feedstocks (dollars per barrel) Brent crude oil $ 79.79 $ 82.27 Brent less West Texas Intermediate (WTI) crude oil 3.95 4.60 Brent less WTI Houston crude oil 2.48 3.15 Brent less Dated Brent crude oil (0.91) (0.44) Brent less Argus Sour Crude Index crude oil 4.33 5.34 Brent less Maya crude oil 11.43 13.33 Brent less Western Canadian Select Houston crude oil 10.36 12.15 WTI crude oil 75.84 77.67 Natural gas (dollars per million British thermal units) 1.88 2.23 RVO (dollars per barrel) (c) 3.75 7.02 Product margins (RVO adjusted unless otherwise noted) (dollars per barrel) U.S.
Biggest changeFinancial Highlights by Segment and Total Company (millions of dollars) Year Ended December 31, 2025 Refining Renewable Diesel Ethanol Corporate and Eliminations Total Revenues: Revenues from external customers $ 116,158 $ 2,508 $ 4,021 $ — $ 122,687 Intersegment revenues 8 2,089 956 (3,053) — Total revenues 116,166 4,597 4,977 (3,053) 122,687 Cost of sales: Cost of materials and other (a) 96,080 4,178 3,913 (3,075) 101,096 Taxes other than income taxes (b) 6,720 — — — 6,720 Operating expenses (excluding depreciation and amortization expense reflected below) (c) 5,426 308 611 (1) 6,344 Depreciation and amortization expense 2,754 267 79 (5) 3,095 Total cost of sales 110,980 4,753 4,603 (3,081) 117,255 Asset impairment loss (d) 1,131 — — — 1,131 Other operating expenses 15 — — — 15 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 1,042 1,042 Depreciation and amortization expense — — — 63 63 Operating income (loss) by segment $ 4,040 $ (156) $ 374 $ (1,077) 3,181 Other income, net 380 Interest and debt expense, net of capitalized interest (556) Income before income tax expense 3,005 Income tax expense 759 Net income 2,246 Less: Net loss attributable to noncontrolling interests (102) Net income attributable to Valero Energy Corporation stockholders $ 2,348 46 Table of Contents Financial Highlights by Segment and Total Company (continued) (millions of dollars) Year Ended December 31, 2024 Refining Renewable Diesel Ethanol Corporate and Eliminations Total Revenues: Revenues from external customers $ 123,853 $ 2,410 $ 3,618 $ — $ 129,881 Intersegment revenues 10 2,656 868 (3,534) — Total revenues 123,863 5,066 4,486 (3,534) 129,881 Cost of sales: Cost of materials and other 106,638 3,944 3,558 (3,524) 110,616 Taxes other than income taxes (b) 5,900 — — — 5,900 Operating expenses (excluding depreciation and amortization expense reflected below) 4,946 350 536 (1) 5,831 Depreciation and amortization expense 2,391 265 77 (4) 2,729 Total cost of sales 119,875 4,559 4,171 (3,529) 125,076 Other operating expenses 17 — 27 — 44 General and administrative expenses (excluding depreciation and amortization expense reflected below) — — — 961 961 Depreciation and amortization expense — — — 45 45 Operating income by segment $ 3,971 $ 507 $ 288 $ (1,011) 3,755 Other income, net 499 Interest and debt expense, net of capitalized interest (556) Income before income tax expense 3,698 Income tax expense (e) 692 Net income 3,006 Less: Net income attributable to noncontrolling interests 236 Net income attributable to Valero Energy Corporation stockholders $ 2,770 47 Table of Contents Average Market Reference Prices and Differentials Year Ended December 31, 2025 2024 Refining Feedstocks (dollars per barrel) Brent crude oil $ 68.18 $ 79.79 Brent less West Texas Intermediate (WTI) crude oil 3.29 3.95 Brent less WTI Houston crude oil 2.29 2.48 Brent less Dated Brent crude oil (0.82) (0.91) Brent less Argus Sour Crude Index crude oil 3.24 4.33 Brent less Maya crude oil 8.46 11.43 Brent less Western Canadian Select Houston crude oil 7.21 10.36 WTI crude oil 64.90 75.84 Natural gas (dollars per million British thermal units) 3.04 1.88 RVO (dollars per barrel) (g) 5.85 3.75 Product margins (RVO adjusted unless otherwise noted) (dollars per barrel) U.S.
The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
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.
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.
DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each member, only 50 percent of DGD’s capital investments should be attributed to our net share of capital investments.
In general, DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each member, only 50 percent of DGD’s capital investments should be attributed to our net share of capital investments.
Tax Matters The Organisation for Economic Co-operation and Development (OECD) has introduced a framework that provides for a 15 percent global minimum effective tax rate for large multinational corporations on the income arising in each jurisdiction where they operate, known as Pillar Two.
Pillar Two The Organisation for Economic Co-operation and Development (OECD) has introduced a framework that provides for a 15 percent global minimum effective tax rate for large multinational corporations on the income arising in each jurisdiction where they operate, known as Pillar Two.
As of December 31, 2024, all of our ratings on our senior unsecured debt, including debt guaranteed by us, were at or above investment grade level as follows: Rating Agency Rating Moody’s Investors Service Baa2 (stable outlook) Standard & Poor’s Ratings Services BBB (stable outlook) Fitch Ratings BBB (stable outlook) We cannot provide assurance that these ratings will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency.
As of December 31, 2025, all of our ratings on our senior unsecured debt, including debt guaranteed by us, were at or above investment grade level as follows: Rating Agency Rating Moody’s Investors Service Baa2 (stable outlook) Standard & Poor’s Ratings Services BBB (stable outlook) Fitch Ratings BBB (stable outlook) We cannot provide assurance that these ratings will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency.
Differences between actual performance or results and any future performance or results expressed, suggested, or forecast in these forward-looking statements could result from a variety of factors, including the following: • 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; • demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, SAF, ethanol, and corn-related co-products; • demand for, and supplies of, crude oil and other feedstocks, as well as other critical supplies; 40 Table of Contents • the effects of public health threats, pandemics, and epidemics, governmental and societal responses thereto, and the adverse impacts of the foregoing on our business, financial condition, results of operations, and liquidity, and the global economy and financial markets generally; • acts of terrorism or other third-party actions affecting either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products, to receive feedstocks, or otherwise operate efficiently; • 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; • the ability of the members of OPEC, and other petroleum-producing nations that collectively make up OPEC+ , to agree on and to maintain crude oil price and production controls; • the level of consumer demand, consumption, and overall economic activity, including the effects from seasonal fluctuations and market prices; • refinery, renewable diesel plant, or ethanol plant overcapacity or undercapacity; • the risk that any transactions or capital decisions may not provide the anticipated benefits or may result in unforeseen detriments; • the actions taken by competitors, including both pricing and adjustments to refining capacity or low-carbon fuels production, as well as changes in the geographic markets where they operate, in response to market conditions; • the level of competitors’ imports into markets that we supply; • accidents, unscheduled shutdowns, weather events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, societal, or political events or developments, terrorism, cyberattacks, or other catastrophes or disruptions affecting our operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of our suppliers, customers, or third-party service providers; • changes in the cost or availability of transportation or storage capacity for feedstocks and our products; • pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products; • the price, availability, technology related to, and acceptance of alternative fuels and alternative-fuel vehicles, as well as sentiment and perceptions with respect to low-carbon projects and GHG emissions more generally; • 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; • the volatility in the market price of compliance credits (primarily RINs needed to comply with the RFS) under the Renewable and Low-Carbon Fuel Programs; • 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; • 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; 41 Table of Contents • rulings, judgments, or settlements in litigation or other legal or regulatory matters, such as unexpected environmental remediation or enforcement costs, including those in excess of any reserves or insurance coverage; • legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, introduction of a global minimum tax, profits, windfall, margin, or other taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2 and related regulation, actions implemented under the Renewable and Low-Carbon Fuel Programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business, financial condition, results of operations, and liquidity; • 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, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, and other actions, policies, and initiatives by federal, state, local, and other jurisdictions applicable to us; • changes in the credit ratings assigned to our debt securities and trade credit; • the operating, financing, and distribution decisions of our joint ventures or other joint venture members, and other consolidated VIEs, that we do not control; • changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar; • the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow or our ability to borrow or access financial markets; • the costs, disruption, and diversion of resources associated with lawsuits, proceedings, demands, or investigations, or campaigns and negative publicity commenced by government authorities, investors, stakeholders, or other interested parties; • overall economic conditions, including the stability and liquidity of financial markets, and the effect thereof on consumer demand; and • other factors generally described in the “RISK FACTORS” section included in “ITEM 1A.
Differences between actual performance or results and any future performance or results expressed, suggested, or forecast in these forward-looking statements could result from a variety of factors, including the following: • 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; 39 Table of Contents • demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, SAF, ethanol, and corn-related co-products; • demand for, and supplies of, crude oil and other feedstocks, as well as other critical materials and supplies; • the effects of public health threats, pandemics, and epidemics, governmental and societal responses thereto, and the adverse impacts of the foregoing on our business, financial condition, results of operations, and liquidity, and the global economy and financial markets generally; • acts of terrorism or other third-party actions affecting either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products, to receive feedstocks, or otherwise operate efficiently; • 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; • the ability of the members of OPEC, and other petroleum-producing nations that collectively make up OPEC+ , to agree on and to maintain crude oil price and production controls; • the level of consumer demand, consumption, and overall economic activity, including the effects from seasonal fluctuations and market prices; • refinery, renewable diesel plant, or ethanol plant overcapacity or undercapacity; • the risk that any transactions or capital decisions may not provide the anticipated benefits or may result in unforeseen detriments; • the actions taken by competitors, including both pricing and adjustments to refining capacity or low-carbon fuels production, as well as changes in the geographic markets where they operate, in response to market conditions; • the level of competitors’ imports into markets that we supply; • accidents, unscheduled shutdowns, weather events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, societal, or political events or developments, terrorism, cyberattacks, or other catastrophes or disruptions affecting our operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of our suppliers, customers, or third-party service providers; • changes in the cost or availability of transportation or storage capacity for feedstocks and our products; • pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products; • the price, availability, technology related to, and acceptance of alternative fuels and alternative-fuel vehicles, as well as sentiment and perceptions with respect to low-carbon projects and GHG emissions more generally; • 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, or affecting the price of natural gas, electricity, and/or water; • the volatility in the market price of compliance credits (primarily RINs needed to comply with the RFS) under the Renewable and Low-Carbon Fuel Programs; • 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; 40 Table of Contents • 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; • rulings, judgments, or settlements in litigation or other legal or regulatory matters, such as unexpected environmental remediation or enforcement costs, including those in excess of any reserves or insurance coverage; • legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, profits, procedures, windfall, margin, or other taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2 and related regulation, actions implemented under the Renewable and Low-Carbon Fuel Programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business, financial condition, results of operations, and liquidity; • 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, 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; • changes in the credit ratings assigned to our debt securities and trade credit; • the operating, financing, and distribution decisions of our joint ventures, other joint venture members, and other consolidated VIEs that we do not control; • changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar; • the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow or our ability to borrow or access financial markets; • the costs, disruption, and diversion of resources associated with lawsuits, proceedings, demands, or investigations, or campaigns and negative publicity commenced by government authorities, investors, stakeholders, or other interested parties; • overall economic conditions, including the stability and liquidity of financial markets, and the effect thereof on consumer demand; and • other factors generally described in the “RISK FACTORS” section included in “ITEM 1A.
In addition, this non-GAAP measure may not be comparable to similarly titled measures used by other companies because we may define it differently, which may diminish its utility. The following table (in millions) reconciles our capital investments to capital investments attributable to Valero for the years ended December 31, 2024 and 2023.
In addition, this non-GAAP measure may not be comparable to similarly titled measures used by other companies because we may define it differently, which may diminish its utility. The following table (in millions) reconciles our capital investments to capital investments attributable to Valero for the years ended December 31, 2025 and 2024.
Debt obligations exclude amounts related to net unamortized debt issuance costs and other. (b) Interest payments related to debt obligations are the expected payments based on information available as of December 31, 2024. (c) Operating lease liabilities, finance lease obligations, and maturity analyses of remaining minimum lease payments are described in Note 5 of Notes to Consolidated Financial Statements.
Debt obligations exclude amounts related to net unamortized debt issuance costs and other. (b) Interest payments related to debt obligations are the expected payments based on information available as of December 31, 2025. (c) Operating lease liabilities, finance lease obligations, and maturity analyses of remaining minimum lease payments are described in Note 5 of Notes to Consolidated Financial Statements.
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 48 reflects market reference prices and differentials that we believe impacted our Refining segment margin in 2024 compared to 2023.
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 48 reflects market reference prices and differentials that we believe impacted our Refining segment margin in 2025 compared to 2024.
The amount outstanding associated with the IEnova Revolver, as defined and described in Note 9 of Notes to Consolidated Financial Statements, is reflected in current portion of debt and finance lease obligations in our balance sheet as of December 31, 2024, and also included in the table above in debt obligations – short-term.
The amount outstanding associated with the IEnova Revolver, as defined and described in Note 9 of Notes to Consolidated Financial Statements, is reflected in current portion of debt and finance lease obligations in our balance sheet as of December 31, 2025, and also included in the table above in debt obligations – short-term.
Actual results could differ from those estimates. The following summary provides further information about our critical accounting policies that involve critical accounting estimates, and should be read in conjunction with Note 1 of Notes to Consolidated Financial Statements, which summarizes our significant accounting policies.
However, actual results could differ from those estimates and assumptions. The following summary provides further information about our critical accounting policies that involve critical accounting estimates, and should be read in conjunction with Note 1 of Notes to Consolidated Financial Statements, which summarizes our significant accounting policies.
(b) Excludes $374 million of cash and cash equivalents related to the consolidated VIEs that is for their use only. Information about our outstanding borrowings, letters of credit issued, and availability under our credit facilities is reflected in Note 9 of Notes to Consolidated Financial Statements.
(b) Excludes $228 million of cash and cash equivalents related to the consolidated VIEs that is for their use only. Information about our outstanding borrowings, letters of credit issued, and availability under our credit facilities is reflected in Note 9 of Notes to Consolidated Financial Statements.
The discussion for the year ended December 31, 2022 and comparison between the years ended December 31, 2023 and 2022 have been omitted from this annual report on Form 10-K for the year ended December 31, 2024, as such information can be found in “ITEM 7.
The discussion for the year ended December 31, 2023 and comparison between the years ended December 31, 2024 and 2023 have been omitted from this annual report on Form 10-K for the year ended December 31, 2025, as such information can be found in “ITEM 7.
Unless otherwise noted, estimates of the sensitivity to earnings that would result from changes in the assumptions used in determining our estimates is not practicable due to the number of assumptions and contingencies involved, and the wide range of possible outcomes.
Unless otherwise noted, estimates of the sensitivity to earnings that would result from changes in the assumptions used in determining our estimates are not practicable due to the number of assumptions and contingencies involved, and the wide range of possible outcomes.
We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends.
We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and 53 Table of Contents trends.
Ethanol Segment Results The following table includes selected financial and operating data of our Ethanol segment for 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Ethanol Segment Results The following table includes selected financial and operating data of our Ethanol segment for 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
These judgments and estimates are subject to change due to many factors, including the progress of ongoing tax audits, case law, and changes in legislation. Details of our changes in unrecognized tax benefits, along with other information about our unrecognized tax benefits, are included in Note 15 of Notes to Consolidated Financial Statements.
These judgments and estimates are subject to change due to many factors, including the progress of ongoing tax audits, case law, and changes in legislation. 64 Table of Contents Details of our changes in unrecognized tax benefits, along with other information about our unrecognized tax benefits, are included in Note 15 of Notes to Consolidated Financial Statements.
Environmental Matters Our operations are subject to extensive environmental regulations by government authorities relating to, among other matters, the release or discharge of materials into the environment, climate, waste management, pollution prevention measures, GHG and other emissions, our facilities and operations, and characteristics and composition of many of our products.
Environmental Matters Our operations are subject to extensive environmental regulations by government authorities relating to, among other matters, the release or discharge of materials into the environment, climate, waste 63 Table of Contents management, pollution prevention measures, GHG and other emissions, our facilities and operations, and characteristics and composition of many of our products.
Regulatory compliance capital investments are generally associated with projects that are incurred to comply with government regulatory requirements, such as requirements to reduce emissions and prohibited elements from our products. • Growth capital investments , including low-carbon growth capital investments that support the development and growth of our low-carbon renewable diesel and ethanol businesses, are generally associated with projects for the construction of new property assets that are expected to enhance our profitability and cash-generating capabilities, including investments in nonconsolidated joint ventures.
Regulatory compliance capital investments are generally associated with projects that are incurred to comply with government regulatory requirements, such as requirements to reduce emissions and prohibited elements from our products. • Growth capital investments , including low-carbon growth capital investments that support the development and growth of our low-carbon fuels businesses, are generally associated with projects for the construction of new property assets that are expected to enhance our profitability and cash-generating capabilities, including investments in nonconsolidated joint ventures.
These forward-looking statements include, among other things, statements regarding: • the effect, impact, potential duration or timing, or other implications of global geopolitical and other conflicts and tensions, and government and other responses thereto; • future Refining segment margins, including gasoline and distillate margins, and differentials; • future Renewable Diesel segment margins; • future Ethanol segment margins; • expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, transportation costs, and operating expenses; • anticipated levels of crude oil and liquid transportation fuel inventories, storage capacity, and production; • expectations with respect to third-party refining, logistics, and low-carbon fuels projects and operations, and the effect and implications thereof on industry and market dynamics; • expectations regarding the levels of, and costs and timing with respect to, the production and operations at our existing refineries and plants, projects under evaluation, construction, or development, and former projects; • 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; 39 Table of Contents • our anticipated level of cash distributions or contributions, such as our dividend payment rate and contributions to our pension plans and other postretirement benefit plans; • 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; • our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities; • anticipated trends in the supply of, and demand for, crude oil and other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, and corn-related co-products in the regions where we operate, as well as globally; • expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in Note 2 of Notes to Consolidated Financial Statements and under “ITEM 3.
These forward-looking statements include, among other things, statements regarding: • the effect, impact, potential duration or timing, or other implications of global geopolitical and other conflicts and tensions, and government and other responses thereto; • future Refining segment margins, including gasoline and distillate margins, and differentials; • future Renewable Diesel segment margins; • future Ethanol segment margins; • 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); • anticipated levels of crude oil and liquid transportation fuel inventories, storage capacity, and production; • expectations with respect to third-party refining, logistics, and low-carbon fuels projects and operations, and the effect and implications thereof on industry and market dynamics; • expectations regarding the levels of, and costs and timing with respect to, the production and operations at our existing refineries and plants, projects under evaluation, construction, or development, and former projects; • our plans, actions, assets, and operations in California and expected timing and cost of obligations and other financial statement impacts; • 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 38 Table of Contents 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; • our anticipated level of cash distributions or contributions, such as our dividend payment rate and contributions to our pension plans and other postretirement benefit plans; • 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; • our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities; • anticipated trends in the supply of, and demand for, crude oil and other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, and corn-related co-products in the regions where we operate, as well as globally; • expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in Notes 2 and 15 of Notes to Consolidated Financial Statements and under “ITEM 3.
The debt borrowings and repayments are described in Note 9 of Notes to Consolidated Financial Statements. As previously noted, our operations generated $6.7 billion of cash in 2024, driven primarily by net income of $3.0 billion, noncash charges to income of $2.9 billion, and a positive change in working capital of $795 million.
The debt borrowings and repayments are described in Note 9 of Notes to Consolidated Financial Statements. 58 Table of Contents As previously noted, our operations generated $6.7 billion of cash in 2024, driven by net income of $3.0 billion, noncash charges of $2.9 billion, and a positive change in working capital of $795 million.
Due to the significant subjectivity of the assumptions used to test for recoverability, changes in market conditions could result in significant impairment charges in the future, thus affecting our earnings. 62 Table of Contents New environmental and tax laws and regulations, as well as changes to existing laws and regulations, are continuously being enacted or proposed.
Due to the significant subjectivity of the assumptions used to test for recoverability, changes in market and economic conditions could result in significant impairment charges in the future, thus affecting our earnings. New environmental and tax laws and regulations, as well as changes to existing laws and regulations, are continuously being enacted or proposed.
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; • the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, SAF, and ethanol industry fundamentals; • expectations regarding our risk management activities, including the anticipated effects of our hedge transactions; • expectations regarding our counterparties and VIEs, including our ability to pass on increased compliance costs and timely collect receivables, and the credit risk within our accounts receivable or accounts payable; • expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address 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 • 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.
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; • 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; • expectations regarding our risk management activities, including the anticipated effects of our hedge transactions; • expectations regarding our counterparties and VIEs, including our ability to pass on increased compliance costs and timely collect receivables, and the credit risk within our accounts receivable or accounts payable; • expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address 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 • expectations regarding our low-carbon fuels strategy, publicly disclosed GHG emissions reductions/displacements target, and our current, former, and any future low-carbon projects.
This discussion and analysis includes the years ended December 31, 2024 and 2023 and comparison between such years.
This discussion and analysis includes the years ended December 31, 2025 and 2024 and comparison between such years.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in our annual report on Form 10-K for the year ended December 31, 2023, which was filed on February 22, 2024.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in our annual report on Form 10-K for the year ended December 31, 2024, which was filed on February 26, 2025.
The following accounting policies involve estimates that are considered critical due to the level of subjectivity and judgment involved, as well as the impact on our financial position and results of operations. We believe that all of our estimates are reasonable.
The following accounting policies involve estimates that are considered critical due to the level of subjectivity and judgment involved, as well as the impact on our financial position and results of operations.
(d) We use throughput volumes, sales volumes, and production volumes for the Refining segment, Renewable Diesel segment, and Ethanol segment, respectively, due to their general use by others who operate facilities similar to those included in our segments. 54 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our Liquidity Our liquidity consisted of the following as of December 31, 2024 (in millions): Available capacity from our committed facilities (a): Valero Revolver $ 3,998 Accounts receivable sales facility 1,300 Total available capacity 5,298 Cash and cash equivalents (b) 4,283 Total liquidity $ 9,581 _______________________ (a) Excludes the committed facilities of the consolidated VIEs.
(h) We use throughput volumes, sales volumes, and production volumes for the Refining segment, Renewable Diesel segment, and Ethanol segment, respectively, due to their general use by others who operate facilities similar to those included in our segments. 56 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our Liquidity Our liquidity consisted of the following as of December 31, 2025 (in millions): Available capacity from our committed facilities (a): Valero Revolver $ 3,998 Accounts receivable sales facility 1,300 Total available capacity 5,298 Cash and cash equivalents (b) 4,460 Total liquidity $ 9,758 _______________________ (a) Excludes the committed facilities of the consolidated VIEs.
In December 2024, the IRS approved our application for registration as a producer of second-generation biofuels with respect to the cellulosic ethanol produced at our ethanol plants.
(e) In December 2024, the Internal Revenue Service (IRS) approved our application for registration as a producer of second-generation biofuels with respect to the cellulosic ethanol produced at our ethanol plants.
These non-GAAP financial measures include adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining, Renewable Diesel, and Ethanol segment margin; and capital investments attributable to Valero.
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 no obligation to make purchases under these programs. 60 Table of Contents Pension Plan Funding During 2025, we plan to contribute approximately $130 million and $20 million to our pension plans and other postretirement benefit plans, respectively. See Note 13 of Notes to Consolidated Financial Statements for a discussion of our employee benefit plans.
We have no obligation to make purchases under these programs. Pension Plan Funding During 2026, we plan to contribute approximately $70 million and $20 million to our pension plans and other postretirement benefit plans, respectively. See Note 13 of Notes to Consolidated Financial Statements for a discussion of our employee benefit plans.
Our operating results for 2024, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 46 . Our operations generated $6.7 billion of cash in 2024.
Our operating results for 2025, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 46 . Our operations generated $5.8 billion of cash in 2025.
However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and potential U.S. tariffs on crude imports from Canada and Mexico could result in increased volatility in the crude oil market and potentially impact crude oil differentials. • Renewable diesel demand is expected to remain consistent with current levels. • Ethanol demand is expected to follow typical seasonal patterns. 45 Table of Contents RESULTS OF OPERATIONS 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 52 , highlight our results of operations, our operating performance, and market reference prices that directly impact our operations.
However, potential sanction adjustments related to Iran and Russia, ongoing uncertainty in Venezuela, and the continued Russia-Ukraine conflict could result in increased volatility in the crude oil market and potentially impact crude oil differentials. • Renewable diesel demand is expected to remain consistent with current levels. • Ethanol demand is expected to follow typical seasonal patterns. 45 Table of Contents RESULTS OF OPERATIONS The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (f) beginning on page 53 , highlight our results of operations, our operating performance, and market reference prices that directly impact our operations.
Our investing activities of $2.0 billion primarily consisted of $2.1 billion in capital investments, as defined on the following page under “Capital Investments,” of which $321 million related to capital investments made by DGD.
Our investing activities of $1.8 billion primarily consisted of $1.9 billion in capital investments, as defined on the following page under “Capital Investments,” of which $170 million related to capital investments made by DGD.
Gulf Coast (USGC) used cooking oil (dollars per pound) 0.43 0.58 USGC DCO (dollars per pound) 0.48 0.63 USGC fancy bleachable tallow (dollars per pound) 0.44 0.59 Ethanol Chicago Board of Trade corn (dollars per bushel) 4.24 5.65 New York Harbor ethanol (dollars per gallon) 1.79 2.34 2024 Compared to 2023 Total Company, Corporate, and Other The following table includes selected financial data for the total company, corporate, and other for 2024 and 2023.
Gulf Coast (USGC) used cooking oil (dollars per pound) 0.56 0.43 USGC DCO (dollars per pound) 0.58 0.48 USGC fancy bleachable tallow (dollars per pound) 0.55 0.44 Ethanol Chicago Board of Trade corn (dollars per bushel) 4.40 4.24 New York Harbor ethanol (dollars per gallon) 1.87 1.79 2025 Compared to 2024 Total Company, Corporate, and Other The following table includes selected financial data for the total company, corporate, and other for 2025 and 2024.
In addition, see Note 1 of Notes to Consolidated Financial Statements regarding our accounting for these liabilities under “Environmental Matters.” See also “ITEMS 1. and 2. BUSINESS AND PROPERTIES—GOVERNMENT REGULATIONS” and the items incorporated by reference therein.
See Note 1 of Notes to Consolidated Financial Statements regarding our accounting for our environmental liabilities under “Environmental Matters” and see Note 8 of Notes to Consolidated Financial Statements for disclosure of these liabilities. See also “ITEMS 1. and 2. BUSINESS AND PROPERTIES—GOVERNMENT REGULATIONS” and the items incorporated by reference therein.
The variability in our 57 Table of Contents year-to-year growth capital investments primarily reflects shifts in expected timing and costs of capital projects rather than a change in our capital allocation strategy.
The variability in our year-to-year growth capital investments primarily reflects shifts in expected timing and costs of capital projects rather than a change in our capital allocation strategy. See also “ITEM 1A.
RISK FACTORS—Legal, Government, and Regulatory Risks— We are subject to risks arising from legal, regulatory, and political developments regarding climate-related matters, GHG emissions, and the environment, or that are adverse to or restrict refining and marketing operations .” 61 Table of Contents CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
RISK FACTORS—LEGAL, GOVERNMENT, AND REGULATORY RISKS— We are subject to risks arising from legal, regulatory, and political developments regarding climate- and environmental-related matters, or that are adverse to or restrict refining and marketing operations .” CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions, which we believe to be reasonable, that affect the amounts reported in our financial statements and accompanying notes.
Year Ended December 31, 2024 2023 Reconciliation of capital investments to capital investments attributable to Valero Capital expenditures (excluding VIEs) $ 649 $ 665 Capital expenditures of VIEs: DGD 250 235 Other VIEs 8 11 Deferred turnaround and catalyst cost expenditures (excluding VIEs) 1,079 946 Deferred turnaround and catalyst cost expenditures of DGD 71 59 Investments in nonconsolidated joint ventures — — Capital investments 2,057 1,916 Adjustments: DGD’s capital investments attributable to the other joint venture member (161) (147) Capital expenditures of other VIEs (8) (11) Capital investments attributable to Valero $ 1,888 $ 1,758 59 Table of Contents Contractual Obligations Below is a summary of our contractual obligations (in millions) as of December 31, 2024 that are expected to be paid within the next year and thereafter.
Year Ended December 31, 2025 2024 Reconciliation of capital investments to capital investments attributable to Valero Capital expenditures (excluding VIEs) $ 719 $ 649 Capital expenditures of VIEs: DGD 71 250 Other VIEs 6 8 Deferred turnaround and catalyst cost expenditures (excluding VIEs) 990 1,079 Deferred turnaround and catalyst cost expenditures of DGD 99 71 Investments in nonconsolidated joint ventures 3 — Capital investments 1,888 2,057 Adjustments: DGD’s capital investments attributable to the other joint venture member (85) (161) Capital expenditures of other VIEs (6) (8) Capital investments attributable to Valero $ 1,797 $ 1,888 61 Table of Contents Contractual Obligations Below is a summary of our contractual obligations (in millions) as of December 31, 2025 that are expected to be paid within the next year and thereafter.
See the tables in note (b) beginning on page 52 for reconciliations of adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) and Refining, Renewable Diesel, and Ethanol segment margin to their most directly comparable GAAP financial measures.
Refer to the tables in note (f), beginning on page 53 , for the 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.
West Coast: CARBOB 87 gasoline less Brent 21.58 28.45 CARB diesel less Brent 18.89 32.79 48 Table of Contents Average Market Reference Prices and Differentials (continued) Year Ended December 31, 2024 2023 Renewable Diesel New York Mercantile Exchange ULS diesel (dollars per gallon) $ 2.44 $ 2.81 Biodiesel RIN (dollars per RIN) 0.59 1.35 California LCFS (dollars per metric ton) 60.19 72.42 U.S.
West Coast: CARBOB 87 gasoline less Brent 26.38 21.58 CARB diesel less Brent 25.17 18.89 48 Table of Contents Average Market Reference Prices and Differentials (continued) Year Ended December 31, 2025 2024 Renewable Diesel New York Mercantile Exchange ULS diesel (dollars per gallon) $ 2.31 $ 2.44 Biodiesel RIN (dollars per RIN) 1.01 0.59 California LCFS (dollars per metric ton) 56.36 60.19 U.S.
Ethanol segment adjusted operating income decreased by $254 million primarily due to lower ethanol and corn-related co-product prices, partially offset by lower corn prices and an increase in production volumes. 44 Table of Contents Outlook Many uncertainties remain with respect to the supply and demand balances in petroleum-based product markets worldwide.
Ethanol segment adjusted operating income increased by $59 million primarily due to higher ethanol prices and an increase in production volumes, partially offset by higher corn prices and an increase in operating expenses (excluding depreciation and amortization expense). 44 Table of Contents Outlook Many uncertainties remain with respect to the supply and demand balances in petroleum-based product markets worldwide.
Year Ended December 31, 2024 2023 Reconciliation of Renewable Diesel operating income to Renewable Diesel margin Renewable Diesel operating income $ 507 $ 852 Adjustments: Operating expenses (excluding depreciation and amortization expense) 350 358 Depreciation and amortization expense 265 231 Renewable Diesel margin $ 1,122 $ 1,441 • Ethanol margin is defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
Year Ended December 31, 2025 2024 Reconciliation of Renewable Diesel operating income (loss) to Renewable Diesel margin Renewable Diesel operating income (loss) $ (156) $ 507 Adjustments: Operating expenses (excluding depreciation and amortization expense) 308 350 Depreciation and amortization expense 267 265 Renewable Diesel margin $ 419 $ 1,122 54 Table of Contents • Ethanol margin is defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
Note references in this section can be found on pages 52 through 54 .
Note references in this section can be found on pages 53 through 56 .
BUSINESS AND PROPERTIES—OUR COMPREHENSIVE LIQUID FUELS STRATEGY— Our Low-Carbon Projects ” for a description of our low-carbon projects. 58 Table of Contents Capital Investments Attributable to Valero Capital investments attributable to Valero is a non-GAAP financial measure that reflects our net share of capital investments and is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, excluding the portion of DGD’s capital investments attributable to the other joint venture member and all of the capital expenditures of other consolidated VIEs.
Certain low-carbon projects and the associated capital investments are also included in our expected capital investments for 2026. 60 Table of Contents Capital Investments Attributable to Valero Capital investments attributable to Valero is a non-GAAP financial measure that reflects our net share of capital investments and is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, excluding the portion of DGD’s capital investments attributable to the other joint venture member and all of the capital expenditures of other consolidated VIEs.
Because environmental laws and regulations have become more complex and stringent and new or revised environmental laws and regulations are continuously being enacted or proposed, the level of future costs and expenditures required for environmental matters could increase. See Note 8 of Notes to Consolidated Financial Statements for disclosure of our environmental liabilities.
Because environmental laws and regulations have become more complex and stringent and new or revised environmental laws and regulations are continuously being enacted or proposed, the level of future costs and expenditures required for environmental matters could increase.
Cash Flows for the Year Ended December 31, 2023 In 2023, we used the $9.2 billion of cash generated by our operations and the $2.4 billion in debt borrowings to make $1.9 billion of investments in our business, repay $2.7 billion of debt and finance lease obligations (including premiums paid on the early retirement of debt), return $6.6 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase 56 Table of Contents our available cash on hand by $562 million.
Cash Flows for the Year Ended December 31, 2024 In 2024, we used the $6.7 billion of cash generated by our operations, $7.1 billion in debt borrowings, and $595 million of cash on hand to make $2.0 billion of investments in our business, repay $7.8 billion of debt and finance lease obligations, and return $4.3 billion to our stockholders through purchases of our common stock for treasury and dividend payments.
(b) We use certain financial measures (as noted below) that are not defined under GAAP and are considered to be non-GAAP financial measures. We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies.
We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies.
If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discounted estimated net cash flows or other appropriate methods.
If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on the most appropriate valuation approach or combination thereof.
Cash Held by Our Foreign Subsidiaries As of December 31, 2024, $3.7 billion of our cash and cash equivalents was held by our foreign subsidiaries.
Cash Held by Our Foreign Subsidiaries As of December 31, 2025, $4.1 billion of our cash and cash equivalents was held by our foreign subsidiaries.
The following table also reflects capital investments attributable to Valero, which is a non-GAAP measure that we define and reconcile to capital investments below under “Capital Investments Attributable to Valero.” Year Ending December 31, 2025 (a) Year Ended December 31, 2024 2023 Capital investments by nature of the project (b): Sustaining capital investments $ 1,670 $ 1,682 $ 1,486 Growth capital investments 390 375 430 Total capital investments $ 2,060 $ 2,057 $ 1,916 Capital investments by segment: Refining $ 1,730 $ 1,635 $ 1,488 Renewable Diesel 220 321 294 Ethanol 70 34 43 Corporate 40 67 91 Total capital investments 2,060 2,057 1,916 Adjustments: Renewable Diesel capital investments attributable to the other joint venture member in DGD (110) (161) (147) Capital expenditures of other VIEs — (8) (11) Capital investments attributable to Valero $ 1,950 $ 1,888 $ 1,758 ________________________ (a) All expected amounts for the year ending December 31, 2025 exclude capital expenditures that the consolidated VIEs (other than DGD) may incur because we do not operate those VIEs.
The following table also reflects capital investments attributable to Valero, which is a non-GAAP measure that we define and reconcile to capital investments below under “Capital Investments Attributable to Valero.” Year Ending December 31, 2026 (a) Year Ended December 31, 2025 2024 Capital investments by nature of the project (b): Sustaining capital investments $ 1,425 $ 1,685 $ 1,682 Growth capital investments 300 203 375 Total capital investments $ 1,725 $ 1,888 $ 2,057 Capital investments by segment: Refining $ 1,545 $ 1,609 $ 1,635 Renewable Diesel 50 170 321 Ethanol 100 39 34 Corporate 30 70 67 Total capital investments 1,725 1,888 2,057 Adjustments: Renewable Diesel capital investments attributable to the other joint venture member in DGD (25) (85) (161) Capital expenditures of other VIEs — (6) (8) Capital investments attributable to Valero $ 1,700 $ 1,797 $ 1,888 ________________________ (a) All expected amounts for the year ending December 31, 2026 exclude capital expenditures that the consolidated VIEs (other than DGD) may incur because we do not operate those VIEs.
Gulf Coast: CBOB gasoline less Brent 6.06 8.83 Ultra-low-sulfur (ULS) diesel less Brent 15.76 25.06 Propylene less Brent (not RVO adjusted) (37.42) (47.47) U.S. Mid-Continent: CBOB gasoline less WTI 10.48 17.70 ULS diesel less WTI 17.87 32.37 North Atlantic: CBOB gasoline less Brent 11.08 15.61 ULS diesel less Brent 18.32 29.47 U.S.
Gulf Coast: CBOB gasoline less Brent 6.11 6.06 Ultra-low-sulfur (ULS) diesel less Brent 19.10 15.76 Polymer Grade Propylene less Brent (not RVO adjusted) (6.45) 4.70 U.S. Mid-Continent: CBOB gasoline less WTI 10.70 10.48 ULS diesel less WTI 22.70 17.87 North Atlantic: CBOB gasoline less Brent 10.93 11.08 ULS diesel less Brent 23.32 18.32 U.S.
The debt borrowings and repayments are described in Note 9 of Notes to Consolidated Financial Statements. As previously noted, our operations generated $9.2 billion of cash in 2023, driven primarily by net income of $9.1 billion and noncash charges to income of $2.4 billion, partially offset by an unfavorable change in working capital of $2.3 billion.
The debt issuance, borrowings, and repayments are described in Note 9 of Notes to Consolidated Financial Statements. As previously noted, our operations generated $5.8 billion of cash in 2025, resulting from net income of $2.2 billion and noncash charges of $3.8 billion, partially offset by a negative change in working capital of $192 million.
Refining segment adjusted operating income decreased by $7.5 billion primarily due to lower gasoline and distillate (primarily diesel) margins, a decline in crude oil differentials, and a decrease in throughput volumes, partially offset by a decrease in operating expenses (excluding depreciation and amortization expense). • Renewable Diesel segment.
Refining segment adjusted operating income increased by $1.3 billion primarily due to higher gasoline, distillate (primarily diesel), and other product 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. • Renewable Diesel segment .
These rules did not have a material effect on our financial condition, results of operations, or liquidity in 2024, and we currently do not expect that compliance with these rules will have a material effect on our financial condition, results of operations, or liquidity in 2025.
We will continue to monitor U.S. and international legislative developments to assess the potential impacts of these rules. We currently do not expect that compliance with these rules will have a material effect on our financial condition, results of operations, or liquidity in the future.
Year Ended December 31, 2024 2023 Reconciliation of Ethanol operating income to adjusted Ethanol operating income Ethanol operating income $ 288 $ 553 Adjustment: Other operating expenses 27 16 Adjusted Ethanol operating income $ 315 $ 569 • Adjusted operating income is defined as total company operating income excluding other operating expenses, as reflected in the table below.
Year Ended December 31, 2025 2024 Reconciliation of Ethanol operating income to adjusted Ethanol operating income Ethanol operating income $ 374 $ 288 Adjustment: Other operating expenses — 27 Adjusted Ethanol operating income $ 374 $ 315 55 Table of Contents • Adjusted operating income is defined as total company operating income excluding the LIFO liquidation adjustment, employee retention and separation costs, the asset impairment loss, and other operating expenses, as reflected in the table below.
Year Ended December 31, 2024 2023 Reconciliation of Ethanol operating income to Ethanol margin Ethanol operating income $ 288 $ 553 Adjustments: Operating expenses (excluding depreciation and amortization expense) 536 515 Depreciation and amortization expense 77 80 Other operating expenses 27 16 Ethanol margin $ 928 $ 1,164 53 Table of Contents • Adjusted Refining operating income is defined as Refining segment operating income excluding other operating expenses, as reflected in the table below.
Year Ended December 31, 2025 2024 Reconciliation of Ethanol operating income to Ethanol margin Ethanol operating income $ 374 $ 288 Adjustments: Operating expenses (excluding depreciation and amortization expense) 611 536 Depreciation and amortization expense 79 77 Other operating expenses — 27 Ethanol margin $ 1,064 $ 928 • Adjusted Refining operating income is defined as Refining segment operating income excluding the LIFO liquidation adjustment, employee retention and separation costs, the asset impairment loss, and other operating expenses, as reflected in the table below.
The U.S. has not yet implemented these rules; however, countries in which we operate, such as Canada, the U.K., and Ireland, have enacted tax legislation to implement Pillar Two with effective dates in 2024, and we are subject to the tax laws of those countries.
While all OECD countries and jurisdictions have agreed to Pillar Two, the related rules are being implemented on a country-by-country basis. Certain countries in which we operate, such as Canada, the U.K., and Ireland, have enacted tax legislation to implement Pillar Two with effective dates beginning in 2024, and we are subject to the tax laws of those countries.
Also on page 59 , we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information. OVERVIEW AND OUTLOOK Overview Business Operations Update Our results for the year ended December 31, 2024 were supported by stable worldwide demand for petroleum-based transportation fuels.
See the table on page 61 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure, and also on page 61 , we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information. 42 Table of Contents OVERVIEW AND OUTLOOK Overview Business Operations Update Our results for the year ended December 31, 2025 were supported by strong worldwide demand for petroleum-based transportation fuels, while worldwide supply of those products remained constrained.
Year Ended December 31, 2024 2023 Reconciliation of Refining operating income to Refining margin Refining operating income $ 3,971 $ 11,511 Adjustments: Operating expenses (excluding depreciation and amortization expense) 4,946 5,208 Depreciation and amortization expense 2,391 2,351 Other operating expenses 17 17 Refining margin $ 11,325 $ 19,087 • Renewable Diesel margin is defined as Renewable Diesel segment operating income excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.
Year Ended December 31, 2025 2024 Reconciliation of Refining operating income to Refining margin Refining operating income $ 4,040 $ 3,971 Adjustments: LIFO liquidation adjustment (see note (a)) 37 — Operating expenses (excluding depreciation and amortization expense) (see note (c)) 5,426 4,946 Depreciation and amortization expense 2,754 2,391 Asset impairment loss (see note (d)) 1,131 — Other operating expenses 15 17 Refining margin $ 13,403 $ 11,325 • Renewable Diesel margin is defined as Renewable Diesel segment operating income (loss) excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.
The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Renewable Diesel Segment Results The following table includes selected financial and operating data of our Renewable Diesel segment for 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Cash Flows Components of our cash flows are set forth below (in millions): Year Ended December 31, 2024 2023 Cash flows provided by (used in): Operating activities $ 6,683 $ 9,229 Investing activities (1,981) (1,865) Financing activities: Debt borrowings 7,137 2,420 Repayments of debt and finance lease obligations (including premiums paid on early retirement of debt) (7,785) (2,687) Return to stockholders: Purchases of common stock for treasury (2,875) (5,136) Common stock dividend payments (1,384) (1,452) Return to stockholders (4,259) (6,588) Other financing activities (142) (86) Financing activities (5,049) (6,941) Effect of foreign exchange rate changes on cash (248) 139 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (595) $ 562 Cash Flows for the Year Ended December 31, 2024 In 2024, we used the $6.7 billion of cash generated by our operations, $7.1 billion in debt borrowings, and $595 million of cash on hand to make $2.0 billion of investments in our business, repay $7.8 billion of debt and finance lease obligations, and return $4.3 billion to our stockholders through purchases of our common stock for treasury and dividend payments.
However, there can be no assurances regarding the availability of any future financings or additional credit facilities or whether such financings or additional credit facilities can be made available on terms that are acceptable to us. 57 Table of Contents Cash Flows Components of our cash flows are set forth below (in millions): Year Ended December 31, 2025 2024 Cash flows provided by (used in): Operating activities $ 5,826 $ 6,683 Investing activities (1,845) (1,981) Financing activities: Debt issuance and borrowings 7,574 7,137 Repayments of debt and finance lease obligations (7,668) (7,785) Return to stockholders: Purchases of common stock for treasury (2,598) (2,875) Common stock dividend payments (1,405) (1,384) Return to stockholders (4,003) (4,259) Other financing activities (85) (142) Financing activities (4,182) (5,049) Effect of foreign exchange rate changes on cash 237 (248) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 36 $ (595) Cash Flows for the Year Ended December 31, 2025 In 2025, we used the $5.8 billion of cash generated by our operations and the $7.6 billion from our debt issuance and borrowings to make $1.8 billion of investments in our business, repay $7.7 billion of debt and finance lease obligations, return $4.0 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $36 million.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing, as it may be updated or modified by our future filings with the SEC.
Such forward-looking statements speak only as of the date of this annual report on Form 10-K and we do not intend to update these statements unless we are required by applicable securities laws to do so. 41 Table of Contents All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing, as it may be updated or modified by our future filings with the SEC.
As a result, income tax expense for the year ended December 31, 2024 includes a current income tax benefit of $79 million for the tax credit attributable to volumes of cellulosic ethanol produced and sold by us in the U.S. from 2020 through 2024.
As a result, we recognized a current income tax benefit of $79 million in December 2024 for the tax credit attributable to volumes of cellulosic ethanol produced and sold by us in the U.S. from 2020 through 2024. (f) We use certain financial measures (as noted below) that are not defined under GAAP and are considered to be non-GAAP measures.
The IEnova Revolver is subject to repayment on demand; however, we do not expect the lender to demand repayment during the next 12 months. Thus, the final cash flows for this instrument cannot be predicted with certainty at this time. In 2024, we repaid $167 million of our public debt that matured in March 2024.
The IEnova Revolver is subject to repayment on demand; however, we do not expect the lender to demand repayment during the next 12 months. Thus, the final cash flows for this instrument cannot be predicted with certainty at this time. We have not entered into any transactions, agreements, or other contractual arrangements that would result in off-balance sheet liabilities.
Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell and the cost of corn that we process. The table on page 49 reflects market reference prices that we believe impacted our Ethanol segment margin in 2024 compared to 2023.
The table on page 49 reflects market reference prices that we believe impacted our Ethanol segment margin in 2025 compared to 2024.
Year Ended December 31, 2024 2023 Change Operating income $ 507 $ 852 $ (345) Renewable Diesel margin (see note (b)) 1,122 1,441 (319) Operating expenses (excluding depreciation and amortization expense reflected below) 350 358 (8) Depreciation and amortization expense 265 231 34 Sales volumes (thousand gallons per day) (see note (d)) 3,530 3,539 (9) Renewable Diesel segment operating income decreased by $345 million in 2024 compared to 2023 primarily due to a decrease in Renewable Diesel segment margin of $319 million.
Year Ended December 31, 2025 2024 Change Operating income (loss) $ (156) $ 507 $ (663) Renewable Diesel margin (see note (f)) 419 1,122 (703) Operating expenses (excluding depreciation and amortization expense reflected below) 308 350 (42) Depreciation and amortization expense 267 265 2 Sales volumes (thousand gallons per day) (see note (h)) 2,748 3,530 (782) Renewable Diesel segment operating income decreased by $663 million in 2025 compared to 2024.
Year Ended December 31, 2024 2023 Change Operating income $ 288 $ 553 $ (265) Adjusted operating income (see note (b)) 315 569 (254) Ethanol margin (see note (b)) 928 1,164 (236) Operating expenses (excluding depreciation and amortization expense reflected below) 536 515 21 Depreciation and amortization expense 77 80 (3) Production volumes (thousand gallons per day) (see note (d)) 4,538 4,367 171 51 Table of Contents Ethanol segment operating income decreased by $265 million in 2024 compared to 2023; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (b), decreased by $254 million in 2024 compared to 2023 primarily due to a decrease in Ethanol segment margin of $236 million.
Year Ended December 31, 2025 2024 Change Operating income $ 374 $ 288 $ 86 Adjusted operating income (see note (f)) 374 315 59 Ethanol margin (see note (f)) 1,064 928 136 Operating expenses (excluding depreciation and amortization expense reflected below) 611 536 75 Depreciation and amortization expense 79 77 2 Production volumes (thousand gallons per day) (see note (h)) 4,611 4,538 73 Ethanol segment operating income increased by $86 million in 2025 compared to 2024; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (f), increased by $59 million in 2025 compared to 2024.
We undertake no obligation to publicly release any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events unless we are required by applicable securities laws to do so. 42 Table of Contents NON-GAAP FINANCIAL MEASURES 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 U.S. generally accepted accounting principles (GAAP).
We undertake no obligation to publicly release any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events unless we are required by applicable securities laws to do so.
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 55 . 43 Table of Contents Results for the Year Ended December 31, 2024 For 2024, we reported net income attributable to Valero stockholders of $2.8 billion compared to $8.8 billion for 2023.
The components of our liquidity and 43 Table of Contents 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 57 .
The following table reflects our expected capital investments for the year ending December 31, 2025 by nature of the project and reportable segment, along with historical amounts for the years ended December 31, 2024 and 2023 (in millions).
RISK FACTORS—BUSINESS, INDUSTRY, AND OPERATIONS RISKS— Our pursuit of capital and other strategic projects and actions exposes us to various risks ” regarding other considerations with respect to our capital investments. 59 Table of Contents The following table reflects our expected capital investments for the year ending December 31, 2026 by nature of the project and segment, along with historical amounts for the years ended December 31, 2025 and 2024 (in millions).
Refining segment adjusted operating income, which excludes the adjustment in the table in note (b), also decreased by $7.5 billion in 2024 compared to 2023. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below. • Refining segment margin decreased by $7.8 billion in 2024 compared to 2023.
The components of this increase in the adjusted results, along with the reasons for the changes in those components, are outlined below. • Refining segment margin increased by $2.1 billion in 2025 compared to 2024.
This cash, along with cash on hand, was used to make $2.1 billion of capital investments in our business and return $4.3 billion to our stockholders through purchases of common stock for treasury and dividend payments.
The cash generated by our operations, along with the net proceeds from our debt issuance, was used to make $1.9 billion of capital investments in our business, return $4.0 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 2025.
Payments Due by Period Short-Term Long-Term Total Debt obligations (a) $ 499 $ 7,657 $ 8,156 Interest payments related to debt obligations (b) 399 4,274 4,673 Operating lease liabilities (c) 417 931 1,348 Finance lease obligations (c) 353 3,010 3,363 Other long-term liabilities (d) — 1,441 1,441 Purchase obligations (e) 18,906 5,217 24,123 ________________________ (a) Debt obligations and a maturity analysis of our debt are described in Note 9 of Notes to Consolidated Financial Statements.
Payments Due by Period Short-Term Long-Term Total Debt obligations (a) $ 695 $ 7,636 $ 8,331 Interest payments related to debt obligations (b) 421 4,003 4,424 Operating lease liabilities (c) 457 889 1,346 Finance lease obligations (c) 361 3,036 3,397 Other long-term liabilities (d) — 1,793 1,793 Purchase obligations (e) 13,904 3,349 17,253 ________________________ (a) Debt obligations and a maturity analysis of our debt are described in Note 9 of Notes to Consolidated Financial Statements.
Adjusted operating income also decreased by $8.1 billion, from $11.9 billion in 2023 to $3.8 billion in 2024. The components of this $8.1 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Operating income decreased by $574 million in 2025; however, adjusted operating income, which excludes the adjustments in the table in note (f), increased by $615 million, from $3.8 billion in 2024 to $4.4 billion in 2025. The components of this $615 million increase in adjusted operating income are discussed by segment in the segment analyses that follow.
This decrease in revenues was partially offset by a decrease in cost of sales of $6.8 billion primarily due to decreases in crude oil and other feedstock costs. These changes resulted in an $8.1 billion decrease in operating income, from $11.9 billion in 2023 to $3.8 billion in 2024.
This decrease in revenues, along with the effect of an asset impairment loss of $1.1 billion in 2025 (see note (d)), was partially offset by a decrease in cost of sales of $7.8 billion primarily due to decreases in crude oil and other feedstock costs.
Therefore, there is a cost to repatriate cash held by certain of our foreign subsidiaries to us.
Therefore, there is a cost to repatriate cash held by certain of our foreign subsidiaries to us. Asset Retirement Obligations See Notes 2 and 8 of Notes to Consolidated Financial Statements for information regarding our expected asset retirement obligations.
If the circumstances that trigger an impairment also result in a reduction in the estimated useful life of the asset, then we may also be required to recognize an asset retirement obligation for that asset. See also the matters and potential impacts from the uncertainty described in Note 2 of Notes to Consolidated Financial Statements.
If the circumstances that trigger an impairment also result in a reduction in the estimated useful life of the asset, then we may also be required to recognize an asset retirement obligation for that asset. 65 Table of Contents Details of the asset impairment loss and associated expected asset retirement obligations recognized during the year ended December 31, 2025 related to our Benicia and Wilmington refineries are included in Notes 2 and 8 of Notes to Consolidated Financial Statements.
In addition, our focus on reliable, low-cost operations favorably impacted our results despite a weaker margin environment in 2024. We reported $2.8 billion of net income attributable to Valero stockholders for the year ended December 31, 2024.
Results for the Year Ended December 31, 2025 For 2025, we reported net income attributable to Valero stockholders of $2.3 billion compared to $2.8 billion for 2024.
Noncash charges primarily included $2.7 billion of depreciation and amortization expense and $103 million of deferred income tax expense. Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 18 of Notes to Consolidated Financial Statements.
Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 18 of Notes to Consolidated Financial Statements. In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDecember 31, 2024 (a) Expected Maturity Dates 2025 2026 2027 2028 2029 There- after Total Fair Value Fixed rate $ 441 $ 672 $ 564 $ 1,047 $ 439 $ 4,935 $ 8,098 $ 7,718 Average interest rate 3.2 % 4.2 % 2.2 % 4.4 % 4.0 % 5.6 % 4.9 % Floating rate $ 58 $ — $ — $ — $ — $ — $ 58 $ 58 Average interest rate 8.4 % — % — % — % — % — % 8.4 % December 31, 2023 (a) Expected Maturity Dates 2024 2025 2026 2027 2028 There- after Total Fair Value Fixed rate $ 167 $ 441 $ 672 $ 564 $ 1,047 $ 5,374 $ 8,265 $ 8,079 Average interest rate 1.2 % 3.2 % 4.2 % 2.2 % 4.4 % 5.5 % 4.8 % Floating rate $ 1,030 $ — $ — $ — $ — $ — $ 1,030 $ 1,030 Average interest rate 8.7 % — % — % — % — % — % 8.7 % ________________________ (a) Excludes unamortized discounts and debt issuance costs.
Biggest changeDecember 31, 2025 (a) Expected Maturity Dates 2026 2027 2028 2029 2030 There- after Total Fair Value Fixed rate $ 672 $ 564 $ 1,047 $ 439 $ 850 $ 4,736 $ 8,308 $ 8,167 Average interest rate 4.2 % 2.2 % 4.4 % 4.0 % 6.0 % 5.5 % 5.0 % Floating rate $ 23 $ — $ — $ — $ — $ — $ 23 $ 23 Average interest rate 7.8 % — % — % — % — % — % 7.8 % December 31, 2024 (a) Expected Maturity Dates 2025 2026 2027 2028 2029 There- after Total Fair Value Fixed rate $ 441 $ 672 $ 564 $ 1,047 $ 439 $ 4,935 $ 8,098 $ 7,718 Average interest rate 3.2 % 4.2 % 2.2 % 4.4 % 4.0 % 5.6 % 4.9 % Floating rate $ 58 $ — $ — $ — $ — $ — $ 58 $ 58 Average interest rate 8.4 % — % — % — % — % — % 8.4 % ________________________ (a) Excludes unamortized discounts and debt issuance costs.
As of December 31, 2024 and 2023, the amount of gain or loss that would have resulted from a 10 percent increase or decrease in the underlying price for all of our commodity derivative instruments entered into for purposes other than trading with which we have market risk was not material.
As of December 31, 2025 and 2024, the amount of gain or loss that would have resulted from a 10 percent increase or decrease in the underlying price for all of our commodity derivative instruments entered into for purposes other than trading with which we have market risk was not material.
To manage this risk, we enter into contracts to purchase these credits. As of December 31, 2024 and 2023, the amount of gain or loss in the fair value of derivative instruments that would have resulted from a 10 percent increase or decrease in the underlying price of the contracts was not material.
To manage this risk, we enter into contracts to purchase these credits. As of December 31, 2025 and 2024, the amount of gain or loss in the fair value of derivative instruments that would have resulted from a 10 percent increase or decrease in the underlying price of the contracts was not material.
See Note 20 of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, 2024. COMPLIANCE PROGRAM 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.
See Note 20 of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, 2025. COMPLIANCE PROGRAM 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.
See Note 20 of Notes to Consolidated Financial Statements for a discussion about these blending programs. 63 Table of Contents INTEREST RATE RISK The following tables provide information about our debt instruments (dollars in millions), the fair values of which are sensitive to changes in interest rates.
See Note 20 of Notes to Consolidated Financial Statements for a discussion about these blending programs. 66 Table of Contents INTEREST RATE RISK The following tables provide information about our debt instruments (dollars in millions), the fair values of which are sensitive to changes in interest rates.
As of December 31, 2024 and 2023, the fair value of our foreign currency contracts was not material. See Note 20 of Notes to Consolidated Financial Statements for a discussion about our foreign currency risk management activities. 64 Table of Contents
As of December 31, 2025 and 2024, the fair value of our foreign currency contracts was not material. See Note 20 of Notes to Consolidated Financial Statements for a discussion about our foreign currency risk management activities. 67 Table of Contents

Other VLO 10-K year-over-year comparisons