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What changed in Valero Energy's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Valero Energy's 2023 and 2024 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 2024 report.

+332 added−320 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-22)

Top changes in Valero Energy's 2024 10-K

332 paragraphs added · 320 removed · 272 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

150 edited+27 added−22 removed22 unchanged
Biggest changeRenewable Transport Fuel Obligation, 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, reductions in the National Ambient Air Quality Standards, bans or restrictions on certain chemicals, feedstocks, products, or processes, and other laws related to climate, GHG emissions, or environmental, health, or safety matters, have resulted in, and are expected to continue to result in, increased costs and capital expenditures, among other impacts, to (i) operate and maintain our facilities (including restrictions on certain refinery operations and requirements to modify our operations), (ii) install new emission controls or other equipment at our facilities, and (iii) administer and manage any emissions or blending programs, including obtaining emission credits, allowances, or allotments.
Biggest changeEmissions 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.
Despite our efforts to maintain safe and environmentally responsible operations, in certain instances we have faced, and may continue to face, changing regulatory interpretations, regulatory 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, 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, 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.
For example, the IRA contains significant changes to U.S. tax law including, but not limited to, a corporate minimum tax and a one percent excise tax on the purchase by companies of their own stock. Many of these tax liabilities are subject to periodic audits by the respective taxing authorities.
For example, the IRA contains significant changes to U.S. tax law including, but not limited to, a corporate alternative minimum tax and a one percent excise tax on the purchase by companies of their own stock. Many of these tax liabilities are subject to periodic audits by the respective taxing authorities.
Price level changes during the period between purchasing feedstocks and selling the resulting products has had, and could continue to have, a significant effect on our financial results. A decline in market prices for our products and feedstocks has had, and could again have, a negative impact to the carrying value of our inventories.
Price level changes during the period between purchasing feedstocks and selling the resulting products have had, and could continue to have, a significant effect on our financial results. A decline in market prices for our products and feedstocks has also had, and could again have, a negative impact to the carrying value of our inventories.
In November 2022, California approved its “Advanced Clean Cars II” rulemaking, which similarly requires an increasing percentage of “zero-emission” light-duty vehicle sales through 2035, at which time 100 percent of light-duty vehicle sales in California must be zero-emission vehicles.
In November 2022, California approved its “Advanced Clean Cars II” rulemaking, which similarly requires an increasing percentage of “zero-emission” light-duty vehicle sales through 2035, at which time 100 percent of new light-duty vehicle sales in California must be zero-emission vehicles.
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 cybersecurity controls over their systems.
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.
Although Darling, the other joint venture member in DGD, supplies some of DGD’s waste feedstock at competitive pricing, DGD must still secure a significant amount of its waste and renewable feedstock requirements from other sources.
Although the other joint venture member in DGD supplies some of DGD’s waste feedstock at competitive pricing, DGD must still secure a significant amount of its waste and renewable feedstock requirements from other sources.
Prices for RINs, LCFS credits, and other credits are dependent upon a variety of factors, including, as applicable, EPA and 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.
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.
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, regional, and local market conditions, as well as by type and class of product.
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.
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 (excise/duty, sales/use, gross receipts, and value-added taxes); and payroll, franchise, withholding, and ad valorem taxes.
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.
As electrification continues to grow, or if there are increased restrictions or costs imposed on the ability of utilities or power suppliers to utilize certain energy sources (such as through restrictions on fossil fuel or nuclear-generated electricity or ESG pressure not to use such sources of electricity generation), there will likely be increased strains on and risks to the integrity, reliability, and resilience of electrical grids, and increased volatility and tightness in natural gas and electricity supplies across the world.
As electrification continues to grow, or if there are increased restrictions or costs imposed on the ability of utilities or power suppliers to utilize certain energy sources (such as through restrictions on, or other pressure not to use, fossil fuel or nuclear-generated electricity), there will likely be increased strains on and risks to the integrity, reliability, and resilience of electrical grids, and increased volatility and tightness in natural gas and electricity supplies across the world.
If one or more of our supply contracts were terminated, or if political or other events were to disrupt our traditional feedstock supply, 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 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.
There may be new entrants into the low-carbon fuels industry that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products. For example, several other companies have made, or announced interest in making, investments in renewable diesel, SAF, and other low-carbon projects.
There may also be new entrants into the low-carbon fuels industry that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products. Other companies have made, or announced interest in making, investments in renewable diesel, SAF, and other low-carbon projects.
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 the EPA’s RFS mandates or our other 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 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.
An inability to recruit, train, and retain adequate personnel, or the loss or departure of personnel with key skills or deep institutional knowledge, may negatively impact our business. Inflation has also caused, and may in the future cause, increases in employee-related costs. Our ability to fully insure losses arising from our operating hazards exposes us to various risks.
An inability to recruit, train, and retain adequate personnel, or the loss or departure of personnel with key skills or deep institutional knowledge, may negatively impact our business. Inflation has also caused, and may in the future cause, increases in employee-related costs. Our ability to adequately insure losses or liabilities arising from various hazards exposes us to risks.
Many government authorities across the world have imposed, and may impose in the future, policies or regulations designed to facilitate less petroleum-dependent modes of transportation (e.g., increases in fuel economy or efficiency standards, low-carbon fuel standards, restrictions and bans on vehicles using liquid fuels, tariffs, tax incentives, and EV subsidies), which could reduce demand for our petroleum-based products and/or all liquid transportation fuels.
Many government authorities across the world have imposed, and may impose in the future, laws, regulations, and policies designed to facilitate less petroleum-dependent modes of transportation (e.g., increases in fuel economy or efficiency standards, low-carbon fuel standards, restrictions and bans on vehicles using internal combustion engines, tariffs, duties, tax incentives, and EV subsidies), which could reduce demand for our petroleum-based products and/or all liquid transportation fuels.
However, the ultimate outcome and impact to us of such litigation cannot be 28 Table of Content s 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.
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.
Our cost to acquire feedstocks and the price at which we can ultimately sell products depend upon several factors beyond our control, including regional and global supplies of and demand for feedstocks (such as crude oil, waste and renewable feedstocks, and corn), liquid transportation fuels (such as gasoline, diesel, renewable diesel, and ethanol), and other products.
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.
Additionally, in July 2023, CARB announced a “Clean Truck Partnership” with various U.S. truck and engine manufacturers and the Truck and Engine Manufacturers Association that is aimed at advancing the development of EVs or other alternative fuel vehicles for the commercial trucking industry regardless of whether the regulatory mandate survives legal challenge.
Additionally, in July 2023, CARB announced a “Clean Truck Partnership” with various U.S. truck and engine manufacturers and the Truck and Engine Manufacturers Association that is aimed at advancing the development of EVs or other alternative fuel vehicles for the commercial trucking industry regardless of whether the regulatory mandates survive legal challenge.
The U.S. government can also prevent or restrict us from doing business in or with other countries. For example, U.S. sanctions targeting Russia, Iran, and Venezuela limit, but do not necessarily ban, the ability of most U.S. companies to engage in petroleum-related transactions involving these countries.
The U.S. government can also prevent or restrict us from doing business in or with other countries. For example, U.S. sanctions targeting Russia, Iran, and Venezuela limit or ban the ability of most U.S. companies to engage in petroleum-related transactions involving these countries.
If we are unable to obtain adequate or optimal volumes or are able to obtain such volumes only at unfavorable prices, our business, financial condition, results of operations, and liquidity could be materially and adversely affected, including from reduced sales volumes of products or higher operating costs.
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.
The other joint venture members and the third-party equity holders of the VIEs have certain economic, business, or legal interests, opportunities, or goals that are inconsistent with or different from our interests, opportunities, and goals, have different liquidity needs or financial condition characteristics than our own, are subject to different legal or contractual obligations than we are, and may be unable to meet their obligations.
The other joint venture members and the third-party equity holders of the VIEs have certain economic, business, or legal interests, opportunities, or goals that are inconsistent with or different from our own, have different liquidity needs or financial condition characteristics than our own, are subject to different legal or contractual obligations than we are, and may be unable to meet their obligations, each of which exposes us to risks.
Additionally, U.S. and 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, health, and safety laws and regulations, particularly with respect to fossil fuel companies. This has been particularly acute in California.
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.
A breach could also originate from or compromise our customers’, vendors’, suppliers’, or other third-party networks outside of our 30 Table of Content s control that could impact our business and operations, as occurred with the Colonial Pipeline cybersecurity incident in May 2021.
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.
The continuing and evolving threat of cybersecurity incidents has also 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.
These legal, political, and regulatory developments, as well as other similarly focused laws and regulations, such as, among others, the California and Quebec cap-and-trade programs, the U.K. Emissions Trading Scheme, the U.K.
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.
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 change and other ESG 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, securities, stock exchange, or other similar 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-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.
Growing electrification and rapidly developing and increasing technology use (such as artificial intelligence, computer processing, cryptocurrency mining, and cloud storage, and the data centers and power supplies required to support these activities) will also 20 Table of Content s 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.
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.
New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future.
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.
Increasing legal and regulatory focus on data privacy and security issues could expose us to increased liability and operational changes and costs. Along with our own data and information in the normal course of our business, we collect and retain certain data that is subject to specific laws and regulations.
CYBERSECURITY ” for additional information on such matters. Increasing legal and regulatory focus on data privacy and security issues could expose us to increased liability and operational changes and costs. Along with our own data and information in the normal course of our business, we collect and retain certain data that is subject to specific laws and regulations.
For example, the real-time market structure of the primary grid provider in Texas exposes many of our refineries and operations located in Texas to “scarcity pricing” during periods of supply and demand imbalance.
For example, the real-time market structure of the largest grid operator in Texas exposes many of our refineries and operations located in Texas to “scarcity pricing” during periods of supply and demand imbalance.
This data is subject to regulation at various levels of government in many areas of our business and in jurisdictions across the world, including data privacy and security laws such as the California Consumer Privacy Act, the California Privacy Rights Act, the EU General Data Protection Regulation (GDPR), the U.K. and General Data Protection Regulation (U.K.
This data is subject to regulation at various levels of government in many areas of our business and in jurisdictions across the world, including data privacy and security laws such as the EU General Data Protection Regulation, the U.K.
As a result, such projects may not be completed on schedule or budget, or at all, and we may not fully realize our expected returns, which could negatively impact our business, financial condition, results of operations, and liquidity.
As a result, such projects may not be completed on schedule or budget, or at all, and may not achieve their expected returns, which could negatively impact our business, financial condition, results of operations, and liquidity.
Some of our competitors also have materially greater financial and other resources 22 Table of Content s than we have and may have a greater ability to bear the economic risks inherent in all phases of 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 bear the economic risks inherent to our industry. We are subject to risks arising from an interruption in any of our refineries or plants.
The European Union (EU), U.K., Canada, and Quebec have each adopted what they refer to as “zero-emissions vehicle” mandates and other government authorities across the world, such as Mexico, and other U.S. states have also announced, or are considering, plans and/or restrictions regarding the sale of new internal combustion engine vehicles, stricter tailpipe emissions standards, and limitations on or penalties for the use of petroleum-based products and certain biofuel feedstocks.
The European Union (EU), the U.K., Canada, and Quebec have each adopted what they refer to as “zero-emissions vehicle” mandates and other government authorities across the world, such as Mexico, Quebec, 23 Ta ble o f Conten t s and other U.S. states have also announced, adopted, or are considering, restrictions on the sale of new internal combustion engine vehicles, stricter tailpipe emissions standards, and/or limitations on or penalties on the use of certain petroleum-based products and biofuel feedstocks.
Certain of these laws and regulations have in the past imposed, and could again impose, obligations on us to conduct assessment or remediation efforts at our refineries and plants, as well as at formerly owned properties or third-party sites where we have taken wastes for disposal or where our wastes may have migrated.
Certain of these laws and regulations have in the past imposed, and could again impose, obligations on us to conduct assessment or remediation efforts at our current or formerly owned facilities or third-party sites where we have taken wastes for disposal or where our wastes may have migrated.
For example, while we operate the DGD Plants and perform certain day-to-day 23 Table of Content s operating and management functions for DGD, we do not have full control of every aspect of DGD’s business and certain significant decisions concerning DGD, including acquiring or disposing of assets above a certain value threshold, making certain changes to its business plan, raising debt or equity capital, altering its distribution policy, and making certain other transactions, require approval from Darling.
For example, while we operate the DGD Plants and perform certain day-to-day operating and management functions for DGD, we do not have full control of every aspect of DGD’s business and certain significant decisions concerning DGD require approval from the other joint venture member, including acquiring or disposing of assets above a certain dollar threshold, making certain changes to its business plan, raising debt or equity capital, altering its distribution policy, and certain other transactions.
Uncertainty and illiquidity in financial markets could have an adverse impact on the costs or availability of the financial, commercial, and other services 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. We are subject to risks arising from severe weather events.
Our operations could also be subject to significant interruption if one or more 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 disasters (such as cybersecurity incidents or acts of terrorism), 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 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.
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, some or all of which data could become publicly available.
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.
The ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree on and to maintain crude oil price and production controls has also had, and is likely to continue to have, a significant impact on the market prices of crude oil and certain of our products.
The ability of the members of the Organization of Petroleum Exporting Countries (OPEC) and other petroleum-producing nations that collectively make up OPEC+ to agree on and to maintain crude oil price and production controls has also had, and is likely to continue to have, a significant impact on the market prices of crude oil and certain of our products.
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, weather (e.g., hurricanes and periods of considerable heat or cold, such as Winter Storm Uri in 2021), logistics interruptions, electric grid outages, cybersecurity incidents, intermittent electricity generation (particularly from wind and solar), hostilities, sanctions, human error, and supply and demand imbalances for natural gas and electricity.
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.
While we consolidate certain VIEs, we do not have full control of every aspect of these VIEs, or the actions taken by their third-party equity holders, some of which have affected, and could continue to affect, our business, legal position, financial condition, results of operations, and liquidity.
While we consolidate certain VIEs, we do not have full control of every aspect of these VIEs, their debt or financing decisions that are reflected in our consolidated financial statements, or the actions taken by their third-party equity holders, some of which have affected, and could continue to affect, our business, legal position, financial condition, results of operations, and liquidity.
Despite government support for and acknowledgement of the importance of certain low-carbon fuels and technologies, such as carbon capture and sequestration, there has also been growing regional political and environmental opposition among various groups in certain geographies to many such projects.
Despite various government and third-party support for and acknowledgement of the importance of certain low-carbon fuels and technologies, such as carbon capture and sequestration, there has also been growing regional political, environmental, and other opposition to many such projects.
Reductions or delays in crop production from these or similar 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 operations outside the U.S. and generally to worldwide political and economic developments.
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.
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 (such as in response to the Russia-Ukraine conflict) have impacted, and may continue to impact, trade flows, and have limited, and may continue to limit, our access to business opportunities in various countries.
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.
Our refineries and plants without access to waterborne deliveries or offtake must rely on rail, pipeline, or ground transportation and thus may be more susceptible to such risks.
Our refineries and plants without access to waterborne deliveries or offtake must rely on rail, pipeline, or ground transportation and thus have been, and will likely continue to be, more susceptible to such risks.
Our efforts to comply with these and other requests and regulations 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 government regulatory actions and investigations, (iii) is inconsistent with other government regulations or our current disclosures that may utilize different methodologies or standards, (iv) is subject to many assumptions and inherent calculation difficulties, such as accuracy and completeness, and (v) may impact our business relationships, credibility, and reputation.
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.
Although we actively manage these risks through contracting and hedging our exposure to price volatility as appropriate, and by pursuing projects that reduce our reliance on third parties and fortify the resilience of our assets, increases in prices for natural gas and electricity, or disruptions to our supply thereof, have in the past, and could again, materially and adversely affect our business, financial condition, results of operations, and liquidity.
While we actively manage these risks through contracting and hedging our exposure to price volatility as appropriate, and by pursuing projects that reduce our reliance on third parties and fortify the resilience of our assets, increases in prices for natural gas and electricity, or disruptions to our supplies thereof, have had, and could again have, a material adverse effect on our business, financial condition, results of operations, and liquidity.
If we incur a significant loss or liability for which we are not adequately insured, it could have a material adverse effect on our business, financial condition, results of operations, and liquidity. 32 Table of Content s ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If we incur a significant loss or liability for which we are not adequately insured, it could have a material adverse effect on our business, financial condition, results of operations, and liquidity. 31 Ta ble o f Conten t s ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Some customers and third parties we do business with have begun requesting product-specific GHG emissions disclosures from us in connection with their own GHG emissions reporting.
Some third parties (including governments) we do business with have begun requesting product-specific GHG emissions disclosures from us in connection with their own reporting or goals.
We have incurred, and expect to continue to incur, costs and expenses associated with severe weather, such as to keep our facilities performing and to mitigate and reduce the risk of severe weather to our operations.
We have incurred, and expect to continue to incur, costs and expenditures associated with severe weather, such as to keep our facilities performing and to mitigate the risks to our operations.
Such unauthorized events 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 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, 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 lawsuits and actions 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 climate change or other ESG matters.
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.
Although we actively seek to manage these risks, we have experienced some of these events in the past and could experience additional events in the future. Competitors that produce their own supply of feedstocks, own their own retail sites, or have greater financial resources may have a competitive advantage.
Although we actively seek to manage these risks, we have experienced some of these events in the past and could experience additional events in the future. 21 Ta ble o f Conten t s Competitors that produce their own supply of feedstocks, own their own retail sites, operate in different regions, or have greater financial resources may have a competitive advantage.
Our investments in joint ventures and other entities decrease our ability to manage risk. We conduct some of our operations through joint ventures in which we share control over certain economic, legal, and business interests with other joint venture members.
We conduct some of our operations through joint ventures in which we share control over certain economic, legal, and business interests with other joint venture members.
Any prolonged strike, work stoppage, or other labor action at our facilities or at facilities owned or operated by third parties that support our operations could have an adverse effect on our business, financial condition, results of operations, and liquidity. Future U.S. federal, state, or international labor legislation could result in labor shortages and higher costs.
Any prolonged strike, work stoppage, or other labor action at our facilities or otherwise impacting third parties that support our operations could have an adverse effect on our business, financial condition, results of operations, and liquidity. Future labor legislation also could result in labor shortages and higher costs.
Previous declines in such differentials have had, and any future declines will likely again have, a negative impact on our results of operations. We are subject to risks arising from industry and market developments that could decrease the demand for our products.
Previous declines in such differentials have had, and any future declines will likely again have, a negative impact on our results of operations. Industry, market, and other developments could decrease the demand for our products.
In addition to regulation, demand is growing for renewable fuels certified through voluntary certification bodies such as the International Sustainability and Carbon Certification system, which presents business opportunities, but also entails additional administrative burdens.
In addition to regulation, demand is growing for low-carbon fuels certified through various voluntary certification bodies such as the International Sustainability and Carbon Certification system, which presents business opportunities, but also entails additional strains on company resources.
Because environmental, health, and safety laws and regulations are becoming more stringent and new environmental, health, and safety 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 environmental matters has increased and is expected to continue to increase in the future.
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.
Future RVOs, RFS changes, and small refinery exemption petition denials may also affect RIN prices. For example, if the RVOs for cellulosic biofuel are high relative to D3 RIN generation, RIN prices may rise, and the EPA may or may not issue cellulosic waiver credits in time to moderate price spikes, if at all.
For example, if the RVOs for cellulosic biofuel are high relative to D3 RIN generation, RIN prices may rise, and the EPA may or may not issue cellulosic waiver credits in time to moderate price spikes, if at all.
For example, the current administration utilizes a “whole of government” approach to climate change and environmental justice that seeks to organize and deploy the full capacity of the U.S. federal government in novel and coordinated ways to limit or eliminate the use of most petroleum-based products.
For example, the previous administration utilized a “whole of government” approach to climate-related initiatives that sought to organize and deploy the full capacity of the U.S. federal government in novel and coordinated ways to limit or eliminate the use of most petroleum-based products.
As described under “ITEMS 1. and 2. BUSINESS AND PROPERTIES—OUR COMPREHENSIVE LIQUID FUELS STRATEGY— Regulations, Policies, and Standards Driving Low-Carbon Fuel Demand ,” government authorities across the world have issued, or are considering issuing, low-carbon fuel regulations, policies, and standards to help reduce GHG emissions and increase the percentage of low-carbon fuels in the transportation fuel mix.
BUSINESS AND PROPERTIES—OUR COMPREHENSIVE LIQUID FUELS STRATEGY— Regulations, Policies, and Standards Driving Low-Carbon Fuel Demand ,” government authorities across the world have issued, are considering issuing, and/or are altering existing low-carbon fuel regulations, policies, and standards to address GHG emissions and the percentage of low-carbon fuels in the transportation fuel mix.
Additionally, increased government regulations and public opposition to pipeline construction and electricity generation and transmission projects have resulted in, and could continue to result in, the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to obtain natural gas feedstocks and electricity in a reliable and cost-efficient manner.
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.
Failure by us, an entity in which we have a joint venture interest, or the VIEs to adequately manage the risks associated with such entities, and any differences in views among us and other joint venture members or the third-party equity holders in the VIEs, could prevent or delay actions that are in the best interest of us, the joint venture, or the VIE, and could have a material adverse effect on our business, financial condition, results of operations, and liquidity.
Failure by us, an entity in which we have a joint venture interest, or the VIEs to adequately manage the risks associated with such entities, and any differences in views among us and such third parties, could prevent or delay actions we prefer to take, expose us to legal, regulatory, and reputational risks, and have a material adverse effect on our business, financial condition, results of operations, and liquidity.
These factors could adversely impact and limit our ability to obtain favorable credit and debt 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. Unstable or illiquid market conditions could also negatively impact our pension plans’ assets and funding requirements.
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.
The U.S. federal government under the current presidential administration has also been aggressive in the scope, magnitude, and number of actions it has taken to address GHG emissions and other environmental matters, including efforts to limit or eliminate petroleum-dependent modes of transportation.
The U.S. federal government under the previous presidential administration was also aggressive in the scope, magnitude, and number of actions it took for the stated purpose of addressing GHG emissions and other environmental matters, including efforts to limit or eliminate petroleum-dependent modes of transportation.
We are, therefore, subject to the political, geographic, and economic risks attendant to doing business with suppliers located in, and supplies originating from, different areas across the world, including global geopolitical and other conflicts and tensions that may impact trade flows and increase transportation costs.
We are, therefore, subject to the political, geographic, and economic risks attendant to doing business with suppliers located in, and supplies originating from, different areas across the world, including global geopolitical and other conflicts and tensions (such as the Russia-Ukraine conflict and turmoil in the Middle East and other producing regions) that have impacted, and may continue to impact, trade flows and transportation costs.
In July 2023, NHTSA also proposed increasing both the fuel economy standard for passenger cars and light trucks for model years 2027 to 2032 and the fuel efficiency standards for heavy-duty pickup trucks and vans for model years 2030 to 2035 .
In June 2024, NHTSA also issued final rules increasing both the fuel economy standard for passenger cars and light trucks for model years 2027 to 2031 and the fuel efficiency standards for heavy-duty pickup trucks and vans for model years 2030 to 2035.
We strategically market our low-carbon fuels based on regional policies, regulations, feedstock preferences, CI scores, and our ability to obtain fuel pathways, credits, certifications, and incentives. A significant portion of our low-carbon fuels are sold in California, Canada, and the U.K. Regarding the RFS, in June 2023, the EPA announced final rules that increase RVOs for 2023, 2024, and 2025.
We strategically market our low-carbon fuels based on regional policies, regulations, feedstock preferences, CI scores, and our ability to obtain fuel pathways, credits, certifications, and incentives. A significant portion of our low-carbon fuels are sold in California, Canada, and the U.K.
If we experience prolonged interruptions of supply or increases in costs to deliver our products to market, or if the ability of the logistics assets used to transport our feedstocks or products is disrupted because of labor issues, weather events, dock availability, water levels of key waterways for trade, rail disruptions, cybersecurity incidents, accidents, derailments, collisions, fires, explosions, spills, public health crises, hostilities, or other government or third-party actions (including protests), 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 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.
These actions have contributed to, and may continue to spur, a number of U.S. federal rulemakings and other actions that disfavor petroleum-dependent modes of transportation, many of which ignore or downplay the full life cycle carbon footprint of EVs, and thereby seek to inappropriately advantage them over internal combustion engine vehicles.
These actions contributed to a number of U.S. federal rulemakings and other actions, as well as similar actions by U.S. state and local governments, that disfavor petroleum-dependent modes of transportation and in many cases ignore or downplay the full life cycle carbon footprint of EVs, and thereby seek to inappropriately advantage EVs over internal combustion engine vehicles.
New developments may 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, and improvements in hydrogen fuel cell technology. Any such developments could increase consumer acceptance and result in greater market penetration of alternative fuel vehicles.
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.
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, regulatory proceedings, and mandatory disclosure requirements related to climate change and other ESG matters, or aimed at the fossil fuel industry.
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.
We do not produce crude oil, waste, renewable feedstocks (except inedible distillers corn oils), corn, or other primary feedstocks, and must purchase nearly all of the feedstocks we process. We generally purchase our feedstocks long before we process them and sell the resulting products.
The longer-term effects of these and other factors on product margins are uncertain. We do not produce crude oil, waste or renewable feedstocks (except inedible DCOs), corn, or other primary feedstocks, and must purchase nearly all of the feedstocks we process. We generally purchase our feedstocks long before we process them and sell the resulting products.
We are also exposed to potential liability and costs related to regulated chemicals and other regulated 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 such materials may arise in the near 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, 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.
Crop production is also affected by government policies (such as farming subsidies) and 21 Table of Content s 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 low-carbon fuels incentives) and by market events (such as changes in fertilizer prices and rail disruptions).
Such competitors are at times able to offset losses from liquid transportation fuels production operations 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 generally, or in challenging regions, with such other operations, and may be better positioned to withstand periods of depressed product margins or feedstock disruptions.
In addition to voluntary disclosures in response to investor and stakeholder requests, many governments have also proposed or adopted regulations that impose disclosure obligations with respect to various climate change and other ESG matters. For example, in March 2022, the SEC proposed sweeping and novel disclosure obligations with respect to climate change and GHG emissions reporting for U.S. publicly-traded companies.
In addition to voluntary disclosures in response to investor and stakeholder requests, many governments have also proposed or adopted regulations that impose disclosure obligations with respect to various climate-related matters and other sustainability-related matters. For example, in March 2024, the SEC adopted sweeping and novel disclosure obligations with respect to GHG emissions reporting, which are currently stayed pending litigation.
In addition, the cost and availability of debt and equity financing may be adversely impacted by persistently high interest rates, inflation, unstable or illiquid 31 Table of Content s market conditions, or adverse changes in our credit profile or to our credit ratings.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo 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.
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.
Key members of the Infosec Oversight Committee and the Executive Steering Committee provide a report to the Audit Committee of the Board as discussed above. Our information services team is led by our Vice President Information Services & Technology, who also chairs the Infosec Oversight Committee and has approximately 25 years of experience in the information technology industry.
Key members of the Infosec Oversight Committee and the Executive Steering Committee provide a report to the Audit Committee of the Board as discussed above. Our information services team is led by our Vice President-Information Services and Technology, who also chairs the Infosec Oversight Committee and has approximately 25 years of experience in the information technology industry.
Collectively, the members of our Infosec Committee, Infosec Oversight Committee, and Executive Steering Committee have decades of experience within the information technology and/or cybersecurity areas. On a monthly basis, our Vice President Information Services & 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 events that have occurred.
These internal efforts and external third-party reviews also support our ability 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.
Typically, we (i) perform periodic tabletop exercises with a company-wide cross-functional team that is facilitated by a third-party expert and is 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 helps to 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 against such risks.
Additionally, our control environment and internal audit process bring a systematic, disciplined approach to evaluate our risk management, control, and governance processes concerning cybersecurity and our information security framework.
Additionally, our control environment and internal audit process are designed to bring a systematic, disciplined approach to evaluate our risk management, control, and governance processes concerning cybersecurity and our information security framework.
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. 34 Table of Content 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 and/or other government agencies. 33 Ta ble o f Conten t s
RISK FACTORS—Cybersecurity and Privacy Related Risks— We are subject to risks arising from a significant breach of our information systems. ” 33 Table of Content 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 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.
Specific incident response playbooks have also been prepared for data breaches, malware, unauthorized remote access, and ransomware, which include applicable legal protocols. We have also retained certain third-party experts to assist us with various aspects of incident assessment and response in the event those services become necessary or useful.
We have also retained certain third-party experts to assist us with various aspects of incident assessment and response in the event those services become necessary or useful.
We have a cybersecurity Incident Response Plan (IRP) that sets forth a process to obtain information, coordinate activities, assess results, and communicate applicable developments to our employees, law enforcement, other external parties and agencies, and our Board. The IRP includes the following major components: preparation, detection and analysis, containment, eradication, notification, recovery, reporting, and lessons learned.
We have a cybersecurity Incident Response Plan (IRP) that sets forth a process designed to effectively respond to an incident by obtaining information, coordinating activities, assessing results, and communicating applicable developments to our stakeholders, including employees, law enforcement, other external parties and agencies, and our Board.
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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.
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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 changeWe are continuing to work with the BAAQMD to resolve these matters. Texas Attorney General (Texas AG) (Port Arthur Refinery). In our annual report on Form 10-K for the year ended December 31, 2022, 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.
Biggest changeIn 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.
Pursuant 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 Quality Management District (BAAQMD) (Benicia Refinery).
Pursuant 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).
In our quarterly report on Form 10-Q for the quarter ended September 30, 2023, we reported that (i) we had received a Notice of Violation (NOV) from the BAAQMD 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 BAAQMD 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.
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.
In our quarterly report on Form 10-Q for the quarter ended September 30, 2023, we reported that we were in the process of working with the BAAQMD to resolve several other NOVs issued by the BAAQMD to our Benicia Refinery in 2020 and 2019, which primarily relate to various emissions and related compliance issues.
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.
We are continuing to work with the BAAQMD to resolve these matters. BAAQMD (Benicia Refinery). In our quarterly report on Form 10-Q for the quarter ended June 30, 2023, we reported that on May 1, 2023, the BAAQMD issued a compliance-related NOV to our Benicia Refinery related to a pressure relief device.
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.
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We are continuing to work with the BAAQMD to resolve this matter. BAAQMD (Benicia Refinery).
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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).
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D-1-GN-19-004121, for alleged violations of the Clean Air Act seeking injunctive relief and penalties. We are working with the Texas AG to resolve this matter.
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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).
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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).
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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.
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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.
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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).
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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

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Biggest changeWalsh 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 Vice President and Deputy General Counsel from 2016 to 2020. He joined Valero in 1999 and has served in many different leadership roles within our legal department. 36 Table of Content s PART II
Biggest changeHe 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.
Fraser 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 effective 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.
Fraser 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.
ITEM 4. MINE SAFETY DISCLOSURES None. 35 Table of Content s INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table lists the names and titles of our executive officers (for purposes of Rule 3b-7 under the Securities Exchange Act of 1934) as of the date of this report.
ITEM 4. MINE SAFETY DISCLOSURES None. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table lists the names and titles of our executive officers (for purposes of Rule 3b-7 under the Securities Exchange Act of 1934) as of the date of this report.
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. Mr. Simmons was elected Executive Vice President and Chief Operating Officer on July 20, 2023.
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.
Simmons has held many leadership positions with Valero, including Vice President and General Manager of our Ardmore and St. Charles refineries. Mr. Walsh was elected Senior Vice President, General Counsel and Secretary, effective April 22, 2021, and prior to that was elected as Senior Vice President and General Counsel effective July 15, 2020. Mr.
Simmons has held many leadership positions with Valero, including Vice President and General Manager of our Ardmore and St. Charles refineries. Mr. Walsh was elected Executive Vice President and General Counsel on October 29, 2024.
Riggs 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.
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.
Fraser Executive Vice President and Chief Financial Officer 2015 55 Gary K. Simmons Executive Vice President and Chief Operating Officer 2011 59 Richard J. Walsh Senior Vice President, General Counsel and Secretary 2016 58 Mr.
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.
There is no arrangement or understanding between any executive officer listed below or any other person under which the executive officer was or is to be selected as an officer. Name Current Position Officer Beginning Age as of December 31, 2023 R. Lane Riggs Chief Executive Officer and President 2011 58 Jason W.
There is no arrangement or understanding between any executive officer listed below or any other person under which the executive officer was or is to be selected as an officer. Under our bylaws, our officers are elected annually by our Board, and hold such office until their successor has been chosen and qualified, or their earlier death, resignation, or removal.
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He previously served as Vice President and Deputy General Counsel from 2016 to 2020. He joined Valero in 1999 and has served in many different leadership roles within our legal department. Mr. Fisher was elected Senior Vice President Product Supply, Trading and Wholesale on July 20, 2023.
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He previously served as Senior Vice President Wholesale Marketing & International Commercial Operations from 2017 to 2023. In his current role, Mr. Fisher has responsibility for our product supply and trading, global wholesale marketing, and the specialty products marketing business.
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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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(c) On February 23, 2023, 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 2023.
Biggest change(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).
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 2023.
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.
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, 2018 and ending December 31, 2023.
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.
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, 2024, there were 4,414 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, 2025, there were 4,196 holders of record of our common stock.
Cumulative total return is based on share price appreciation plus reinvestment of dividends from December 31, 2018 through December 31, 2023. 38 Table of Contents ITEM 6. [RESERVED]
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]
On September 15, 2023, 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 2023 Program). As of December 31, 2023, we had $2.2 billion remaining available for purchase under the September 2023 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 February 22, 2024, 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 2023 Program. 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 .
This 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 .
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 2023 611,778 $ 124.20 559,399 $3.1 billion November 2023 1,561,401 $ 124.24 1,487,134 $2.9 billion December 2023 5,324,131 $ 128.92 5,323,068 $2.2 billion Total 7,497,310 $ 127.56 7,369,601 $2.2 billion ________________________ (a) The shares reported in this column include 127,709 shares related to our purchases of shares from our employees (including former employees) and non-employee directors in connection with the exercise of stock options, 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 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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN 4 Among Valero, the S&P 500 Index, Old Peer Group, and New Peer Group As of December 31, 2018 2019 2020 2021 2022 2023 Valero common stock $ 100.00 $ 130.36 $ 83.95 $ 117.80 $ 206.18 $ 218.29 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 Old Peer Group 100.00 103.43 63.56 103.27 180.60 194.27 New Peer Group 100.00 105.09 69.11 106.04 177.48 192.24 4 Assumes that an investment in Valero common stock, the S&P 500 index, our old peer group, and our new peer group was $100 on December 31, 2018.
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.
Removed
(b) The average price paid per share reported in this column excludes brokerage commissions and a one percent excise tax on share purchases.
Added
As of December 31, 2024, we had $1.8 billion remaining available for purchase under the February 2024 Program.
Removed
LyondellBasell Industries N.V. was added to the prior year’s peer group because of its similarities to us in size, complexity, and exposure to commodity pricing volatility for both its products and feedstocks.
Removed
LyondellBasell Industries N.V. also helps to balance the full portfolio of peers by helping ensure accountability of performance both within the core downstream segment of the oil and gas industry, and also in adjacent segments that face similar challenges and opportunities.

Item 7. Management's Discussion & Analysis

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

83 edited+20 added−21 removed47 unchanged
Biggest changeFinancial Highlights by Segment and Total Company (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 (e) 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 46 Table of Contents Financial Highlights by Segment and Total Company (continued) (millions of dollars) Year Ended December 31, 2022 Refining Renewable Diesel Ethanol Corporate and Eliminations Total Revenues: Revenues from external customers $ 168,154 $ 3,483 $ 4,746 $ — $ 176,383 Intersegment revenues 56 2,018 740 (2,814) — Total revenues 168,210 5,501 5,486 (2,814) 176,383 Cost of sales: Cost of materials and other (a) 144,588 4,350 4,628 (2,796) 150,770 Operating expenses (excluding depreciation and amortization expense reflected below) 5,509 255 625 — 6,389 Depreciation and amortization expense (b) 2,247 122 59 — 2,428 Total cost of sales 152,344 4,727 5,312 (2,796) 159,587 Asset impairment loss (c) — — 61 — 61 Other operating expenses 63 — 3 — 66 General and administrative expenses (excluding depreciation and amortization expense reflected below) (d) — — — 934 934 Depreciation and amortization expense — — — 45 45 Operating income by segment $ 15,803 $ 774 $ 110 $ (997) 15,690 Other income, net (e) 179 Interest and debt expense, net of capitalized interest (562) Income before income tax expense 15,307 Income tax expense (f) 3,428 Net income 11,879 Less: Net income attributable to noncontrolling interests 351 Net income attributable to Valero Energy Corporation stockholders $ 11,528 47 Table of Contents Average Market Reference Prices and Differentials Year Ended December 31, 2023 2022 Refining Feedstocks (dollars per barrel) Brent crude oil $ 82.27 $ 98.86 Brent less West Texas Intermediate (WTI) crude oil 4.60 4.43 Brent less WTI Houston crude oil 3.15 2.82 Brent less Dated Brent crude oil (0.44) (2.22) Brent less Argus Sour Crude Index crude oil 5.34 7.42 Brent less Maya crude oil 13.33 11.68 Brent less Western Canadian Select Houston crude oil 12.15 15.55 WTI crude oil 77.67 94.43 Natural gas (dollars per million British thermal units) 2.23 5.83 RVO (dollars per barrel) (g) 7.02 7.72 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, 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.
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 discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” below 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. 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).
As of December 31, 2023, 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, 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.
BUSINESS AND PROPERTIES—OUR COMPREHENSIVE LIQUID FUELS STRATEGY— Our Low-Carbon Projects ” for a description of our low-carbon projects. 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.
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.
We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty.
We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, current and potential counterparties, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty.
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, 2023 and 2022.
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.
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, 2023. (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, 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.
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,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” 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,” “ambition,” “could,” “would,” “should,” “may,” “strive,” “seek,” “pursue,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” “evaluate,” and similar expressions.
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. 64 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 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.
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 2023 compared to 2022.
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.
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, 2023, 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, 2024, and also included in the table above in debt obligations – short-term.
(h) 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.
(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.
(b) Excludes $260 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 $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.
We believe that our allocation of growth capital into low-carbon projects to date has been consistent with such targets and ambition. Certain low-carbon projects have been completed or are already in execution and the associated capital investments are included in our expected capital investments for 2024.
We believe that our allocation of growth capital into low-carbon projects to date has been consistent with such targets and ambition. Certain low-carbon projects have been completed or are already in execution and the associated capital investments are included in our expected capital investments for 2025.
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 2023 compared to 2022.
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.
Environmental Matters Our operations are subject to extensive environmental regulations by government authorities relating to, among other matters, the 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 management, pollution prevention measures, GHG and other emissions, our facilities and operations, and characteristics and composition of many of our products.
The discussion for the year ended December 31, 2021 and comparison between the years ended December 31, 2022 and 2021 have been omitted from this annual report on Form 10-K for the year ended December 31, 2023, as such information can be found in “ITEM 7.
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.
While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the first quarter of 2024. • Gasoline and diesel demand have returned to pre-pandemic levels and are expected to follow typical seasonal patterns.
While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Notes to Consolidated Financial Statements or other political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the first quarter of 2025. • Gasoline and diesel demand have exceeded pre-pandemic levels and are expected to follow typical seasonal patterns.
Ethanol Segment Results The following table includes selected financial and operating data of our Ethanol segment for 2023 and 2022. 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 2024 and 2023. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
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, and ethanol and corn related co-products; • demand for, and supplies of, crude oil and other feedstocks; • the effects of public health threats, pandemics, and epidemics, such as the COVID-19 pandemic and variants of the virus, 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; 40 Table of Contents • acts of terrorism aimed at either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, 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, 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 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 renewable fuels production 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, 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 and emission credits needed under other environmental emissions 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 constructing such planned projects; • earthquakes, hurricanes, tornadoes, winter storms, 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, and ethanol; • 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, 41 Table of Contents introduction of a global minimum tax, windfall taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2, actions implemented under the Renewable and Low-Carbon Fuel Programs and other environmental emissions 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 or operations; • 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 the states, counties, cities, and other jurisdictions in the countries in which we operate or otherwise do business; • 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 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, 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; • 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.
Also in note (h), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 61 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure.
Also in note (b), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 59 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure.
Because environmental laws and regulations are becoming more complex and stringent and new 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. See Note 8 of Notes to Consolidated Financial Statements for disclosure of our environmental liabilities.
See the tables in note (h) beginning on page 54 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.
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.
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; • future Refining segment margins, including gasoline and distillate margins, and discounts; • 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 and storage capacity; • expectations regarding the levels of, 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; • 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; 39 Table of Contents • 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 and refined petroleum products, renewable diesel, and 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 SBx 1-2 and the matters discussed 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; • 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.
RISK FACTORS” in this report. Any one of these factors, or a combination of these factors, could materially affect our future results of operations and whether any forward-looking statements ultimately prove to be accurate.
RISK FACTORS” in this report. Any one of these factors, or a combination of these factors, could materially affect our future business, financial condition, results of operations, and liquidity and whether any forward-looking statements ultimately prove to be accurate.
This discussion and analysis includes the years ended December 31, 2023 and 2022 and comparison between such years.
This discussion and analysis includes the years ended December 31, 2024 and 2023 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, 2022, which was filed on February 23, 2023.
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.
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 below under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 57 . 43 Table of Contents Results for the Year Ended December 31, 2023 For 2023, we reported net income attributable to Valero stockholders of $8.8 billion compared to $11.5 billion for 2022.
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.
In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income. Our investing activities primarily consisted of $1.9 billion in capital investments, as defined below under “Capital Investments,” of which $294 million related to capital investments made by DGD.
In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income. Our investing activities primarily consisted of $1.9 billion in capital investments, of which $294 million related to capital investments made by DGD.
RISK FACTORS—Legal, Government, and Regulatory Risks— We are subject to risks arising from legal, political, and regulatory developments regarding climate, GHG emissions, and the environment.” 63 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-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.
Our operating results for 2023, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found below under “RESULTS OF OPERATIONS” beginning on page 46 . Our operations generated $9.2 billion of cash in 2023.
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.
This decrease in revenues was partially offset by a decrease in cost of sales of $27.8 billion primarily due to decreases in crude oil and other feedstock costs. These changes resulted in a $3.8 billion decrease in operating income, from $15.7 billion in 2022 to $11.9 billion in 2023.
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.
LEGAL PROCEEDINGS” above, 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 effect 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, and ethanol industry fundamentals; • expectations regarding our risk management activities, including the anticipated effects of our hedge transactions; • expectations regarding our counterparties, 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 Renewable and Low-Carbon Fuel Programs, blending and tax credits, or efficiency standards that impact demand for renewable fuels; and • expectations regarding our low-carbon fuels strategy, publicly announced GHG emissions reduction/displacement targets and ambitions, 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; • 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.
Year Ended December 31, 2023 2022 Reconciliation of Renewable Diesel operating income to Renewable Diesel margin Renewable Diesel operating income $ 852 $ 774 Adjustments: Operating expenses (excluding depreciation and amortization expense) 358 255 Depreciation and amortization expense 231 122 Renewable Diesel margin $ 1,441 $ 1,151 • Ethanol margin is defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, the asset impairment loss, and other operating expenses, as reflected in the table below.
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, 2023 2022 Reconciliation of capital investments to capital investments attributable to Valero Capital expenditures (excluding VIEs) $ 665 $ 788 Capital expenditures of VIEs: DGD 235 853 Other VIEs 11 40 Deferred turnaround and catalyst cost expenditures (excluding VIEs) 946 1,030 Deferred turnaround and catalyst cost expenditures of DGD 59 26 Investments in nonconsolidated joint ventures — 1 Capital investments 1,916 2,738 Adjustments: DGD’s capital investments attributable to our joint venture member (147) (439) Capital expenditures of other VIEs (11) (40) Capital investments attributable to Valero $ 1,758 $ 2,259 61 Table of Contents Contractual Obligations Below is a summary of our contractual obligations (in millions) as of December 31, 2023 that are expected to be paid within the next year and thereafter.
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.
Cash Flows for the Year Ended December 31, 2022 In 2022, we used the $12.6 billion of cash generated by our operations and the $3.2 billion from the debt issuance and borrowings to make $2.8 billion of investments in our business, repay $6.0 billion of debt and finance lease obligations (including premiums paid on the early retirement of debt), return $6.1 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $740 million.
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.
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.
Noncash charges primarily included $2.8 billion of depreciation and amortization 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. In addition, see “RESULTS OF OPERATIONS” for an analysis of the significant components of our net income.
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 2023, we used cash on hand to purchase and retire $199 million of our public debt.
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.
Gulf Coast (USGC) used cooking oil (dollars per pound) 0.58 0.77 USGC distillers corn oil (dollars per pound) 0.63 0.77 USGC fancy bleachable tallow (dollars per pound) 0.59 0.75 Ethanol Chicago Board of Trade corn (dollars per bushel) 5.65 6.94 New York Harbor ethanol (dollars per gallon) 2.34 2.57 2023 Compared to 2022 Total Company, Corporate, and Other The following table includes selected financial data for the total company, corporate, and other for 2023 and 2022.
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.
West Coast: CARBOB 87 gasoline less Brent 28.45 31.32 CARB diesel less Brent 32.79 40.97 48 Table of Contents Average Market Reference Prices and Differentials (continued) Year Ended December 31, 2023 2022 Renewable Diesel New York Mercantile Exchange ULS diesel (dollars per gallon) $ 2.81 $ 3.54 Biodiesel RIN (dollars per RIN) 1.35 1.67 California LCFS (dollars per metric ton) 72.42 98.73 U.S.
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.
Note references in this section can be found on pages 53 through 56 .
Note references in this section can be found on pages 52 through 54 .
Also on page 61 , 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, 2023 were favorably impacted by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained.
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.
We have not entered into any transactions, agreements, or other contractual arrangements that would result in off-balance sheet liabilities. 62 Table of Contents Other Matters Impacting Liquidity and Capital Resources Stock Purchase Programs During the year ended December 31, 2023, we purchased for treasury 39,717,265 of our shares for a total cost of $5.2 billion.
We will continue to evaluate further deleveraging opportunities. We have not entered into any transactions, agreements, or other contractual arrangements that would result in off-balance sheet liabilities. Other Matters Impacting Liquidity and Capital Resources Stock Purchase Programs During the year ended December 31, 2024, we purchased for treasury 19,115,715 of our shares for a total cost of $2.9 billion.
Gulf Coast: CBOB gasoline less Brent 8.83 9.54 Ultra-low-sulfur (ULS) diesel less Brent 25.06 38.73 Propylene less Brent (not RVO adjusted) (47.47) (42.73) U.S. Mid-Continent: CBOB gasoline less WTI 17.70 15.88 ULS diesel less WTI 32.37 44.11 North Atlantic: CBOB gasoline less Brent 15.61 19.24 ULS diesel less Brent 29.47 49.29 U.S.
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.
Ethanol segment adjusted operating income increased by $418 million primarily due to lower corn prices, higher production volumes, and lower operating expenses (excluding depreciation and amortization expense), partially offset by lower ethanol and corn related co-product prices. 44 Table of Contents Outlook Many uncertainties remain with respect to the supply and demand imbalance in the petroleum-based products market worldwide.
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.
The following table also reflects capital investments attributable to Valero, which is a non-GAAP measure 59 Table of Contents that we define and reconcile to capital investments below under “Capital Investments Attributable to Valero.” Year Ending December 31, 2024 (a) Year Ended December 31, 2023 2022 Capital investments by nature of the project (b): Sustaining capital investments $ 1,620 $ 1,486 $ 1,368 Growth capital investments: Low-carbon growth capital investments 345 237 836 Other growth capital investments 200 193 534 Total growth capital investments 545 430 1,370 Total capital investments $ 2,165 $ 1,916 $ 2,738 Capital investments by segment: Refining $ 1,605 $ 1,488 $ 1,764 Renewable Diesel 430 294 879 Ethanol 60 43 22 Corporate 70 91 73 Total capital investments 2,165 1,916 2,738 Adjustments: Renewable Diesel capital investments attributable to the other joint venture member in DGD (215) (147) (439) Capital expenditures of other VIEs — (11) (40) Capital investments attributable to Valero $ 1,950 $ 1,758 $ 2,259 ________________________ (a) All expected amounts for the year ending December 31, 2024 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, 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 debt issuance, borrowings, and repayments are described in Note 9 of Notes to Consolidated Financial Statements. 58 Table of Contents As previously noted, our operations generated $12.6 billion of cash in 2022, driven primarily by net income of $11.9 billion and noncash charges to income of $2.3 billion, partially offset by an unfavorable change in working capital of $1.6 billion.
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.
In addition, conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil discounts. • 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 (h) beginning on page 54 , highlight our results of operations, our operating performance, and market reference prices that directly impact our operations.
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.
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.
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.
(b) Capital investments attributable to Valero by nature of the project are as follows (in millions): Year Ending December 31, 2024 Year Ended December 31, 2023 2022 Sustaining capital investments $ 1,565 $ 1,449 $ 1,340 Growth capital investments: Low-carbon growth capital investments 185 126 422 Other growth capital investments 200 183 497 Total growth capital investments 385 309 919 Capital investments attributable to Valero $ 1,950 $ 1,758 $ 2,259 We have publicly announced GHG emissions reduction/displacement targets and a long-term ambition.
(b) Capital investments attributable to Valero by nature of the project are as follows (in millions): Year Ending December 31, 2025 Year Ended December 31, 2024 2023 Sustaining capital investments $ 1,600 $ 1,634 $ 1,449 Growth capital investments 350 254 309 Capital investments attributable to Valero $ 1,950 $ 1,888 $ 1,758 We have publicly announced GHG emissions reduction/displacement targets and a long-term ambition.
Year Ended December 31, 2023 2022 Reconciliation of Refining operating income to Refining margin Refining operating income $ 11,511 $ 15,803 Adjustments: Modification of RVO (see note (a)) — (104) Operating expenses (excluding depreciation and amortization expense) 5,208 5,509 Depreciation and amortization expense 2,351 2,247 Other operating expenses 17 63 Refining margin $ 19,087 $ 23,518 54 Table of Contents • 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, 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.
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 $4.4 billion in 2023 compared to 2022.
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.
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, 2023 2022 Cash flows provided by (used in): Operating activities $ 9,229 $ 12,574 Investing activities (1,865) (2,805) Financing activities: Debt issuance and borrowings 2,420 3,153 Repayments of debt and finance lease obligations (including premiums paid on early retirement of debt) (2,687) (6,019) Return to stockholders: Purchases of common stock for treasury (5,136) (4,577) Common stock dividend payments (1,452) (1,562) Return to stockholders (6,588) (6,139) Other financing activities (86) 156 Financing activities (6,941) (8,849) Effect of foreign exchange rate changes on cash 139 (180) Net increase in cash and cash equivalents $ 562 $ 740 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 our available cash on hand by $562 million.
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.
The increase in Renewable Diesel segment margin was primarily due to the following: ◦ A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $1.9 billion. ◦ An increase in sales volumes of 1.4 million gallons per day had a favorable impact of approximately $724 million.
The decrease in Renewable Diesel segment margin was primarily due to the following: • A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $2.0 billion. • A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $1.7 billion.
We have developed an extensive multi-year capital investment program, which we update and revise based on changing internal and external factors. The following table reflects our expected capital investments for the year ending December 31, 2024 by nature of the project and reportable segment, along with historical amounts for the years ended December 31, 2023 and 2022 (in millions).
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).
The table on page 49 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in 2023 compared to 2022.
Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 49 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in 2024 compared to 2023.
Refining Segment Results The following table includes selected financial and operating data of our Refining segment for 2023 and 2022. 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.
The increase in Ethanol segment margin was primarily due to the following: ◦ Lower corn prices had a favorable impact of approximately $618 million. 52 Table of Contents ◦ An increase in production volumes of 501,000 gallons per day had a favorable impact of approximately $150 million. ◦ Lower ethanol prices had an unfavorable impact of approximately $337 million. ◦ Lower prices for the corn related co-products that we produce, primarily DDGs and inedible distillers corn oils, had an unfavorable impact of approximately $129 million. • Ethanol segment operating expenses (excluding depreciation and amortization expense) decreased by $110 million primarily due to lower natural gas costs. ________________________ The following notes relate to references on pages 46 through 52 .
The decrease in Ethanol segment margin was primarily due to the following: • A decrease in ethanol prices had an unfavorable impact of approximately $875 million. • A decrease in prices for the co-products that we produce, primarily DDGs and inedible DCOs, had an unfavorable impact of approximately $300 million. • A decrease in corn prices had a favorable impact of approximately $905 million. • An increase in production volumes of 171,000 gallons per day had a favorable impact of approximately $35 million. ________________________ The following notes relate to references on pages 46 through 52 .
Year Ended December 31, 2023 2022 Reconciliation of Ethanol operating income to Ethanol margin Ethanol operating income $ 553 $ 110 Adjustments: Operating expenses (excluding depreciation and amortization expense) 515 625 Depreciation and amortization expense (see note (b)) 80 59 Asset impairment loss (see note (c)) — 61 Other operating expenses 16 3 Ethanol margin $ 1,164 $ 858 • Adjusted Refining operating income is defined as Refining segment operating income excluding the modification of RVO adjustment 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.
Refining segment adjusted operating income decreased by $4.2 billion primarily due to lower gasoline and distillate (primarily diesel) margins, partially offset by higher discounts on crude oils and other feedstocks and lower operating expenses (excluding depreciation and amortization expense). • Renewable Diesel segment.
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.
Renewable Diesel Segment Results The following table includes selected financial and operating data of our Renewable Diesel segment for 2023 and 2022. 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.
Renewable Diesel segment operating income increased by $78 million primarily due to lower feedstock costs and higher sales volumes, partially offset by lower product prices (primarily renewable diesel), higher operating expenses (excluding depreciation and amortization expense), and higher depreciation and amortization expense. • Ethanol segment.
Renewable Diesel segment operating income decreased by $345 million primarily due to lower product prices (primarily renewable diesel), partially offset by lower feedstock costs. • Ethanol segment.
Year Ended December 31, 2023 2022 Change Operating income $ 852 $ 774 $ 78 Renewable Diesel margin (see note (h)) 1,441 1,151 290 Operating expenses (excluding depreciation and amortization expense reflected below) 358 255 103 Depreciation and amortization expense 231 122 109 Sales volumes (thousand gallons per day) (see note (i)) 3,539 2,175 1,364 Renewable Diesel segment operating income increased by $78 million in 2023 compared to 2022.
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, 2023 2022 Change Revenues $ 144,766 $ 176,383 $ (31,617) Cost of sales (see notes (a) and (b)) 131,834 159,587 (27,753) Operating income 11,858 15,690 (3,832) Adjusted operating income (see note (h)) 11,891 15,710 (3,819) Other income, net (see note (e)) 502 179 323 Income tax expense (see note (f)) 2,619 3,428 (809) Revenues decreased by $31.6 billion in 2023 compared to 2022 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment.
Year Ended December 31, 2024 2023 Change Revenues $ 129,881 $ 144,766 $ (14,885) Cost of sales 125,076 131,834 (6,758) Operating income 3,755 11,858 (8,103) Adjusted operating income (see note (b)) 3,799 11,891 (8,092) Income tax expense (see note (a)) 692 2,619 (1,927) Revenues decreased by $14.9 billion in 2024 compared to 2023 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment.
This cash was used to make $1.9 billion of capital investments in our business and return $6.6 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we reduced our outstanding debt through the purchase of $199 million of our public debt in 2023.
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.
Year Ended December 31, 2023 2022 Change Operating income $ 11,511 $ 15,803 $ (4,292) Adjusted operating income (see note (h)) 11,528 15,762 (4,234) Refining margin (see note (h)) 19,087 23,518 (4,431) Operating expenses (excluding depreciation and amortization expense reflected below) 5,208 5,509 (301) Depreciation and amortization expense 2,351 2,247 104 Throughput volumes (thousand BPD) (see note (i)) 2,979 2,953 26 Refining segment operating income decreased by $4.3 billion in 2023 compared to 2022; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (h), decreased by $4.2 billion in 2023 compared to 2022.
Year Ended December 31, 2024 2023 Change Operating income $ 3,971 $ 11,511 $ (7,540) Adjusted operating income (see note (b)) 3,988 11,528 (7,540) Refining margin (see note (b)) 11,325 19,087 (7,762) Operating expenses (excluding depreciation and amortization expense reflected below) 4,946 5,208 (262) Depreciation and amortization expense 2,391 2,351 40 Throughput volumes (thousand BPD) (see note (d)) 2,912 2,979 (67) Refining segment operating income decreased by $7.5 billion in 2024 compared to 2023.
Year Ended December 31, 2023 2022 Change Operating income $ 553 $ 110 $ 443 Adjusted operating income (see note (h)) 569 151 418 Ethanol margin (see note (h)) 1,164 858 306 Operating expenses (excluding depreciation and amortization expense reflected below) 515 625 (110) Depreciation and amortization expense (see note (b)) 80 59 21 Asset impairment loss (see note (c)) — 61 (61) Production volumes (thousand gallons per day) (see note (i)) 4,367 3,866 501 Ethanol segment operating income increased by $443 million in 2023 compared to 2022; however, Ethanol segment adjusted operating income, which excludes the adjustments in the table in note (h), increased by $418 million in 2023 compared to 2022.
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, 2023 2022 Reconciliation of total company operating income to adjusted operating income Total company operating income $ 11,858 $ 15,690 Adjustments: Modification of RVO (see note (a)) — (104) Gain on sale of ethanol plant (see note (b)) — (23) Asset impairment loss (see note (c)) — 61 Environmental reserve adjustment (see note (d)) — 20 Other operating expenses 33 66 Adjusted operating income $ 11,891 $ 15,710 (i) 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, 2023 (in millions): Available capacity from our committed facilities (a): Valero Revolver $ 3,996 Accounts receivable sales facility 1,300 Total available capacity 5,296 Cash and cash equivalents (b) 5,164 Total liquidity $ 10,460 _______________________ (a) Excludes the committed facilities of the consolidated VIEs.
(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.
Year Ended December 31, 2023 2022 Change Refining segment: Operating income $ 11,511 $ 15,803 $ (4,292) Adjusted operating income 11,528 15,762 (4,234) Renewable Diesel segment: Operating income 852 774 78 Ethanol segment: Operating income 553 110 443 Adjusted operating income 569 151 418 Total company: Operating income 11,858 15,690 (3,832) Adjusted operating income 11,891 15,710 (3,819) While our operating income decreased by $3.8 billion in 2023 compared to 2022, adjusted operating income also decreased by $3.8 billion primarily due to the following: • Refining segment.
Year Ended December 31, 2024 2023 Change Refining segment: Operating income $ 3,971 $ 11,511 $ (7,540) Adjusted operating income 3,988 11,528 (7,540) Renewable Diesel segment: Operating income 507 852 (345) Ethanol segment: Operating income 288 553 (265) Adjusted operating income 315 569 (254) Total company: Operating income 3,755 11,858 (8,103) Adjusted operating income 3,799 11,891 (8,092) While our operating income decreased by $8.1 billion in 2024 compared to 2023, adjusted operating income also decreased by $8.1 billion primarily due to the following: • Refining segment.
Payments Due by Period Short-Term Long-Term Total Debt obligations (a) $ 1,197 $ 8,098 $ 9,295 Interest payments related to debt obligations (b) 478 4,873 5,351 Operating lease liabilities (c) 398 1,002 1,400 Finance lease obligations (c) 312 3,026 3,338 Other long-term liabilities (d) — 1,510 1,510 Purchase obligations (e) 17,852 9,554 27,406 ________________________ (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) $ 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.
Our operations have historically generated positive cash flows to fulfill our working capital requirements and other uses of cash as discussed below. Capital Investments Capital investments are comprised of our capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, as reflected in our statements of cash flows as shown on page 76 .
Capital Investments Capital investments are composed of our capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, as reflected in our statements of cash flows as shown on page 74 . Capital investments exclude acquisitions, if any.
Non-GAAP financial measures are as follows (in millions): • Refining margin is defined as Refining segment operating income excluding the modification of RVO adjustment, operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility. 52 Table of Contents Non-GAAP financial measures are as follows (in millions): • Refining margin is defined as Refining 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, 2023 2022 Reconciliation of Refining operating income to adjusted Refining operating income Refining operating income $ 11,511 $ 15,803 Adjustments: Modification of RVO (see note (a)) — (104) Other operating expenses 17 63 Adjusted Refining operating income $ 11,528 $ 15,762 55 Table of Contents • Adjusted Ethanol operating income is defined as Ethanol segment operating income excluding the gain on sale of ethanol plant, the asset impairment loss, and other operating expenses, as reflected in the table below.
Year Ended December 31, 2024 2023 Reconciliation of Refining operating income to adjusted Refining operating income Refining operating income $ 3,971 $ 11,511 Adjustment: Other operating expenses 17 17 Adjusted Refining operating income $ 3,988 $ 11,528 • Adjusted Ethanol operating income is defined as Ethanol segment operating income excluding other operating expenses, as reflected in the table below.
Year Ended December 31, 2023 2022 Reconciliation of Ethanol operating income to adjusted Ethanol operating income Ethanol operating income $ 553 $ 110 Adjustments: Gain on sale of ethanol plant (see note (b)) — (23) Asset impairment loss (see note (c)) — 61 Other operating expenses 16 3 Adjusted Ethanol operating income $ 569 $ 151 • Adjusted operating income is defined as total company operating income excluding the modification of RVO adjustment, the gain on sale of ethanol plant, the asset impairment loss, the environmental reserve adjustment, and other operating expenses, as reflected in the table below.
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.
Adjusted operating income also decreased by $3.8 billion, from $15.7 billion in 2022 to $11.9 billion in 2023.
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.
Our investing activities of $2.8 billion primarily consisted of $2.7 billion in capital investments, of which $879 million related to capital investments made by DGD. Our Capital Resources Our material cash requirements as of December 31, 2023 primarily consist of working capital requirements, capital investments, contractual obligations, and other matters, as described below.
Our Capital Resources Our material cash requirements as of December 31, 2024 primarily consisted of working capital requirements, capital investments, contractual obligations, and other matters, as described below. Our operations have historically generated positive cash flows to fulfill our working capital requirements and other uses of cash as discussed below.
See Note 13 of Notes to Consolidated Financial Statements for a discussion of our employee benefit plans. Cash Held by Our Foreign Subsidiaries As of December 31, 2023, $4.3 billion of our cash and cash equivalents was held by our foreign subsidiaries.
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.
We will continue to evaluate the timing of purchases when appropriate. We have no obligation to make purchases under these programs. Pension Plan Funding We plan to contribute $113 million to our pension plans and $22 million to our other postretirement benefit plans during 2024.
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.
The decrease of $2.7 billion was primarily due to a decrease in operating income of $3.8 billion, partially offset by an increase in “other income, net” of $323 million and a decrease in income tax expense of $809 million.
The decrease of $6.1 billion was primarily due to a decrease in operating income of $8.1 billion, partially offset by a decrease in income tax expense of $1.9 billion. The details of our operating income and adjusted operating income, where applicable, by segment and in total are reflected below (in millions).
The decrease in Refining segment margin was primarily due to the following: ◦ A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $5.6 billion. 50 Table of Contents ◦ A decrease in gasoline margins had an unfavorable impact of approximately $529 million. ◦ Higher discounts on crude oils had a favorable impact of approximately $1.1 billion. ◦ Higher discounts on other feedstocks had a favorable impact of approximately $438 million. • Refining segment operating expenses (excluding depreciation and amortization expense) decreased by $301 million primarily due to lower natural gas costs of $438 million, partially offset by increases in chemicals and catalyst costs of $96 million and certain employee compensation expenses of $39 million.
The decrease in Refining segment margin was primarily due to the following: ◦ A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $4.3 billion. ◦ A decrease in gasoline margins had an unfavorable impact of approximately $2.4 billion. ◦ A decline in crude oil differentials had an unfavorable impact of approximately $585 million. ◦ A decrease in throughput volumes of 67,000 barrels per day had an unfavorable impact of approximately $260 million. • Refining segment operating expenses (excluding depreciation and amortization expense) decreased by $262 million primarily due to decreases in energy costs of $149 million, property taxes of $52 million, and chemicals and catalyst costs of $39 million. 50 Table of Contents Renewable Diesel Segment Results The following table includes selected financial and operating data of our Renewable Diesel segment for 2024 and 2023.

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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, 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 % December 31, 2022 (a) Expected Maturity Dates 2023 2024 2025 2026 2027 There- after Total Fair Value Fixed rate $ — $ 167 $ 441 $ 672 $ 578 $ 6,606 $ 8,464 $ 8,041 Average interest rate — % 1.2 % 3.2 % 4.2 % 2.2 % 5.3 % 4.8 % Floating rate $ 861 $ — $ — $ — $ — $ — $ 861 $ 861 Average interest rate 7.1 % — % — % — % — % — % 7.1 % ________________________ (a) Excludes unamortized discounts and debt issuance costs.
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.
A 10 percent increase or decrease in our floating interest rates would not have a material effect to our results of operations. Principal cash flows and related weighted-average interest rates by expected maturity dates are presented. See Note 9 of Notes to Consolidated Financial Statements for additional information related to our debt.
A 10 percent increase or decrease in our floating interest rates would not have a material effect on our results of operations. Principal cash flows and related weighted-average interest rates by expected maturity dates are presented. See Note 9 of Notes to Consolidated Financial Statements for additional information related to our debt.
As of December 31, 2023 and 2022, 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, 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.
To manage this risk, we enter into contracts to purchase these credits. As of December 31, 2023 and 2022, 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, 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.
See Note 20 of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, 2023. 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, 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 a discussion about these blending programs. 65 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. 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.
As of December 31, 2023 and 2022, 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. 66 Table of Contents
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

Other VLO 10-K year-over-year comparisons