Valero Energy Corporation【VLO】株式ニュース

Valero Energy Reports 2025 Fourth Quarter and Full Year ResultsJanuary 29, 2026 6:30 AM
Business Wire

Reported net income attributable to Valero stockholders of $1.1 billion, or $3.73 per share, for the fourth quarter and $2.3 billion, or $7.57 per share, for the year

Reported adjusted net income attributable to Valero stockholders of $1.2 billion, or $3.82 per share, for the fourth quarter and $3.3 billion, or $10.61 per share, for the year

Stockholder cash returns totaled $1.4 billion in the fourth quarter and $4.0 billion in the year

Increased quarterly cash dividend on common stock by 6 percent to $1.20 per share on January 22, 2026

The St. Charles FCC Unit optimization project is still expected to begin operations in the second half of 2026

Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $1.1 billion, or $3.73 per share, for the fourth quarter of 2025, compared to net income of $281 million, or $0.88 per share, for the fourth quarter of 2024. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $1.2 billion, or $3.82 per share, for the fourth quarter of 2025, compared to $207 million, or $0.64 per share, for the fourth quarter of 2024.

For 2025, net income attributable to Valero stockholders was $2.3 billion, or $7.57 per share, compared to $2.8 billion, or $8.58 per share, in 2024. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $3.3 billion, or $10.61 per share, in 2025, compared to $2.7 billion, or $8.48 per share, in 2024.

“2025 was our best year for mechanical availability, personnel safety, and environmental performance, building on the personnel and process safety records we set in 2024,” said Lane Riggs, Valero’s Chairman, Chief Executive Officer and President. “We also achieved record refining throughput and ethanol production in both the fourth quarter and the full year. These accomplishments reflect the hard work, expertise, and dedication of our entire team.”

Refining

The Refining segment reported operating income of $1.7 billion for the fourth quarter of 2025, compared to $437 million for the fourth quarter of 2024. Adjusted operating income was $1.7 billion for the fourth quarter of 2025, compared to $441 million for the fourth quarter of 2024. Refining throughput volumes averaged 3.1 million barrels per day in the fourth quarter of 2025.

Renewable Diesel

The Renewable Diesel segment, which consists of the Diamond Green Diesel joint venture (DGD), reported $92 million of operating income for the fourth quarter of 2025, compared to $170 million for the fourth quarter of 2024. Segment sales volumes averaged 3.1 million gallons per day in the fourth quarter of 2025.

Ethanol

The Ethanol segment reported $117 million of operating income for the fourth quarter of 2025, compared to $20 million for the fourth quarter of 2024. Ethanol production volumes averaged 4.8 million gallons per day in the fourth quarter of 2025.

Corporate and Other

General and administrative expenses were $315 million in the fourth quarter of 2025 and $1.0 billion for the year. The effective tax rate for 2025 was 25 percent.

Investing and Financing Activities

Net cash provided by operating activities was $2.1 billion in the fourth quarter of 2025. Included in this amount was a $349 million unfavorable impact from working capital and $269 million of adjusted net cash provided by operating activities associated with the other joint venture member’s share of DGD. Excluding these items, adjusted net cash provided by operating activities was $2.1 billion in the fourth quarter of 2025.

Net cash provided by operating activities in 2025 was $5.8 billion. Included in this amount was a $192 million unfavorable impact from working capital and $30 million of adjusted net cash provided by operating activities associated with the other joint venture member’s share of DGD. Excluding these items, adjusted net cash provided by operating activities in 2025 was $6.0 billion.

Capital investments totaled $412 million in the fourth quarter of 2025, of which $368 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to the other joint venture member’s share of DGD and other variable interest entities, capital investments attributable to Valero were $405 million in the fourth quarter of 2025 and $1.8 billion for the year.

Valero stockholder cash returns totaled $1.4 billion in the fourth quarter of 2025, resulting in a payout ratio of 66 percent of adjusted net cash provided by operating activities. In 2025, Valero stockholder cash returns totaled $4.0 billion, resulting in a payout ratio of 67 percent for the year.

On January 22, 2026, Valero announced an increase of its quarterly cash dividend on common stock from $1.13 per share to $1.20 per share, demonstrating its strong financial position.

“Valero’s strong financial results and record operating performance highlight our operational and commercial excellence. We remain committed to our capital allocation framework that prioritizes balance sheet strength, disciplined capital investments, and shareholder returns,” said Riggs.

Liquidity and Financial Position

Valero ended 2025 with $8.3 billion of total debt, $2.4 billion of total finance lease obligations, and $4.7 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 18 percent as of December 31, 2025.

Strategic Update

Valero continues to make progress on the FCC Unit optimization project at the St. Charles Refinery that will enhance the refinery’s ability to produce high-value products. This $230 million project is still expected to begin operations in the second half of 2026.

Conference Call

Valero’s senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States (U.S.), Canada, the United Kingdom (U.K.), Ireland and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which produces low-carbon fuels including renewable diesel and sustainable aviation fuel (SAF), with a production capacity of approximately 1.2 billion gallons per year in the U.S. Gulf Coast region. See the annual report on Form 10-K for more information on SAF. Valero also owns 12 ethanol plants located in the U.S. Mid-Continent region with a combined production capacity of approximately 1.7 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel, and Ethanol segments. Please visit investorvalero.com for more information.

Valero Contacts

Investors:

Brian Donovan, Vice President – Investor Relations, 210-345-1682

Eric Herbort, Director – Investor Relations and Finance, 210-345-3331

Gautam Srivastava, Director – Investor Relations, 210-345-3992

Media:

Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Safe-Harbor Statement

Statements contained in this release and the accompanying earnings release tables, or made during the conference call, that state Valero’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” “intend,” “target,” “commitment,” “plans,” “forecast, “guidance” and other similar expressions identify forward-looking statements. Forward-looking statements in this release and the accompanying earnings release tables include, and those made on the conference call may include, statements relating to Valero’s low-carbon fuels strategy, expected timing, cost and performance of projects, our plans, actions, assets and operations in California and expected timing and cost of obligations and other financial statement impacts, future market and industry conditions, future operating and financial performance, future production and manufacturing ability and size, and management of future risks, among other matters. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting Valero’s operations and financial performance or the demand for Valero’s products. These factors also include, but are not limited to, the uncertainties that remain with respect to current or contemplated legal, political or regulatory developments that are adverse to or restrict refining and marketing operations, or that impose taxes or penalties on profits, windfalls, or margins above a certain level, tariffs and their effects on trading relationships, global geopolitical and other conflicts and tensions, the impact of inflation on margins and costs, economic activity levels, and the adverse effects the foregoing may have on Valero’s business plan, strategy, operations and financial performance. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission and available on Valero’s website at www.valero.com.

Use of Non-GAAP Financial Information

This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include adjusted net income attributable to Valero stockholders, adjusted earnings per common share – assuming dilution, Refining margin, Renewable Diesel margin, Ethanol margin, adjusted Refining operating income (loss), adjusted Ethanol operating income, adjusted Refining operating expenses (excluding depreciation and amortization expense), adjusted net cash provided by operating activities, and capital investments attributable to Valero. These non-GAAP financial measures have been included to help facilitate the comparison of operating results between periods. See the accompanying earnings release tables for a definition of non-GAAP measures and a reconciliation to their most directly comparable GAAP measures. Note (h) to the earnings release tables provides reasons for the use of these non-GAAP financial measures.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Statement of income data

Revenues

$

30,372

$

30,756

$

122,687

$

129,881

Cost of sales:

Cost of materials and other (a)

24,238

26,409

101,096

110,616

Taxes other than income taxes (b)

1,740

1,517

6,720

5,900

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

1,685

1,514

6,344

5,831

Depreciation and amortization expense

805

687

3,095

2,729

Total cost of sales

28,468

30,127

117,255

125,076

Asset impairment loss (d)

—

—

1,131

—

Other operating expenses (e)

2

4

15

44

General and administrative expenses (excluding depreciation and amortization expense reflected below)

315

266

1,042

961

Depreciation and amortization expense

12

11

63

45

Operating income

1,575

348

3,181

3,755

Other income, net

88

110

380

499

Interest and debt expense, net of capitalized interest

(139

)

(135

)

(556

)

(556

)

Income before income tax expense (benefit)

1,524

323

3,005

3,698

Income tax expense (benefit) (f)

355

(34

)

759

692

Net income

1,169

357

2,246

3,006

Less: Net income (loss) attributable to noncontrolling interests

35

76

(102

)

236

Net income attributable to Valero Energy Corporation stockholders

$

1,134

$

281

$

2,348

$

2,770

Earnings per common share

$

3.73

$

0.89

$

7.57

$

8.58

Weighted-average common shares outstanding (in millions)

303

315

309

322

Earnings per common share – assuming dilution

$

3.73

$

0.88

$

7.57

$

8.58

Weighted-average common shares outstanding – assuming dilution (in millions)

303

316

309

322

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

Renewable

Diesel

Ethanol

Corporate

and

Eliminations

Total

Three months ended December 31, 2025

Revenues:

Revenues from external customers

$

28,663

$

731

$

978

$

—

$

30,372

Intersegment revenues

3

665

275

(943

)

—

Total revenues

28,666

1,396

1,253

(943

)

30,372

Cost of sales:

Cost of materials and other (a)

23,065

1,162

951

(940

)

24,238

Taxes other than income taxes (b)

1,740

—

—

—

1,740

Operating expenses (excluding depreciation and amortization expense reflected below)

1,440

80

165

—

1,685

Depreciation and amortization expense

725

62

20

(2

)

805

Total cost of sales

26,970

1,304

1,136

(942

)

28,468

Other operating expenses

2

—

—

—

2

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

315

315

Depreciation and amortization expense

—

—

—

12

12

Operating income by segment

$

1,694

$

92

$

117

$

(328

)

$

1,575

Three months ended December 31, 2024

Revenues:

Revenues from external customers

$

29,334

$

522

$

900

$

—

$

30,756

Intersegment revenues

2

724

214

(940

)

—

Total revenues

29,336

1,246

1,114

(940

)

30,756

Cost of sales:

Cost of materials and other

25,493

919

933

(936

)

26,409

Taxes other than income taxes (b)

1,517

—

—

—

1,517

Operating expenses (excluding depreciation and amortization expense reflected below)

1,287

88

141

(2

)

1,514

Depreciation and amortization expense

598

69

20

—

687

Total cost of sales

28,895

1,076

1,094

(938

)

30,127

Other operating expenses

4

—

—

—

4

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

266

266

Depreciation and amortization expense

—

—

—

11

11

Operating income by segment

$

437

$

170

$

20

$

(279

)

$

348

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

Renewable

Diesel

Ethanol

Corporate

and

Eliminations

Total

Year ended December 31, 2025

Revenues:

Revenues from external customers

$

116,158

$

2,508

$

4,021

$

—

$

122,687

Intersegment revenues

8

2,089

956

(3,053

)

—

Total revenues

116,166

4,597

4,977

(3,053

)

122,687

Cost of sales:

Cost of materials and other (a)

96,080

4,178

3,913

(3,075

)

101,096

Taxes other than income taxes (b)

6,720

—

—

—

6,720

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

5,426

308

611

(1

)

6,344

Depreciation and amortization expense

2,754

267

79

(5

)

3,095

Total cost of sales

110,980

4,753

4,603

(3,081

)

117,255

Asset impairment loss (d)

1,131

—

—

—

1,131

Other operating expenses

15

—

—

—

15

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

1,042

1,042

Depreciation and amortization expense

—

—

—

63

63

Operating income (loss) by segment

$

4,040

$

(156

)

$

374

$

(1,077

)

$

3,181

Year ended December 31, 2024

Revenues:

Revenues from external customers

$

123,853

$

2,410

$

3,618

$

—

$

129,881

Intersegment revenues

10

2,656

868

(3,534

)

—

Total revenues

123,863

5,066

4,486

(3,534

)

129,881

Cost of sales:

Cost of materials and other

106,638

3,944

3,558

(3,524

)

110,616

Taxes other than income taxes (b)

5,900

—

—

—

5,900

Operating expenses (excluding depreciation and amortization expense reflected below)

4,946

350

536

(1

)

5,831

Depreciation and amortization expense

2,391

265

77

(4

)

2,729

Total cost of sales

119,875

4,559

4,171

(3,529

)

125,076

Other operating expenses (e)

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

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS REPORTED UNDER U.S. GAAP (h)

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of net income attributable to Valero Energy Corporation stockholders to adjusted net income attributable to Valero Energy Corporation stockholders

Net income attributable to Valero Energy Corporation stockholders

$

1,134

$

281

$

2,348

$

2,770

Adjustments:

Last-in, first-out (LIFO) liquidation adjustment (a)

37

—

37

—

Income tax benefit related to the LIFO liquidation adjustment

(9

)

—

(9

)

—

LIFO liquidation adjustment, net of taxes

28

—

28

—

Employee retention and separation costs (c)

—

—

50

—

Income tax benefit related to employee retention and separation costs

—

—

(11

)

—

Employee retention and separation costs, net of taxes

—

—

39

—

Asset impairment loss (d)

—

—

1,131

—

Income tax benefit related to asset impairment loss

—

—

(254

)

—

Asset impairment loss, net of taxes

—

—

877

—

Project liability adjustment (e)

—

—

—

29

Income tax benefit related to project liability adjustment

—

—

—

(7

)

Project liability adjustment, net of taxes

—

—

—

22

Second-generation biofuel tax credit (f)

—

(74

)

—

(53

)

Total adjustments

28

(74

)

944

(31

)

Adjusted net income attributable to Valero Energy Corporation stockholders

$

1,162

$

207

$

3,292

$

2,739

Reconciliation of earnings per common share – assuming dilution to adjusted earnings per common share – assuming dilution

Earnings per common share – assuming dilution

$

3.73

$

0.88

$

7.57

$

8.58

Adjustments:

LIFO liquidation adjustment (a)

0.09

—

0.09

—

Employee retention and separation costs (c)

—

—

0.12

—

Asset impairment loss (d)

—

—

2.83

—

Project liability adjustment (e)

—

—

—

0.07

Second-generation biofuel tax credit (f)

—

(0.24

)

—

(0.17

)

Total adjustments

0.09

(0.24

)

3.04

(0.10

)

Adjusted earnings per common share – assuming dilution

$

3.82

$

0.64

$

10.61

$

8.48

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of operating income (loss) by segment to segment margin, and reconciliation of operating income (loss) by segment to adjusted operating income by segment

Refining segment

Refining operating income

$

1,694

$

437

$

4,040

$

3,971

Adjustments:

LIFO liquidation adjustment (a)

37

—

37

—

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

1,440

1,287

5,426

4,946

Depreciation and amortization expense

725

598

2,754

2,391

Asset impairment loss (d)

—

—

1,131

—

Other operating expenses

2

4

15

17

Refining margin

$

3,898

$

2,326

$

13,403

$

11,325

Refining operating income

$

1,694

$

437

$

4,040

$

3,971

Adjustments:

LIFO liquidation adjustment (a)

37

—

37

—

Employee retention and separation costs (c)

—

—

50

—

Asset impairment loss (d)

—

—

1,131

—

Other operating expenses

2

4

15

17

Adjusted Refining operating income

$

1,733

$

441

$

5,273

$

3,988

Renewable Diesel segment

Renewable Diesel operating income (loss)

$

92

$

170

$

(156

)

$

507

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

80

88

308

350

Depreciation and amortization expense

62

69

267

265

Renewable Diesel margin

$

234

$

327

$

419

$

1,122

Ethanol segment

Ethanol operating income

$

117

$

20

$

374

$

288

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

165

141

611

536

Depreciation and amortization expense

20

20

79

77

Other operating expenses (e)

—

—

—

27

Ethanol margin

$

302

$

181

$

1,064

$

928

Ethanol operating income

$

117

$

20

$

374

$

288

Adjustment: Other operating expenses (e)

—

—

—

27

Adjusted Ethanol operating income

$

117

$

20

$

374

$

315

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of Refining segment operating income (loss) to Refining margin (by region), and reconciliation of Refining segment operating income (loss) to adjusted Refining segment operating income (loss) (by region) (i)

U.S. Gulf Coast region

Refining operating income

$

1,130

$

314

$

3,253

$

2,426

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

806

719

3,003

2,744

Depreciation and amortization expense

386

375

1,540

1,495

Other operating expenses

—

4

9

12

Refining margin

$

2,322

$

1,412

$

7,805

$

6,677

Refining operating income

$

1,130

$

314

$

3,253

$

2,426

Adjustment: Other operating expenses

—

4

9

12

Adjusted Refining operating income

$

1,130

$

318

$

3,262

$

2,438

U.S. Mid-Continent region

Refining operating income

$

143

$

30

$

508

$

449

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

211

194

816

753

Depreciation and amortization expense

87

79

325

333

Other operating expenses

2

—

5

3

Refining margin

$

443

$

303

$

1,654

$

1,538

Refining operating income

$

143

$

30

$

508

$

449

Adjustment: Other operating expenses

2

—

5

3

Adjusted Refining operating income

$

145

$

30

$

513

$

452

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of Refining segment operating income (loss) to Refining margin (by region), and reconciliation of Refining segment operating income (loss) to adjusted Refining segment operating income (loss) (by region) (i) (continued)

North Atlantic region

Refining operating income

$

620

$

233

$

1,587

$

1,162

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

210

169

763

698

Depreciation and amortization expense

79

70

303

268

Other operating expenses

—

—

—

1

Refining margin

$

909

$

472

$

2,653

$

2,129

Refining operating income

$

620

$

233

$

1,587

$

1,162

Adjustment: Other operating expenses

—

—

—

1

Adjusted Refining operating income

$

620

$

233

$

1,587

$

1,163

U.S. West Coast region

Refining operating loss

$

(199

)

$

(140

)

$

(1,308

)

$

(66

)

Adjustments:

LIFO liquidation adjustment (a)

37

—

37

—

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

213

205

844

751

Depreciation and amortization expense (g)

173

74

586

295

Asset impairment loss (d)

—

—

1,131

—

Other operating expenses

—

—

1

1

Refining margin

$

224

$

139

$

1,291

$

981

Refining operating loss

$

(199

)

$

(140

)

$

(1,308

)

$

(66

)

Adjustments:

LIFO liquidation adjustment (a)

37

—

37

—

Employee retention and separation costs (c)

—

—

50

—

Asset impairment loss (d)

—

—

1,131

—

Other operating expenses

—

—

1

1

Adjusted Refining operating loss

$

(162

)

$

(140

)

$

(89

)

$

(65

)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Throughput volumes (thousand barrels per day)

Feedstocks:

Heavy sour crude oil

520

608

536

504

Medium/light sour crude oil

282

239

215

241

Sweet crude oil

1,620

1,508

1,630

1,501

Residuals

169

126

159

165

Other feedstocks

118

104

91

113

Total feedstocks

2,709

2,585

2,631

2,524

Blendstocks and other

404

410

357

388

Total throughput volumes

3,113

2,995

2,988

2,912

Yields (thousand barrels per day)

Gasolines and blendstocks

1,544

1,494

1,470

1,433

Distillates

1,170

1,141

1,141

1,103

Other products (j)

423

393

403

406

Total yields

3,137

3,028

3,014

2,942

Operating statistics (h) (k)

Refining margin

$

3,898

$

2,326

$

13,403

$

11,325

Adjusted Refining operating income

$

1,733

$

441

$

5,273

$

3,988

Throughput volumes (thousand barrels per day)

3,113

2,995

2,988

2,912

Refining margin per barrel of throughput

$

13.61

$

8.44

$

12.29

$

10.62

Less:

Adjusted operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

5.03

4.67

4.93

4.64

Depreciation and amortization expense per barrel of throughput

2.53

2.17

2.53

2.24

Adjusted Refining operating income per barrel of throughput

$

6.05

$

1.60

$

4.83

$

3.74

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Operating statistics (h) (k)

Renewable Diesel margin

$

234

$

327

$

419

$

1,122

Renewable Diesel operating income (loss)

$

92

$

170

$

(156

)

$

507

Sales volumes (thousand gallons per day)

3,101

3,356

2,748

3,530

Renewable Diesel margin per gallon of sales

$

0.82

$

1.06

$

0.42

$

0.87

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per gallon of sales

0.28

0.28

0.31

0.27

Depreciation and amortization expense per gallon of sales

0.22

0.23

0.27

0.21

Renewable Diesel operating income (loss) per gallon of sales

$

0.32

$

0.55

$

(0.16

)

$

0.39

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

ETHANOL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Operating statistics (h) (k)

Ethanol margin

$

302

$

181

$

1,064

$

928

Adjusted Ethanol operating income

$

117

$

20

$

374

$

315

Production volumes (thousand gallons per day)

4,756

4,627

4,611

4,538

Ethanol margin per gallon of production

$

0.69

$

0.42

$

0.63

$

0.56

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per gallon of production

0.38

0.33

0.36

0.32

Depreciation and amortization expense per gallon of production

0.04

0.04

0.05

0.05

Adjusted Ethanol operating income per gallon of production

$

0.27

$

0.05

$

0.22

$

0.19

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Operating statistics by region (i)

U.S. Gulf Coast region (h) (k)

Refining margin

$

2,322

$

1,412

$

7,805

$

6,677

Adjusted Refining operating income

$

1,130

$

318

$

3,262

$

2,438

Throughput volumes (thousand barrels per day)

1,863

1,829

1,806

1,763

Refining margin per barrel of throughput

$

13.54

$

8.39

$

11.84

$

10.35

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

4.70

4.27

4.56

4.25

Depreciation and amortization expense per barrel of throughput

2.25

2.23

2.33

2.32

Adjusted Refining operating income per barrel of throughput

$

6.59

$

1.89

$

4.95

$

3.78

U.S. Mid-Continent region (h) (k)

Refining margin

$

443

$

303

$

1,654

$

1,538

Adjusted Refining operating income

$

145

$

30

$

513

$

452

Throughput volumes (thousand barrels per day)

462

473

451

445

Refining margin per barrel of throughput

$

10.41

$

6.97

$

10.04

$

9.44

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

4.97

4.47

4.95

4.62

Depreciation and amortization expense per barrel of throughput

2.04

1.81

1.97

2.05

Adjusted Refining operating income per barrel of throughput

$

3.40

$

0.69

$

3.12

$

2.77

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Operating statistics by region (i) (continued)

North Atlantic region (h) (k)

Refining margin

$

909

$

472

$

2,653

$

2,129

Adjusted Refining operating income

$

620

$

233

$

1,587

$

1,163

Throughput volumes (thousand barrels per day)

523

434

482

443

Refining margin per barrel of throughput

$

18.92

$

11.85

$

15.09

$

13.12

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

4.38

4.24

4.34

4.30

Depreciation and amortization expense per barrel of throughput

1.63

1.78

1.72

1.65

Adjusted Refining operating income per barrel of throughput

$

12.91

$

5.83

$

9.03

$

7.17

U.S. West Coast region (h) (k)

Refining margin

$

224

$

139

$

1,291

$

981

Adjusted Refining operating loss

$

(162

)

$

(140

)

$

(89

)

$

(65

)

Throughput volumes (thousand barrels per day)

265

259

249

261

Refining margin per barrel of throughput

$

9.19

$

5.80

$

14.17

$

10.26

Less:

Adjusted operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

8.72

8.60

8.72

7.86

Depreciation and amortization expense per barrel of throughput (g)

7.09

3.09

6.43

3.08

Adjusted Refining operating loss per barrel of throughput

$

(6.62

)

$

(5.89

)

$

(0.98

)

$

(0.68

)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Refining

Feedstocks (dollars per barrel)

Brent crude oil

$

63.11

$

73.98

$

68.18

$

79.79

Brent less West Texas Intermediate (WTI) crude oil

3.89

3.62

3.29

3.95

Brent less WTI Houston crude oil

3.08

2.31

2.29

2.48

Brent less Dated Brent crude oil

(0.55

)

(0.71

)

(0.82

)

(0.91

)

Brent less Argus Sour Crude Index crude oil

4.93

4.16

3.24

4.33

Brent less Maya crude oil

8.78

10.75

8.46

11.43

Brent less Western Canadian Select Houston crude oil

8.42

8.34

7.21

10.36

WTI crude oil

59.23

70.36

64.90

75.84

Natural gas (dollars per million British thermal units)

3.23

2.14

3.04

1.88

Renewable volume obligation (RVO) (dollars per barrel) (l)

6.11

4.04

5.85

3.75

Product margins (RVO adjusted unless otherwise noted) (dollars per barrel)

U.S. Gulf Coast:

Conventional Blendstock for Oxygenate Blending (CBOB) gasoline less Brent

4.10

1.86

6.11

6.06

Ultra-low-sulfur (ULS) diesel less Brent

23.86

12.41

19.10

15.76

Polymer Grade Propylene less Brent (not RVO adjusted)

(16.58

)

(3.05

)

(6.45

)

4.70

U.S. Mid-Continent:

CBOB gasoline less WTI

5.82

5.46

10.70

10.48

ULS diesel less WTI

27.55

14.63

22.70

17.87

North Atlantic:

CBOB gasoline less Brent

10.80

7.07

10.93

11.08

ULS diesel less Brent

28.95

15.10

23.32

18.32

U.S. West Coast:

California Reformulated Gasoline Blendstock for Oxygenate Blending 87 gasoline less Brent

18.72

10.94

26.38

21.58

California Air Resources Board diesel less Brent

30.27

16.61

25.17

18.89

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Renewable Diesel

New York Mercantile Exchange ULS diesel (dollars per gallon)

$

2.33

$

2.23

$

2.31

$

2.44

Biodiesel Renewable Identification Number (RIN) (dollars per RIN)

1.03

0.66

1.01

0.59

California Low-Carbon Fuel Standard carbon credit (dollars per metric ton)

53.53

72.27

56.36

60.19

U.S. Gulf Coast (USGC) used cooking oil (dollars per pound)

0.56

0.45

0.56

0.43

USGC distillers corn oil (dollars per pound)

0.57

0.48

0.58

0.48

USGC fancy bleachable tallow (dollars per pound)

0.53

0.45

0.55

0.44

Ethanol

Chicago Board of Trade corn (dollars per bushel)

4.31

4.27

4.40

4.24

New York Harbor ethanol (dollars per gallon)

1.84

1.70

1.87

1.79

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

December 31,

2025

2024

Balance sheet data

Current assets

$

23,210

$

23,737

Cash and cash equivalents included in current assets

4,688

4,657

Inventories included in current assets

7,591

7,761

Current liabilities

14,109

15,495

Valero Energy Corporation stockholders’ equity

23,725

24,512

Total equity

26,605

27,521

Debt and finance lease obligations:

Debt –

Current portion of debt (excluding variable interest entities (VIEs))

$

672

$

441

Debt, less current portion of debt (excluding VIEs)

7,566

7,586

Total debt (excluding VIEs)

8,238

8,027

Current portion of debt attributable to VIEs

23

58

Total debt

8,261

8,085

Finance lease obligations –

Current portion of finance lease obligations (excluding VIEs)

228

217

Finance lease obligations, less current portion (excluding VIEs)

1,488

1,492

Total finance lease obligations (excluding VIEs)

1,716

1,709

Current portion of finance lease obligations attributable to VIEs

26

27

Finance lease obligations, less current portion attributable to VIEs

616

642

Total finance lease obligations attributable to VIEs

642

669

Total finance lease obligations

2,358

2,378

Total debt and finance lease obligations

$

10,619

$

10,463

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of net cash provided by operating activities to

adjusted net cash provided by operating activities (h)

Net cash provided by operating activities

$

2,057

$

1,070

$

5,826

$

6,683

Exclude:

Changes in current assets and current liabilities

(349

)

—

(192

)

795

Diamond Green Diesel LLC’s (DGD) adjusted net cash provided by operating activities attributable to the other joint venture member’s ownership interest in DGD

269

119

30

371

Adjusted net cash provided by operating activities

$

2,137

$

951

$

5,988

$

5,517

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Reconciliation of capital investments to capital investments attributable to Valero (h)

Capital expenditures (excluding VIEs)

$

215

$

250

$

719

$

649

Capital expenditures of VIEs:

DGD

4

52

71

250

Other VIEs

1

1

6

8

Deferred turnaround and catalyst cost expenditures (excluding VIEs)

182

235

990

1,079

Deferred turnaround and catalyst cost expenditures of DGD

8

9

99

71

Investments in nonconsolidated joint ventures

2

—

3

—

Capital investments

412

547

1,888

2,057

Adjustments:

DGD’s capital investments attributable to the other joint venture member

(6

)

(31

)

(85

)

(161

)

Capital expenditures of other VIEs

(1

)

(1

)

(6

)

(8

)

Capital investments attributable to Valero

$

405

$

515

$

1,797

$

1,888

Dividends per common share

$

1.13

$

1.07

$

4.52

$

4.28

Year Ending

December 31, 2026

Reconciliation of expected capital investments to expected capital investments attributable to Valero (h)

Expected capital investments

$

1,725

Adjustment: DGD’s capital investments attributable to the

other joint venture member

(25

)

Expected capital investments attributable to Valero

$

1,700

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

NOTES TO EARNINGS RELEASE TABLES

(a)

Cost of materials and other for the three months and year ended December 31, 2025 includes a charge of $37 million related to the liquidation of certain LIFO inventory layers attributable to our Refining segment. Inventory levels for our West Coast refining operations decreased during the year ended December 31, 2025 in connection with our plan to cease refining operations at the Benicia Refinery by the end of April 2026.

(b)

Taxes other than income taxes includes excise taxes on sales by certain of our foreign operations.

(c)

Operating expenses (excluding depreciation and amortization expense) for the year ended December 31, 2025 includes employee retention and separation costs of $50 million related to the Benicia Refinery. In connection with our plan to cease refining operations at the Benicia Refinery, we implemented a transition plan for eligible employees, which includes retention incentive payments and separation benefits.

(d)

In March 2025, we approved a plan with respect to the operations at our Benicia Refinery and currently intend to cease refining operations by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, we evaluated the assets of the Benicia and Wilmington refineries for impairment as of March 31, 2025 and concluded that the carrying values of these assets were not recoverable. Therefore, we reduced the carrying values of the Benicia and Wilmington refineries to their estimated fair values and recognized a combined asset impairment loss of $1.1 billion in the year ended December 31, 2025.

(e)

In March 2021, we announced our participation in a then-proposed large-scale carbon capture and sequestration pipeline system with Navigator Energy Services (Navigator). In October 2023, Navigator announced that it decided to cancel this project. Under the terms of the agreements associated with the project, we had some rights from and obligations to Navigator, including a portion of the aggregate project costs. As a result, we recognized a charge of $29 million in the year ended December 31, 2024 related to our obligation to Navigator.

(f)

In December 2024, the Internal Revenue Service approved our application for registration as a producer of second-generation biofuels with respect to the cellulosic ethanol produced at our ethanol plants. As a result, we recognized a current income tax benefit of $79 million in December 2024 for the tax credit attributable to volumes of cellulosic ethanol produced and sold by us in the U.S. from 2020 through 2024. Of the $79 million benefit, $5 million and $26 million is attributable to the three months and year ended December 31, 2024, respectively, and $53 million is attributable to years ended December 31, 2020 through 2023.

(g)

Depreciation and amortization expense for the three months and year ended December 31, 2025 includes incremental depreciation expense of approximately $100 million and $300 million, respectively, related to the Benicia Refinery. In connection with our plan to cease refining operations at our Benicia Refinery, we shortened the estimated useful life of the refinery, and as a result, will depreciate the revised carrying value of the refinery’s long-lived assets to the estimated salvage value through April 2026.

(h)

We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under GAAP and are considered to be non-GAAP measures.

We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. 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.

Non-GAAP measures are as follows:

Adjusted net income attributable to Valero Energy Corporation stockholders is defined as net income attributable to Valero Energy Corporation stockholders adjusted to reflect the items noted below, along with their related income tax effect, as applicable. The income tax effect for the adjustments was calculated using a combined U.S. federal and state statutory rate of 22.5 percent. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below.

LIFO liquidation adjustment – Generally, the LIFO inventory valuation method provides for the matching of current costs with current revenues. However, a LIFO liquidation results in a portion of our current-year cost of sales being impacted by historical costs, which obscures our current-year financial performance. Therefore, we have excluded the historical cost impact from adjusted net income attributable to Valero Energy Corporation stockholders. See note (a) for additional details.

Employee retention and separation costs – The employee retention and separation costs related to the Benicia Refinery (see note (c)) are not indicative of our ongoing operations.

Asset impairment loss – The asset impairment loss attributable to our Benicia and Wilmington refineries (see note (d)) is not indicative of our ongoing operations or our expectations about the profitability of our refining business.

Project liability adjustment – The project liability adjustment related to the cancellation of Navigator’s project (see note (e)) is not indicative of our ongoing operations.

Second-generation biofuel tax credit – The income tax benefit from the second-generation biofuel tax credit recognized by us in December 2024 is attributable to volumes produced and sold from 2020 to 2024 (see note (f)). Therefore, the adjustments reflect the portion of the credit that is not attributable to volumes produced and sold in the three months and year ended December 31, 2024.

Adjusted earnings per common share – assuming dilution is defined as adjusted net income attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.

Refining margin is defined as Refining segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, the asset impairment loss (see note (d)), and other operating expenses. We believe Refining margin is an important measure of our Refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

Renewable Diesel margin is defined as Renewable Diesel segment operating income (loss) excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense. We believe Renewable Diesel margin is an important measure of our Renewable Diesel segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

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. We believe Ethanol margin is an important measure of our Ethanol segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

Adjusted Refining operating income (loss) is defined as Refining segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), employee retention and separation costs (see note (c)), the asset impairment loss (see note (d)), and other operating expenses. We believe adjusted Refining operating income (loss) is an important measure of our Refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.

Adjusted Ethanol operating income is defined as Ethanol segment operating income excluding other operating expenses. We believe adjusted Ethanol operating income is an important measure of our Ethanol segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.

Adjusted Refining operating expenses (excluding depreciation and amortization expense) is defined as Refining segment operating expenses (excluding depreciation and amortization expense) excluding employee retention and separation costs (see note (c)). We believe adjusted Refining operating expense (excluding depreciation and amortization expense) is an important measure of our Refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance. Adjusted Refining operating expenses (excluding depreciation and amortization expense) for the Refining segment and the U.S. West Coast region is calculated as follows (in millions):

Year Ended

December 31,

2025

2024

Refining segment

Operating expenses (excluding depreciation and amortization expense)

$

5,426

$

4,946

Adjustment: Employee retention and separation costs

(50

)

—

Adjusted operating expenses (excluding depreciation and amortization expense)

$

5,376

$

4,946

U.S. West Coast region

Operating expenses (excluding depreciation and amortization expense)

$

844

$

751

Adjustment: Employee retention and separation costs

(50

)

—

Adjusted operating expenses (excluding depreciation and amortization expense)

$

794

$

751

Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding the items noted below. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities. The basis for our belief with respect to each excluded item is provided below.

Changes in current assets and current liabilities – Current assets net of current liabilities represents our operating liquidity. We believe that the change in our operating liquidity from period to period does not represent cash generated by our operations that is available to fund our investing and financing activities.

DGD’s adjusted net cash provided by operating activities attributable to the other joint venture member’s ownership interest in DGD – We are a 50 percent joint venture member in DGD and we consolidate DGD’s financial statements. Our Renewable Diesel segment includes the operations of DGD and the associated activities to market its products. Because we consolidate DGD’s financial statements, all of DGD’s net cash provided by (used in) operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities.
In general, DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD’s operating cash flow is effectively attributable to each member and only a portion of DGD’s operating cash flow should be attributed to our net cash provided by operating activities. Therefore, we have adjusted our net cash provided by operating activities for the portion of DGD’s operating cash flow attributable to the other joint venture member’s ownership interest because we believe that it more accurately reflects the operating cash flow available to us to fund our investing and financing activities. The adjustment is calculated as follows (in millions):

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

DGD operating cash flow data

Net cash provided by (used in) operating activities

$

254

$

352

$

(110

)

$

889

Exclude: Changes in current assets and current liabilities

(285

)

116

(170

)

148

Adjusted net cash provided by operating activities

539

236

60

741

Other joint venture member’s ownership interest

50

%

50

%

50

%

50

%

DGD’s adjusted net cash provided by operating activities attributable to the other joint venture member’s ownership interest in DGD

$

269

$

119

$

30

$

371

Capital investments attributable to Valero is defined as all capital expenditures and deferred turnaround and catalyst cost expenditures presented in our consolidated statements of cash flows, excluding the portion of DGD’s capital investments attributable to the other joint venture member and all of the capital expenditures of VIEs other than DGD.
In general, DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each member, only 50 percent of DGD’s capital investments should be attributed to our net share of total capital investments. We also exclude the capital expenditures of other VIEs that we consolidate because we do not operate those VIEs. We believe capital investments attributable to Valero is an important measure because it more accurately reflects our capital investments.

(i)

The Refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries.

(j)

Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.

(k)

We use certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

All per barrel of throughput, per gallon of sales, and per gallon of production amounts are calculated by dividing the associated dollar amount by the throughput volumes, sales volumes, and production volumes for the period, as applicable.

Throughput volumes, sales volumes, and production volumes are calculated by multiplying throughput volumes per day, sales volumes per day, and production volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. 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. We believe the use of such volumes results in per unit amounts that are most representative of the product margins generated and the operating costs incurred as a result of our operation of those facilities.

(l)

The RVO cost represents the average market cost on a per barrel basis to comply with the Renewable Fuel Standard program. The RVO cost is calculated by multiplying (i) the average market price during the applicable period for the RINs associated with each class of renewable fuel (i.e., biomass-based diesel, cellulosic biofuel, advanced biofuel, and total renewable fuel) by (ii) the quotas for the volume of each class of renewable fuel that must be blended into petroleum-based transportation fuels consumed in the U.S., as set or proposed by the U.S. Environmental Protection Agency, on a percentage basis for each class of renewable fuel and adding together the results of each calculation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260128964581/en/
Valero Contacts

Investors:

Brian Donovan, Vice President – Investor Relations, 210-345-1682

Eric Herbort, Director – Investor Relations and Finance, 210-345-3331

Gautam Srivastava, Director – Investor Relations, 210-345-3992
Media:

Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Original: Valero Energy Reports 2025 Fourth Quarter and Full Year Results

Valero Energy Reports 2022 Fourth Quarter and Full Year Results

Source: Business Wire
Reported net income attributable to Valero stockholders of $3.1 billion, or $8.15 per share, for the fourth quarter and $11.5 billion, or $29.04 per share, for the year
Reported adjusted net income attributable to Valero stockholders of $3.2 billion, or $8.45 per share, for the fourth quarter and $11.6 billion, or $29.16 per share, for the year
Reduced debt by $2.7 billion in 2022, bringing Valero’s aggregate debt reduction since the second half of 2021 to $4.0 billion
Successfully commenced operations of the new DGD Port Arthur plant in the fourth quarter
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $3.1 billion, or $8.15 per share, for the fourth quarter of 2022, compared to $1.0 billion, or $2.46 per share, for the fourth quarter of 2021. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $3.2 billion, or $8.45 per share, for the fourth quarter of 2022, compared to $988 million, or $2.41 per share, for the fourth quarter of 2021.

For 2022, net income attributable to Valero stockholders was $11.5 billion, or $29.04 per share, compared to $930 million, or $2.27 per share, in 2021. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders was $11.6 billion, or $29.16 per share, in 2022, compared to $1.2 billion, or $2.81 per share, in 2021.

Refining

The Refining segment reported operating income of $4.3 billion for the fourth quarter of 2022, compared to $1.3 billion for the fourth quarter of 2021. Adjusted operating income for the fourth quarter of 2022 was $4.4 billion, compared to $1.1 billion for the fourth quarter of 2021. Refining throughput volumes averaged 3.0 million barrels per day in the fourth quarter of 2022.

“Our refineries operated at a 97 percent capacity utilization rate in the fourth quarter, which is the highest utilization rate for our system since 2018,” said Joe Gorder, Valero’s Chairman and Chief Executive Officer, “I am also proud to report that 2022 was Valero’s best year ever for combined employee and contractor safety, which is a testament to our long-standing commitment to safe, reliable and environmentally responsible operations.”

Renewable Diesel

The Renewable Diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $261 million of operating income for the fourth quarter of 2022, compared to $150 million for the fourth quarter of 2021. Segment sales volumes averaged 2.4 million gallons per day in the fourth quarter of 2022, which was 851 thousand gallons per day higher than the fourth quarter of 2021. The higher sales volumes were due to the impact of additional volumes from the DGD St. Charles plant expansion and the fourth quarter 2022 startup of the DGD Port Arthur plant.

Ethanol

The Ethanol segment reported $7 million of operating income for the fourth quarter of 2022, compared to $474 million for the fourth quarter of 2021. Adjusted operating income for the fourth quarter of 2022 was $69 million, compared to $475 million for the fourth quarter of 2021. Ethanol production volumes averaged 4.1 million gallons per day in the fourth quarter of 2022, which was 340 thousand gallons per day lower than the fourth quarter of 2021. The higher operating income in the fourth quarter of 2021 was primarily attributed to high ethanol prices due to strong demand and low inventories.

Corporate and Other

General and administrative expenses were $282 million in the fourth quarter of 2022, compared to $286 million in the fourth quarter of 2021. General and administrative expenses were $934 million for the year. The effective tax rate for 2022 was 22 percent.

Investing and Financing Activities

Net cash provided by operating activities was $4.1 billion in the fourth quarter of 2022. Included in this amount was a $9 million unfavorable change in working capital and $142 million of net cash provided by operating activities associated with the other joint venture member’s share of DGD, excluding changes in DGD’s working capital. Excluding these items, adjusted net cash provided by operating activities was $4.0 billion in the fourth quarter of 2022.

Net cash provided by operating activities in 2022 was $12.6 billion. Included in this amount was a $1.6 billion unfavorable impact from working capital and $436 million of net cash provided by operating activities associated with the other joint venture member’s share of DGD, excluding changes in DGD’s working capital. Excluding these items, adjusted net cash provided by operating activities in 2022 was $13.8 billion.

Capital investments totaled $640 million in the fourth quarter of 2022, of which $349 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to the other joint venture member’s share of DGD and those related to other variable interest entities, capital investments attributable to Valero were $538 million in the fourth quarter of 2022 and $2.3 billion in 2022, which was higher than the annual guidance primarily due to spend timing on the Port Arthur Coker project and the accelerated completion of the DGD Port Arthur plant.

Valero returned 45 percent of adjusted net cash provided by operating activities to stockholders in 2022.

Valero continues to target a long-term total payout ratio between 40 and 50 percent of adjusted net cash provided by operating activities. Valero defines total payout ratio as the sum of dividends and stock buybacks divided by net cash provided by operating activities adjusted for changes in working capital and DGD’s net cash provided by operating activities, excluding changes in its working capital, attributable to the other joint venture member’s share of DGD.

Valero further reduced its debt by $442 million in the fourth quarter. This reduction, combined with a series of debt reduction and refinancing transactions completed since the second half of 2021, have collectively reduced Valero’s debt by over $4.0 billion.

Liquidity and Financial Position

Valero ended 2022 with $9.2 billion of total debt, $2.4 billion of finance lease obligations and $4.9 billion of cash and cash equivalents, compared to $13.0 billion of total debt, $1.6 billion of finance lease obligations and $2.3 billion of cash and cash equivalents at the end of the first quarter of 2021. The debt to capitalization ratio, net of cash and cash equivalents, was approximately 21 percent as of December 31, 2022, down from the pandemic high of 40 percent as of March 31, 2021.

Strategic Update

The DGD project adjacent to the Port Arthur refinery (DGD Port Arthur plant), which has a production capacity of 470 million gallons per year of renewable diesel and 20 million gallons per year of renewable naphtha, was commissioned and started up in the fourth quarter. The project was completed under budget and ahead of the original schedule. Total annual DGD production capacity is now approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha.

Refinery optimization projects that are expected to reduce costs and improve margin capture are progressing on schedule. The Port Arthur Coker project is expected to be completed in the second quarter of 2023 and to increase the refinery’s throughput capacity, while also improving turnaround efficiency.

BlackRock and Navigator’s carbon sequestration project is still expected to begin startup activities in late 2024. Valero expects to be the anchor shipper with eight of its ethanol plants connected to this system, which is expected to result in the production of a lower carbon intensity ethanol product that should significantly improve the margin profile and competitive positioning of the ethanol business.

“We continue to advance other low-carbon opportunities, such as sustainable aviation fuel, renewable hydrogen, and additional renewable naphtha and carbon sequestration projects,” said Gorder. “Our gated process helps ensure these projects meet our minimum return threshold.”

Conference Call

Valero’s senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, “Valero”), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and it sells its products primarily in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), Ireland and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which owns two renewable diesel plants located in the U.S. Gulf Coast region with a production capacity of approximately 1.2 billion gallons per year, and Valero owns 12 ethanol plants located in the U.S. Mid-Continent region with a combined production capacity of approximately 1.6 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel, and Ethanol segments. Please visit investorvalero.com for more information.

Valero Contacts

Investors:
Homer Bhullar, Vice President – Investor Relations and Finance, 210-345-1982
Eric Herbort, Director – Investor Relations, 210-345-3331
Gautam Srivastava, Senior Manager – Investor Relations, 210-345-3992

Media:
Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Safe-Harbor Statement

Statements contained in this release and the accompanying tables that state Valero’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” “intend,” “target,” “will,” “plans,” “forecast,” and other similar expressions identify forward-looking statements. Forward-looking statements in this release and the accompanying tables include those relating to Valero’s greenhouse gas emissions targets, expected timing of completion and performance of projects, future market and industry conditions, future operating and financial performance, and management of future risks. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting Valero’s operations or the demand for Valero’s products. These factors also include, but are not limited to, the uncertainties that remain with respect to the Russia-Ukraine conflict, the impact of inflation on margins and costs, economic activity levels, the COVID-19 pandemic, variants of the COVID-19 virus, governmental and societal responses thereto, and the adverse effects the foregoing may have on Valero’s business or economic conditions generally. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission and available on Valero’s website at www.valero.com.

Use of Non-GAAP Financial Information

This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include adjusted net income attributable to Valero stockholders, adjusted earnings per common share – assuming dilution, Refining margin, Renewable Diesel margin, Ethanol margin, adjusted Refining operating income, adjusted Renewable Diesel operating income, adjusted Ethanol operating income, adjusted net cash provided by operating activities, and capital investments attributable to Valero. These non-GAAP financial measures have been included to help facilitate the comparison of operating results between periods. See the accompanying earnings release tables for a reconciliation of non-GAAP measures to their most directly comparable GAAP measures. Note (h) to the earnings release tables provides reasons for the use of these non-GAAP financial measures.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Statement of income data

Revenues

$

41,746

$

35,903

$

176,383

$

113,977

Cost of sales:

Cost of materials and other (a) (b)

34,811

31,849

150,770

102,714

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

1,638

1,558

6,389

5,776

Depreciation and amortization expense (c)

622

586

2,428

2,358

Total cost of sales

37,071

33,993

159,587

110,848

Asset impairment loss (d)

61

—

61

—

Other operating expenses

26

18

66

87

General and administrative expenses (excluding

depreciation and amortization expense reflected below) (e)

282

286

934

865

Depreciation and amortization expense

11

12

45

47

Operating income

4,295

1,594

15,690

2,130

Other income (expense), net (f)

92

(163

)

179

16

Interest and debt expense, net of capitalized interest

(137

)

(152

)

(562

)

(603

)

Income before income tax expense

4,250

1,279

15,307

1,543

Income tax expense (g)

1,018

169

3,428

255

Net income

3,232

1,110

11,879

1,288

Less: Net income attributable to noncontrolling interests

119

101

351

358

Net income attributable to Valero Energy Corporation

stockholders

$

3,113

$

1,009

$

11,528

$

930

Earnings per common share

$

8.15

$

2.47

$

29.05

$

2.27

Weighted-average common shares outstanding (in millions)

380

408

395

407

Earnings per common share – assuming dilution

$

8.15

$

2.46

$

29.04

$

2.27

Weighted-average common shares outstanding –

assuming dilution (in millions)

381

408

396

407

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

Renewable
Diesel

Ethanol

Corporate
and
Eliminations

Total

Three months ended December 31, 2022

Revenues:

Revenues from external customers

$

39,566

$

1,066

$

1,114

$

—

$

41,746

Intersegment revenues

32

528

233

(793

)

—

Total revenues

39,598

1,594

1,347

(793

)

41,746

Cost of sales:

Cost of materials and other

33,280

1,221

1,095

(785

)

34,811

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,398

77

161

2

1,638

Depreciation and amortization expense

565

35

22

—

622

Total cost of sales

35,243

1,333

1,278

(783

)

37,071

Asset impairment loss (d)

—

—

61

—

61

Other operating expenses

25

—

1

—

26

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

—

—

—

282

282

Depreciation and amortization expense

—

—

—

11

11

Operating income by segment

$

4,330

$

261

$

7

$

(303

)

$

4,295

Three months ended December 31, 2021

Revenues:

Revenues from external customers

$

33,521

$

684

$

1,698

$

—

$

35,903

Intersegment revenues

7

253

174

(434

)

—

Total revenues

33,528

937

1,872

(434

)

35,903

Cost of sales:

Cost of materials and other (a)

30,342

714

1,224

(431

)

31,849

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,358

48

153

(1

)

1,558

Depreciation and amortization expense

543

23

20

—

586

Total cost of sales

32,243

785

1,397

(432

)

33,993

Other operating expenses

15

2

1

—

18

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

—

—

—

286

286

Depreciation and amortization expense

—

—

—

12

12

Operating income by segment

$

1,270

$

150

$

474

$

(300

)

$

1,594

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

Renewable
Diesel

Ethanol

Corporate
and
Eliminations

Total

Year ended December 31, 2022

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 (c)

2,247

122

59

—

2,428

Total cost of sales

152,344

4,727

5,312

(2,796

)

159,587

Asset impairment loss (d)

—

—

61

—

61

Other operating expenses

63

—

3

—

66

General and administrative expenses (excluding

depreciation and amortization expense reflected

below) (e)

—

—

—

934

934

Depreciation and amortization expense

—

—

—

45

45

Operating income by segment

$

15,803

$

774

$

110

$

(997

)

$

15,690

Year ended December 31, 2021

Revenues:

Revenues from external customers

$

106,947

$

1,874

$

5,156

$

—

$

113,977

Intersegment revenues

14

468

433

(915

)

—

Total revenues

106,961

2,342

5,589

(915

)

113,977

Cost of sales:

Cost of materials and other (a) (b)

97,759

1,438

4,428

(911

)

102,714

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

5,088

134

556

(2

)

5,776

Depreciation and amortization expense (c)

2,169

58

131

—

2,358

Total cost of sales

105,016

1,630

5,115

(913

)

110,848

Other operating expenses

83

3

1

—

87

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

—

—

—

865

865

Depreciation and amortization expense

—

—

—

47

47

Operating income by segment

$

1,862

$

709

$

473

$

(914

)

$

2,130

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Reconciliation of net income attributable to Valero Energy

Corporation stockholders to adjusted net income

attributable to Valero Energy Corporation stockholders

Net income attributable to Valero Energy Corporation

stockholders

$

3,113

$

1,009

$

11,528

$

930

Adjustments:

Modification of renewable volume obligation (RVO) (a)

—

(220

)

(104

)

(1

)

Income tax expense related to modification of RVO

—

49

23

—

Modification of RVO, net of taxes

—

(171

)

(81

)

(1

)

Gain on sale of ethanol plant (c)

—

—

(23

)

—

Income tax expense related to gain on sale of ethanol plant

—

—

5

—

Gain on sale of ethanol plant, net of taxes

—

—

(18

)

—

Asset impairment loss (d)

61

—

61

—

Income tax benefit related to asset impairment loss

(14

)

—

(14

)

—

Asset impairment loss, net of taxes

47

—

47

—

Environmental reserve adjustment (e)

—

—

20

—

Income tax benefit related to environmental reserve adjustment

—

—

(5

)

—

Environmental reserve adjustment, net of taxes

—

—

15

—

Pension settlement charge (f)

58

—

58

—

Income tax benefit related to pension settlement charge

(13

)

—

(13

)

—

Pension settlement charge, net of taxes

45

—

45

—

Loss (gain) on early redemption and retirement of debt (f)

(38

)

193

(14

)

193

Income tax (benefit) expense related to loss (gain) on early

redemption and retirement of debt

9

(43

)

3

(43

)

Loss (gain) on early redemption and retirement of debt,

net of taxes

(29

)

150

(11

)

150

Foreign withholding tax (g)

51

—

51

—

Change in estimated useful life of ethanol plant (c)

—

—

—

48

Income tax benefit related to the change in estimated useful

life of ethanol plant

—

—

—

(11

)

Change in estimated useful life of ethanol plant,

net of taxes

—

—

—

37

Gain on sale of MVP interest (f)

—

—

—

(62

)

Income tax expense related to gain on sale of MVP interest

—

—

—

14

Gain on sale of MVP interest, net of taxes

—

—

—

(48

)

Diamond Pipeline asset impairment loss (f)

—

—

—

24

Income tax benefit related to Diamond Pipeline asset

impairment loss

—

—

—

(5

)

Diamond Pipeline asset impairment loss, net of taxes

—

—

—

19

Income tax expense related to changes in statutory tax rates (g)

—

—

—

64

Total adjustments

114

(21

)

48

221

Adjusted net income attributable to

Valero Energy Corporation stockholders

$

3,227

$

988

$

11,576

$

1,151

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Reconciliation of earnings per common share –

assuming dilution to adjusted earnings per common

share – assuming dilution

Earnings per common share – assuming dilution

$

8.15

$

2.46

$

29.04

$

2.27

Adjustments:

Modification of RVO (a)

—

(0.42

)

(0.20

)

—

Gain on sale of ethanol plant (c)

—

—

(0.05

)

—

Asset impairment loss (d)

0.13

—

0.12

—

Environmental reserve adjustment (e)

—

—

0.04

—

Pension settlement charge (f)

0.12

—

0.11

—

Loss (gain) on early redemption and retirement of debt (f)

(0.08

)

0.37

(0.03

)

0.37

Foreign withholding tax (g)

0.13

—

0.13

—

Change in estimated useful life of ethanol plant (c)

—

—

—

0.09

Gain on sale of MVP interest (f)

—

—

—

(0.12

)

Diamond Pipeline asset impairment loss (f)

—

—

—

0.04

Income tax expense related to changes in statutory tax rates (g)

—

—

—

0.16

Total adjustments

0.30

(0.05

)

0.12

0.54

Adjusted earnings per common share – assuming dilution

$

8.45

$

2.41

$

29.16

$

2.81

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Reconciliation of operating income by segment to segment

margin, and reconciliation of operating income by segment

to adjusted operating income by segment

Refining segment

Refining operating income

$

4,330

$

1,270

$

15,803

$

1,862

Adjustments:

Modification of RVO (a)

—

(220

)

(104

)

(1

)

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

1,398

1,358

5,509

5,088

Depreciation and amortization expense

565

543

2,247

2,169

Other operating expenses

25

15

63

83

Refining margin

$

6,318

$

2,966

$

23,518

$

9,201

Refining operating income

$

4,330

$

1,270

$

15,803

$

1,862

Adjustments:

Modification of RVO (a)

—

(220

)

(104

)

(1

)

Other operating expenses

25

15

63

83

Adjusted Refining operating income

$

4,355

$

1,065

$

15,762

$

1,944

Renewable Diesel segment

Renewable Diesel operating income

$

261

$

150

$

774

$

709

Adjustments:

Operating expenses (excluding depreciation and

amortization expense reflected below)

77

48

255

134

Depreciation and amortization expense

35

23

122

58

Other operating expenses

—

2

—

3

Renewable Diesel margin

$

373

$

223

$

1,151

$

904

Renewable Diesel operating income

$

261

$

150

$

774

$

709

Adjustment: Other operating expenses

—

2

—

3

Adjusted Renewable Diesel operating income

$

261

$

152

$

774

$

712

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Reconciliation of operating income by segment to segment

margin, and reconciliation of operating income by segment

to adjusted operating income by segment (continued)

Ethanol segment

Ethanol operating income

$

7

$

474

$

110

$

473

Adjustments:

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

161

153

625

556

Depreciation and amortization expense (c)

22

20

59

131

Asset impairment loss (d)

61

—

61

—

Other operating expenses

1

1

3

1

Ethanol margin

$

252

$

648

$

858

$

1,161

Ethanol operating income

$

7

$

474

$

110

$

473

Adjustments:

Gain on sale of ethanol plant (c)

—

—

(23

)

—

Asset impairment loss (d)

61

—

61

—

Change in estimated useful life of ethanol plant (c)

—

—

—

48

Other operating expenses

1

1

3

1

Adjusted Ethanol operating income

$

69

$

475

$

151

$

522

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Reconciliation of Refining segment operating income (loss) to

Refining margin (by region), and reconciliation of Refining

segment operating income (loss) to adjusted Refining

segment operating income (loss) (by region) (i)

U.S. Gulf Coast region

Refining operating income

$

2,629

$

843

$

9,096

$

831

Adjustments:

Modification of RVO (a)

—

(158

)

(74

)

(1

)

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

774

748

3,113

3,027

Depreciation and amortization expense

346

328

1,369

1,326

Other operating expenses

19

12

48

70

Refining margin

$

3,768

$

1,773

$

13,552

$

5,253

Refining operating income

$

2,629

$

843

$

9,096

$

831

Adjustments:

Modification of RVO (a)

—

(158

)

(74

)

(1

)

Other operating expenses

19

12

48

70

Adjusted Refining operating income

$

2,648

$

697

$

9,070

$

900

U.S. Mid-Continent region

Refining operating income

$

551

$

204

$

2,252

$

528

Adjustments:

Modification of RVO (a)

—

(39

)

(19

)

—

Operating expenses (excluding depreciation and

amortization expense reflected below) (b)

191

190

772

713

Depreciation and amortization expense

84

82

335

335

Other operating expenses

1

1

1

11

Refining margin

$

827

$

438

$

3,341

$

1,587

Refining operating income

$

551

$

204

$

2,252

$

528

Adjustments:

Modification of RVO (a)

—

(39

)

(19

)

—

Other operating expenses

1

1

1

11

Adjusted Refining operating income

$

552

$

166

$

2,234

$

539

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Reconciliation of Refining segment operating income (loss) to

Refining margin (by region), and reconciliation of Refining

segment operating income (loss) to adjusted Refining

segment operating income (loss) (by region) (i) (continued)

North Atlantic region

Refining operating income

$

1,091

$

265

$

3,384

$

558

Adjustments:

Operating expenses (excluding depreciation and

amortization expense reflected below)

192

195

816

671

Depreciation and amortization expense

62

68

259

247

Other operating expenses

2

1

11

1

Refining margin

$

1,347

$

529

$

4,470

$

1,477

Refining operating income

$

1,091

$

265

$

3,384

$

558

Adjustments:

Other operating expenses

2

1

11

1

Adjusted Refining operating income

$

1,093

$

266

$

3,395

$

559

U.S. West Coast region

Refining operating income (loss)

$

59

$

(42

)

$

1,071

$

(55

)

Adjustments:

Modification of RVO (a)

—

(23

)

(11

)

—

Operating expenses (excluding depreciation and

amortization expense reflected below)

241

225

808

677

Depreciation and amortization expense

73

65

284

261

Other operating expenses

3

1

3

1

Refining margin

$

376

$

226

$

2,155

$

884

Refining operating income (loss)

$

59

$

(42

)

$

1,071

$

(55

)

Adjustments:

Modification of RVO (a)

—

(23

)

(11

)

—

Other operating expenses

3

1

3

1

Adjusted Refining operating income (loss)

$

62

$

(64

)

$

1,063

$

(54

)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended
December 31,

Year Ended
December 31,

2022

2021

2022

2021

Throughput volumes (thousand barrels per day)

Feedstocks:

Heavy sour crude oil

343

340

343

338

Medium/light sour crude oil

338

300

413

296

Sweet crude oil

1,578

1,621

1,474

1,448

Residuals

218

241

222

240

Other feedstocks

110

138

114

123

Total feedstocks

2,587

2,640

2,566

2,445

Blendstocks and other

455

393

387

342

Total throughput volumes

3,042

3,033

2,953

2,787

Yields (thousand barrels per day)

Gasolines and blendstocks

1,501

1,533

1,451

1,403

Distillates

1,153

1,126

1,118

1,028

Other products (j)

410

403

409

387

Total yields

3,064

3,062

2,978

2,818

Operating statistics (b) (h) (k)

Refining margin

$

6,318

$

2,966

$

23,518

$

9,201

Adjusted Refining operating income

$

4,355

$

1,065

$

15,762

$

1,944

Throughput volumes (thousand barrels per day)

3,042

3,033

2,953

2,787

Refining margin per barrel of throughput

$

22.58

$

10.63

$

21.82

$

9.04

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

5.00

4.86

5.11

5.00

Depreciation and amortization expense per barrel of

throughput

2.02

1.95

2.09

2.13

Adjusted Refining operating income per barrel of

throughput

$

15.56

$

3.82

$

14.62

$

1.91

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Operating statistics (h) (k)

Renewable Diesel margin

$

373

$

223

$

1,151

$

904

Adjusted Renewable Diesel operating income

$

261

$

152

$

774

$

712

Sales volumes (thousand gallons per day)

2,443

1,592

2,175

1,014

Renewable Diesel margin per gallon of sales

$

1.66

$

1.52

$

1.45

$

2.44

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of sales

0.34

0.33

0.32

0.36

Depreciation and amortization expense per gallon of sales

0.16

0.15

0.15

0.16

Adjusted Renewable Diesel operating income per gallon of sales

$

1.16

$

1.04

$

0.98

$

1.92

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

ETHANOL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Operating statistics (b) (h) (k)

Ethanol margin

$

252

$

648

$

858

$

1,161

Adjusted Ethanol operating income

$

69

$

475

$

151

$

522

Production volumes (thousand gallons per day)

4,062

4,402

3,866

3,949

Ethanol margin per gallon of production

$

0.67

$

1.60

$

0.61

$

0.81

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of production

0.43

0.38

0.44

0.39

Depreciation and amortization expense per gallon of production (c)

0.05

0.05

0.04

0.09

Gain on sale of ethanol plant per gallon of production (c)

—

—

0.02

—

Change in estimated useful life of ethanol plant per gallon

of production (c)

—

—

—

(0.03

)

Adjusted Ethanol operating income per gallon of production

$

0.19

$

1.17

$

0.11

$

0.36

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Operating statistics by region (i)

U.S. Gulf Coast region (b) (h) (k)

Refining margin

$

3,768

$

1,773

$

13,552

$

5,253

Adjusted Refining operating income

$

2,648

$

697

$

9,070

$

900

Throughput volumes (thousand barrels per day)

1,806

1,796

1,766

1,673

Refining margin per barrel of throughput

$

22.68

$

10.73

$

21.02

$

8.60

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.66

4.53

4.83

4.96

Depreciation and amortization expense per barrel of

throughput

2.09

1.98

2.12

2.16

Adjusted Refining operating income per barrel of

throughput

$

15.93

$

4.22

$

14.07

$

1.48

U.S. Mid-Continent region (b) (h) (k)

Refining margin

$

827

$

438

$

3,341

$

1,587

Adjusted Refining operating income

$

552

$

166

$

2,234

$

539

Throughput volumes (thousand barrels per day)

477

486

447

453

Refining margin per barrel of throughput

$

18.84

$

9.78

$

20.49

$

9.59

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.35

4.25

4.74

4.31

Depreciation and amortization expense per barrel of

throughput

1.92

1.84

2.06

2.03

Adjusted Refining operating income per barrel of

throughput

$

12.57

$

3.69

$

13.69

$

3.25

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Operating statistics by region (i) (continued)

North Atlantic region (h) (k)

Refining margin

$

1,347

$

529

$

4,470

$

1,477

Adjusted Refining operating income

$

1,093

$

266

$

3,395

$

559

Throughput volumes (thousand barrels per day)

494

492

485

413

Refining margin per barrel of throughput

$

29.66

$

11.69

$

25.25

$

9.81

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.23

4.29

4.61

4.46

Depreciation and amortization expense per barrel of

throughput

1.35

1.51

1.46

1.64

Adjusted Refining operating income per barrel of

throughput

$

24.08

$

5.89

$

19.18

$

3.71

U.S. West Coast region (h) (k)

Refining margin

$

376

$

226

$

2,155

$

884

Adjusted Refining operating income (loss)

$

62

$

(64

)

$

1,063

$

(54

)

Throughput volumes (thousand barrels per day)

265

259

255

248

Refining margin per barrel of throughput

$

15.43

$

9.52

$

23.15

$

9.75

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

9.87

9.45

8.68

7.46

Depreciation and amortization expense per barrel of

throughput

3.00

2.73

3.05

2.89

Adjusted Refining operating income (loss) per barrel of

throughput

$

2.56

$

(2.66

)

$

11.42

$

(0.60

)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Refining

Feedstocks (dollars per barrel)

Brent crude oil

$

88.81

$

79.85

$

98.86

$

70.79

Brent less West Texas Intermediate (WTI) crude oil

5.96

2.49

4.43

2.83

Brent less WTI Houston crude oil

4.45

1.55

2.82

1.91

Brent less Dated Brent crude oil

(0.11

)

(0.05

)

(2.22

)

0.03

Brent less Alaska North Slope (ANS) crude oil

0.82

0.03

0.06

0.35

Brent less Argus Sour Crude Index crude oil

9.91

4.83

7.42

3.92

Brent less Maya crude oil

17.21

8.07

11.68

6.48

Brent less Western Canadian Select Houston crude oil

22.51

9.31

15.55

7.40

WTI crude oil

82.85

77.36

94.43

67.97

Natural gas (dollars per million British Thermal Units)

4.46

4.54

5.83

7.85

Products (dollars per barrel)

U.S. Gulf Coast:

Conventional Blendstock of Oxygenate Blending (CBOB)

gasoline less Brent

8.21

13.20

17.26

13.66

Ultra-low-sulfur (ULS) diesel less Brent

52.78

17.68

46.45

13.75

Propylene less Brent

(56.82

)

(18.59

)

(42.73

)

(6.43

)

U.S. Mid-Continent:

CBOB gasoline less WTI

14.92

13.86

23.60

17.36

ULS diesel less WTI

59.53

19.79

51.83

18.70

North Atlantic:

CBOB gasoline less Brent

20.29

17.80

26.96

16.89

ULS diesel less Brent

73.03

20.36

57.01

15.91

U.S. West Coast:

California Reformulated Gasoline Blendstock of

Oxygenate Blending (CARBOB) 87 gasoline less ANS

24.82

27.44

39.10

24.17

California Air Resources Board (CARB) diesel less ANS

54.10

22.44

48.75

17.60

CARBOB 87 gasoline less WTI

29.96

29.90

43.47

26.64

CARB diesel less WTI

59.24

24.90

53.12

20.08

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

Renewable Diesel

New York Mercantile Exchange ULS diesel

(dollars per gallon)

$

3.55

$

2.39

$

3.54

$

2.07

Biodiesel Renewable Identification Number (RIN)

(dollars per RIN)

1.82

1.49

1.67

1.49

California Low-Carbon Fuel Standard (dollars per metric ton)

65.78

155.24

98.73

177.78

Chicago Board of Trade (CBOT) soybean oil (dollars per

pound)

0.70

0.58

0.71

0.58

Ethanol

CBOT corn (dollars per bushel)

6.69

5.67

6.94

5.80

New York Harbor ethanol (dollars per gallon)

2.48

3.43

2.57

2.49

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

December 31,

2022

2021

Balance sheet data

Current assets

$

24,133

$

21,165

Cash and cash equivalents included in current assets

4,862

4,122

Inventories included in current assets

6,752

6,265

Current liabilities

17,461

16,851

Valero Energy Corporation stockholders’ equity

23,561

18,430

Total equity

25,468

19,817

Debt and finance lease obligations:

Debt –

Current portion of debt (excluding variable interest entities (VIEs))

$

—

$

300

Debt, less current portion of debt (excluding VIEs)

8,380

10,820

Total debt (excluding VIEs)

8,380

11,120

Current portion of debt attributable to VIEs

861

810

Debt, less current portion of debt attributable to VIEs

—

20

Total debt attributable to VIEs

861

830

Total debt

9,241

11,950

Finance lease obligations –

Current portion of finance lease obligations (excluding VIEs)

184

141

Finance lease obligations, less current portion (excluding VIEs)

1,453

1,502

Total finance lease obligations (excluding VIEs)

1,637

1,643

Current portion of finance lease obligations attributable to VIEs

64

13

Finance lease obligations, less current portion attributable to VIEs

693

264

Total finance lease obligations attributable to VIEs

757

277

Total finance lease obligations

2,394

1,920

Total debt and finance lease obligations

$

11,635

$

13,870

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

Reconciliation of net cash provided by operating activities to

adjusted net cash provided by operating activities (h)

Net cash provided by operating activities

$

4,096

$

2,454

$

12,574

$

5,859

Exclude:

Changes in current assets and current liabilities

(9

)

595

(1,626

)

2,225

Diamond Green Diesel LLC’s (DGD) adjusted net cash

provided by operating activities attributable to the other joint

venture member’s ownership interest in DGD

142

82

436

381

Adjusted net cash provided by operating activities

$

3,963

$

1,777

$

13,764

$

3,253

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

Reconciliation of capital investments to capital

investments attributable to Valero (h)

Capital expenditures (excluding VIEs)

$

236

$

145

$

788

$

513

Capital expenditures of VIEs:

DGD

171

312

853

1,042

Other VIEs

10

51

40

110

Deferred turnaround and catalyst cost expenditures

(excluding VIEs)

210

243

1,030

787

Deferred turnaround and catalyst cost expenditures

of DGD

13

—

26

6

Investments in nonconsolidated joint ventures

—

1

1

9

Capital investments

640

752

2,738

2,467

Adjustments:

DGD’s capital investments attributable to the other joint

venture member

(92

)

(156

)

(439

)

(524

)

Capital expenditures of other VIEs

(10

)

(51

)

(40

)

(110

)

Capital investments attributable to Valero

$

538

$

545

$

2,259

$

1,833

Dividends per common share

$

0.98

$

0.98

$

3.92

$

3.92

Year Ending
December 31, 2023

Reconciliation of expected total capital investments to

expected capital investments attributable to Valero (h)

Expected total capital investments

$

2,055

Adjustment:

DGD’s capital investments attributable to the other joint

venture member

(55

)

Expected capital investments attributable to Valero

$

2,000

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

NOTES TO EARNINGS RELEASE TABLES

(a)

Under the Renewable Fuel Standard program, the U.S. Environmental Protection Agency (EPA) is required to set annual quotas for the volume of renewable fuels that obligated parties, such as us, must blend into petroleum-based transportation fuels consumed in the U.S. The quotas are used to determine an obligated party’s renewable volume obligation (RVO). The EPA released a final rule on June 3, 2022 that, among other things, modified the volume standards for 2020 and, for the first time, established volume standards for 2021 and 2022.

In 2020, we recognized the cost of the RVO using the 2020 quotas set by the EPA at that time, and in 2021 and the three months ended March 31, 2022, we recognized the cost of the RVO using our estimates of the quotas. As a result of the final rule released by the EPA as noted above, we recognized a benefit of $104 million in June 2022 primarily related to the modification of the 2020 quotas. The impacts to the estimated cost of the RVO recognized by us in 2021 and the three months ended March 31, 2022 were not significant; however, there were impacts in the 2021 quarterly periods as follows: (i) benefit of $80 million for the three months ended March 31, 2021; (ii) benefit of $81 million for the three months ended June 30, 2021; (iii) benefit of $58 million for the three months ended September 30, 2021; and (iv) charge of $220 million related to the three months ended December 31, 2021, resulting in a charge of $1 million for the year ended December 31, 2021.

(b)

In mid-February 2021, many of our refineries and plants were impacted to varying extents by the severe cold, utility disruptions, and higher energy costs arising out of Winter Storm Uri. The higher energy costs resulted from an increase in the prices of natural gas and electricity that significantly exceeded rates that we consider normal, such as the average rates we incurred the month preceding the storm. As a result, our operating income for the year ended December 31, 2021 includes estimated excess energy costs of $579 million ($1.15 per share).

The above-mentioned pre-tax estimated excess energy charge is reflected in our statement of income line items and attributable to our reportable segments for the year ended December 31, 2021 as follows (in millions):

Refining

Renewable
Diesel

Ethanol

Total

Cost of materials and other

$

47

$

—

$

—

$

47

Operating expenses (excluding depreciation

and amortization expense)

478

—

54

532

Total estimated excess energy costs

$

525

$

—

$

54

$

579

The estimated excess energy costs attributable to our Refining segment for the year ended December 31, 2021 are associated with the Refining segment regions as follows (in millions, except per barrel amounts):

U.S.
Gulf Coast

U.S.
Mid-
Continent

Other
Regions
Combined

Refining
Segment

Cost of materials and other

$

45

$

2

$

—

$

47

Operating expenses (excluding depreciation

and amortization expense)

437

38

3

478

Total estimated excess energy costs

$

482

$

40

$

3

$

525

Effect of estimated excess energy costs

on operating statistics (k)

Refining margin per barrel of throughput (h)

$

0.07

$

0.01

n/a

$

0.05

Operating expenses (excluding depreciation

and amortization expense) per barrel of

throughput

0.72

0.23

n/a

0.47

Adjusted Refining operating income per barrel

of throughput (h)

$

0.79

$

0.24

n/a

$

0.52

The estimated excess energy costs attributable to our Ethanol segment for the year ended December 31, 2021 affected that segment’s operating statistics of (i) operating expenses (excluding depreciation and amortization expenses) per gallon of production and (ii) adjusted operating income per gallon of production by $0.04 (see note (h) below).

(c)

Depreciation and amortization expense includes the following:

?

a gain of $23 million in the year ended December 31, 2022 on the sale of our ethanol plant located in Jefferson, Wisconsin (Jefferson ethanol plant); and

?

accelerated depreciation of $48 million in the year ended December 31, 2021 related to a change in the estimated useful life of our Jefferson ethanol plant.

(d)

Our ethanol plant located in Lakota, Iowa (Lakota ethanol plant) is configured to produce USP-grade ethanol, a higher grade ethanol suitable for hand sanitizer blending that has a higher market value than fuel-grade ethanol. During 2022, demand for USP-grade ethanol declined and had a negative impact on the profitability of the plant. As a result, we tested the recoverability of the carrying value of the Lakota ethanol plant and concluded that it was impaired. Therefore, we reduced the carrying value of the plant to its estimated fair value and recognized an asset impairment loss of $61 million in the three months and year ended December 31, 2022.

(e)

General and administrative expenses (excluding depreciation and amortization expense) for the year ended December 31, 2022 includes a charge of $20 million for an environmental reserve adjustment associated with a non-operating site.

(f)

“Other income (expense), net” includes the following:

?

a pension settlement charge of $58 million in the three months and year ended December 31, 2022 resulting from a greater number of employees retiring in 2022 who elected lump sum benefit payments from our defined benefit pension plans than estimated. We believe that the increase in lump sum elections was driven by the negative impact to lump sum payments in 2023 that will result from higher interest rates in 2022;

?

a net gain of $38 million and $14 million in the three months and year ended December 31, 2022, respectively, related to the early retirement of approximately $442 million and $3.1 billion aggregate principal amount, respectively, of various series of our senior notes;

?

a charge of $193 million in the three months and year ended December 31, 2021 related to the early redemption and retirement of approximately $2.1 billion aggregate principal amount of various series of our senior notes;

?

a gain of $62 million in the year ended December 31, 2021 on the sale of a 24.99 percent membership interest in MVP Terminalling, LLC (MVP), a nonconsolidated joint venture with a subsidiary of Magellan Midstream Partners, L.P.; and

?

a charge of $24 million in the year ended December 31, 2021 representing our portion of the asset impairment loss recognized by Diamond Pipeline LLC, a nonconsolidated joint venture with a subsidiary of Plains All American Pipeline, L.P., resulting from the joint venture’s cancellation of its pipeline extension project.

(g)

Income tax expense includes the following:

?

deferred income tax expense of $51 million in the three months and year ended December 31, 2022 associated with the recognition of a deferred tax liability for foreign withholding tax on the anticipated repatriation of cash held by one of our international subsidiaries that we have deemed will not be permanently reinvested in our operations in that country; and

?

deferred income tax expense of $64 million in the year ended December 31, 2021 related to certain statutory income tax rate changes (primarily an increase in the U.K. rate from 19 percent to 25 percent effective in 2023) that were enacted in 2021 and resulted in the remeasurement of our deferred tax liabilities.

(h)

We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under GAAP and are considered to be non-GAAP measures.

We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. 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.

Non-GAAP measures are as follows:

?

Adjusted net income attributable to Valero Energy Corporation stockholders is defined as net income attributable to Valero Energy Corporation stockholders adjusted to reflect the items noted below, along with their related income tax effect. The income tax effect for the adjustments was calculated using a combined federal and state statutory rate for the U.S.-based adjustments of 22.5 percent and a local statutory income tax rate for foreign-based adjustments. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below.

–

Modification of RVO – The net benefit resulting from the modification of our RVO for 2020 and 2021 that was recognized by us in June 2022 is not associated with the cost of the RVO generated by our operations during the year ended December 31, 2022. See note (a) for additional details.

On the other hand, the net charge resulting from the modification of our RVO for 2021 that was recognized by us in June 2022 is associated with the cost of the RVO generated by our operations throughout 2021. Therefore, the adjustment reflects the portion of the net charge that is associated with the cost of the RVO generated by our operations during the three months and year ended December 31, 2021.

–

Gain on sale of ethanol plant – The gain on the sale of our Jefferson ethanol plant (see note (c)) is not indicative of our ongoing operations.

–

Asset impairment loss – The asset impairment loss attributable to our Lakota ethanol plant (see note (d)) is not indicative of our ongoing operations or our expectations about the profitability of our ethanol business.

–

Environmental reserve adjustment – The environmental reserve adjustment is attributable to a site that was shut down by prior owners and subsequently acquired by us (referred to by us as a non-operating site (see note (e)).

–

Pension settlement charge – The settlement charge is largely the result of the rising interest rate environment in 2022 and the impact of higher interest rates on lump sum pension benefits that affected employee retirement decisions (see note (f)). Therefore, the settlement charge is not indicative of the ongoing costs associated with our pension plans.

–

Loss (gain) on early redemption and retirement of debt – Discounts, premiums, and other expenses recognized in connection with the early redemption and retirement of various series of our senior notes (see note (f)) are not associated with the ongoing costs of our borrowing and financing activities.

–

Foreign withholding tax – The deferred income tax expense associated with the recognition of a deferred tax liability for foreign withholding tax (see note (g)) is the result of a change in the three months and year ended December 31, 2022 in the manner in which cash generated by the company’s business in international jurisdictions is deployed in the U.S.

–

Change in estimated useful life of ethanol plant – The accelerated depreciation recognized as a result of a change in the estimated useful life of our Jefferson ethanol plant (see note (c)) is not indicative of our ongoing operations.

–

Gain on sale of MVP interest – The gain on the sale of a 24.99 percent membership interest in MVP (see note (f)) is not indicative of our ongoing operations.

–

Diamond Pipeline asset impairment loss – The asset impairment loss related to the cancellation of a capital project associated with Diamond Pipeline LLC (see note (f)) is not indicative of our ongoing operations.

–

Income tax expense related to changes in statutory tax rates – The income tax expense related to changes in certain statutory income tax rates (see note (g)) is not indicative of income tax expense associated with the pre-tax results for the year ended December 31, 2021.

?

Adjusted earnings per common share – assuming dilution is defined as adjusted net income attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.

?

Refining margin is defined as Refining segment operating income (loss) excluding the modification of RVO adjustment (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe Refining margin is an important measure of our Refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

?

Renewable Diesel margin is defined as Renewable Diesel segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe Renewable Diesel margin is an important measure of our Renewable Diesel segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

?

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 (see note (d)), and other operating expenses. We believe Ethanol margin is an important measure of our Ethanol segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

?

Adjusted Refining operating income is defined as Refining segment operating income (loss) excluding the modification of RVO adjustment (see note (a)) and other operating expenses. We believe adjusted Refining operating income is an important measure of our Refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.

?

Adjusted Renewable Diesel operating income is defined as Renewable Diesel segment operating income excluding other operating expenses. We believe adjusted Renewable Diesel operating income is an important measure of our Renewable Diesel segment’s operating and financial performance because it excludes an item that is not indicative of that segment’s core operating performance.

?

Adjusted Ethanol operating income is defined as Ethanol segment operating income excluding the gain on sale of ethanol plant (see note (c)), the asset impairment loss (see note (d)), the change in estimated useful life of ethanol plant (see note (c)), and other operating expenses. We believe adjusted Ethanol operating income is an important measure of our Ethanol segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance.

?

Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding the items noted below. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities. The basis for our belief with respect to each excluded item is provided below.

–

Changes in current assets and current liabilities – Current assets net of current liabilities represents our operating liquidity. We believe that the change in our operating liquidity from period to period does not represent cash generated by our operations that is available to fund our investing and financing activities.

–

DGD’s adjusted net cash provided by operating activities attributable to the other joint venture member’s ownership interest in DGD – We are a 50 percent joint venture member in DGD and we consolidate DGD’s financial statements. Our Renewable Diesel segment includes the operations of DGD and the associated activities to market renewable diesel. Because we consolidate DGD’s financial statements, all of DGD’s net cash provided by operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities.

DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD’s operating cash flow is effectively attributable to each member and only 50 percent of DGD’s operating cash flow should be attributed to our net cash provided by operating activities. Therefore, we have adjusted our net cash provided by operating activities for the portion of DGD’s operating cash flow attributable to the other joint venture member’s ownership interest because we believe that it more accurately reflects the operating cash flow available to us to fund our investing and financing activities. The adjustment is calculated as follows (in millions):

Three Months Ended
December 31,

Year Ended

December 31,

2022

2021

2022

2021

DGD operating cash flow data

Net cash provided by (used in) operating activities

$

—

$

(199

)

$

661

$

439

Exclude: Changes in current assets and current

liabilities

(283

)

(362

)

(210

)

(323

)

Adjusted net cash provided by operating

activities

283

163

871

762

Other joint venture member’s ownership interest

50

%

50

%

50

%

50

%

DGD’s adjusted net cash provided by operating

activities attributable to the other joint venture

member’s ownership interest in DGD

$

142

$

82

$

436

$

381

?

Capital investments attributable to Valero, including expected amounts for the year ending December 31, 2023, is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures presented in our consolidated statements of cash flows, excluding the portion of DGD’s capital investments attributable to the other joint venture member and all of the capital expenditures of VIEs other than DGD.

DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each member, only 50 percent of DGD’s capital investments should be attributed to our net share of total capital investments. We also exclude the capital expenditures of other VIEs that we consolidate because we do not operate those VIEs. We believe capital investments attributable to Valero, including expected amounts for the year ending December 31, 2023, is an important measure because it more accurately reflects our capital investments.

(i)

The Refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries.

(j)

Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.

(k)

Valero uses certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

All per barrel of throughput, per gallon of sales, and per gallon of production amounts are calculated by dividing the associated dollar amount by the throughput volumes, sales volumes, and production volumes for the period, as applicable.

Throughput volumes, sales volumes, and production volumes are calculated by multiplying throughput volumes per day, sales volumes per day, and production volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. 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. We believe the use of such volumes results in per unit amounts that are most representative of the product margins generated and the operating costs incurred as a result of our operation of those facilities.

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Valero Contacts
Investors:
Homer Bhullar, Vice President – Investor Relations and Finance, 210-345-1982
Eric Herbort, Director – Investor Relations, 210-345-3331
Gautam Srivastava, Senior Manager – Investor Relations, 210-345-3992

Media:
Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002