Valero Energy Corporation

10/23/2025 | Press release | Distributed by Public on 10/23/2025 13:57

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report, including without limitation our disclosures below under "OVERVIEW AND OUTLOOK," includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words "anticipate," "believe," "expect," "plan," "intend," "scheduled," "estimate," "project," "projection," "predict," "budget," "forecast," "goal," "guidance," "target," "ambition," "could," "would," "should," "may," "strive," "seek," "pursue," "potential," "opportunity," "aimed," "considering," "continue," "evaluate," and similar expressions.
These forward-looking statements include, among other things, statements regarding:
•the effect, impact, potential duration or timing, or other implications of global geopolitical and other conflicts and tensions, and government and other responses thereto;
•future Refining segment margins, including gasoline and distillate margins, and differentials;
•future Renewable Diesel segment margins;
•future Ethanol segment margins;
•expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, transportation costs, and operating expenses;
•anticipated levels of crude oil and liquid transportation fuel inventories, storage capacity, and production;
•expectations with respect to third-party refining, logistics, and low-carbon fuels projects and operations, and the effect and implications thereof on industry and market dynamics;
•expectations regarding the levels of, and costs and timing with respect to, the production and operations at our existing refineries and plants, projects under evaluation, construction, or development, and former projects;
•our plans, actions, assets, and operations in California and expected timing and cost of obligations and other financial statement impacts;
•our anticipated level of capital investments, including deferred turnaround and catalyst cost expenditures, our expected allocation between, and/or within, growth capital expenditures and sustaining capital expenditures, capital expenditures for environmental and other purposes, and joint venture investments, the expected costs and timing applicable to such capital investments and any related projects, and the effect of those capital investments on our business, financial condition, results of operations, and liquidity;
•our anticipated level of cash distributions or contributions, such as our dividend payment rate and contributions to our pension plans and other postretirement benefit plans;
•our ability to meet future cash and credit requirements, whether from funds generated from our operations or our ability to access financial markets effectively, and expectations regarding our liquidity;
•our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities;
•anticipated trends in the supply of, and demand for, crude oil and other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, and corn-related co-products in the regions where we operate, as well as globally;
•expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in Notes 2 and 8 of Condensed Notes to Consolidated Financial Statements and under "PART II, ITEM 1. LEGAL PROCEEDINGS," the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated or potential effects thereof on our business, financial condition, results of operations, and liquidity;
•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, SAF, and ethanol industry fundamentals;
•expectations regarding our risk management activities, including the anticipated effects of our hedge transactions;
•expectations regarding our counterparties and VIEs, including our ability to pass on increased compliance costs and timely collect receivables, and the credit risk within our accounts receivable or accounts payable;
•expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address greenhouse gas (GHG) emissions and the percentage of low-carbon fuels in the transportation fuel mix, including, but not limited to, the Renewable and Low-Carbon Fuel Programs, blending and tax credits, efficiency standards, or other benefits or incentives that impact the demand for low-carbon fuels; and
•expectations regarding our low-carbon fuels strategy, publicly announced GHG emissions reduction/displacement targets and long-term ambition, and our current, former, and any future low-carbon projects.
We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, current and potential counterparties, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty. In addition, we based many of these forward-looking statements on assumptions about future events, the ultimate outcomes of which we cannot predict with certainty and which may prove to be inaccurate. Accordingly, actual performance or results may differ materially from the future performance or results that we have expressed, suggested, or forecast in the forward-looking statements. Differences between actual performance or results and any future performance or results expressed, suggested, or forecast in these forward-looking statements could result from a variety of factors, including the following:
•the effects arising out of global geopolitical and other conflicts and tensions, including with respect to changes in trade flows and impacts to crude oil and other markets;
•demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, SAF, ethanol, and corn-related co-products;
•demand for, and supplies of, crude oil and other feedstocks, as well as other critical materials and supplies;
•the effects of public health threats, pandemics, and epidemics, governmental and societal responses thereto, and the adverse impacts of the foregoing on our business, financial condition, results of operations, and liquidity, and the global economy and financial markets generally;
•acts of terrorism or other third-party actions affecting either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products, to receive feedstocks, or otherwise operate efficiently;
•the effects of war or hostilities, and political and economic conditions, in countries that produce crude oil or other feedstocks or consume refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products;
•the ability of the members of the Organization of Petroleum Exporting Countries (OPEC), and other petroleum-producing nations that collectively make up OPEC+, to agree on and to maintain crude oil price and production controls;
•the level of consumer demand, consumption, and overall economic activity, including the effects from seasonal fluctuations and market prices;
•refinery, renewable diesel plant, or ethanol plant overcapacity or undercapacity;
•the risk that any transactions or capital decisions may not provide the anticipated benefits or may result in unforeseen detriments;
•the actions taken by competitors, including both pricing and adjustments to refining capacity or low-carbon fuels production, as well as changes in the geographic markets where they operate, in response to market conditions;
•the level of competitors' imports into markets that we supply;
•accidents, unscheduled shutdowns, weather events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, societal, or political events or developments, terrorism, cyberattacks, or other catastrophes or disruptions affecting our operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of our suppliers, customers, or third-party service providers;
•changes in the cost or availability of transportation or storage capacity for feedstocks and our products;
•pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, SAF, ethanol, or corn-related co-products;
•the price, availability, technology related to, and acceptance of alternative fuels and alternative-fuel vehicles, as well as sentiment and perceptions with respect to low-carbon projects and GHG emissions more generally;
•the levels of government subsidies for, and executive orders, mandates, or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies or initiatives, including those related to carbon capture, carbon sequestration, and low-carbon fuels, or affecting the price of natural gas and/or electricity;
•the volatility in the market price of compliance credits (primarily RINs needed to comply with the RFS) under the Renewable and Low-Carbon Fuel Programs;
•delay of, cancellation of, or failure to implement planned capital or other strategic projects and realize the various assumptions and benefits projected for such projects or cost overruns in executing such planned projects;
•severe weather events, such as storms, hurricanes, droughts, floods, wildfires, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, waste and renewable feedstocks, corn, and other feedstocks, critical supplies, refined petroleum products, renewable diesel, SAF, ethanol, and corn-related co-products;
•rulings, judgments, or settlements in litigation or other legal or regulatory matters, such as unexpected environmental remediation or enforcement costs, including those in excess of any reserves or insurance coverage;
•legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, profits, procedures, windfall, margin, or other taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2 and related
regulation, actions implemented under the Renewable and Low-Carbon Fuel Programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA's or other government agencies' regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business, financial condition, results of operations, and liquidity;
•changing economic, regulatory, and political environments and related events in the various countries in which we operate or otherwise do business, including trade restrictions, expropriation or impoundment of assets, failure of foreign governments and state-owned entities to honor their contracts, property disputes, economic instability, restrictions on the transfer of funds, duties and tariffs and their effects on trading relationships, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, government shutdowns, and other actions, policies, and initiatives by federal, state, local, and other jurisdictions applicable to us;
•changes in the credit ratings assigned to our debt securities and trade credit;
•the operating, financing, and distribution decisions of our joint ventures or other joint venture members, and other consolidated VIEs, that we do not control;
•changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar;
•the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow or our ability to borrow or access financial markets;
•the costs, disruption, and diversion of resources associated with lawsuits, proceedings, demands, or investigations, or campaigns and negative publicity commenced by government authorities, investors, stakeholders, or other interested parties;
•overall economic conditions, including the stability and liquidity of financial markets, and the effect thereof on consumer demand; and
•other factors generally described in the "RISK FACTORS" section included in our annual report on Form 10-K for the year ended December 31, 2024.
Any one of these factors, or a combination of these factors, could materially affect our future business, financial condition, results of operations, and liquidity and whether any forward-looking statements ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those expressed, suggested, or forecast in any forward-looking statements. Such forward-looking statements speak only as of the date of this quarterly report on Form 10-Q and we do not intend to update these statements unless we are required by applicable securities laws to do so.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing, as it may be updated or modified by our future filings with the U.S. Securities and Exchange Commission (SEC). We undertake no obligation to publicly release any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events unless we are required by applicable securities laws to do so.
NON-GAAP FINANCIAL MEASURES
The following discussions in "OVERVIEW AND OUTLOOK," "RESULTS OF OPERATIONS," and "LIQUIDITY AND CAPITAL RESOURCES" include references to financial measures that are not defined under GAAP. These non-GAAP financial measures include Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining segment adjusted operating expenses (excluding depreciation and amortization expense); and capital investments attributable to Valero. We have included these non-GAAP financial measures to help facilitate the comparison of operating results between periods, to help assess our cash flows, and because we believe they provide useful information as discussed further below. See the tables in note (c) beginning on page 57 for reconciliations of Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); and adjusted Refining operating expenses (excluding depreciation and amortization expense) to their most directly comparable GAAP financial measures. Also in note (c), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 64 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 63, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.
OVERVIEW AND OUTLOOK
Overview
Business Operations Update
Our results for the third quarter and first nine months of 2025 were supported by strong worldwide demand for petroleum-based transportation fuels, while worldwide supply of those products remained constrained. Our results for the first nine months of 2025, however, were also impacted by the asset impairment loss of $1.1 billion ($877 million after taxes) associated with our operations in California, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.
We reported $1.1 billion and $1.2 billion of net income attributable to Valero stockholders for the third quarter of 2025 and the first nine months of 2025, respectively. Our operating results, including operating results by segment, are described in the following summary under "Third Quarter Results" and "First Nine Months Results," and detailed descriptions can be found under "RESULTS OF OPERATIONS" beginning on page 43.
Our operations generated $3.8 billion of cash during the first nine months of 2025. In addition, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030 during the first nine months of 2025, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations, along with the net proceeds from our debt issuance and cash on hand, was used to make $1.5 billion of capital investments in our business, return $2.6 billion to our stockholders through purchases of common stock for treasury and dividend payments, and repay $440 million of our public debt that matured in the first nine months of 2025. As a result of this and other activity, our cash, cash equivalents, and restricted cash increased by $112 million during the first nine months of 2025 to $4.9 billion as of September 30, 2025. We had $9.9 billion in liquidity as of September 30, 2025. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under "LIQUIDITY AND CAPITAL RESOURCES" beginning on page 61.
Third Quarter Results
For the third quarter of 2025, we reported net income attributable to Valero stockholders of $1.1 billion compared to $364 million for the third quarter of 2024. The increase of $731 million was primarily due to an increase in operating income of $1.0 billion, partially offset by an increase in income tax expense of $294 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (c) beginning on page 57.
Three Months Ended September 30,
2025 2024 Change
Refining segment:
Operating income $ 1,610 $ 565 $ 1,045
Adjusted operating income 1,665 568 1,097
Renewable Diesel segment:
Operating income (loss) (28) 35 (63)
Ethanol segment:
Operating income 183 153 30
Total company:
Operating income 1,509 507 1,002
Adjusted operating income 1,564 510 1,054
While our operating income increased by $1.0 billion in the third quarter of 2025 compared to the third quarter of 2024, adjusted operating income increased by $1.1 billion primarily due to the following:
•Refining segment. Refining segment adjusted operating income increased by $1.1 billion primarily due to higher gasoline and distillate (primarily diesel) margins and an increase in throughput volumes, partially offset by a decline in crude oil and other feedstock differentials and increases in adjusted operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense.
•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $63 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel).
•Ethanol segment.Ethanol segment operating income increased by $30 million primarily due to higher ethanol and corn related co-product prices and an increase in production volumes, partially offset by higher corn prices and an increase in operating expenses (excluding depreciation and amortization expense).
First Nine Months Results
For the first nine months of 2025, we reported net income attributable to Valero stockholders of $1.2 billion compared to $2.5 billion for the first nine months of 2024. The decrease of $1.3 billion was primarily due to a decrease in operating income of $1.8 billion, partially offset by a decrease in income tax expense of $322 million and a decrease in net income attributable to noncontrolling interests of $297 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (c) beginning on page 57.
Nine Months Ended September 30,
2025 2024 Change
Refining segment:
Operating income $ 2,346 $ 3,534 $ (1,188)
Adjusted operating income 3,540 3,547 (7)
Renewable Diesel segment:
Operating income (loss) (248) 337 (585)
Ethanol segment:
Operating income 257 268 (11)
Adjusted operating income 257 295 (38)
Total company:
Operating income 1,606 3,407 (1,801)
Adjusted operating income 2,800 3,447 (647)
While our operating income decreased by $1.8 billion in the first nine months of 2025 compared to the first nine months of 2024, adjusted operating income decreased by $647 million primarily due to the following:
•Refining segment. Refining segment adjusted operating income decreased by $7 million primarily due to a decline in crude oil and other feedstock differentials and increases in adjusted operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, partially offset by higher gasoline, distillate (primarily diesel), and other product margins and an increase in throughput volumes.
•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $585 million primarily due to higher feedstock costs and a decrease in sales volumes, partially offset by higher product prices (primarily renewable diesel) and a decrease in operating expenses (excluding depreciation and amortization expense).
•Ethanol segment.Ethanol segment adjusted operating income decreased by $38 million primarily due to higher corn prices and an increase in operating expenses (excluding depreciation and amortization expense), partially offset by higher ethanol prices and an increase in production volumes.
Outlook
Many uncertainties remain with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic activity and its resulting impact on product supply and demand, including the effects of tariffs thereon, we have noted several factors below that have impacted or may impact our results of operations during the fourth quarter of 2025.
•Global demand for gasoline, diesel, and jet fuel continues to rise, with demand for jet fuel outpacing other primary petroleum-based transportation fuels. As biofuel consumption increases at a slower pace than in recent years, petroleum-based transportation fuels account for a greater share of the overall increase in demand for finished products.
•Combined light product (gasoline, diesel, and jet fuel) inventories across the U.S. and Europe remain low. Expected reductions in refining capacity in both regions, unplanned outages at Russian refineries due to the Russia-Ukraine conflict, and a prolonged ramp-up of new capacity in emerging markets continue to support utilization of remaining global refining capacity.
•Crude oil differentials are expected to widen as a result of an increase in sour crude oil production from OPEC+ suppliers. However, potential sanction adjustments related to Iran, Russia, and Venezuela and the Russia-Ukraine conflict could result in increased volatility in the crude oil market and potentially impact crude oil differentials.
•Renewable diesel demand is expected to remain consistent with current levels.
•Ethanol demand is expected to follow typical seasonal patterns.
RESULTS OF OPERATIONS
The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (c) beginning on page 57, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 57 through 60.
Third Quarter Results -
Financial Highlights by Segment and Total Company
(millions of dollars)
Three Months Ended September 30, 2025
Refining Renewable
Diesel 		Ethanol Corporate
and
Eliminations 		Total
Revenues:
Revenues from external customers
$ 30,414 $ 719 $ 1,035 $ - $ 32,168
Intersegment revenues
1 484 259 (744) -
Total revenues
30,415 1,203 1,294 (744) 32,168
Cost of sales:
Cost of materials and other 26,684 1,077 942 (745) 27,958
Operating expenses (excluding depreciation and
amortization expense reflected below) (a)
1,388 78 148 - 1,614
Depreciation and amortization expense 728 76 21 (1) 824
Total cost of sales
28,800 1,231 1,111 (746) 30,396
Other operating expenses 5 - - - 5
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
- - - 246 246
Depreciation and amortization expense - - - 12 12
Operating income (loss) by segment $ 1,610 $ (28) $ 183 $ (256) 1,509
Other income, net 86
Interest and debt expense, net of capitalized
interest
(139)
Income before income tax expense 1,456
Income tax expense 390
Net income 1,066
Less: Net loss attributable to noncontrolling
interests
(29)
Net income attributable to
Valero Energy Corporation stockholders
$ 1,095
Third Quarter Results -
Financial Highlights by Segment and Total Company (continued)
(millions of dollars)
Three Months Ended September 30, 2024
Refining Renewable
Diesel 		Ethanol Corporate
and
Eliminations 		Total
Revenues:
Revenues from external customers
$ 31,332 $ 632 $ 912 $ - $ 32,876
Intersegment revenues
3 593 235 (831) -
Total revenues
31,335 1,225 1,147 (831) 32,876
Cost of sales:
Cost of materials and other 28,922 1,029 842 (828) 29,965
Operating expenses (excluding depreciation and
amortization expense reflected below)
1,256 92 133 1 1,482
Depreciation and amortization expense 589 69 19 (2) 675
Total cost of sales
30,767 1,190 994 (829) 32,122
Other operating expenses 3 - - - 3
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
- - - 234 234
Depreciation and amortization expense - - - 10 10
Operating income by segment
$ 565 $ 35 $ 153 $ (246) 507
Other income, net
123
Interest and debt expense, net of capitalized
interest
(141)
Income before income tax expense
489
Income tax expense
96
Net income
393
Less: Net income attributable to noncontrolling
interests
29
Net income attributable to
Valero Energy Corporation stockholders
$ 364
Third Quarter Results -
Average Market Reference Prices and Differentials
Three Months Ended September 30,
2025 2024
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$ 68.14 $ 78.37
Brent less West Texas Intermediate (WTI) crude oil 3.11 3.18
Brent less WTI Houston crude oil 2.09 1.94
Brent less Dated Brent crude oil (0.91) (1.63)
Brent less Argus Sour Crude Index (ASCI) crude oil 3.46 4.30
Brent less Maya crude oil
7.14 11.19
Brent less Western Canadian Select (WCS) Houston crude oil 6.93 10.36
WTI crude oil
65.03 75.19
Natural gas (dollars per million British thermal units
(MMBTu))
2.70 1.83
Renewable volume obligation (RVO) (dollars per barrel) (d) 6.38 3.89
Product margins (RVO adjusted unless otherwise noted)
(dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock for Oxygenate Blending (CBOB)
gasoline less Brent
7.78 6.28
Ultra-low-sulfur (ULS) diesel less Brent
21.05 11.89
Polymer Grade Propylene less Brent (not RVO adjusted) (8.22) 12.82
U.S. Mid-Continent:
CBOB gasoline less WTI
12.79 14.08
ULS diesel less WTI
26.16 16.74
North Atlantic:
CBOB gasoline less Brent
14.58 12.16
ULS diesel less Brent
24.64 13.68
U.S. West Coast:
California Reformulated Gasoline Blendstock for
Oxygenate Blending (CARBOB) 87 gasoline less Brent
26.69 23.56
California Air Resources Board (CARB) diesel less Brent 29.83 14.22
Third Quarter Results -
Average Market Reference Prices and Differentials (continued)
Three Months Ended September 30,
2025 2024
Renewable Diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$ 2.35 $ 2.31
Biodiesel RIN (dollars per RIN) 1.13 0.60
California LCFS carbon credit (dollars per metric ton) 53.36 53.65
U.S. Gulf Coast (USGC) used cooking oil (UCO)
(dollars per pound)
0.62 0.46
USGC DCO (dollars per pound) 0.64 0.48
USGC fancy bleachable tallow (Tallow) (dollars per pound) 0.62 0.47
Ethanol
Chicago Board of Trade (CBOT) corn (dollars per bushel) 4.02 3.92
New York Harbor ethanol (dollars per gallon) 1.96 1.92
Total Company, Corporate, and Other
The following table includes selected financial data for the total company, corporate, and other for the third quarter of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Three Months Ended September 30,
2025 2024 Change
Revenues $ 32,168 $ 32,876 $ (708)
Cost of sales 30,396 32,122 (1,726)
Operating income 1,509 507 1,002
Adjusted operating income (see note (c))
1,564 510 1,054
Income tax expense
390 96 294
Revenues decreased by $708 million in the third quarter of 2025 compared to the third quarter of 2024 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenues was more than offset by a decrease in cost of sales of $1.7 billion primarily due to decreases in crude oil and other feedstock costs.
Operating income increased by $1.0 billion in the third quarter of 2025; however, adjusted operating income, which excludes the adjustments in the table in note (c), increased by $1.1 billion, from $510 million in the third quarter of 2024 to $1.6 billion in the third quarter of 2025. The components of this $1.1 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.
Income tax expense increased by $294 million in the third quarter of 2025 compared to the third quarter of 2024 primarily as a result of higher income before income tax expense.
Refining Segment Results
The following table includes selected financial and operating data of our Refining segment for the third quarter of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Three Months Ended September 30,
2025 2024 Change
Operating income $ 1,610 $ 565 $ 1,045
Adjusted operating income (see note (c)) 1,665 568 1,097
Refining margin (see note (c))
3,731 2,413 1,318
Operating expenses (excluding depreciation and amortization
expense reflected below) (see note (a))
1,388 1,256 132
Adjusted operating expenses (excluding depreciation and
amortization expense reflected below) (see note (c))
1,338 1,256 82
Depreciation and amortization expense 728 589 139
Throughput volumes (thousand barrels per day) (see note (e)) 3,087 2,884 203
Refining segment operating income increased by $1.0 billion in the third quarter of 2025; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (c), increased by $1.1 billion in the third quarter of 2025 compared to the third quarter of 2024. The components of this increase in the adjusted results, along with the reasons for the changes in those components, are outlined below.
•Refining segment margin increased by $1.3 billion in the third quarter of 2025 compared to the third quarter of 2024.
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 45 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the third quarter of 2025 compared to the third quarter of 2024.
The increase in Refining segment margin was primarily due to the following:
◦An increase in distillate (primarily diesel) margins had a favorable impact of approximately$1.1 billion.
◦An increase in gasoline margins had a favorable impact of approximately $330 million.
◦An increase in throughput volumes of 203,000 barrels per day had a favorable impact of approximately $250 million.
◦A decline in crude oil differentials had an unfavorable impact of approximately $210 million.
◦A decline in differentials for other feedstocks had an unfavorable impact of approximately $230 million.
•Refining segment adjusted operating expenses (excluding depreciation and amortization expense) increased by $82 million primarily due to increases in energy costs of $48 million, certain employee compensation expenses of $13 million, and chemical and catalyst costs of $5 million.
•Refining segment depreciation and amortization expense increased by $139 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.
Renewable Diesel Segment Results
The following table includes selected financial and operating data of our Renewable Diesel segment for the third quarter of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Three Months Ended September 30,
2025 2024 Change
Operating income (loss) $ (28) $ 35 $ (63)
Renewable Diesel margin (see note (c)) 126 196 (70)
Operating expenses (excluding depreciation and amortization
expense reflected below)
78 92 (14)
Depreciation and amortization expense 76 69 7
Sales volumes (thousand gallons per day) (see note (e)) 2,717 3,544 (827)
Renewable Diesel segment operating income decreased by $63 million in the third quarter of 2025 compared to the third quarter of 2024 primarily due to a decrease in Renewable Diesel segment margin of $70 million.
Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell and the cost of the feedstocks that we process. The table on page 46 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the third quarter of 2025 compared to the third quarter of 2024.
The decrease in Renewable Diesel segment margin was primarily due to the following:
•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $210 million.
•A decrease in sales volumes of 827,000 gallons per day had an unfavorable impact of approximately $100 million. The decrease in sales volumes was primarily due to reduced production driven by unfavorable economic conditions in the third quarter of 2025.
•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $240 million.
Ethanol Segment Results
The following table includes selected financial and operating data of our Ethanol segment for the third quarter of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Three Months Ended September 30,
2025 2024 Change
Operating income $ 183 $ 153 $ 30
Ethanol margin (see note (c)) 352 305 47
Operating expenses (excluding depreciation and amortization
expense reflected below)
148 133 15
Depreciation and amortization expense 21 19 2
Production volumes (thousand gallons per day) (see note (e)) 4,635 4,584 51
Ethanol segment operating income increased by $30 million in the third quarter of 2025 compared to the third quarter of 2024. The components of this increase, along with the reasons for the changes in those components, are outlined below.
•Ethanol segment margin increased by $47 million in the third quarter of 2025 compared to the third quarter of 2024.
Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 46 reflects market reference prices that we believe impacted our Ethanol segment margin in the third quarter of 2025 compared to the third quarter of 2024.
The increase in Ethanol segment margin was primarily due to the following:
◦An increase in ethanol prices had a favorable impact of approximately $30 million.
◦An increase in prices for the co-products that we produce, primarily dry distillers grains and inedible DCOs, had a favorable impact of approximately $30 million.
◦An increase in production volumes of 51,000 gallons per day had a favorable impact of approximately $10 million.
◦An increase in corn prices had an unfavorable impact of approximately $20 million.
•Ethanol segment operating expenses (excluding depreciation and amortization expense) increased by $15 million primarily due to an increase in energy costs.
First Nine Months Results -
Financial Highlights by Segment and Total Company
(millions of dollars)
Nine Months Ended September 30, 2025
Refining Renewable
Diesel 		Ethanol Corporate
and
Eliminations 		Total
Revenues:
Revenues from external customers
$ 87,495 $ 1,777 $ 3,043 $ - $ 92,315
Intersegment revenues
5 1,424 681 (2,110) -
Total revenues
87,500 3,201 3,724 (2,110) 92,315
Cost of sales:
Cost of materials and other 77,995 3,016 2,962 (2,135) 81,838
Operating expenses (excluding depreciation and
amortization expense reflected below) (a)
3,986 228 446 (1) 4,659
Depreciation and amortization expense 2,029 205 59 (3) 2,290
Total cost of sales
84,010 3,449 3,467 (2,139) 88,787
Asset impairment loss (b) 1,131 - - - 1,131
Other operating expenses 13 - - - 13
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
- - - 727 727
Depreciation and amortization expense - - - 51 51
Operating income (loss) by segment
$ 2,346 $ (248) $ 257 $ (749) 1,606
Other income, net
292
Interest and debt expense, net of capitalized
interest
(417)
Income before income tax expense
1,481
Income tax expense
404
Net income
1,077
Less: Net loss attributable to noncontrolling
interests
(137)
Net income attributable to
Valero Energy Corporation stockholders
$ 1,214
First Nine Months Results -
Financial Highlights by Segment and Total Company (continued)
(millions of dollars)
Nine Months Ended September 30, 2024
Refining Renewable
Diesel 		Ethanol Corporate
and
Eliminations 		Total
Revenues:
Revenues from external customers
$ 94,519 $ 1,888 $ 2,718 $ - $ 99,125
Intersegment revenues
8 1,932 654 (2,594) -
Total revenues
94,527 3,820 3,372 (2,594) 99,125
Cost of sales:
Cost of materials and other 85,528 3,025 2,625 (2,588) 88,590
Operating expenses (excluding depreciation and
amortization expense reflected below)
3,659 262 395 1 4,317
Depreciation and amortization expense 1,793 196 57 (4) 2,042
Total cost of sales
90,980 3,483 3,077 (2,591) 94,949
Other operating expenses 13 - 27 - 40
General and administrative expenses (excluding
depreciation and amortization expense reflected
below)
- - - 695 695
Depreciation and amortization expense - - - 34 34
Operating income by segment
$ 3,534 $ 337 $ 268 $ (732) 3,407
Other income, net
389
Interest and debt expense, net of capitalized
interest
(421)
Income before income tax expense
3,375
Income tax expense
726
Net income
2,649
Less: Net income attributable to noncontrolling
interests
160
Net income attributable to
Valero Energy Corporation stockholders
$ 2,489
First Nine Months Results -
Average Market Reference Prices and Differentials
Nine Months Ended September 30,
2025 2024
Refining
Feedstocks (dollars per barrel)
Brent crude oil $ 69.87 $ 81.72
Brent less WTI crude oil 3.08 4.05
Brent less WTI Houston crude oil 2.02 2.53
Brent less Dated Brent crude oil (0.91) (0.97)
Brent less ASCI crude oil 2.68 4.39
Brent less Maya crude oil 8.35 11.66
Brent less WCS Houston crude oil 6.81 11.03
WTI crude oil
66.79 77.67
Natural gas (dollars per MMBtu) 2.97 1.79
RVO (dollars per barrel) (d) 5.76 3.65
Product margins (RVO adjusted unless otherwise noted)
(dollars per barrel)
U.S. Gulf Coast:
CBOB gasoline less Brent 6.78 7.45
ULS diesel less Brent 17.51 16.87
Polymer Grade Propylene less Brent (not RVO adjusted) (3.07) 7.28
U.S. Mid-Continent:
CBOB gasoline less WTI 12.32 12.16
ULS diesel less WTI 21.09 18.94
North Atlantic:
CBOB gasoline less Brent 10.97 12.41
ULS diesel less Brent 21.44 19.39
U.S. West Coast:
CARBOB 87 gasoline less Brent 28.94 25.13
CARB diesel less Brent 23.47 19.65
First Nine Months Results -
Average Market Reference Prices and Differentials (continued)
Nine Months Ended September 30,
2025 2024
Renewable Diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$ 2.30 $ 2.51
Biodiesel RIN (dollars per RIN) 1.00 0.56
California LCFS carbon credit (dollars per metric ton) 57.30 56.16
USGC UCO (dollars per pound) 0.56 0.43
USGC DCO (dollars per pound) 0.58 0.47
USGC Tallow (dollars per pound) 0.56 0.44
Ethanol
CBOT corn (dollars per bushel) 4.42 4.23
New York Harbor ethanol (dollars per gallon) 1.87 1.82
Total Company, Corporate, and Other
The following table includes selected financial data for the total company, corporate, and other for the first nine months of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Nine Months Ended September 30,
2025 2024 Change
Revenues $ 92,315 $ 99,125 $ (6,810)
Cost of sales 88,787 94,949 (6,162)
Asset impairment loss (see note (b)) 1,131 - 1,131
Operating income
1,606 3,407 (1,801)
Adjusted operating income (see note (c))
2,800 3,447 (647)
Income tax expense
404 726 (322)
Net income (loss) attributable to noncontrolling interests
(137) 160 (297)
Revenues decreased by $6.8 billion in the first nine months of 2025 compared to the first nine months of 2024 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenues, along with the effect of an asset impairment loss of $1.1 billion in the first nine months of 2025 (see note (b)), was partially offset by a decrease in cost of sales of $6.2 billion primarily due to decreases in crude oil and other feedstock costs.
Operating income decreased by $1.8 billion in the first nine months of 2025; however, adjusted operating income, which excludes the adjustments in the table in note (c) decreased by $647 million, from $3.4 billion in the first nine months of 2024 to $2.8 billion in the first nine months of 2025. The components of this $647 million decrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Income tax expense decreased by $322 million in the first nine months of 2025 compared to the first nine months of 2024 primarily as a result of lower income before income tax expense.
Net income attributable to noncontrolling interests decreased by $297 million in the first nine months of 2025 compared to the first nine months of 2024 primarily due to lower earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 6 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis on page 55.
Refining Segment Results
The following table includes selected financial and operating data of our Refining segment for the first nine months of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Nine Months Ended September 30,
2025 2024 Change
Operating income
$ 2,346 $ 3,534 $ (1,188)
Adjusted operating income (see note (c))
3,540 3,547 (7)
Refining margin (see note (c)) 9,505 8,999 506
Operating expenses (excluding depreciation and amortization
expense reflected below) (see note (a))
3,986 3,659 327
Adjusted operating expenses (excluding depreciation and
amortization expense reflected below) (see note (c))
3,936 3,659 277
Depreciation and amortization expense 2,029 1,793 236
Asset impairment loss (see note (b)) 1,131 - 1,131
Throughput volumes (thousand barrels per day) (see note (e)) 2,947 2,885 62
Refining segment operating income decreased by $1.2 billion in the first nine months of 2025 compared to the first nine months of 2024; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (c), decreased by $7 million in the first nine months of 2025 compared to the first nine months of 2024. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.
•Refining segment margin increased by $506 million in the first nine months of 2025 compared to the first nine months of 2024.
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 52 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first nine months of 2025 compared to the first nine months of 2024.
The increase in Refining segment margin was primarily due to the following:
◦An increase in margins for products other than gasoline and distillates had a favorable impact of approximately $710 million.
◦An increase in distillate (primarily diesel) margins had a favorable impact of approximately $680 million.
◦An increase in gasoline margins had a favorable impact of approximately $340 million.
◦An increase in throughput volumes of 62,000 barrels per day had a favorable impact of approximately $200 million.
◦A decline in crude oil differentials had an unfavorable impact of approximately $970 million.
◦A decline in differentials for other feedstocks had an unfavorable impact of approximately $420 million.
•Refining segment adjusted operating expenses (excluding depreciation and amortization expense) increased by $277 million primarily due to increases in energy costs of $144 million and maintenance expenses of $49 million and the effect of a favorable property tax settlement of $51 million in the first nine months of 2024.
•Refining segment depreciation and amortization expense increased by $236 million primarily due to incremental depreciation expense of approximately $200 million related to our plan to cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.
Renewable Diesel Segment Results
The following table includes selected financial and operating data of our Renewable Diesel segment for the first nine months of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Nine Months Ended September 30,
2025 2024 Change
Operating income (loss)
$ (248) $ 337 $ (585)
Renewable Diesel margin (see note (c)) 185 795 (610)
Operating expenses (excluding depreciation and amortization
expense reflected below)
228 262 (34)
Depreciation and amortization expense 205 196 9
Sales volumes (thousand gallons per day) (see note (e)) 2,629 3,588 (959)
Renewable Diesel segment operating income decreased by $585 million in the first nine months of 2025 compared to the first nine months of 2024. The components of this decrease, along with the reasons for the changes in those components, are outlined below.
•Renewable Diesel segment margin decreased by $610 million in the first nine months of 2025 compared to the first nine months of 2024.
Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell and the cost of the feedstocks that we process. The table on page 53 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first nine months of 2025 compared to the first nine months of 2024.
The decrease in Renewable Diesel segment margin was primarily due to the following:
◦An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $560 million.
◦A decrease in sales volumes of 959,000 gallons per day had an unfavorable impact of approximately $380 million. The decrease in sales volumes was primarily due to reduced production driven by unfavorable economic conditions and planned maintenance activities at the DGD St. Charles Plant in the first nine months of 2025.
◦An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $340 million.
•Renewable Diesel segment operating expenses (excluding depreciation and amortization expense) decreased by $34 million primarily due to decreases in chemicals and catalysts costs of $21 million and outside services of $17 million.
Ethanol Segment Results
The following table includes selected financial and operating data of our Ethanol segment for the first nine months of 2025 and 2024. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Nine Months Ended September 30,
2025 2024 Change
Operating income
$ 257 $ 268 $ (11)
Adjusted operating income (see note (c)) 257 295 (38)
Ethanol margin (see note (c)) 762 747 15
Operating expenses (excluding depreciation and amortization
expense reflected below)
446 395 51
Depreciation and amortization expense 59 57 2
Production volumes (thousand gallons per day) (see note (e)) 4,562 4,508 54
Ethanol segment operating income decreased by $11 million in the first nine months of 2025 compared to the first nine months of 2024; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (c), decreased by $38 million in the first nine months of 2025 compared to the first nine months of 2024. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.
•Ethanol segment margin increased by $15 million in the first nine months of 2025 compared to the first nine months of 2024.
Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 53 reflects market reference prices that we believe impacted our Ethanol segment margin in the first nine months of 2025 compared to the first nine months of 2024.
The increase in Ethanol segment margin was primarily due to the following:
◦An increase in ethanol prices had a favorable impact of approximately $75 million.
◦An increase in production volumes of 54,000 gallons per day had a favorable impact of approximately $20 million.
◦An increase in corn prices had an unfavorable impact of approximately $80 million.
•Ethanol segment operating expenses (excluding depreciation and amortization expense) increased by $51 million primarily due to an increase in energy costs.
________________________
The following notes relate to references on pages 43 through 56.
(a)Operating expenses (excluding depreciation and amortization expense) for the three and nine months ended September 30, 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.
(b)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 nine months ended September 30, 2025.
(c)We use certain financial measures (as noted below) 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 (in millions):
◦Refining marginis defined as Refining segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, the asset impairment loss, and other operating expenses, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Refining operating income
to Refining margin
Refining operating income $ 1,610 $ 565 $ 2,346 $ 3,534
Adjustments:
Operating expenses (excluding depreciation
and amortization expense) (see note (a))
1,388 1,256 3,986 3,659
Depreciation and amortization expense 728 589 2,029 1,793
Asset impairment loss (see note (b)) - - 1,131 -
Other operating expenses 5 3 13 13
Refining margin $ 3,731 $ 2,413 $ 9,505 $ 8,999
◦Renewable Diesel marginis defined as Renewable Diesel segment operating income (loss) excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Renewable Diesel operating
income (loss) to Renewable Diesel margin
Renewable Diesel operating income (loss) $ (28) $ 35 $ (248) $ 337
Adjustments:
Operating expenses (excluding depreciation
and amortization expense)
78 92 228 262
Depreciation and amortization expense 76 69 205 196
Renewable Diesel margin $ 126 $ 196 $ 185 $ 795
◦Ethanol marginis defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Ethanol operating income to
Ethanol margin
Ethanol operating income $ 183 $ 153 $ 257 $ 268
Adjustments:
Operating expenses (excluding depreciation
and amortization expense)
148 133 446 395
Depreciation and amortization expense 21 19 59 57
Other operating expenses - - - 27
Ethanol margin $ 352 $ 305 $ 762 $ 747
◦Adjusted Refining operating incomeis defined as Refining segment operating income excluding employee retention and separation costs, the asset impairment loss, and other operating expenses, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Refining operating income
to adjusted Refining operating income
Refining operating income $ 1,610 $ 565 $ 2,346 $ 3,534
Adjustments:
Employee retention and separation costs (see
note (a))
50 - 50 -
Asset impairment loss (see note (b)) - - 1,131 -
Other operating expenses 5 3 13 13
Adjusted Refining operating income $ 1,665 $ 568 $ 3,540 $ 3,547
◦Adjusted Ethanol operating incomeis defined as Ethanol segment operating income excluding other operating expenses, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Ethanol operating income to
adjusted Ethanol operating income
Ethanol operating income $ 183 $ 153 $ 257 $ 268
Adjustment: Other operating expenses - - - 27
Adjusted Ethanol operating income $ 183 $ 153 $ 257 $ 295
◦Adjusted operating incomeis defined as total company operating income excluding employee retention and separation costs, the asset impairment loss, and other operating expenses, as reflected in the table below.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of total company operating
income to adjusted operating income
Total company operating income $ 1,509 $ 507 $ 1,606 $ 3,407
Adjustments:
Employee retention and separation costs (see
note (a))
50 - 50 -
Asset impairment loss (see note (b)) - - 1,131 -
Other operating expenses 5 3 13 40
Adjusted operating income $ 1,564 $ 510 $ 2,800 $ 3,447
◦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.
Three Months Ended
September 30, 		Nine Months Ended
September 30,
2025 2024 2025 2024
Reconciliation of Refining operating
expenses (excluding depreciation and
amortization expense) to adjusted Refining
operating expenses (excluding depreciation and
amortization expense)
Operating expenses (excluding depreciation
and amortization expense)
$ 1,388 $ 1,256 $ 3,986 $ 3,659
Adjustment: Employee retention and separation
costs (see note (a))
(50) - (50) -
Adjusted Refining operating expenses (excluding
depreciation and amortization expense)
$ 1,338 $ 1,256 $ 3,936 $ 3,659
(d)The RVO cost represents the average market cost on a per barrel basis to comply with the RFS 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 EPA, on a percentage basis for each class of renewable fuel and adding together the results of each calculation.
(e)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.
LIQUIDITY AND CAPITAL RESOURCES
Our Liquidity
Our liquidity consisted of the following as of September 30, 2025 (in millions):
Available capacity from our committed facilities (a):
Valero Revolver $ 3,998
Accounts receivable sales facility 1,300
Total available capacity 5,298
Cash and cash equivalents (b) 4,595
Total liquidity
$ 9,893
________________________
(a)Excludes the committed facilities of the consolidated VIEs.
(b)Excludes $169 million of cash and cash equivalents related to the consolidated VIEs that is for their use only.
Information about our outstanding borrowings, letters of credit issued, and availability under our credit facilities is reflected in Note 4 of Condensed Notes to Consolidated Financial Statements.
On February 7, 2025, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030. Proceeds from this debt issuance totaled $649 million before deducting the underwriting discount and other debt issuance costs. A portion of the net proceeds from this debt issuance was used for the repayment of our outstanding 3.65 percent Senior Notes due March 15, 2025 and 2.850 percent Senior Notes due April 15, 2025. The remaining net proceeds were used for general corporate purposes.
We believe we have sufficient funds from operations and from available capacity under our credit facilities to fund our ongoing operating requirements and other commitments over the next 12 months and thereafter for the foreseeable future. We expect that, to the extent necessary, we can raise additional cash through equity or debt financings in the public and private capital markets or the arrangement of additional credit facilities. However, there can be no assurances regarding the availability of any future financings or additional credit facilities or whether such financings or additional credit facilities can be made available on terms that are acceptable to us.
Cash Flows
Components of our cash flows are set forth below (in millions):
Nine Months Ended
September 30,
2025 2024
Cash flows provided by (used in):
Operating activities $ 3,769 $ 5,613
Investing activities (1,426) (1,437)
Financing activities:
Debt issuance and borrowings
5,999 5,473
Repayments of debt and finance lease obligations (5,913) (6,053)
Return to stockholders:
Purchases of common stock for treasury (1,534) (2,616)
Common stock dividend payments (1,061) (1,045)
Return to stockholders (2,595) (3,661)
Other financing activities 79 (24)
Financing activities (2,430) (4,265)
Effect of foreign exchange rate changes on cash 199 19
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 112 $ (70)
Cash Flows for the Nine Months Ended September 30, 2025
In the first nine months of 2025, we used the $3.8 billion of cash generated by our operations and the $6.0 billion from our debt issuance and borrowings to make $1.4 billion of investments in our business, repay $5.9 billion of debt and finance lease obligations, return $2.6 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $112 million. The debt issuance, borrowings, and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.
As previously noted, our operations generated $3.8 billion of cash in the first nine months of 2025, primarily resulting from net income of $1.1 billion, noncash charges to income of $2.5 billion, and a positive change in working capital of $157 million. Noncash charges primarily included a $1.1 billion asset impairment loss associated with our operations in California, as described in Note 2 of Condensed Notes to Consolidated Financial Statements, and $2.3 billion of depreciation and amortization expense, partially offset by a $288 million deferred income tax benefit. Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 11 of Condensed Notes to Consolidated Financial Statements. In addition, see "RESULTS OF OPERATIONS" for an analysis of the significant components of our net income.
Our investing activities of $1.4 billion primarily consisted of $1.5 billion in capital investments, as defined on the following page under "Capital Investments," of which $158 million related to capital investments made by DGD.
Cash Flows for the Nine Months Ended September 30, 2024
In the first nine months of 2024, we used the $5.6 billion of cash generated by our operations, $5.5 billion in debt borrowings, and $70 million of cash on hand to make $1.4 billion of investments in our business, repay $6.1 billion of debt and finance lease obligations, and return $3.7 billion to our stockholders
through purchases of our common stock for treasury and dividend payments. The debt borrowings and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.
As previously noted, our operations generated $5.6 billion of cash in the first nine months of 2024, driven primarily by net income of $2.6 billion, noncash charges to income of $2.2 billion, and a positive change in working capital of $795 million. Noncash charges primarily included $2.1 billion of depreciation and amortization expense. Details regarding the components of the change in working capital, along with the reasons for the changes in those components, are described in Note 11 of Condensed Notes to Consolidated Financial Statements. In addition, see "RESULTS OF OPERATIONS" for an analysis of the significant components of our net income.
Our investing activities of $1.4 billion primarily consisted of $1.5 billion in capital investments, of which $260 million related to capital investments made by DGD.
Our Capital Resources
Our material cash requirements as of September 30, 2025 primarily consisted of working capital requirements, capital investments, contractual obligations, and other matters, as described below. Our operations have historically generated positive cash flows to fulfill our working capital requirements and other uses of cash as discussed below.
Capital Investments
Capital investments are composed of our capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, as reflected in our statements of cash flows as shown on page 6. Capital investments exclude acquisitions, if any.
We have publicly announced GHG emissions reduction/displacement targets and a long-term ambition. We believe that our allocation of growth capital into low-carbon projects to date has been consistent with such targets and ambition. Certain low-carbon projects have been completed or are already in execution and the associated capital investments are included in our expected capital investments for 2025. Our capital investments in future years to achieve these targets and ambition are expected to include investments associated with certain low-carbon projects currently at various stages of progress, evaluation, or approval. For additional information, see the "RISK FACTORS" section included in our annual report on Form 10-K for the year ended December 31, 2024.
Capital Investments Attributable to Valero
Capital investments attributable to Valero is a non-GAAP financial measure that reflects our net share of capital investments and is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, excluding the portion of DGD's capital investments attributable to the other joint venture member and all of the capital expenditures of other consolidated VIEs.
We are a 50 percent joint venture member in DGD and consolidate its financial statements, and DGD's operations compose our Renewable Diesel segment. As a result, 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. In general, DGD's members use DGD's operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD's operating cash flow is effectively attributable to each member, only 50 percent of DGD's capital investments should be attributed to our net share of capital investments. We also exclude all of the capital expenditures of other VIEs that we consolidate because we do not operate
those VIEs. See Note 6 of Condensed Notes to Consolidated Financial Statements for more information about the VIEs that we consolidate. We believe capital investments attributable to Valero is an important measure because it more accurately reflects our capital investments.
Capital investments attributable to Valero should not be considered as an alternative to capital investments, which is the most comparable GAAP measure, nor should it be considered in isolation or as a substitute for an analysis of our cash flows as reported under GAAP. In addition, this non-GAAP measure may not be comparable to similarly titled measures used by other companies because we may define it differently, which may diminish its utility.
The following table (in millions) reconciles our capital investments to capital investments attributable to Valero for the nine months ended September 30, 2025 and 2024.
Nine Months Ended
September 30,
2025 2024
Reconciliation of capital investments
to capital investments attributable to Valero
Capital expenditures (excluding VIEs) $ 504 $ 399
Capital expenditures of VIEs:
DGD 67 198
Other VIEs 5 7
Deferred turnaround and catalyst cost expenditures
(excluding VIEs)
808 844
Deferred turnaround and catalyst cost expenditures
of DGD
91 62
Investments in nonconsolidated joint ventures 1 -
Capital investments 1,476 1,510
Adjustments:
DGD's capital investments attributable to the other joint
venture member
(79) (130)
Capital expenditures of other VIEs (5) (7)
Capital investments attributable to Valero $ 1,392 $ 1,373
We have developed an extensive multi-year capital investment program, which we update and revise based on changing internal and external factors. We expect to incur approximately $1.9 billion for capital investments attributable to Valero during 2025. Of this amount, approximately $1.6 billion is for sustaining the business and the balance for growth strategies.
Contractual Obligations
As of September 30, 2025, our contractual obligations included debt obligations, interest payments related to debt obligations, operating lease liabilities, finance lease obligations, other long-term liabilities, and purchase obligations. In the ordinary course of business, we had debt-related activities during the nine months ended September 30, 2025, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. There were no material changes outside the ordinary course of business with respect to our contractual obligations during the nine months ended September 30, 2025.
Other Matters Impacting Liquidity and Capital Resources
Stock Purchase Programs
During the nine months ended September 30, 2025, we purchased for treasury 10,309,669 of our shares for a total cost of $1.5 billion. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to our stock purchase programs. As of September 30, 2025, we had $311 million and $2.5 billion remaining available for purchase under the February 2024 and September 2024 Programs, respectively. We will continue to evaluate the timing of purchases when appropriate. We have no obligation to make purchases under these programs.
Pension Plan Funding
We contributed $88 million to our pension plans and $14 million to our other postretirement benefit plans during the nine months ended September 30, 2025.
Tax Matters
On July 4, 2025, the OBBB was enacted, which resulted in a broad range of changes to the Code, as more fully described in Note 8 of Condensed Notes to Consolidated Financial Statements.
We do not expect that these changes and other provisions of this legislation will have a material effect on our financial condition, results of operations, and liquidity in 2025; however, we continue to evaluate the effects of the OBBB on our financial condition, results of operations, and liquidity in the future.
Cash Held by Our Foreign Subsidiaries
As of September 30, 2025, $4.0 billion of our cash and cash equivalents was held by our foreign subsidiaries. Cash held by our foreign subsidiaries can be repatriated to us through dividends without any U.S. federal income tax consequences, but certain other taxes may apply, including, but not limited to, withholding taxes imposed by certain foreign jurisdictions, U.S. state income taxes, and U.S. federal income tax on foreign exchange gains. Therefore, there is a cost to repatriate cash held by certain of our foreign subsidiaries to us.
Asset Retirement Obligations
See Note 2 of Condensed Notes to Consolidated Financial Statements for information regarding our asset retirement obligations.
Environmental Matters
Our operations are subject to extensive environmental regulations by government authorities relating to, among other matters, the release or discharge of materials into the environment, climate, waste management, pollution prevention measures, GHG and other emissions, our facilities and operations, and characteristics and composition of many of our products. Because environmental laws and regulations have become more complex and stringent and new or revised environmental laws and regulations are continuously being enacted or proposed, the level of future costs and expenditures required for environmental matters could increase.
Concentration of Customers
Our operations have a concentration of customers in the refining industry and customers who are refined petroleum product wholesalers and retailers. These concentrations of customers may impact our overall exposure to credit risk, either positively or negatively, in that these customers may be similarly affected by changes in economic or other conditions, including the uncertainties concerning worldwide events causing volatility in the global crude oil markets. However, we believe that our portfolio of accounts
receivable is sufficiently diversified to the extent necessary to minimize potential credit risk. Historically, we have not had any significant problems collecting our accounts receivable.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Actual results could differ from those estimates. There have been no changes to the critical accounting policies that involve critical accounting estimates disclosed in our annual report on Form 10-K for the year ended December 31, 2024.
Valero Energy Corporation published this content on October 23, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2025 at 19:58 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]