Valero Energy VLO Form 10-Q filing Q1 FY2026

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

See Condensed Notes to Consolidated Financial Statements.

See Condensed Notes to Consolidated Financial Statements.

See Condensed Notes to Consolidated Financial Statements.

See Condensed Notes to Consolidated Financial Statements.

(a)Restricted cash is included in prepaid expenses and other in our consolidated balance sheets.

See Condensed Notes to Consolidated Financial Statements.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

General

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

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

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

Reclassifications

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

Significant Accounting Policy

Use of Estimates

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. IMPAIRMENT AND OTHER MATTERS

In March 2025, we approved a plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result of these actions, the following impacts were recorded in our Refining segment:

• During the first quarter of 2025, we evaluated the Benicia and Wilmington refineries for potential impairment and concluded that their carrying values were not recoverable as of March 31, 2025. Therefore, we recognized a combined asset impairment loss of $1.1 billion.
• Included in the recoverability assessments discussed above was the recognition of expected asset retirement obligations of $337 million. During the three months ended March 31, 2026, we settled approximately $100 million of the asset retirement obligation related to our Benicia Refinery.
• We shortened the estimated useful life of the Benicia Refinery, and as a result, have been depreciating the revised carrying value of the net property, plant, and equipment and other noncurrent assets since April 2025 to the estimated salvage value. Accordingly, we recorded incremental depreciation of approximately $100 million in depreciation and amortization expense in the three months ended March 31, 2026.
• We implemented a transition plan for the affected employees of the Benicia Refinery, which includes retention incentive payments and separation benefits. During the third quarter of 2025, we recognized a liability of $50 million for these one-time costs, which was included in operating expenses (excluding depreciation and amortization expense). A portion of this amount was paid to eligible employees during the first quarter of 2026 and we expect to distribute the remaining balance by the end of the second quarter of 2026.
• During the fourth quarter of 2025, we reduced certain inventory levels related to our California operations that resulted in the liquidation of last-in, first-out (LIFO) inventory layers with historical costs higher than current costs. As a result, cost of materials and other increased by $37 million.

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

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3. INVENTORIES

Inventories consisted of the following (in millions):

As of March 31, 2026 and December 31, 2025, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $11.2 billion and $2.6 billion, respectively. Our non-LIFO inventories accounted for $1.3 billion and $1.2 billion of our total inventories as of March 31, 2026 and December 31, 2025, respectively.

4. DEBT

Public Debt

On March 10, 2026, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036. Proceeds from this debt issuance totaled $850 million before deducting the underwriting discount and other debt issuance costs.

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Facilities

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

(a)Letters of credit issued as of March 31, 2026 expire at various times in 2026 through 2027.

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

(c)In February 2026, DGD amended this unsecured revolving credit facility with a syndicate of financial institutions (the DGD Revolver) to (i) extend the maturity date to February 2029 and (ii) modify the reference interest rates from an adjusted term SOFR, a secured overnight financing rate (SOFR), to the term SOFR, and from an adjusted daily simple SOFR to the daily simple SOFR. The variable interest rate on the DGD Revolver was 6.169 percent as of March 31, 2026.

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

(e)Central Mexico Terminals (defined in Note 7) has an unsecured revolving credit facility (the IEnova Revolver) with IEnova (defined in Note 7). The variable interest rate on the IEnova Revolver was 7.511 percent and 7.835 percent as of March 31, 2026 and December 31, 2025, respectively.

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

Other Disclosures

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. COMMITMENTS AND CONTINGENCIES

Port Arthur Refinery Fire

On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery’s distillate hydrotreater units that prompted a full shut-down of the refinery. As of the date of this quarterly report on Form 10-Q, the Port Arthur Refinery has resumed operations at reduced capacity and efforts remain ongoing to determine the ultimate cause of the incident, assess the full extent of the damages, and implement a plan for making any repairs or replacements. We currently expect that the incident will result in additional capital expenditures in 2026, which should be covered by insurance, subject to our self-insured retention. However, the ultimate timing and amount of any such capital expenditures and insurance proceeds are currently uncertain and are not reasonably estimable at this time. Such capital expenditures may also occur in a different period than when any insurance proceeds may be received. Uncertainties remain with respect to the ultimate outcomes from this incident and the resulting impact on our financial position, results of operations, and cash flows.

We have received a number of lawsuits, including a proposed class action lawsuit, alleging personal injury, property damage, and nuisance in the adjacent community. Several of these actions seek unspecified damages in excess of $1 million. While we intend to vigorously defend against such pending actions, the ultimate outcomes and impacts thereof are currently uncertain and any potential losses or damages cannot be reasonably estimated at this time. We continue to work cooperatively with various regulatory authorities reviewing the incident and discussions are ongoing. As of the date of this quarterly report on Form 10-Q, no formal regulatory actions or proceedings have been commenced. Regulatory actions or proceedings, if any, that may arise in the future, are currently uncertain and we are unable to make any reasonable estimates with respect thereto at this time.

Trade and Other Policy Matters

The U.S. federal government under the current administration implemented new or revised tariffs that negatively impacted our business, particularly our Renewable Diesel segment, during 2025 and into 2026, including those implemented pursuant to the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA were invalid. On April 20, 2026, the U.S. Customs and Border Protection (CBP) launched a system that was developed to process IEEPA tariff refund claims. Based on the eligibility parameters established by the CBP for the initial phase of the refund process, DGD prepared and filed a refund claim in the amount of $51 million, which has been accepted by the CBP. In accordance with the accounting for gain contingencies, we recorded a receivable for this amount in April 2026. We will continue to monitor developments related to trade and tariff-related matters and evaluate their potential effects on our business, financial position, results of operations, and cash flows.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. EQUITY

Treasury Stock

We purchase shares of our outstanding common stock as authorized by our board of directors (Board), including under share purchase programs (described in the table below) and with respect to our employee stock-based compensation plans. During the three months ended March 31, 2026 and 2025, we purchased for treasury 2,327,023 shares and 2,074,605 shares, respectively.

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

Accumulated Other Comprehensive Loss

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

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7. VARIABLE INTEREST ENTITIES

Consolidated VIEs

We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary. As of March 31, 2026, the significant consolidated VIEs included:

• DGD, a joint venture with a subsidiary of Darling Ingredients Inc. that owns and operates two plants that process waste and renewable feedstocks (predominantly animal fats, used cooking oils, vegetable oils, and inedible distillers corn oils (DCOs)) into renewable diesel, renewable naphtha, and neat sustainable aviation fuel (SAF)1; and
• Central Mexico Terminals, a collective group of three subsidiaries of Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova), which is a Mexican company and indirect subsidiary of Sempra Energy, a U.S. public company. We have terminaling agreements with Central Mexico Terminals that represent variable interests. We do not have an ownership interest in Central Mexico Terminals.

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

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

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

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Nonconsolidated VIEs

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

8. EMPLOYEE BENEFIT PLANS

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

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. EARNINGS (LOSS) PER COMMON SHARE

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

Participating securities include restricted stock and performance awards granted under our 2020 Omnibus Stock Incentive Plan. Dilutive securities include participating securities. For the three months ended March 31, 2026 and 2025, we computed earnings (loss) per common share – assuming dilution using the two-class method and included dilutive securities as appropriate.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. REVENUES AND SEGMENT INFORMATION

Revenue from Contracts with Customers

Disaggregation of Revenue

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

Contract Balances

Contract balances were as follows (in millions):

Remaining Performance Obligations

We have spot and term contracts with customers, the majority of which are spot contracts with no remaining performance obligations. We do not disclose remaining performance obligations for contracts that have terms of one year or less. The transaction price for our remaining term contracts includes a fixed component and variable consideration (i.e., a commodity price), both of which are allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation. The fixed component is not material and the variable consideration is highly uncertain. Therefore, as of March 31, 2026, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations. See Note 2 for additional information regarding contractual obligations related to our Benicia Refinery.

Segment Information

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

• The Refining segment includes the operations of our petroleum refineries, the associated activities to market our refined petroleum products, and the logistics assets that support our refining operations. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks, distillates, and other products.
• The Renewable Diesel segment includes the operations of DGD, a consolidated joint venture as discussed in Note 7, and the associated activities to market low-carbon fuels. The principal products manufactured by DGD and sold by this segment are renewable diesel, renewable naphtha, and neat SAF. This segment sells some renewable diesel and neat SAF to the Refining

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segment for blending into petroleum-based diesel and conventional jet fuel, respectively, which is then sold to that segment’s customers as finished product.

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

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

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

See notes on page 19.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a)Cost of materials and other is net of the clean fuel production credit on qualifying sales of certain low-carbon transportation fuels of $178 million and $20 million for our Renewable Diesel and Ethanol segments, respectively, in the three months ended March 31, 2026 and $51 million for our Renewable Diesel segment in the three months ended March 31, 2025.

(b)Other corporate expenses include general and administrative expenses and depreciation and amortization expense, as reflected in our consolidated statements of income on page 2.

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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

As of March 31, 2026 and December 31, 2025, our investments in nonconsolidated joint ventures accounted for under the equity method were $680 million and $684 million, respectively, all of which

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related to the Refining segment and are reflected in “deferred charges and other assets, net” in our balance sheets.

11. SUPPLEMENTAL CASH FLOW INFORMATION

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

Changes in current assets and current liabilities for the three months ended March 31, 2026 were primarily due to the following:

• The increase in receivables was due to an increase in refined petroleum product prices combined with an increase in related sales volumes in March 2026 compared to December 2025; and
• The increase in accounts payable was due to an increase in crude oil and other feedstock prices combined with an increase in related volumes purchased in March 2026 compared to December 2025.

Changes in current assets and current liabilities for the three months ended March 31, 2025 were primarily due to the following:

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

There were no significant noncash investing and financing activities during the three months ended March 31, 2026 or 2025, except as noted in the table above.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

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

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

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• Commodity derivative contracts consist primarily of exchange-traded futures, which are used to reduce the impact of price volatility on our results of operations and cash flows as discussed in Note 13. These contracts are measured at fair value using a market approach based on quoted prices from the commodity exchange and are categorized in Level 1 of the fair value hierarchy.
• Physical purchase contracts represent the fair value of fixed-price corn purchase contracts. The fair values of these purchase contracts are measured using a market approach based on quoted prices from the commodity exchange or an independent pricing service and are categorized in Level 2 of the fair value hierarchy.
• Clean fuel production credits represent the fair value of the tax credits that DGD intends to sell on behalf of the other joint venture member. These tax credits are categorized in Level 3 of the fair value hierarchy and are measured at fair value using a market approach based on historical sales prices and third-party consultant estimates. Significant unobservable inputs used in the valuation include the expected market discount per $1.00 of credit value.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• Investments of certain benefit plans consist of investment securities held by trusts for the purpose of satisfying a portion of our obligations under certain U.S. nonqualified benefit plans. The plan assets categorized in Level 1 of the fair value hierarchy are measured at fair value using a market approach based on quoted prices from national securities exchanges. The plan assets categorized in Level 3 of the fair value hierarchy represent insurance contracts, the fair value of which is provided by the insurer.
• Investments in AFS debt securities consist primarily of commercial paper and U.S. government treasury bills and have maturities within one year. The securities categorized in Level 1 are measured at fair value using a market approach based on quoted prices from national securities exchanges and the securities categorized in Level 2 are measured at fair value using a market approach based on quoted prices from independent pricing services. The amortized cost basis of the securities approximates fair value. Realized and unrealized gains and losses were de minimis for the three months ended March 31, 2026 and 2025.
• Blending program obligations represent our liability for the purchase of compliance credits needed to satisfy our blending obligations under various government and regulatory blending programs, such as the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard (LCFS), Canada Clean Fuel Regulations, U.K. Renewable Transport Fuel Obligation, and similar programs in other jurisdictions in which we operate (collectively, the Renewable and Low-Carbon Fuel Programs). The blending program obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based on quoted prices from an independent pricing service.
• Foreign currency contracts consist of foreign currency exchange and purchase contracts related to our foreign operations to manage our exposure to exchange rate fluctuations on transactions denominated in currencies other than the local (functional) currencies of our operations. These contracts are measured at fair value using a market approach based on quoted foreign currency exchange rates and are categorized in Level 1 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

There were no assets or liabilities that were measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025.

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Financial Instruments

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

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

13. PRICE RISK MANAGEMENT ACTIVITIES

General

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

Risk Management Activities by Type of Risk

Commodity Price Risk

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

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

• Cash flow hedges – Cash flow hedges are derivative instruments that are formally designated and qualify for hedge accounting. The objective of these hedges is to reduce variability in cash flows by locking in the price of forecasted purchases and/or product sales at market prices.
• Economic hedges – Economic hedges are derivative instruments that are not designated as hedging instruments for accounting purposes. These derivatives are primarily used to manage exposure to commodity price volatility associated with certain feedstock and product inventories and, in some cases, forecasted purchases and/or product sales. Although economic hedges may achieve similar economic risk management objectives as cash flow hedges, changes in their fair value are recognized currently in our statements of income.

As of March 31, 2026, we had the following outstanding commodity derivative instruments that were used as cash flow hedges and economic hedges, as well as commodity derivative instruments related to the physical purchase of corn at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels, except corn contracts that are presented in thousands of bushels).

Renewable and Low-Carbon Fuel Programs Price Risk

We are exposed to market risk related to the volatility in the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. To manage this risk, we enter into contracts to purchase these credits. Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values. The Renewable and Low-Carbon Fuel

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Programs require us to blend a certain volume of renewable and low-carbon fuels into the petroleum-based transportation fuels we produce in, or import into, the respective jurisdiction to be consumed therein based on annual quotas. To the degree we are unable to blend at the required quotas, we must purchase compliance credits (primarily Renewable Identification Numbers (RINs)). The cost of meeting our credit obligations under the Renewable and Low-Carbon Fuel Programs was $653 million and $332 million for the three months ended March 31, 2026 and 2025, respectively. These amounts are reflected in cost of materials and other.

Foreign Currency Risk

We are exposed to exchange rate fluctuations on transactions related to our foreign operations that are denominated in currencies other than the local (functional) currencies of our operations. To manage our exposure to these exchange rate fluctuations, we often use foreign currency contracts. These contracts are not designated as hedging instruments for accounting purposes and therefore are classified as economic hedges. As of March 31, 2026, we had foreign currency contracts to purchase $530 million of U.S. dollars. These commitments matured on or before April 24, 2026.

Fair Values of Derivative Instruments

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

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

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Market Risk

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

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

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

For cash flow hedges, no component of any derivative instrument’s gain or loss was excluded from the assessment of hedge effectiveness for the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2026 and 2025, cash flow hedges primarily related to forecasted sales of renewable diesel. As of March 31, 2026, the estimated deferred after-tax loss that is expected to be reclassified into revenues within the next 12 months was not material. The changes in accumulated other comprehensive loss by component, net of tax, for the three months ended March 31, 2026 and 2025 are described in Note 6.

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

29

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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); 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. Refer to the tables in note (b), beginning on page 44, for the reconciliations of Refining, Renewable Diesel, and Ethanol segment margin and adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) to their most directly comparable GAAP financial measures. Also in note (b), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 49 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 48, 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 first quarter of 2026 benefited from strong global demand for petroleum-based transportation fuels amid constrained worldwide supply. Geopolitical developments disrupted global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand. These conditions led to higher market prices for petroleum-based transportation fuels, as well as increased prices for crude oil and other feedstocks used in their production. Despite higher feedstock costs, the spread between product prices and input costs resulted in strong refining margins during the first quarter of 2026. However, refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results.

Our results for the first quarter of 2026 were also impacted by actions taken under our plan with respect to the operations of our Benicia Refinery. During the quarter, we began idling the processing units through a phased approach and ceased operation of the fuel production units. In accordance with our plan, full idling of all processing units was completed in April 2026. See Note 2 of Condensed Notes to Consolidated Financial Statements for additional information related to our Benicia Refinery.

In addition, on March 23, 2026, our Port Arthur Refinery experienced a fire in one of its distillate hydrotreater units, which prompted a full shut-down of the refinery. As of the date of this quarterly report on Form 10-Q, the refinery has resumed operations at reduced capacity. This incident did not have a

material effect on our results of operations for the first quarter of 2026. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to this event.

The strong demand for our products and continued strength in refining margins are the primary contributors to us reporting $1.3 billion of net income attributable to Valero stockholders for the first quarter of 2026. Our operating results, including operating results by segment, are described in the following summary under “First Quarter Results” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 37.

Our operations generated $1.4 billion of cash during the first quarter of 2026. Also, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036 during the first quarter of 2026, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations was used to make $448 million of capital investments in our business and return $932 million to our stockholders through purchases of common stock for treasury and dividend payments. As a result of these items, along with the net proceeds from our debt issuance and other activities, our cash, cash equivalents, and restricted cash increased by $1.0 billion during the first quarter of 2026 to $5.9 billion as of March 31, 2026. We had $10.8 billion in liquidity as of March 31, 2026. 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 46.

First Quarter Results

For the first quarter of 2026, we reported net income attributable to Valero stockholders of $1.3 billion compared to a net loss of $595 million for the first quarter of 2025. The increase of $1.9 billion was primarily due to an increase in operating income of $2.6 billion, partially offset by an increase in income tax expense of $666 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 (b) beginning on page 44.

While our operating income increased by $2.6 billion in the first quarter of 2026 compared to the first quarter of 2025, adjusted operating income increased by $1.5 billion primarily due to the following:

• Refining segment. Refining segment adjusted operating income increased by $1.2 billion primarily due to higher distillate (primarily diesel) margins, an increase in crude oil differentials,

and an increase in throughput volumes, partially offset by lower gasoline margins and an increase in depreciation and amortization expense.

• Renewable Diesel segment. Renewable Diesel segment operating income increased by $280 million primarily due to higher product prices (primarily renewable diesel) and an increase in clean fuel production credits recognized on qualifying sales, partially offset by higher feedstock prices.
• Ethanol segment. Ethanol segment operating income increased by $70 million primarily due to lower corn prices, the recognition of clean fuel production credits in 2026, and an increase in production volumes.

Outlook

Many uncertainties exist with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic and geopolitical activity and the resulting impact on product supply and demand, we have noted several factors below that have impacted or may impact our results of operations during the second quarter of 2026.

• Global demand for gasoline, diesel, and jet fuel remains strong; however, demand growth has moderated amid market disruptions related to conflict in the Middle East.
• Continued disruption to global refining capacity is expected due to unplanned outages at refineries and export infrastructure in the Middle East and Russia resulting from ongoing conflicts in those regions as well as reduced production in other regions driven by crude supply constraints. As a result, global refined product inventories are expected to remain low.
• Crude oil differentials are expected to remain volatile as reductions in Middle Eastern sour crude oil production are expected to be only partially offset by incremental crude oil supply from other regions. In addition, ongoing conflict in the Middle East continues to disrupt global transportation routes, resulting in higher freight costs that could contribute to further volatility in the crude oil market.
• Renewable diesel demand is expected to rise driven by an increase in the renewable volume obligations (RVOs) imposed by the EPA for 2026 and 2027, particularly with respect to biomass-based diesel.
• Ethanol demand is expected to follow typical seasonal patterns.
• On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery’s distillate hydrotreater units, which is more fully discussed in Note 5 of Condensed Notes to Consolidated Financial Statements. As of the date of this quarterly report on Form 10-Q, the Port Arthur Refinery has resumed operations at reduced capacity. For the second quarter of 2026, we expect throughput volumes for our Gulf Coast region to range between 1.690 to 1.740 million barrels per day, which reflects the anticipated reduction in volumes for our Port Arthur Refinery.

RESULTS OF OPERATIONS

The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (b) beginning on page 44, 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 44 through 46.

First Quarter Results -

Financial Highlights by Segment and Total Company

(millions of dollars)

First Quarter Results -

Financial Highlights by Segment and Total Company (continued)

(millions of dollars)

First Quarter Results -

Average Market Reference Prices and Differentials

First Quarter Results -

Average Market Reference Prices and Differentials (continued)

Total Company, Corporate, and Other

The following table includes selected financial data for the total company, corporate, and other for the first quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Revenues increased by $2.1 billion in the first quarter of 2026 compared to the first quarter of 2025 primarily due to increases in product prices for the petroleum-based transportation fuels (primarily diesel) associated with sales made by our Refining segment. This increase in revenues, along with the effect of an asset impairment loss of $1.1 billion in the first quarter of 2025 (see note (a)), was partially offset by an increase in cost of sales of $578 million primarily due to increases in crude oil and other feedstock costs.

Operating income increased by $2.6 billion in the first quarter of 2026; however, adjusted operating income, which excludes the adjustments in the table in note (b), increased by $1.5 billion, from $235 million in the first quarter of 2025 to $1.8 billion in the first quarter of 2026. The primary components of this $1.5 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.

Income tax expense increased by $666 million in the first quarter of 2026 compared to the first quarter of 2025 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 first quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Refining segment operating income increased by $2.3 billion in the first quarter of 2026; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (b), increased by $1.2 billion in the first quarter of 2026 compared to the first quarter of 2025. The primary 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 $1.4 billion in the first quarter of 2026 compared to the first quarter of 2025.

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 39 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first quarter of 2026 compared to the first quarter of 2025.

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 crude oil differentials had a favorable impact of approximately $390 million.
  • An increase in throughput volumes of 86,000 barrels per day had a favorable impact of approximately $120 million. As discussed in “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 34 and in Note 2 of Condensed Notes to Consolidated Financial Statements, we began idling the processing units through a phased approach and ceased operation of the fuel production units at our Benicia Refinery during the first quarter of 2026. While these actions resulted in lower volumes at our Benicia Refinery, the overall impact was more than offset by increased

volumes at our other refineries, resulting in higher aggregate volumes in the first quarter of 2026 compared to the first quarter of 2025.

• A decrease in gasoline margins had an unfavorable impact of approximately $340 million.
• Refining segment depreciation and amortization expense increased by $138 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to idle the processing units and 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 quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Renewable Diesel segment operating income increased by $280 million in the first quarter of 2026 compared to the first quarter of 2025 primarily due to an increase in Renewable Diesel segment margin of $297 million.

Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of the feedstocks that we process. The table on page 40 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first quarter of 2026 compared to the first quarter of 2025.

The increase in Renewable Diesel segment margin was primarily due to the following:

• An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $380 million.
• An increase in clean fuel production credits recognized on qualifying sales had a favorable impact of $127 million.
• An increase in the cost of the feedstocks we process had an unfavorable impact of approximately $190 million.

Ethanol Segment Results

The following table includes selected financial and operating data of our Ethanol segment for the first quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

Ethanol segment operating income increased by $70 million in the first quarter of 2026 compared to the first quarter of 2025 primarily due to an increase in Ethanol segment margin of $80 million.

Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of corn that we process. The table on page 40 reflects market reference prices that we believe impacted our Ethanol segment margin in the first quarter of 2026 compared to the first quarter of 2025.

The increase in Ethanol segment margin was primarily due to the following:

• A decrease in corn prices had a favorable impact of approximately $40 million.
• The recognition of clean fuel production credits had a favorable impact of $20 million. Provisions of the One Big Beautiful Bill Act became effective on January 1, 2026, making certain ethanol produced and sold by us eligible for the clean fuel production credit. Accordingly, we recognized clean fuel production credits on qualifying sales of ethanol during the three months ended March 31, 2026.
• An increase in production volumes of 153,000 gallons per day had a favorable impact of approximately $10 million.

The following notes relate to references on pages 37 through 43.

(a)In March 2025, we approved a plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, 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 three months ended March 31, 2025.

(b)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 margin is defined as Refining segment operating income (loss) 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.

• Renewable Diesel margin is defined as Renewable Diesel segment operating income (loss) excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.

• Ethanol margin is defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense, as reflected in the table below.

• Adjusted Refining operating income is defined as Refining segment operating income (loss) excluding the asset impairment loss and other operating expenses, as reflected in the table below.

• Adjusted operating income is defined as total company operating income (loss) excluding the asset impairment loss and other operating expenses, as reflected in the table below.

(c)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.

(d)We use throughput volumes, sales volumes, and production volumes for the Refining segment, Renewable Diesel segment, and Ethanol segment, respectively, due to their general use by others who operate facilities similar to those included in our segments.

LIQUIDITY AND CAPITAL RESOURCES

Our Liquidity

Our liquidity consisted of the following as of March 31, 2026 (in millions):

(a)Excludes the committed facilities of the consolidated VIEs.

(b)Excludes $195 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 March 10, 2026, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036. Proceeds from this debt issuance totaled $850 million before deducting the underwriting discount and other debt issuance costs. The net proceeds from this debt issuance are expected to be used for general corporate purposes, including the repayment, repurchase, or redemption of the remaining $100 million aggregate principal amount of our 7.65 percent Debentures due July 1, 2026, the remaining $426 million aggregate principal amount of our 3.400 percent Senior Notes due September 15, 2026, and the remaining

$146 million aggregate principal amount of the 4.375 percent Senior Notes due December 15, 2026 issued by Valero Energy Partners LP and guaranteed by us.

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):

Cash Flows for the Three Months Ended March 31, 2026

In the first quarter of 2026, we used the $1.4 billion of cash generated by our operations and the $3.1 billion from our debt issuance and borrowings to make $400 million of investments in our business, repay $2.2 billion of debt and finance lease obligations, return $932 million to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $1.0 billion. The debt issuance, borrowings, and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.

As previously noted, our operations generated $1.4 billion of cash in the first quarter of 2026, driven by net income of $1.3 billion and noncash charges to income of $371 million, partially offset by a negative change in working capital of $303 million. Noncash charges primarily included $840 million of depreciation and amortization expense, partially offset by a $397 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 $400 million primarily consisted of $448 million in capital investments, as defined below under “Capital Investments,” of which $33 million related to capital investments made by DGD.

Cash Flows for the Three Months Ended March 31, 2025

In the first quarter of 2025, we used the $952 million of cash generated by our operations, $2.5 billion from our debt issuance and borrowings, and $22 million of cash on hand to make $635 million of investments in our business, repay $2.1 billion of debt and finance lease obligations, and return $630 million to our stockholders through purchases of our common stock for treasury and dividend payments. The debt issuance, borrowings, and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.

As previously noted, our operations generated $952 million of cash in the first quarter of 2025, resulting from noncash charges to income of $1.4 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 $691 million of depreciation and amortization expense, partially offset by a $324 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 loss.

Our investing activities of $635 million primarily consisted of $660 million in capital investments, of which $95 million related to capital investments made by DGD.

Our Capital Resources

Our material cash requirements as of March 31, 2026 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 consist of our capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, as reflected in our statements of cash flows on page 5. Capital investments exclude acquisitions, if any.

We have developed an extensive multi-year capital investment program, which we update and revise based on changing internal and external factors. For additional information, see “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—LIQUIDITY AND CAPITAL RESOURCES—Our Capital Resources—Capital Investments” and the “RISK FACTORS” section included in our annual report on Form 10-K for the year ended December 31, 2025.

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 7 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 three months ended March 31, 2026 and 2025.

See Note 5 of Condensed Notes to Consolidated Financial Statements for information regarding the potential impact to our capital expenditures resulting from an incident at the Port Arthur Refinery during the first quarter of 2026, as well as the related potential effect on capital investments attributable to Valero during 2026.

Contractual Obligations

As of March 31, 2026, 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 three months ended March 31, 2026, 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 three months ended March 31, 2026. See Note 2 of Condensed Notes to Consolidated Financial Statements for additional information regarding contractual obligations for our Benicia Refinery.

Other Matters Impacting Liquidity and Capital Resources

Stock Purchase Programs

During the three months ended March 31, 2026, we purchased for treasury 2,327,023 of our shares for a total cost of $564 million. See Note 6 of Condensed Notes to Consolidated Financial Statements for additional information related to our stock purchase programs. As of March 31, 2026, we had $1.2 billion remaining available for purchase under the September 2024 Program. On February 25, 2026, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, which is in addition to the amount remaining under the September 2024 Program. We will continue to evaluate the timing of purchases when appropriate. We have no obligation to make purchases under these programs.

Pension Plan Funding

As disclosed in our annual report on Form 10-K for the year ended December 31, 2025, we plan to contribute approximately $70 million to our pension plans and $20 million to our other postretirement benefit plans during 2026. No significant contributions were made to these plans during the three months ended March 31, 2026.

Trade and Other Policy Matters

See Note 5 of Condensed Notes to Consolidated Financial Statements for information regarding trade and other policy changes that have impacted our business.

Cash Held by Our Foreign Subsidiaries

As of March 31, 2026, $3.8 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 expected asset retirement obligations and settlement activity during the first quarter of 2026.

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, 2025.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

The following tables provide information about our debt instruments (dollars in millions), the fair values of which are sensitive to changes in interest rates. A 10 percent increase or decrease in our floating interest rates would not have a material effect on our results of operations. Principal cash flows and related weighted-average interest rates by expected maturity dates are presented. See Note 4 of Condensed Notes to Consolidated Financial Statements for additional information related to our debt.

(a)Excludes unamortized discounts and debt issuance costs.

OTHER MARKET RISKS

We are exposed to market risks primarily related to the volatility in the price of commodities, the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs, and foreign currency exchange rates. There have been no material changes to these market risks disclosed in our annual report on Form 10-K for the year ended December 31, 2025. See Note 13 of Condensed Notes to Consolidated Financial Statements for a discussion about these market risks as of March 31, 2026.

ITEM 4. CONTROLS AND PROCEDURES

(a)Evaluation of disclosure controls and procedures.

Our management has evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report, and has concluded that our disclosure controls and procedures were effective as of March 31, 2026.

(b)Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During the three months ended March 31, 2026, there were no proceedings required to be disclosed in this item under SEC regulations. Pursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of certain environmental proceedings is required in this item. We believe any such proceedings less than this threshold are not material to our business and financial condition.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table discloses purchases of shares of our common stock made by us or on our behalf during the first quarter of 2026.

(a)The shares reported in this column include 158,468 shares related to our purchases of shares from participants in our stock-based compensation plans in connection with the vesting of restricted stock and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.

(b)The average price paid per share reported in this column excludes brokerage commissions and a one percent excise tax on share purchases.

(c)On October 29, 2024, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date (the September 2024 Program). This authorization was granted on September 19, 2024. As of March 31, 2026, we had $1.2 billion remaining available for purchase under the September 2024 Program. On February 25, 2026, we announced that our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, which is in addition to the amount remaining under the September 2024 Program.

ITEM 5. OTHER INFORMATION

(a)None.

(b)None.

(c)During the three months ended March 31, 2026, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) of Valero adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS

Exhibit No. Description

22.01 Subsidiary Issuer of Guaranteed Securities–incorporated by reference to Exhibit 22.01 to Valero’s quarterly report on Form 10-Q for the quarter ended June 30, 2025 (SEC File No. 001-13175).

*31.01 Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal executive officer.

*31.02 Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal financial officer.

**32.01 Section 1350 Certifications (under Section 906 of the Sarbanes-Oxley Act of 2002).

***101.INS Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

***101.SCH Inline XBRL Taxonomy Extension Schema Document.

***101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

***101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

***101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

***101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

***104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ________________________

* Filed herewith.

** Furnished herewith.

*** Submitted electronically herewith.

Pursuant to paragraph 601(b)(4)(iii)(A) of Regulation S-K, the registrant has omitted from the foregoing listing of exhibits, and hereby agrees to furnish to the SEC upon its request, copies of certain instruments, each relating to debt not exceeding 10 percent of the total assets of the registrant and its subsidiaries on a consolidated basis.

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