10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

Commission File Number 001-13175

VALERO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	74-1828067
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

One Valero Way

San Antonio, Texas

(Address of principal executive offices)

78249

(Zip Code)

(210) 345-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VLO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☑	Accelerated filer			☐	Non-accelerated filer		☐
	Smaller reporting company			☐	Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s only class of common stock, $0.01 par value, outstanding as of July 21, 2023 was 353,132,880.

VALERO ENERGY CORPORATION

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022	2
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	3
Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2023 and 2022	4
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	6
Condensed Notes to Consolidated Financial Statements	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	61
ITEM 4. CONTROLS AND PROCEDURES	62
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	62
ITEM 1A. RISK FACTORS	62
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	63
ITEM 5. OTHER INFORMATION	63
ITEM 6. EXHIBITS	64
SIGNATURE	65

i

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALERO ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(millions of dollars, except par value)

	June 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5,075	$	4,862
Receivables, net	10,888		11,919
Inventories	6,961		6,752
Prepaid expenses and other	771		600
Total current assets	23,695		24,133
Property, plant, and equipment, at cost	51,125		50,576
Accumulated depreciation	(20,555)		(19,598)
Property, plant, and equipment, net	30,570		30,978
Deferred charges and other assets, net	6,402		5,871
Total assets	$	60,667	$	60,982
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and finance lease obligations	$	1,193	$	1,109
Accounts payable	10,825		12,728
Accrued expenses	1,117		1,215
Taxes other than income taxes payable	1,491		1,568
Income taxes payable	322		841
Total current liabilities	14,948		17,461
Debt and finance lease obligations, less current portion	10,130		10,526
Deferred income tax liabilities	5,382		5,217
Other long-term liabilities	2,213		2,310
Commitments and contingencies
Equity:
Valero Energy Corporation stockholders’ equity:
Common stock, $0.01 par value; 1,200,000,000 shares authorized; 673,501,593 and 673,501,593 shares issued	7		7
Additional paid-in capital	6,889		6,863
Treasury stock, at cost; 320,378,393 and 301,372,958 common shares	(22,586)		(20,197)
Retained earnings	42,512		38,247
Accumulated other comprehensive loss	(971)		(1,359)
Total Valero Energy Corporation stockholders’ equity	25,851		23,561
Noncontrolling interests	2,143		1,907
Total equity	27,994		25,468
Total liabilities and equity	$	60,667	$	60,982

See Condensed Notes to Consolidated Financial Statements.

1

VALERO ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(millions of dollars, except per share amounts)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues (a)	$	34,509	$	51,641	$	70,948	$	90,183
Cost of sales:
Cost of materials and other	29,430		42,946		59,435		77,895
Operating expenses (excluding depreciation and amortization expense reflected below)	1,440		1,626		2,917		3,005
Depreciation and amortization expense	658		590		1,308		1,185
Total cost of sales	31,528		45,162		63,660		82,085
Other operating expenses	2		15		12		34
General and administrative expenses (excluding depreciation and amortization expense reflected below)	209		233		453		438
Depreciation and amortization expense	11		12		21		23
Operating income	2,759		6,219		6,802		7,603
Other income, net	106		33		235		13
Interest and debt expense, net of capitalized interest	(148)		(142)		(294)		(287)
Income before income tax expense	2,717		6,110		6,743		7,329
Income tax expense	595		1,342		1,475		1,594
Net income	2,122		4,768		5,268		5,735
Less: Net income attributable to noncontrolling interests	178		75		257		137
Net income attributable to Valero Energy Corporation stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Earnings per common share	$	5.41	$	11.58	$	13.75	$	13.75
Weighted-average common shares outstanding (in millions)	358		404		363		406
Earnings per common share – assuming dilution	$	5.40	$	11.57	$	13.74	$	13.74
Weighted-average common shares outstanding – assuming dilution (in millions)	358		404		363		406
__________________________
Supplemental information:
(a) Includes excise taxes on sales by certain of our foreign operations	$	1,449	$	1,254	$	2,871	$	2,677

See Condensed Notes to Consolidated Financial Statements.

2

VALERO ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions of dollars)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	2,122	$	4,768	$	5,268	$	5,735
Other comprehensive income (loss):
Foreign currency translation adjustment	257		(442)		391		(429)
Net gain (loss) on pension and other postretirement benefits	(6)		9		(13)		17
Net gain (loss) on cash flow hedges	(47)		50		10		5
Other comprehensive income (loss) before income tax expense (benefit)	204		(383)		388		(407)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(6)		7		(5)		7
Other comprehensive income (loss)	210		(390)		393		(414)
Comprehensive income	2,332		4,378		5,661		5,321
Less: Comprehensive income attributable to noncontrolling interests	154		101		262		140
Comprehensive income attributable to Valero Energy Corporation stockholders	$	2,178	$	4,277	$	5,399	$	5,181

See Condensed Notes to Consolidated Financial Statements.

3

VALERO ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(millions of dollars)

(unaudited)

	Valero Energy Corporation Stockholders’ Equity
	Common Stock		Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total		Non- controlling Interests		Total Equity
Balance as of March 31, 2023	$	7	$	6,877	$	(21,637)	$	40,935	$	(1,205)	$	24,977	$	2,090	$	27,067
Net income	—		—		—		1,944		—		1,944		178		2,122
Dividends on common stock ($1.02 per share)	—		—		—		(367)		—		(367)		—		(367)
Stock-based compensation expense	—		14		—		—		—		14		—		14
Transactions in connection with stock-based compensation plans	—		(2)		2		—		—		—		—		—
Purchases of common stock for treasury	—		—		(951)		—		—		(951)		—		(951)
Distributions to noncontrolling interests	—		—		—		—		—		—		(101)		(101)
Other comprehensive income (loss)	—		—		—		—		234		234		(24)		210
Balance as of June 30, 2023	$	7	$	6,889	$	(22,586)	$	42,512	$	(971)	$	25,851	$	2,143	$	27,994
Balance as of March 31, 2022	$	7	$	6,832	$	(15,794)	$	28,785	$	(1,009)	$	18,821	$	1,589	$	20,410
Net income	—		—		—		4,693		—		4,693		75		4,768
Dividends on common stock ($0.98 per share)	—		—		—		(399)		—		(399)		—		(399)
Stock-based compensation expense	—		15		—		—		—		15		—		15
Transactions in connection with stock-based compensation plans	—		(2)		5		—		—		3		—		3
Purchases of common stock for treasury	—		—		(1,748)		—		—		(1,748)		—		(1,748)
Contributions from noncontrolling interests	—		—		—		—		—		—		75		75
Distributions to noncontrolling interests	—		—		—		—		—		—		(1)		(1)
Other comprehensive income (loss)	—		—		—		—		(416)		(416)		26		(390)
Balance as of June 30, 2022	$	7	$	6,845	$	(17,537)	$	33,079	$	(1,425)	$	20,969	$	1,764	$	22,733

See Condensed Notes to Consolidated Financial Statements.

4

VALERO ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(millions of dollars)

(unaudited)

	Valero Energy Corporation Stockholders’ Equity
	Common Stock		Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total		Non- controlling Interests		Total Equity
Balance as of December 31, 2022	$	7	$	6,863	$	(20,197)	$	38,247	$	(1,359)	$	23,561	$	1,907	$	25,468
Net income	—		—		—		5,011		—		5,011		257		5,268
Dividends on common stock ($2.04 per share)	—		—		—		(746)		—		(746)		—		(746)
Stock-based compensation expense	—		53		—		—		—		53		—		53
Transactions in connection with stock-based compensation plans	—		(27)		28		—		—		1		—		1
Purchases of common stock for treasury	—		—		(2,417)		—		—		(2,417)		—		(2,417)
Contributions from noncontrolling interests	—		—		—		—		—		—		75		75
Distributions to noncontrolling interests	—		—		—		—		—		—		(101)		(101)
Other comprehensive income	—		—		—		—		388		388		5		393
Balance as of June 30, 2023	$	7	$	6,889	$	(22,586)	$	42,512	$	(971)	$	25,851	$	2,143	$	27,994
Balance as of December 31, 2021	$	7	$	6,827	$	(15,677)	$	28,281	$	(1,008)	$	18,430	$	1,387	$	19,817
Net income	—		—		—		5,598		—		5,598		137		5,735
Dividends on common stock ($1.96 per share)	—		—		—		(800)		—		(800)		—		(800)
Stock-based compensation expense	—		47		—		—		—		47		—		47
Transactions in connection with stock-based compensation plans	—		(29)		32		—		—		3		—		3
Purchases of common stock for treasury	—		—		(1,892)		—		—		(1,892)		—		(1,892)
Contributions from noncontrolling interests	—		—		—		—		—		—		240		240
Distributions to noncontrolling interests	—		—		—		—		—		—		(3)		(3)
Other comprehensive income (loss)	—		—		—		—		(417)		(417)		3		(414)
Balance as of June 30, 2022	$	7	$	6,845	$	(17,537)	$	33,079	$	(1,425)	$	20,969	$	1,764	$	22,733

See Condensed Notes to Consolidated Financial Statements.

5

VALERO ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions of dollars)

(unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	5,268	$	5,735
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	1,329		1,208
Loss (gain) on early retirement of debt, net	(11)		50
Deferred income tax expense (benefit)	159		(333)
Changes in current assets and current liabilities	(1,728)		(128)
Changes in deferred charges and credits and other operating activities, net	(335)		(99)
Net cash provided by operating activities	4,682		6,433
Cash flows from investing activities:
Capital expenditures (excluding variable interest entities (VIEs))	(311)		(324)
Capital expenditures of VIEs:
Diamond Green Diesel Holdings LLC (DGD)	(122)		(458)
Other VIEs	(2)		(19)
Deferred turnaround and catalyst cost expenditures (excluding VIEs)	(508)		(681)
Deferred turnaround and catalyst cost expenditures of DGD	(39)		(13)
Purchases of available-for-sale (AFS) debt securities	(354)		—
Proceeds from sales and maturities of AFS debt securities	251		—
Proceeds from sale of assets	—		32
Investments in nonconsolidated joint ventures	—		(1)
Other investing activities, net	7		4
Net cash used in investing activities	(1,078)		(1,460)
Cash flows from financing activities:
Proceeds from debt issuances and borrowings (excluding VIEs)	1,450		1,439
Proceeds from borrowings of VIEs:
DGD	300		359
Other VIEs	54		46
Repayments of debt and finance lease obligations (excluding VIEs)	(1,726)		(2,580)
Repayments of debt and finance lease obligations of VIEs:
DGD	(386)		(365)
Other VIEs	(41)		(33)
Premiums paid on early retirement of debt	(5)		(48)
Purchases of common stock for treasury	(2,393)		(1,892)
Common stock dividend payments	(746)		(800)
Contributions from noncontrolling interests	75		240
Distributions to noncontrolling interests	(101)		(3)
Other financing activities, net	(1)		(5)
Net cash used in financing activities	(3,520)		(3,642)
Effect of foreign exchange rate changes on cash	129		(61)
Net increase in cash and cash equivalents	213		1,270
Cash and cash equivalents at beginning of period	4,862		4,122
Cash and cash equivalents at end of period	$	5,075	$	5,392

See Condensed Notes to Consolidated Financial Statements.

6

VALERO ENERGY CORPORATION

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 have been 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 periods presented. All such adjustments are of a normal recurring nature unless disclosed otherwise. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. 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, 2022.

The balance sheet as of December 31, 2022 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, 2022.

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.

2.    UNCERTAINTY

In September 2022, California adopted Senate Bill No. 1322 (SB 1322), which requires refineries in California to report monthly on the volume and cost of the crude oil they buy, the quantity and price of the wholesale gasoline they sell, and the gross gasoline margin per barrel, among other information. The provisions of SB 1322 were effective January 2023, and we began the required monthly reporting for our two California refineries at that time.

In March 2023, California adopted Senate Bill No. 2 (such statute, together with any regulations contemplated or issued thereunder, SBx 1-2), which, among other things, (i) authorizes the establishment of a maximum gross gasoline refining margin (max margin) and the imposition of a financial penalty for profits above a max margin, (ii) significantly expands the reporting obligations under SB 1322 and the

7

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Petroleum Industry Information Reporting Act of 1980, which include reporting requirements to the California Energy Commission (CEC) for all participants in the petroleum industry supply chain in California (e.g., refiners, marketers, importers, transporters, terminals, producers, renewables producers, pipelines, and ports), (iii) creates the Division of Petroleum Market Oversight within the CEC to analyze the data provided under SBx 1-2, and (iv) authorizes the CEC to regulate the timing and other aspects of refinery turnaround and maintenance activities in certain instances. The provisions of SBx 1-2 became effective June 26, 2023. The CEC has not yet undertaken rulemaking with respect to SBx 1-2, including the establishment of any max margin, the imposition of a financial penalty, or restrictions on turnaround and maintenance activities, and it is uncertain when or whether any such rulemaking will occur. SBx 1-2 imposes increased and substantial reporting requirements, which include daily, weekly, monthly, and annual reporting of detailed operational and financial data on all aspects of our operations in California, much of it at the transaction level. The operational data includes our plans for turnaround and maintenance activities at our two California refineries and the manner in which we expect to address the potential impacts on feedstock and product inventories in California as a result of such turnaround and maintenance activities.

We continue to review and analyze the provisions of SBx 1-2 and the possible impacts to our refining and marketing operations in California. While the CEC has not yet established a max margin, imposed a financial penalty for profits above a max margin, or imposed restrictions on turnaround and maintenance activities, the potential implementation of a financial penalty or any restrictions or delays on our ability to undertake turnaround or maintenance activities creates uncertainty due to the potential adverse effects on us. Any adverse effects on our operations or financial performance in California could indicate that the carrying value of our assets in California is not recoverable, which would result in an impairment loss that could be material. In addition, if the circumstances that trigger an impairment loss result in a reduction in the estimated useful lives of the assets, we may be required to recognize an asset retirement obligation that could be material. Other jurisdictions are contemplating similarly focused legislation or actions.

The ultimate timing and impacts of SBx 1-2 and any other similarly focused legislation or actions are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, legal challenges, and potential changes in law, regulation, or policy, and it is not currently possible to predict the ultimate effects of these matters and developments on us.

3.    INVENTORIES

Inventories consisted of the following (in millions):

	June 30, 2023		December 31, 2022
Refinery feedstocks	$	1,980	$	1,949
Refined petroleum products and blendstocks	3,773		3,579
Renewable diesel feedstocks and products	585		583
Ethanol feedstocks and products	293		328
Materials and supplies	330		313
Inventories	$	6,961	$	6,752

8

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of June 30, 2023 and December 31, 2022, the replacement cost (market value) of last-in, first-out (LIFO) inventories exceeded their LIFO carrying amounts by $5.1 billion and $6.3 billion, respectively. Our non-LIFO inventories accounted for $1.0 billion and $1.6 billion of our total inventories as of June 30, 2023 and December 31, 2022, respectively.

4.    DEBT

Public Debt

In February 2023, we used cash on hand to purchase and retire a portion of the following notes (in millions):

Debt Purchased and Retired	Principal Amount
6.625% Senior Notes due 2037	$	62
3.650% Senior Notes due 2051	26
4.000% Senior Notes due 2052	45
Various other Valero and Valero Energy Partners (VLP) Senior Notes	66
Total	$	199

In June 2022, we reduced our debt through the acquisition of the $300 million of 4.00 percent Gulf Opportunity Zone Revenue Bonds Series 2010 that are due December 1, 2040, but were subject to mandatory tender on June 1, 2022. We have the option to effectuate a remarketing of these bonds.

In February 2022, we issued $650 million of 4.000 percent Senior Notes due June 1, 2052. Proceeds from this debt issuance totaled $639 million before deducting the underwriting discount and other debt issuance costs. The proceeds and cash on hand were used to purchase and retire a portion of the following notes in connection with cash tender offers that we publicly announced and completed in February 2022 (in millions):

Debt Purchased and Retired	Principal Amount
3.65% Senior Notes due 2025	$	72
2.850% Senior Notes due 2025	507
4.375% VLP Senior Notes due 2026	168
3.400% Senior Notes due 2026	653
Total	$	1,400

9

VALERO ENERGY CORPORATION

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 (amounts in millions and currency in U.S. dollars, except as noted):

				June 30, 2023
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued (a)		Availability
Committed facilities:
Valero Revolver	$	4,000	November 2027	$	—	$	6	$	3,994
Canadian Revolver	C$	150	November 2023	C$	—	C$	5	C$	145
Accounts receivable sales facility (b)	$	1,300	July 2023	$	—	n/a		$	1,300
Committed facilities of VIEs (c):
DGD Revolver (d)	$	400	June 2026	$	50	$	58	$	292
DGD Loan Agreement (e)	$	100	June 2026	$	—	n/a		$	100
IEnova Revolver (f)	$	830	February 2028	$	733	n/a		$	97
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	70	n/a

________________________

(a)Letters of credit issued as of June 30, 2023 expire at various times in 2023 through 2024.

(b)In July 2023, we extended the maturity date of this facility to July 2024.

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

(d)In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026 and (ii) transition the benchmark reference interest rate previously based on the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR). The variable interest rate on the DGD Revolver was 6.980 percent and 5.880 percent as of June 30, 2023 and December 31, 2022, respectively.

(e)The amounts shown for this facility 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. In April 2023, DGD extended the maturity date of this facility to June 2023. In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026, (ii) increase each member’s commitment from $25 million to $100 million, resulting in an increase in aggregate commitments from $50 million to $200 million, and (iii) transition the benchmark reference interest rate previously based on the LIBOR to Term SOFR. The variable interest rate on the DGD Loan Agreement was 6.672 percent as of December 31, 2022.

(f)Both parties to this facility have agreed to use a SOFR as the interest rate applied to outstanding borrowings. The variable interest rate on the IEnova Revolver was 8.740 percent and 7.393 percent as of June 30, 2023 and December 31, 2022, respectively.

10

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

	Six Months Ended June 30,
	2023		2022
Borrowings:
Accounts receivable sales facility	$	1,450	$	800
DGD Revolver	300		359
IEnova Revolver	54		46
Repayments:
Accounts receivable sales facility	(1,450)		(800)
DGD Revolver	(350)		(359)
DGD Loan Agreement	(25)		—
IEnova Revolver	(38)		(30)

Other Disclosures

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest and debt expense	$	151	$	156	$	303	$	313
Less: Capitalized interest	3		14		9		26
Interest and debt expense, net of capitalized interest	$	148	$	142	$	294	$	287

5.    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 below) and with respect to our employee stock-based compensation plans.

During the three and six months ended June 30, 2023, we purchased for treasury 8,421,452 shares and 19,414,793 shares, respectively. During the three and six months ended June 30, 2022, we purchased for treasury 14,211,408 shares and 15,757,281 shares, respectively. On October 26, 2022, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, and we completed all authorized share purchases under that program during the second quarter of 2023. On February 23, 2023, 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 2023 Program). As of June 30, 2023, we had $2.5 billion remaining available for purchase under the 2023 Program.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Common Stock Dividends

On July 20, 2023, our Board declared a quarterly cash dividend of $1.02 per common share payable on September 5, 2023 to holders of record at the close of business on August 3, 2023.

Accumulated Other Comprehensive Loss

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

	Three Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,031)	$	(188)	$	14	$	(1,205)	$	(549)	$	(437)	$	(23)	$	(1,009)
Other comprehensive income (loss) before reclassifications	257		—		12		269		(442)		1		(50)		(491)
Amounts reclassified from accumulated other comprehensive loss	—		(6)		(30)		(36)		—		4		69		73
Effect of exchange rates	—		1		—		1		—		2		—		2
Other comprehensive income (loss)	257		(5)		(18)		234		(442)		7		19		(416)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

	Six Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,168)	$	(183)	$	(8)	$	(1,359)	$	(562)	$	(441)	$	(5)	$	(1,008)
Other comprehensive income (loss) before reclassifications	394		—		49		443		(429)		(2)		(114)		(545)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		(45)		(58)		—		11		115		126
Effect of exchange rates	—		3		—		3		—		2		—		2
Other comprehensive income (loss)	394		(10)		4		388		(429)		11		1		(417)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

12

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.    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 June 30, 2023, 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 (predominately animal fats, used cooking oils, and inedible distillers corn oils) into renewable diesel and renewable naphtha; and

•Central Mexico Terminals, a collective group of three subsidiaries of Infraestructura Energetica 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, 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):

	DGD		Central Mexico Terminals		Other		Total
June 30, 2023
Assets
Cash and cash equivalents	$	318	$	—	$	26	$	344
Other current assets	1,204		6		31		1,241
Property, plant, and equipment, net	3,748		672		74		4,494
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	432	$	782	$	18	$	1,232
Debt and finance lease obligations, less current portion	680		—		—		680

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	DGD		Central Mexico Terminals		Other		Total
December 31, 2022
Assets
Cash and cash equivalents	$	133	$	—	$	16	$	149
Other current assets	1,106		7		32		1,145
Property, plant, and equipment, net	3,785		681		79		4,545
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	626	$	737	$	21	$	1,384
Debt and finance lease obligations, less current portion	693		—		—		693

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.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.    EMPLOYEE BENEFIT PLANS

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

	Pension Plans				Other Postretirement Benefit Plans
	2023		2022		2023		2022
Three months ended June 30
Service cost	$	28	$	39	$	1	$	1
Interest cost	30		21		3		2
Expected return on plan assets	(51)		(48)		—		—
Amortization of:
Net actuarial (gain) loss	(1)		13		(2)		—
Prior service credit	(4)		(5)		(1)		(1)
Net periodic benefit cost	$	2	$	20	$	1	$	2
Six months ended June 30
Service cost	$	56	$	77	$	2	$	3
Interest cost	60		42		6		4
Expected return on plan assets	(101)		(96)		—		—
Amortization of:
Net actuarial (gain) loss	(3)		26		(3)		—
Prior service credit	(9)		(9)		(2)		(2)
Net periodic benefit cost	$	3	$	40	$	3	$	5

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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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.    EARNINGS PER COMMON SHARE

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Earnings per common share:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Earnings per common share	$	5.41	$	11.58	$	13.75	$	13.75
Earnings per common share – assuming dilution:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Effect of dilutive securities	—		—		—		—
Weighted-average common shares outstanding – assuming dilution	358		404		363		406
Earnings per common share – assuming dilution	$	5.40	$	11.57	$	13.74	$	13.74

Participating securities include restricted stock and performance awards granted under our 2020 Omnibus Stock Incentive Plan (OSIP) or our 2011 OSIP. Dilutive securities include participating securities as well as outstanding stock options.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.    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):

	June 30, 2023		December 31, 2022
Receivables from contracts with customers, included in receivables, net	$	5,878	$	7,189
Contract liabilities, included in accrued expenses	85		129

During the six months ended June 30, 2023 and 2022, we recognized as revenue $123 million and $72 million that was included in contract liabilities as of December 31, 2022 and 2021, respectively. Revenue recognized related to contract liabilities during the three months ended June 30, 2023 and 2022 was not material.

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 June 30, 2023, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations.

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 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.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

•The Renewable Diesel segment represents the operations of DGD, a consolidated joint venture as discussed in Note 6, and the associated activities to market renewable diesel and renewable naphtha. The principal products manufactured by DGD and sold by this segment are renewable diesel and renewable naphtha. This segment sells some renewable diesel to the Refining segment, which is then sold to that segment’s customers.

•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 category.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables reflect information about our operating income by reportable segment (in millions):

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Three months ended June 30, 2023
Revenues:
Revenues from external customers	$	31,996	$	1,296	$	1,217	$	—	$	34,509
Intersegment revenues	(3)		950		257		(1,204)		—
Total revenues	31,993		2,246		1,474		(1,204)		34,509
Cost of sales:
Cost of materials and other (a)	27,773		1,643		1,199		(1,185)		29,430
Operating expenses (excluding depreciation and amortization expense reflected below)	1,205		104		128		3		1,440
Depreciation and amortization expense	582		59		19		(2)		658
Total cost of sales	29,560		1,806		1,346		(1,184)		31,528
Other operating expenses	1		—		1		—		2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		209		209
Depreciation and amortization expense	—		—		—		11		11
Operating income by segment	$	2,432	$	440	$	127	$	(240)	$	2,759
Three months ended June 30, 2022
Revenues:
Revenues from external customers	$	49,495	$	855	$	1,291	$	—	$	51,641
Intersegment revenues	11		596		201		(808)		—
Total revenues	49,506		1,451		1,492		(808)		51,641
Cost of sales:
Cost of materials and other (a)	41,313		1,213		1,226		(806)		42,946
Operating expenses (excluding depreciation and amortization expense reflected below)	1,402		58		167		(1)		1,626
Depreciation and amortization expense	565		28		(3)		—		590
Total cost of sales	43,280		1,299		1,390		(807)		45,162
Other operating expenses	14		—		1		—		15
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		233		233
Depreciation and amortization expense	—		—		—		12		12
Operating income by segment	$	6,212	$	152	$	101	$	(246)	$	6,219

________________________

See note (a) on page 20.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Six months ended June 30, 2023
Revenues:
Revenues from external customers	$	66,403	$	2,231	$	2,314	$	—	$	70,948
Intersegment revenues	—		1,695		480		(2,175)		—
Total revenues	66,403		3,926		2,794		(2,175)		70,948
Cost of sales:
Cost of materials and other (a)	56,283		2,974		2,330		(2,152)		59,435
Operating expenses (excluding depreciation and amortization expense reflected below)	2,466		190		258		3		2,917
Depreciation and amortization expense	1,154		117		39		(2)		1,308
Total cost of sales	59,903		3,281		2,627		(2,151)		63,660
Other operating expenses	11		—		1		—		12
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		453		453
Depreciation and amortization expense	—		—		—		21		21
Operating income by segment	$	6,489	$	645	$	166	$	(498)	$	6,802
Six months ended June 30, 2022
Revenues:
Revenues from external customers	$	86,308	$	1,450	$	2,425	$	—	$	90,183
Intersegment revenues	15		982		328		(1,325)		—
Total revenues	86,323		2,432		2,753		(1,325)		90,183
Cost of sales:
Cost of materials and other (a)	74,919		1,968		2,330		(1,322)		77,895
Operating expenses (excluding depreciation and amortization expense reflected below)	2,595		109		302		(1)		3,005
Depreciation and amortization expense	1,114		54		17		—		1,185
Total cost of sales	78,628		2,131		2,649		(1,323)		82,085
Other operating expenses	32		—		2		—		34
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		438		438
Depreciation and amortization expense	—		—		—		23		23
Operating income by segment	$	7,663	$	301	$	102	$	(463)	$	7,603

________________________

(a)Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Refining:
Gasolines and blendstocks	$	15,229	$	20,604	$	30,277	$	36,164
Distillates	13,992		24,427		30,830		41,871
Other product revenues	2,775		4,464		5,296		8,273
Total Refining revenues	31,996		49,495		66,403		86,308
Renewable Diesel:
Renewable diesel	1,249		817		2,125		1,412
Renewable naphtha	47		38		106		38
Total Renewable Diesel revenues	1,296		855		2,231		1,450
Ethanol:
Ethanol	898		979		1,661		1,854
Distillers grains	319		312		653		571
Total Ethanol revenues	1,217		1,291		2,314		2,425
Revenues	$	34,509	$	51,641	$	70,948	$	90,183

Total assets by reportable segment were as follows (in millions):

	June 30, 2023		December 31, 2022
Refining	$	47,253	$	48,484
Renewable Diesel	5,524		5,217
Ethanol	1,499		1,551
Corporate and eliminations	6,391		5,730
Total assets	$	60,667	$	60,982

21

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.    SUPPLEMENTAL CASH FLOW INFORMATION

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

	Six Months Ended June 30,
	2023		2022
Decrease (increase) in current assets:
Receivables, net	$	1,225	$	(4,163)
Inventories	(73)		(1,056)
Prepaid expenses and other	(55)		(108)
Increase (decrease) in current liabilities:
Accounts payable	(1,909)		4,240
Accrued expenses	(128)		(126)
Taxes other than income taxes payable	(136)		133
Income taxes payable	(652)		952
Changes in current assets and current liabilities	$	(1,728)	$	(128)

Changes in current assets and current liabilities for the six months ended June 30, 2023 were primarily due to the following:

•The decrease in receivables was due to a decrease in refined petroleum product prices combined with a decrease in sales volumes in June 2023 compared to December 2022;

•The decrease in accounts payable was due to a decrease in crude oil and other feedstock prices combined with a decrease in related volumes purchased in June 2023 compared to December 2022; and

•The decrease in income taxes payable was primarily due to income tax payments made in 2023.

Changes in current assets and current liabilities for the six months ended June 30, 2022 were primarily due to the following:

•The increase in receivables was due to an increase in refined petroleum product prices in June 2022 compared to December 2021, partially offset by a decrease in sales volumes;

•The increase in inventories was due to an increase in inventory volumes valued at higher unit prices in June 2022 compared to December 2021;

•The increase in accounts payable was due to an increase in crude oil and other feedstock prices in June 2022 compared to December 2021, partially offset by a decrease in crude oil and other feedstock volumes purchased; and

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

•The increase in income taxes payable was primarily due to higher income before income tax expense in the second quarter of 2022.

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

	Six Months Ended June 30,
	2023		2022
Interest paid in excess of amount capitalized, including interest on finance leases	$	273	$	291
Income taxes paid, net	2,410		916

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

	Six Months Ended June 30,
	2023				2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	206	$	54	$	196	$	39
Financing cash flows	—		107		—		86
Changes in lease balances resulting from new and modified leases	237		48		92		164

There were no significant noncash investing and financing activities during the six months ended June 30, 2023 or 2022, except as noted in the table above.

23

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.    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 June 30, 2023 and December 31, 2022.

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 on the balance sheet.

	June 30, 2023
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	469	$	—	$	—	$	469	$	(398)	$	—	$	71	$	—
Physical purchase contracts	—		—		—		—		n/a		n/a		—		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	104		98		—		202		n/a		n/a		202		n/a
Total	$	645	$	98	$	6	$	749	$	(398)	$	—	$	351
Liabilities
Commodity derivative contracts	$	398	$	—	$	—	$	398	$	(398)	$	—	$	—	$	(54)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		51		—		51		n/a		n/a		51		n/a
Foreign currency contracts	1		—		—		1		n/a		n/a		1		n/a
Total	$	399	$	106	$	—	$	505	$	(398)	$	—	$	107

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	December 31, 2022
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	830	$	—	$	—	$	830	$	(705)	$	(8)	$	117	$	—
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	56		165		—		221		n/a		n/a		221		n/a
Total	$	958	$	169	$	6	$	1,133	$	(705)	$	(8)	$	420
Liabilities
Commodity derivative contracts	$	705	$	—	$	—	$	705	$	(705)	$	—	$	—	$	(149)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Foreign currency contracts	2		—		—		2		n/a		n/a		2		n/a
Total	$	707	$	59	$	—	$	766	$	(705)	$	—	$	61

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 12. 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.

•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.

25

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

•Investments in AFS debt securities consist primarily of commercial paper and U.S. government treasury bills and have maturities within one year. The securities were reflected in the following balance sheet line items (in millions):

	June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	125	$	125
Prepaid expenses and other	104		98		202		56		40		96
Investments in AFS debt securities	$	104	$	98	$	202	$	56	$	165	$	221

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 and six months ended June 30, 2023. There were no AFS debt securities held as of and for the six months ended June 30, 2022.

•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), the California Low Carbon Fuel Standard (LCFS), the Canada Clean Fuel Regulations, 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 and foreign currency swap agreements 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 valued based on quoted foreign currency exchange rates and are categorized in Level 1 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

As previously disclosed in our annual report on Form 10-K for the year ended December 31, 2022, we concluded that our ethanol plant located in Lakota, Iowa (Lakota ethanol plant) was impaired as of December 31, 2022, which resulted in an asset impairment loss of $61 million. The fair value of the Lakota ethanol plant was determined using a combination of the income and market approaches and was classified in Level 3. We employed a probability-weighted approach to possible future cash flow scenarios, including the use of peer company metrics and comparison to a recent sales transaction.

There were no assets or liabilities that were measured at fair value on a nonrecurring basis as of June 30, 2023 and December 31, 2022, except as noted above.

26

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Financial Instruments

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

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Debt (excluding finance lease obligations)	Level 2	$	8,986	$	8,664	$	9,241	$	8,902

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.

12.    PRICE RISK MANAGEMENT ACTIVITIES

General

We are exposed to market risks primarily related to the volatility in the price of commodities, foreign currency exchange rates, and the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. 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 11), 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 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 has been approved by our Board.

We primarily use commodity derivative instruments as cash flow hedges and economic hedges. Our objectives for entering into each type of hedge is described below.

•Cash flow hedges – The objective of our cash flow hedges is to lock in the price of forecasted purchases and/or product sales at existing market prices that we deem favorable.

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VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

•Economic hedges – Our objectives for holding economic hedges are to (i) manage price volatility in certain feedstock and product inventories and (ii) lock in the price of forecasted purchases and/or product sales at existing market prices that we deem favorable.

As of June 30, 2023, 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).

	Notional Contract Volumes by Year of Maturity
	2023	2024
Derivatives designated as cash flow hedges:
Refined petroleum products:
Futures – long	2,451	—
Futures – short	7,020	—
Derivatives designated as economic hedges:
Crude oil and refined petroleum products:
Futures – long	75,103	59
Futures – short	73,103	302
Corn:
Futures – long	172,335	20
Futures – short	212,675	2,120
Physical contracts – long	40,132	2,084

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 June 30, 2023, we had foreign currency contracts to purchase $614 million of U.S. dollars. All of these commitments matured on or before July 26, 2023.

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 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

28

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

our credit obligations under the Renewable and Low-Carbon Fuel Programs was $387 million and $221 million for the three months ended June 30, 2023 and 2022, respectively, and $800 million and $523 million for the six months ended June 30, 2023 and 2022, respectively. These amounts are reflected in cost of materials and other.

Fair Values of Derivative Instruments

The following table provides information about the fair values of our derivative instruments as of June 30, 2023 and December 31, 2022 (in millions) and the line items in the balance sheets in which the fair values are reflected. See Note 11 for additional information related to the fair values of our derivative instruments.

As indicated in Note 11, 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:

	Balance Sheet Location	June 30, 2023				December 31, 2022
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Derivatives designated as hedging instruments:
Commodity contracts	Receivables, net	$	7	$	1	$	61	$	44
Derivatives not designated as hedging instruments:
Commodity contracts	Receivables, net	$	462	$	397	$	769	$	661
Physical purchase contracts	Inventories	—		51		4		4
Foreign currency contracts	Accrued expenses	—		1		—		2
Total		$	462	$	449	$	773	$	667

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 approved by our Board. 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.

29

VALERO ENERGY CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts:
Gain (loss) recognized in other comprehensive income (loss)	n/a	$	31	$	(130)	$	126	$	(294)
Gain (loss) reclassified from accumulated other comprehensive loss into income	Revenues	78		(180)		116		(299)

For cash flow hedges, no component of any derivative instrument’s gains or losses was excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2023 and 2022. For the three and six months ended June 30, 2023 and 2022, cash flow hedges primarily related to forecasted sales of renewable diesel. As of June 30, 2023, the estimated deferred after-tax gain 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 and six months ended June 30, 2023 and 2022 are described in Note 5.

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 the statements of income in which such gains (losses) are reflected (in millions):

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts	Revenues	$	(10)	$	(2)	$	(17)	$	(6)
Commodity contracts	Cost of materials and other	91		(272)		174		(867)
Commodity contracts	Operating expenses (excluding depreciation and amortization expense)	—		6		1		9
Foreign currency contracts	Cost of materials and other	(17)		49		(20)		47
Foreign currency contracts	Other income, net	—		(115)		—		(81)

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ITEM 2. 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 Form 10-Q, 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,” “could,” “would,” “should,” “may,” “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” and similar expressions.

These forward-looking statements include, among other things, statements regarding:

•the effect, impact, potential duration or timing, or other implications of the Russia-Ukraine conflict;

•future Refining segment margins, including gasoline and distillate margins, and discounts;

•future Renewable Diesel segment margins;

•future Ethanol segment margins;

•expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, and operating expenses;

•anticipated levels of crude oil and liquid transportation fuel inventories and storage capacity;

•expectations regarding the levels of, and timing with respect to, the production and operations at our existing refineries and plants, and projects under construction or under development;

•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 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 qualified pension plans and other postretirement benefit plans;

•our ability to meet future cash requirements, whether from funds generated from our operations or our ability to access financial markets effectively, and our ability to maintain sufficient liquidity;

•our evaluation of, and expectations regarding, any future activity under our share purchase program or transactions involving our debt securities;

•anticipated trends in the supply of, and demand for, crude oil and other feedstocks and refined petroleum products, renewable diesel, and ethanol and corn related co-products in the regions where we operate, as well as globally;

•expectations regarding environmental, tax, and other regulatory matters, including SBx 1-2, the anticipated amounts and timing of payment with respect to our deferred tax liabilities, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated effect thereof on our business, financial condition, results of operations, and liquidity;

•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, and ethanol industry fundamentals;

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•expectations regarding our risk management activities, including the anticipated effects of our hedge transactions;

•expectations regarding our counterparties, including our ability to pass on increased compliance costs and timely collect receivables, and the credit risk within our accounts receivable or accounts payable;

•expectations regarding adoptions of new, or changes to existing, low-carbon fuel standards or policies, blending and tax credits, or efficiency standards that impact demand for renewable fuels; and

•expectations regarding our low-carbon fuels strategy, publicly announced greenhouse gas (GHG) emissions reduction/displacement targets and our current and any future low-carbon projects.

We based our forward-looking statements on our current expectations, estimates, and projections about ourselves, our industry, and the global economy and financial markets generally. We caution that these statements are not guarantees of future performance or results and involve known and unknown risks and uncertainties, the ultimate outcomes of which we cannot predict with certainty. 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 the Russia-Ukraine conflict, including with respect to changes in trade flows and impacts to crude oil and other markets;

•demand for, and supplies of, refined petroleum products (such as gasoline, diesel, jet fuel, and petrochemicals), renewable diesel, and ethanol and corn related co-products;

•demand for, and supplies of, crude oil and other feedstocks;

•the effects of public health threats, pandemics, and epidemics, such as the COVID-19 pandemic and variants of the virus, governmental and societal responses thereto, and the adverse impacts of the foregoing on our business, financial condition, results of operations, and liquidity, and the global economy and financial markets generally;

•acts of terrorism aimed at either our refineries and plants or third-party facilities that could impair our ability to produce or transport refined petroleum products, renewable diesel, ethanol, or corn related co-products, to receive feedstocks, or otherwise operate efficiently;

•the effects of war or hostilities, and political and economic conditions, in countries that produce crude oil or other feedstocks or consume refined petroleum products, renewable diesel, ethanol or corn related co-products;

•the ability of the members of 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 may not provide the anticipated benefits or may result in unforeseen detriments;

•the actions taken by competitors, including both pricing and adjustments to refining capacity or renewable fuels production in response to market conditions;

•the level of competitors’ imports into markets that we supply;

32

•accidents, unscheduled shutdowns, weather events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, 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;

•political pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, transportation, storage, refining, processing, marketing, and sales of crude oil or other feedstocks, refined petroleum products, renewable diesel, ethanol, or corn related co-products;

•the price, availability, technology related to, and acceptance of alternative fuels and alternative-fuel vehicles, as well as sentiment and perceptions with respect to GHG emissions more generally;

•the levels of government subsidies for, and executive orders, mandates, or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies or initiatives, including those related to carbon capture, carbon sequestration, and low-carbon fuels, or affecting the price of natural gas and/or electricity;

•the volatility in the market price of compliance credits (primarily RINs needed to comply with the RFS) under the Renewable and Low-Carbon Fuel Programs and emission credits needed under other environmental emissions programs;

•delay of, cancellation of, or failure to implement planned capital or other projects and realize the various assumptions and benefits projected for such projects or cost overruns in constructing such planned capital projects;

•earthquakes, hurricanes, tornadoes, winter storms, droughts, floods, wildfires, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, waste and renewable feedstocks, corn, and other feedstocks, critical supplies, refined petroleum products, renewable diesel, and ethanol;

•rulings, judgments, or settlements in litigation or other legal or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;

•legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, introduction of a global minimum tax, windfall taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2, actions implemented under the Renewable and Low-Carbon Fuel Programs and other environmental emissions programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business or operations;

•changing economic, regulatory, and political environments and related events in the various countries in which we operate or otherwise do business, including trade restrictions, expropriation or impoundment of assets, failure of foreign governments and state-owned entities to honor their contracts, property disputes, economic instability, restrictions on the transfer of funds, duties and tariffs, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, and other actions, policies, and initiatives by the states, counties, cities, and other jurisdictions in the countries in which we operate or otherwise do business;

•changes in the credit ratings assigned to our debt securities and trade credit;

33

•the operating, financing, and distribution decisions of our joint ventures or other joint venture members that we do not control;

•changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar;

•the adequacy of capital resources and liquidity, including availability, timing, and amounts of cash flow or our ability to borrow or access financial markets;

•the costs, disruption, and diversion of resources associated with lawsuits, demands, or investigations, or campaigns and negative publicity commenced by government authorities, investors, stakeholders, or other interested parties;

•overall economic conditions, including the stability and liquidity of financial markets, and the effect thereof on consumer demand; and

•other factors generally described in the “RISK FACTORS” section included in our annual report on Form 10-K for the year ended December 31, 2022.

Any one of these factors, or a combination of these factors, could materially affect our future results of operations and whether any forward-looking statements ultimately prove to be accurate. 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 discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” below include references to financial measures that are not defined under GAAP. These non-GAAP financial measures include adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining, Renewable Diesel, and Ethanol segment margin; and capital investments attributable to Valero. 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 (f) beginning on page 53 for reconciliations of adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) and Refining, Renewable Diesel, and Ethanol segment margin to their most directly comparable GAAP financial measures. Also in note (f), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 59 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 58, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

34

OVERVIEW AND OUTLOOK

Overview

Business Operations Update

Our results for the second quarter and first six months of 2023 were favorably impacted by the continued strong worldwide demand for petroleum-based transportation fuels, while the worldwide supply of those products remained constrained. This supply and demand imbalance has continued to contribute to strong refining margins.

The strong demand for our products and continued strength in refining margins were the primary contributors to us reporting $1.9 billion and $5.0 billion of net income attributable to Valero stockholders for the second quarter of 2023 and the first six months of 2023, respectively. Our operating results, including operating results by segment, are described in the following summary under “Second Quarter Results” and “First Six Months Results,” with more detailed descriptions found under “RESULTS OF OPERATIONS” beginning on page 38.

Our operations generated $4.7 billion of cash during the first six months of 2023. This cash was used to make $982 million of capital investments in our business and return $3.1 billion to our stockholders through purchases of common stock for treasury and dividend payments. In addition, we continued to reduce our outstanding debt through the purchase of $199 million of our public debt during the first six months of 2023. As a result of this and other activity, our cash and cash equivalents increased by $213 million, from $4.9 billion as of December 31, 2022 to $5.1 billion as of June 30, 2023. We had $10.1 billion in liquidity as of June 30, 2023. 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 56.

Second Quarter Results

For the second quarter of 2023, we reported net income attributable to Valero stockholders of $1.9 billion compared to $4.7 billion for the second quarter of 2022. The decrease of $2.7 billion was primarily due to a decrease in operating income of $3.5 billion, partially offset by a decrease in income tax expense of $747 million. The details of our operating income and adjusted operating income by segment and in total are reflected below. Adjusted operating income excludes the adjustments reflected in the table in note (f) on page 53.

	Three Months Ended June 30,
	2023		2022		Change
Refining segment:
Operating income	$	2,432	$	6,212	$	(3,780)
Adjusted operating income	2,433		6,122		(3,689)
Renewable Diesel segment:
Operating income	440		152		288
Ethanol segment:
Operating income	127		101		26
Adjusted operating income	128		79		49
Total company:
Operating income	2,759		6,219		(3,460)
Adjusted operating income	2,761		6,127		(3,366)

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While our operating income decreased by $3.5 billion in the second quarter of 2023 compared to the second quarter of 2022, adjusted operating income decreased by $3.4 billion primarily due to the following:

•Refining segment. Refining segment adjusted operating income decreased by $3.7 billion primarily due to lower gasoline and distillate (primarily diesel) margins, partially offset by higher discounts on crude oils and lower operating expenses (excluding depreciation and amortization expense).

•Renewable Diesel segment. Renewable Diesel segment operating income increased by $288 million primarily due to lower feedstock costs and higher sales volumes, partially offset by lower product prices (primarily renewable diesel), higher operating expenses (excluding depreciation and amortization expense), and higher depreciation and amortization expense.

•Ethanol segment. Ethanol segment adjusted operating income increased by $49 million primarily due to lower corn prices, higher production volumes, and lower operating expenses (excluding depreciation and amortization expense), partially offset by lower ethanol and corn related co-product prices.

First Six Months Results

For the first six months of 2023, we reported net income attributable to Valero stockholders of $5.0 billion compared to $5.6 billion for the first six months of 2022. The decrease of $587 million was primarily due to a decrease in operating income of $801 million, partially offset by a decrease in income tax expense of $119 million. The details of our operating income and adjusted operating income by segment and in total are reflected below. Adjusted operating income excludes the adjustments reflected in the table in note (f) on page 53.

	Six Months Ended June 30,
	2023		2022		Change
Refining segment:
Operating income	$	6,489	$	7,663	$	(1,174)
Adjusted operating income	6,500		7,591		(1,091)
Renewable Diesel segment:
Operating income	645		301		344
Ethanol segment:
Operating income	166		102		64
Adjusted operating income	167		81		86
Total company:
Operating income	6,802		7,603		(801)
Adjusted operating income	6,814		7,530		(716)

While our operating income decreased by $801 million in the first six months of 2023 compared to the first six months of 2022, adjusted operating income decreased by $716 million primarily due to the following:

•Refining segment. Refining segment adjusted operating income decreased by $1.1 billion primarily due to lower gasoline and distillate (primarily diesel) margins, partially offset by higher

36

discounts on crude oils and other feedstocks, an increase in throughput volumes, and lower operating expenses (excluding depreciation and amortization expense).

•Renewable Diesel segment. Renewable Diesel segment operating income increased by $344 million primarily due to lower feedstock costs and higher sales volumes, partially offset by lower product prices (primarily renewable diesel), higher operating expenses (excluding depreciation and amortization expense), and higher depreciation and amortization expense.

•Ethanol segment. Ethanol segment adjusted operating income increased by $86 million primarily due to lower corn prices, higher production volumes, and lower operating expenses (excluding depreciation and amortization expense), partially offset by lower ethanol and corn related co-product prices.

Outlook

Many uncertainties remain with respect to the supply and demand imbalance in the petroleum-based products market worldwide. While it is difficult to predict future worldwide economic activity and its impact on product supply and demand, as well as any effect that the uncertainty described in Note 2 of Condensed Notes to Consolidated Financial Statements may have on us, we have noted several factors below that have impacted or may impact our results of operations during the third quarter of 2023.

•Gasoline and diesel demand have returned to near pre-pandemic levels and are expected to follow typical seasonal patterns. Jet fuel demand continues to improve and is approaching pre-pandemic levels in the U.S.

•Light product (gasoline, diesel, and jet fuel) inventories in the U.S. and Europe are below historical levels and should support continued high utilization of refining capacity.

•Crude oil discounts have narrowed with reduced sour crude oil production from suppliers in OPEC+, and they are expected to remain near current levels absent further changes in crude oil supply or availability.

•Renewable diesel margins are expected to remain consistent with current levels.

•Ethanol demand is expected to follow typical seasonal patterns.

37

RESULTS OF OPERATIONS

The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (f) beginning on page 53, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 52 through 55.

Second Quarter Results -

Financial Highlights By Segment and Total Company

(millions of dollars)

	Three Months Ended June 30, 2023
	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Revenues:
Revenues from external customers	$	31,996	$	1,296	$	1,217	$	—	$	34,509
Intersegment revenues	(3)		950		257		(1,204)		—
Total revenues	31,993		2,246		1,474		(1,204)		34,509
Cost of sales:
Cost of materials and other	27,773		1,643		1,199		(1,185)		29,430
Operating expenses (excluding depreciation and amortization expense reflected below)	1,205		104		128		3		1,440
Depreciation and amortization expense	582		59		19		(2)		658
Total cost of sales	29,560		1,806		1,346		(1,184)		31,528
Other operating expenses	1		—		1		—		2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		209		209
Depreciation and amortization expense	—		—		—		11		11
Operating income by segment	$	2,432	$	440	$	127	$	(240)	2,759
Other income, net									106
Interest and debt expense, net of capitalized interest									(148)
Income before income tax expense									2,717
Income tax expense									595
Net income									2,122
Less: Net income attributable to noncontrolling interests									178
Net income attributable to Valero Energy Corporation stockholders									$	1,944

38

Second Quarter Results -

Financial Highlights By Segment and Total Company (continued)

(millions of dollars)

	Three Months Ended June 30, 2022
	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Revenues:
Revenues from external customers	$	49,495	$	855	$	1,291	$	—	$	51,641
Intersegment revenues	11		596		201		(808)		—
Total revenues	49,506		1,451		1,492		(808)		51,641
Cost of sales:
Cost of materials and other (a)	41,313		1,213		1,226		(806)		42,946
Operating expenses (excluding depreciation and amortization expense reflected below)	1,402		58		167		(1)		1,626
Depreciation and amortization expense (b)	565		28		(3)		—		590
Total cost of sales	43,280		1,299		1,390		(807)		45,162
Other operating expenses	14		—		1		—		15
General and administrative expenses (excluding depreciation and amortization expense reflected below) (c)	—		—		—		233		233
Depreciation and amortization expense	—		—		—		12		12
Operating income by segment	$	6,212	$	152	$	101	$	(246)	6,219
Other income, net									33
Interest and debt expense, net of capitalized interest									(142)
Income before income tax expense									6,110
Income tax expense									1,342
Net income									4,768
Less: Net income attributable to noncontrolling interests									75
Net income attributable to Valero Energy Corporation stockholders									$	4,693

39

Second Quarter Results -

Average Market Reference Prices and Differentials

	Three Months Ended June 30,
	2023		2022
Refining
Feedstocks (dollars per barrel)
Brent crude oil	$	77.98	$	111.69
Brent less West Texas Intermediate (WTI) crude oil	4.22		3.03
Brent less WTI Houston crude oil	3.07		1.84
Brent less Dated Brent crude oil	(0.45)		(1.89)
Brent less Argus Sour Crude Index (ASCI) crude oil	4.74		6.59
Brent less Maya crude oil	14.31		7.91
Brent less Western Canadian Select (WCS) Houston crude oil	9.23		12.34
WTI crude oil	73.76		108.66
Natural gas (dollars per million British Thermal Units (MMBTu))	2.00		7.23
Renewable volume obligation (RVO) (dollars per barrel) (e)	7.69		7.80
Product margins (RVO adjusted unless otherwise noted) (dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate Blending (CBOB) gasoline less Brent	12.98		23.53
Ultra-low-sulfur (ULS) diesel less Brent	14.64		48.15
Propylene less Brent (not RVO adjusted)	(38.78)		(38.56)
U.S. Mid-Continent:
CBOB gasoline less WTI	23.60		28.28
ULS diesel less WTI	25.16		52.36
North Atlantic:
CBOB gasoline less Brent	22.63		33.78
ULS diesel less Brent	17.36		62.45
U.S. West Coast:
California Reformulated Gasoline Blendstock of Oxygenate Blending (CARBOB) 87 gasoline less Brent	30.63		48.04
California Air Resources Board (CARB) diesel less Brent	14.80		51.35

40

Second Quarter Results -

Average Market Reference Prices and Differentials (continued)

	Three Months Ended June 30,
	2023		2022
Renewable Diesel
New York Mercantile Exchange ULS diesel (dollars per gallon)	$	2.44	$	4.03
Biodiesel RIN (dollars per RIN)	1.51		1.70
California LCFS carbon credit (dollars per metric ton)	80.81		104.30
U.S. Gulf Coast (USGC) used cooking oil (UCO) (dollars per pound)	0.57		0.80
USGC distillers corn oil (DCO) (dollars per pound)	0.60		0.81
USGC fancy bleachable tallow (Tallow) (dollars per pound)	0.57		0.78
Ethanol
Chicago Board of Trade corn (dollars per bushel)	6.27		7.77
New York Harbor ethanol (dollars per gallon)	2.56		2.84

Total Company, Corporate, and Other

The following table includes selected financial data for the total company, corporate, and other for the second quarter of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Three Months Ended June 30,
	2023		2022		Change
Revenues	$	34,509	$	51,641	$	(17,132)
Cost of sales (see notes (a) and (b))	31,528		45,162		(13,634)
General and administrative expenses (excluding depreciation and amortization expense) (see note (c))	209		233		(24)
Operating income	2,759		6,219		(3,460)
Adjusted operating income (see note (f))	2,761		6,127		(3,366)
Other income, net	106		33		73
Income tax expense	595		1,342		(747)
Net income attributable to noncontrolling interests	178		75		103

Revenues decreased by $17.1 billion in the second quarter of 2023 compared to the second quarter of 2022 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 partially offset by a decrease in cost of sales of $13.6 billion and a decrease in general and administrative expenses (excluding depreciation and amortization expense) of $24 million. The decrease in cost of sales was primarily due to decreases in crude oil and other feedstock costs, and the decrease in general and administrative expenses (excluding depreciation and amortization expense) was primarily due to the effect from a charge of $20 million for an environmental reserve adjustment in the second quarter of 2022 (see note (c)). These changes resulted in a $3.5 billion decrease in operating income, from $6.2 billion in the second quarter of 2022 to $2.8 billion in the second quarter of 2023.

41

Adjusted operating income decreased by $3.4 billion, from $6.1 billion in the second quarter of 2022 to $2.8 billion in the second quarter of 2023. The components of this $3.4 billion decrease in adjusted operating income are discussed by segment in the segment analyses that follow.

“Other income, net” increased by $73 million in the second quarter of 2023 compared to the second quarter of 2022 due to the items noted in the following table (in millions):

	Three Months Ended June 30,
	2023		2022		Change
Interest income on cash	$	62	$	10	$	52
Equity income on joint ventures and other	44		23		21
Other income, net	$	106	$	33	$	73

Income tax expense decreased by $747 million in the second quarter of 2023 compared to the second quarter of 2022 primarily as a result of lower income before income tax expense.

Net income attributable to noncontrolling interests increased by $103 million in the second quarter of 2023 compared to the second quarter of 2022 primarily due to higher earnings associated with DGD. See Note 6 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD.

Refining Segment Results

The following table includes selected financial and operating data of our Refining segment for the second quarter of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Three Months Ended June 30,
	2023		2022		Change
Operating income	$	2,432	$	6,212	$	(3,780)
Adjusted operating income (see note (f))	2,433		6,122		(3,689)
Refining margin (see note (f))	4,220		8,089		(3,869)
Operating expenses (excluding depreciation and amortization expense reflected below)	1,205		1,402		(197)
Depreciation and amortization expense	582		565		17
Throughput volumes (thousand barrels per day) (see note (g))	2,969		2,962		7

Refining segment operating income decreased by $3.8 billion in the second quarter of 2023 compared to the second quarter of 2022; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (f), decreased by $3.7 billion in the second quarter of 2023 compared to the second quarter of 2022. The components of this decrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.

•Refining segment margin decreased by $3.9 billion in the second quarter of 2023 compared to the second quarter of 2022.

Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process.

42

The table on page 40 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the second quarter of 2023 compared to the second quarter of 2022.

The decrease in Refining segment margin was primarily due to the following:

◦A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $3.4 billion.

◦A decrease in gasoline margins had an unfavorable impact of approximately $1.3 billion.

◦Higher discounts on crude oils had a favorable impact of approximately $734 million.

•Refining segment operating expenses (excluding depreciation and amortization expense) decreased by $197 million primarily due to a decrease in energy costs (primarily natural gas) of $214 million, partially offset by an increase in chemicals and catalyst costs of $17 million.

Renewable Diesel Segment Results

The following table includes selected financial and operating data of our Renewable Diesel segment for the second quarter of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Three Months Ended June 30,
	2023		2022		Change
Operating income	$	440	$	152	$	288
Renewable Diesel margin (see note (f))	603		238		365
Operating expenses (excluding depreciation and amortization expense reflected below)	104		58		46
Depreciation and amortization expense	59		28		31
Sales volumes (thousand gallons per day) (see note (g))	4,400		2,182		2,218

Renewable Diesel segment operating income increased by $288 million in the second quarter of 2023 compared to the second quarter of 2022. The components of this increase, along with the reasons for the changes in those components, are outlined below.

•Renewable Diesel segment margin increased by $365 million in the second quarter of 2023 compared to the second quarter of 2022.

Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 41 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the second quarter of 2023 compared to the second quarter of 2022.

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

◦A decrease in the cost of feedstocks we process had a favorable impact of approximately $1.2 billion.

43

◦An increase in sales volumes of 2.2 million gallons per day had a favorable impact of approximately $237 million. The increase in sales volumes was primarily due to the additional production resulting from the completion of the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

◦A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $1.0 billion.

•Renewable Diesel segment operating expenses (excluding depreciation and amortization expense) increased by $46 million primarily due to increased costs resulting from the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

•Renewable Diesel segment depreciation and amortization expense increased by $31 million primarily due to depreciation expense associated with the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

Ethanol Segment Results

The following table includes selected financial and operating data of our Ethanol segment for the second quarter of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Three Months Ended June 30,
	2023		2022		Change
Operating income	$	127	$	101	$	26
Adjusted operating income (see note (f))	128		79		49
Ethanol margin (see note (f))	275		266		9
Operating expenses (excluding depreciation and amortization expense reflected below)	128		167		(39)
Depreciation and amortization expense (see note (b))	19		(3)		22
Production volumes (thousand gallons per day) (see note (g))	4,443		3,861		582

Ethanol segment operating income increased by $26 million in the second quarter of 2023 compared to the second quarter of 2022; however, Ethanol segment adjusted operating income, which excludes the adjustments in the table in note (f), increased by $49 million in the second quarter of 2023 compared to the second quarter of 2022. The components of this increase, along with the reasons for the changes in those components, are outlined below.

•Ethanol segment margin increased by $9 million in the second quarter of 2023 compared to the second quarter of 2022. Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 41 reflects market reference prices that we believe impacted our Ethanol segment margin in the second quarter of 2023 compared to the second quarter of 2022.

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

◦Lower corn prices had a favorable impact of approximately $129 million.

44

◦An increase in production volumes of 582,000 gallons per day had a favorable impact of approximately $41 million.

◦Lower ethanol prices had an unfavorable impact of approximately $100 million.

◦Lower prices for the co-products that we produce, primarily dry distillers grains and inedible DCO, had an unfavorable impact of approximately $62 million.

•Ethanol segment operating expenses (excluding depreciation and amortization expense) decreased by $39 million primarily due to a decrease in energy costs (primarily natural gas) of $46 million, partially offset by an increase in chemicals and catalyst costs of $7 million.

First Six Months Results -

Financial Highlights By Segment and Total Company

(millions of dollars)

	Six Months Ended June 30, 2023
	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Revenues:
Revenues from external customers	$	66,403	$	2,231	$	2,314	$	—	$	70,948
Intersegment revenues	—		1,695		480		(2,175)		—
Total revenues	66,403		3,926		2,794		(2,175)		70,948
Cost of sales:
Cost of materials and other	56,283		2,974		2,330		(2,152)		59,435
Operating expenses (excluding depreciation and amortization expense reflected below)	2,466		190		258		3		2,917
Depreciation and amortization expense	1,154		117		39		(2)		1,308
Total cost of sales	59,903		3,281		2,627		(2,151)		63,660
Other operating expenses	11		—		1		—		12
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		453		453
Depreciation and amortization expense	—		—		—		21		21
Operating income by segment	$	6,489	$	645	$	166	$	(498)	6,802
Other income, net (d)									235
Interest and debt expense, net of capitalized interest									(294)
Income before income tax expense									6,743
Income tax expense									1,475
Net income									5,268
Less: Net income attributable to noncontrolling interests									257
Net income attributable to Valero Energy Corporation stockholders									$	5,011

45

First Six Months Results -

Financial Highlights By Segment and Total Company (continued)

(millions of dollars)

	Six Months Ended June 30, 2022
	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Revenues:
Revenues from external customers	$	86,308	$	1,450	$	2,425	$	—	$	90,183
Intersegment revenues	15		982		328		(1,325)		—
Total revenues	86,323		2,432		2,753		(1,325)		90,183
Cost of sales:
Cost of materials and other (a)	74,919		1,968		2,330		(1,322)		77,895
Operating expenses (excluding depreciation and amortization expense reflected below)	2,595		109		302		(1)		3,005
Depreciation and amortization expense (b)	1,114		54		17		—		1,185
Total cost of sales	78,628		2,131		2,649		(1,323)		82,085
Other operating expenses	32		—		2		—		34
General and administrative expenses (excluding depreciation and amortization expense reflected below) (c)	—		—		—		438		438
Depreciation and amortization expense	—		—		—		23		23
Operating income by segment	$	7,663	$	301	$	102	$	(463)	7,603
Other income, net (d)									13
Interest and debt expense, net of capitalized interest									(287)
Income before income tax expense									7,329
Income tax expense									1,594
Net income									5,735
Less: Net income attributable to noncontrolling interests									137
Net income attributable to Valero Energy Corporation stockholders									$	5,598

46

First Six Months Results -

Average Market Reference Prices and Differentials

	Six Months Ended June 30,
	2023		2022
Refining
Feedstocks (dollars per barrel)
Brent crude oil	$	80.09	$	104.52
Brent less WTI crude oil	5.16		2.96
Brent less WTI Houston crude oil	3.68		1.58
Brent less Dated Brent crude oil	0.24		(2.90)
Brent less ASCI crude oil	6.58		5.76
Brent less Maya crude oil	16.85		8.21
Brent less WCS Houston crude oil	13.30		11.00
WTI crude oil	74.94		101.56
Natural gas (dollars per MMBtu)	2.13		5.78
RVO (dollars per barrel) (e)	7.95		7.12
Product margins (RVO adjusted unless otherwise noted) (dollars per barrel)
U.S. Gulf Coast:
CBOB gasoline less Brent	11.51		16.38
ULS diesel less Brent	22.46		34.83
Propylene less Brent (not RVO adjusted)	(40.50)		(33.69)
U.S. Mid-Continent:
CBOB gasoline less WTI	20.65		18.93
ULS diesel less WTI	29.63		36.60
North Atlantic:
CBOB gasoline less Brent	16.98		22.51
ULS diesel less Brent	25.33		44.24
U.S. West Coast:
CARBOB 87 gasoline less Brent	27.67		34.16
CARB diesel less Brent	23.32		37.72

47

First Six Months Results -

Average Market Reference Prices and Differentials (continued)

	Six Months Ended June 30,
	2023		2022
Renewable Diesel
New York Mercantile Exchange ULS diesel (dollars per gallon)	$	2.69	$	3.54
Biodiesel RIN (dollars per RIN)	1.57		1.57
California LCFS carbon credit (dollars per metric ton)	73.25		121.47
USGC UCO (dollars per pound)	0.60		0.79
USGC DCO (dollars per pound)	0.62		0.79
USGC Tallow (dollars per pound)	0.59		0.75
Ethanol
CBOT corn (dollars per bushel)	6.44		7.24
New York Harbor ethanol (dollars per gallon)	2.43		2.61

Total Company, Corporate, and Other

The following table includes selected financial data for the total company, corporate, and other for the first six months of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Six Months Ended June 30,
	2023		2022		Change
Revenues	$	70,948	$	90,183	$	(19,235)
Cost of sales (see notes (a) and (b))	63,660		82,085		(18,425)
Operating income	6,802		7,603		(801)
Adjusted operating income (see note (f))	6,814		7,530		(716)
Other income, net (see note (d))	235		13		222
Income tax expense	1,475		1,594		(119)
Net income attributable to noncontrolling interests	257		137		120

Revenues decreased by $19.2 billion in the first six months of 2023 compared to the first six months of 2022 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 partially offset by a decrease in cost of sales of $18.4 billion, which was primarily due to decreases in crude oil and other feedstock costs. These changes resulted in an $801 million decrease in operating income, from $7.6 billion in the first six months of 2022 to $6.8 billion in the first six months of 2023.

Adjusted operating income decreased by $716 million, from $7.5 billion in the first six months of 2022 to $6.8 billion in the first six months of 2023. The components of this $716 million decrease in adjusted operating income are discussed by segment in the segment analyses that follow.

48

“Other income, net” increased by $222 million in the first six months of 2023 compared to the first six months of 2022 primarily due to the items noted in the following table (in millions):

	Six Months Ended June 30,
	2023		2022		Change
Interest income on cash	$	123	$	13	$	110
Net gain (loss) from early retirement of debt (see note (d))	11		(50)		61
Equity income on joint ventures and other	101		50		51
Other income, net	$	235	$	13	$	222

Income tax expense decreased by $119 million in the first six months of 2023 compared to the first six months of 2022 primarily as a result of lower income before income tax expense.

Net income attributable to noncontrolling interests increased by $120 million in the first six months of 2023 compared to the first six months of 2022 primarily due to higher earnings associated with DGD. See Note 6 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD.

Refining Segment Results

The following table includes selected financial and operating data of our Refining segment for the first six months of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Six Months Ended June 30,
	2023		2022		Change
Operating income	$	6,489	$	7,663	$	(1,174)
Adjusted operating income (see note (f))	6,500		7,591		(1,091)
Refining margin (see note (f))	10,120		11,300		(1,180)
Operating expenses (excluding depreciation and amortization expense reflected below)	2,466		2,595		(129)
Depreciation and amortization expense	1,154		1,114		40
Throughput volumes (thousand barrels per day) (see note (g))	2,950		2,881		69

Refining segment operating income decreased by $1.2 billion in the first six months of 2023 compared to the first six months of 2022; however, Refining segment adjusted operating income, which excludes the adjustments in the table in note (f), decreased by $1.1 billion in the first six months of 2023 compared to the first six months of 2022. The components of this decrease, along with the reasons for the changes in those components, are outlined below.

•Refining segment margin decreased by $1.2 billion in the first six months of 2023 compared to the first six months of 2022.

49

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 47 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the first six months of 2023 compared to the first six months of 2022.

The decrease in Refining segment margin was primarily due to the following:

◦A decrease in distillate (primarily diesel) margins had an unfavorable impact of approximately $2.3 billion.

◦A decrease in gasoline margins had an unfavorable impact of approximately $805 million.

◦Higher discounts on crude oils had a favorable impact of approximately $1.4 billion.

◦An increase in throughput volumes of 69,000 barrels per day had a favorable impact of approximately $237 million.

◦Higher discounts on other feedstocks had a favorable impact of approximately $188 million.

•Refining segment operating expenses (excluding depreciation and amortization expense) decreased by $129 million primarily due to a decrease in energy costs of $264 million (primarily natural gas), partially offset by increases in chemicals and catalyst costs of $67 million, maintenance expense of $28 million, and property taxes of $22 million.

Renewable Diesel Segment Results

The following table includes selected financial and operating data of our Renewable Diesel segment for the first six months of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Six Months Ended June 30,
	2023		2022		Change
Operating income	$	645	$	301	$	344
Renewable Diesel margin (see note (f))	952		464		488
Operating expenses (excluding depreciation and amortization expense reflected below)	190		109		81
Depreciation and amortization expense	117		54		63
Sales volumes (thousand gallons per day) (see note (g))	3,698		1,961		1,737

Renewable Diesel segment operating income increased by $344 million in the first six months of 2023 compared to the first six months of 2022. The components of this increase, along with the reasons for the changes in those components, are outlined below.

•Renewable Diesel segment margin increased by $488 million in the first six months of 2023 compared to the first six months of 2022.

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Renewable Diesel segment margin is primarily affected by the price for the renewable diesel that we sell and the cost of the feedstocks that we process. The table on page 48 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the first six months of 2023 compared to the first six months of 2022.

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

◦A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $1.2 billion.

◦An increase in sales volumes of 1.7 million gallons per day had a favorable impact of approximately $386 million. The increase in sales volumes was primarily due to the additional production resulting from the completion of the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

◦A decrease in product prices, primarily renewable diesel, had an unfavorable impact of approximately $1.0 billion.

•Renewable Diesel segment operating expenses (excluding depreciation and amortization expense) increased by $81 million primarily due to increased costs resulting from the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

•Renewable Diesel segment depreciation and amortization expense increased by $63 million primarily due to depreciation expense associated with the new DGD Port Arthur Plant that commenced operations in the fourth quarter of 2022.

Ethanol Segment Results

The following table includes selected financial and operating data of our Ethanol segment for the first six months of 2023 and 2022. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.

	Six Months Ended June 30,
	2023		2022		Change
Operating income	$	166	$	102	$	64
Adjusted operating income (see note (f))	167		81		86
Ethanol margin (see note (f))	464		423		41
Operating expenses (excluding depreciation and amortization expense reflected below)	258		302		(44)
Depreciation and amortization expense (see note (b))	39		17		22
Production volumes (thousand gallons per day) (see note (g))	4,314		3,953		361

Ethanol segment operating income increased by $64 million in the first six months of 2023 compared to the first six months of 2022; however, Ethanol segment adjusted operating income, which excludes the adjustments in the table in note (f), increased by $86 million in the first six months of 2023 compared to

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the first six months of 2022. The components of this increase in the adjusted results, along with the reasons for the changes in those components, are outlined below.

•Ethanol segment margin increased by $41 million in the first six months of 2023 compared to the first six months of 2022.

Ethanol segment margin is primarily affected by prices for the ethanol and corn related co-products that we sell and the cost of corn that we process. The table on page 48 reflects market reference prices that we believe impacted our Ethanol segment margin in the first six months of 2023 compared to the first six months of 2022.

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

◦Lower corn prices had a favorable impact of approximately $132 million.

◦An increase in production volumes of 361,000 gallons per day had a favorable impact of approximately $54 million.

◦Lower ethanol prices had an unfavorable impact of approximately $113 million.

◦Lower prices for the co-products that we produce, primarily inedible DCO, had an unfavorable impact of approximately $33 million.

•Ethanol segment operating expenses (excluding depreciation and amortization expense) decreased by $44 million primarily due to a decrease in energy costs (primarily natural gas) of $57 million, partially offset by increases in chemical and catalyst costs of $6 million and certain employee compensation expenses of $4 million.

________________________

The following notes relate to references on pages 38 through 51.

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

In 2020, we recognized the cost of the RVO using the 2020 quotas set by the EPA at that time, and in 2021 and the three months ended March 31, 2022, we recognized the cost of the RVO using our estimates of the quotas. As a result of the final rule released by the EPA as noted above, we recognized a benefit of $104 million in the three and six months ended June 30, 2022 primarily related to the modification of the 2020 quotas.

(b)Depreciation and amortization expense for the three and six months ended June 30, 2022 includes a gain of $23 million on the sale of our ethanol plant located in Jefferson, Wisconsin.

(c)General and administrative expenses (excluding depreciation and amortization expense) for the three and six months ended June 30, 2022 includes a charge of $20 million for an environmental reserve adjustment associated with a non-operating site.

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

◦a net gain of $11 million in the six months ended June 30, 2023 related to the early retirement of $199 million aggregate principal amount of various series of our senior notes; and

◦a charge of $50 million in the six months ended June 30, 2022 related to the early retirement of $1.4 billion aggregate principal amount of various series of our senior notes.

(e)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.

(f)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:

◦Refining margin is defined as Refining segment operating income excluding the modification of RVO adjustment, operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses, as reflected in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of Refining operating income to Refining margin
Refining operating income	$	2,432	$	6,212	$	6,489	$	7,663
Adjustments:
Modification of RVO (see note (a))	—		(104)		—		(104)
Operating expenses (excluding depreciation and amortization expense)	1,205		1,402		2,466		2,595
Depreciation and amortization expense	582		565		1,154		1,114
Other operating expenses	1		14		11		32
Refining margin	$	4,220	$	8,089	$	10,120	$	11,300

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of Renewable Diesel operating income to Renewable Diesel margin
Renewable Diesel operating income	$	440	$	152	$	645	$	301
Adjustments:
Operating expenses (excluding depreciation and amortization expense)	104		58		190		109
Depreciation and amortization expense	59		28		117		54
Renewable Diesel margin	$	603	$	238	$	952	$	464

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of Ethanol operating income to Ethanol margin
Ethanol operating income	$	127	$	101	$	166	$	102
Adjustments:
Operating expenses (excluding depreciation and amortization expense)	128		167		258		302
Depreciation and amortization expense (see note (b))	19		(3)		39		17
Other operating expenses	1		1		1		2
Ethanol margin	$	275	$	266	$	464	$	423

◦Adjusted Refining operating income is defined as Refining segment operating income excluding the modification of RVO adjustment and other operating expenses, as reflected in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of Refining operating income to adjusted Refining operating income
Refining operating income	$	2,432	$	6,212	$	6,489	$	7,663
Adjustments:
Modification of RVO (see note (a))	—		(104)		—		(104)
Other operating expenses	1		14		11		32
Adjusted Refining operating income	$	2,433	$	6,122	$	6,500	$	7,591

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◦Adjusted Ethanol operating income is defined as Ethanol segment operating income excluding the gain on sale of ethanol plant and other operating expenses, as reflected in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of Ethanol operating income to adjusted Ethanol operating income
Ethanol operating income	$	127	$	101	$	166	$	102
Adjustments:
Gain on sale of ethanol plant (see note (b))	—		(23)		—		(23)
Other operating expenses	1		1		1		2
Adjusted Ethanol operating income	$	128	$	79	$	167	$	81

◦Adjusted operating income is defined as total company operating income excluding the modification of RVO adjustment, the gain on sale of ethanol plant, the environmental reserve adjustment, and other operating expenses, as reflected in the table below.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Reconciliation of total company operating income to adjusted operating income
Total company operating income	$	2,759	$	6,219	$	6,802	$	7,603
Adjustments:
Modification of RVO (see note (a))	—		(104)		—		(104)
Gain on sale of ethanol plant (see note (b))	—		(23)		—		(23)
Environmental reserve adjustment (see note (c))	—		20		—		20
Other operating expenses	2		15		12		34
Adjusted operating income	$	2,761	$	6,127	$	6,814	$	7,530

(g)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.

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LIQUIDITY AND CAPITAL RESOURCES

Our Liquidity

Our liquidity consisted of the following as of June 30, 2023 (in millions):

Available capacity from our committed facilities (a):
Valero Revolver	$	3,994
Canadian Revolver (b)	110
Accounts receivable sales facility	1,300
Total available capacity	5,404
Cash and cash equivalents (c)	4,731
Total liquidity	$	10,135

________________________

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

(b)The amount for our Canadian Revolver is shown in U.S. dollars. As set forth in the summary of our credit facilities in Note 4 of Condensed Notes to Consolidated Financial Statements, the availability under our Canadian Revolver as of June 30, 2023 in Canadian dollars was C$145 million.

(c)Excludes $344 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.

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.

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Cash Flows

Components of our cash flows are set forth below (in millions):

	Six Months Ended June 30,
	2023		2022
Cash flows provided by (used in):
Operating activities	$	4,682	$	6,433
Investing activities	(1,078)		(1,460)
Financing activities:
Debt issuances and borrowings	1,804		1,844
Repayments of debt and finance lease obligations (including premiums paid on early retirement of debt)	(2,158)		(3,026)
Return to stockholders:
Purchases of common stock for treasury	(2,393)		(1,892)
Common stock dividend payments	(746)		(800)
Return to stockholders	(3,139)		(2,692)
Other financing activities	(27)		232
Financing activities	(3,520)		(3,642)
Effect of foreign exchange rate changes on cash	129		(61)
Net increase in cash and cash equivalents	$	213	$	1,270

Cash Flows for the Six Months Ended June 30, 2023

In the first six months of 2023, we used the $4.7 billion of cash generated by our operations and the $1.8 billion in debt borrowings to make $1.1 billion of investments in our business, repay $2.2 billion of debt and finance lease obligations (including premiums paid on the early retirement of debt), return $3.1 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $213 million. The debt borrowings and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.

As previously noted, our operations generated $4.7 billion of cash in the first six months of 2023, driven primarily by net income of $5.3 billion and noncash charges to income of $1.1 billion, partially offset by an unfavorable change in working capital of $1.7 billion. Noncash charges primarily included $1.3 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 10 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 $1.1 billion primarily consisted of $982 million in capital investments, as defined below under “Capital Investments,” of which $161 million related to capital investments made by DGD.

Cash Flows for the Six Months Ended June 30, 2022

In the first six months of 2022, we used the $6.4 billion of cash generated by our operations and $1.8 billion in debt issuances and borrowings to make $1.5 billion of investments in our business, repay $3.0 billion of debt and finance lease obligations (including premiums paid on the early retirement of debt), return $2.7 billion to our stockholders through purchases of our common stock for treasury and dividend payments, and increase our available cash on hand by $1.3 billion. The debt issuance,

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borrowings, and repayments are described in Note 4 of Condensed Notes to Consolidated Financial Statements.

As previously noted, our operations generated $6.4 billion of cash in the first six months of 2022, driven primarily by net income of $5.7 billion and noncash charges to income of $826 million, partially offset by an unfavorable change in working capital of $128 million. Noncash charges primarily included $1.2 billion of depreciation and amortization expense, partially offset by a $333 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 10 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 primarily consisted of $1.5 billion in capital investments, of which $471 million related to capital investments made by DGD and $19 million related to capital expenditures of VIEs other than DGD.

Other financing activities of $232 million primarily consisted of $240 million in contributions from the other joint venture member in DGD.

Our Capital Resources

Our material cash requirements as of June 30, 2023 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 comprised of our capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in nonconsolidated joint ventures, as reflected in our consolidated statements of cash flows as shown on page 6. Capital investments exclude acquisitions, if any.

We have publicly announced GHG emissions reduction/displacement targets for 2025 and 2035. We believe that our expected allocation of growth capital into low-carbon projects is consistent with such targets. Certain of these low-carbon projects have been completed or are already in execution and the associated capital investments are included in our expected capital investments for 2023. Our capital investments in future years, consistent with our targets, are expected to include investments associated with certain low-carbon projects currently at various stages of progress, evaluation, or approval.

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. 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. 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

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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.

	Six Months Ended June 30,
	2023		2022
Reconciliation of capital investments to capital investments attributable to Valero
Capital expenditures (excluding VIEs)	$	311	$	324
Capital expenditures of VIEs:
DGD	122		458
Other VIEs	2		19
Deferred turnaround and catalyst cost expenditures (excluding VIEs)	508		681
Deferred turnaround and catalyst cost expenditures of DGD	39		13
Investments in nonconsolidated joint ventures	—		1
Capital investments	982		1,496
Adjustments:
DGD’s capital investments attributable to the other joint venture member	(80)		(235)
Capital expenditures of other VIEs	(2)		(19)
Capital investments attributable to Valero	$	900	$	1,242

We have developed an extensive multi-year capital investment program, which we update and revise based on changing internal and external factors. As previously disclosed in our annual report on Form 10-K for the year ended December 31, 2022, we expect to incur approximately $2.0 billion for capital investments attributable to Valero during 2023. Approximately $1.5 billion of the expected capital investments attributable to Valero are for sustaining the business and the balance towards growth strategies, of which over 40 percent is allocated to expanding our low-carbon businesses.

Contractual Obligations

As of June 30, 2023, 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 six months ended June 30, 2023, 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 six months ended June 30, 2023.

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During the six months ended June 30, 2023, we used cash on hand to purchase and retire $199 million of our public debt. We will continue to evaluate further deleveraging opportunities.

Other Matters Impacting Liquidity and Capital Resources

Stock Purchase Programs

During the three and six months ended June 30, 2023, we purchased for treasury 8,421,452 of our shares for a total cost of $951 million and 19,414,793 shares for $2.4 billion, respectively. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to our stock purchase programs. As of June 30, 2023, we had $2.5 billion remaining available for purchase under the 2023 Program. We will continue to evaluate the timing of purchases when appropriate. We have no obligation to make purchases under this program.

Pension Plan Funding

As disclosed in our annual report on Form 10-K for the year ended December 31, 2022, we plan to contribute $108 million to our pension plans and $21 million to our other postretirement benefit plans during 2023. No significant contributions were made during the six months ended June 30, 2023.

Cash Held by Our Foreign Subsidiaries

As of June 30, 2023, $3.9 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.

Environmental Matters

Our operations are subject to extensive environmental regulations by government authorities relating to, among other matters, the discharge of materials into the environment, climate, waste management, pollution prevention measures, GHG and other emissions, our facilities and operations, and characteristics and composition of many of our products. Because environmental laws and regulations are becoming more complex and stringent and new environmental laws and regulations are continuously being enacted or proposed, the level of future costs and expenditures required for environmental matters could increase.

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.

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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, 2022.

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.

	June 30, 2023 (a)
	Expected Maturity Dates
	Remainder of 2023			2024			2025			2026			2027			There- after			Total			Fair Value
Fixed rate	$	—		$	167		$	441		$	672		$	564		$	6,421		$	8,265		$	7,864
Average interest rate	—		%	1.2		%	3.2		%	4.2		%	2.2		%	5.3		%	4.8		%
Floating rate	$	786		$	14		$	—		$	—		$	—		$	—		$	800		$	800
Average interest rate	8.6		%	6.3		%	—		%	—		%	—		%	—		%	8.6		%
	December 31, 2022 (a)
	Expected Maturity Dates
	2023			2024			2025			2026			2027			There- after			Total			Fair Value
Fixed rate	$	—		$	167		$	441		$	672		$	578		$	6,606		$	8,464		$	8,041
Average interest rate	—		%	1.2		%	3.2		%	4.2		%	2.2		%	5.3		%	4.8		%
Floating rate	$	861		$	—		$	—		$	—		$	—		$	—		$	861		$	861
Average interest rate	7.1		%	—		%	—		%	—		%	—		%	—		%	7.1		%

________________________

(a)Excludes unamortized discounts and debt issuance costs.

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, 2022. See Note 12 of Condensed Notes to Consolidated Financial Statements for a discussion about these market risks as of June 30, 2023.

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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 June 30, 2023.

(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

There have been no material developments in proceedings that we previously reported in our annual report on Form 10-K for the year ended December 31, 2022 or in our quarterly report on Form 10-Q for the quarter ended March 31, 2023.

Environmental Enforcement Matters

We are reporting this proceeding to comply with SEC regulations, which require us to disclose certain information about proceedings arising under U.S. federal, state, or local provisions regulating the discharge of materials into the environment or protecting the environment if we reasonably believe that such proceedings have the potential to result in monetary sanctions of $300,000 or more.

Bay Area Air Quality Management District (BAAQMD) (Benicia Refinery). On May 1, 2023, the BAAQMD issued a Notice of Violation (NOV) to our Benicia Refinery in connection with a release from a pressure relief device. We are working with the BAAQMD to resolve this NOV.

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, 2022. However, to the extent SBx 1-2 discussed in Note 2 of Condensed Notes to Consolidated Financial Statements adversely affects our business, financial condition, results of operations, and liquidity, it may also have the effect of heightening many of the other risks described in such risk factors.

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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 second quarter of 2023.

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (c)
April 2023	21,404	$	120.66	—	$3.4 billion
May 2023	3,091,392	$	111.30	3,086,238	$3.1 billion
June 2023	5,308,656	$	112.00	5,304,000	$2.5 billion
Total	8,421,452	$	111.76	8,390,238	$2.5 billion

________________________

(a)The shares reported in this column include 31,214 shares related to our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.

(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 26, 2022, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, and we completed all authorized share purchases under that program during the second quarter of 2023. On February 23, 2023, 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. As of June 30, 2023, we had $2.5 billion remaining available for purchase under the 2023 Program.

ITEM 5. OTHER INFORMATION

(a)On July 21, 2023, the Human Resources and Compensation Committee of the Board of Directors of Valero Energy Corporation elected to amend the Valero Energy Corporation Supplemental Executive Retirement Plan, effective for retirements on or after July 1, 2023, to modify the interest rate that is used to calculate the lump-sum benefit thereunder based on the average of Internal Revenue Service (IRS) lump-sum interest rates for the 60-month period ending with the fifth month prior to the participant’s retirement rather than the IRS lump-sum interest rates for the month of August preceding the calendar year of the participant’s retirement. This change is solely intended to eliminate the volatility and impact of fluctuations from year-over-year changes in actuarial assumptions, which can significantly increase or decrease the calculated value of such benefit from one year to the next and could negatively impact retention.

(b)None.

(c)During the three months ended June 30, 2023, 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(a) of Regulation S-K.

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ITEM 6. EXHIBITS

Exhibit No.	Description
*+10.01	Valero Energy Corporation Supplemental Executive Retirement Plan, as amended and restated effective July 1, 2023.
22.01	Subsidiary Issuer of Guaranteed Securities–incorporated by reference to Exhibit 22.01 to Valero’s annual report on Form 10-K for the year ended December 31, 2020 (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.
+	Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.

Certain agreements relating to our long-term debt have not been filed as exhibits as permitted by paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K since the total amount of securities authorized under any such agreements do not exceed 10 percent of our total consolidated assets. Upon request, we will furnish to the SEC all constituent agreements defining the rights of holders of our long-term debt not filed herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VALERO ENERGY CORPORATION (Registrant)
By:	/s/ Jason W. Fraser
	Jason W. Fraser
	Executive Vice President and
	Chief Financial Officer
	(Duly Authorized Officer and Principal
	Financial and Accounting Officer)

Date: July 27, 2023

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EX-10.01

Exhibit 10.01

VALERO ENERGY CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(AS AMENDED AND RESTATED EFFECTIVE JULY 1, 2023)

VALERO ENERGY CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

		Page
ARTICLE I		DEFINITIONS	1
	1.1	Accrued Benefit	1
	1.2	Actuarial Equivalent or Actuarially Equivalent Basis	1
	1.3	Beneficiary	2
	1.4	Board of Directors	2
	1.5	Change in Control	2
	1.6	Code	2
	1.7	Company	2
	1.8	Committee	2
	1.9	Covered Compensation	3
	1.10	Credited Service	3
	1.11	Eligible Earnings	3
	1.12	Final Average Compensation	3
	1.13	Monthly Covered Compensation	3
	1.14	Monthly FICA Amount	3
	1.15	Normal Retirement Date	4
	1.16	NuStar	4
	1.17	NuStar Excess Pension Plan	4
	1.18	NuStar SERP	4
	1.19	Participant	4
	1.20	Plan	4
	1.21	Plan of Deferred Compensation	4
	1.22	Plan Year	4
	1.23	Retirement	4
	1.24	Rules	4
	1.25	Securities Act	4
	1.26	Separation from Service	4
	1.27	Subsidiary	4
	1.28	Surviving Spouse	5
	1.29	Trust	5
	1.30	Trustee	5
	1.31	Valero	5
	1.32	Valero Pension Plan	5
	1.33	Valero Pension Plan Benefit	5
ARTICLE II		ELIGIBILITY	5
	2.1	Eligibility	5
	2.2	Frozen Participation	5
	2.3	Renewed Eligibility	6

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ARTICLE III		VESTING	6
ARTICLE IV		RETIREMENT BENEFIT	6
	4.1	Calculation of Retirement Benefit	6
	4.2	Form and Time of Payment	7
	4.3	Modification of Pension	7
	4.4	Delay of Certain Payments	7
	4.5	Application of Code Section 409A Transition Relief Provisions	7
ARTICLE V		DEATH BENEFITS	8
	5.1	Death Benefit Prior to Retirement	8
	5.2	Death Benefit Following Retirement But Prior to Benefit Payment	8
ARTICLE VI		ARTICLE VI    PROVISIONS RELATING TO ALL BENEFITS	8
	6.1	Effect of This Article	8
	6.2	No Duplication of Benefits	8
	6.3	Forfeiture Upon Termination for Cause	8
	6.4	Forfeiture for Competition	8
	6.5	Expenses Incurred in Enforcing the Plan	9
	6.6	No Restrictions on any Portion of Benefits Determined to be Excess Parachute Payments	9
ARTICLE VII		ADMINISTRATION	9
	7.1	Committee Appointment	9
	7.2	Committee Organization and Voting	9
	7.3	Powers of the Committee	9
	7.4	Committee Discretion	10
	7.5	Reliance Upon Information	10
	7.6	Approval of Benefit Modifications	10
ARTICLE VIII		ADOPTION BY SUBSIDIARIES	10
	8.1	Procedure for and Status After Adoption	10
	8.2	Termination of Participation By Adopting Subsidiary	11
	8.3	Spinoff Plan	11
ARTICLE IX		AMENDMENT AND/OR TERMINATION	11
	9.1	Amendment or Termination of the Plan	11
	9.2	No Retroactive Effect on Annual Benefits	11
	9.3	Effect of Termination	11
	9.4	Effect of Change in Control	11
ARTICLE X		FUNDING	12
	10.1	Payments from Trust	12
	10.2	Plan May Be Funded Through Life Insurance	12
	10.3	Rabbi Trust	12
	10.4	Ownership of Assets; Release	12
	10.5	Reversion of Excess Assets	13
	10.6	Repurchase of Valero Stock	13
	10.7	Participants Must Rely Only on General Credit of the Companies	13
ARTICLE XI		MISCELLANEOUS	14
	11.1	Responsibility for Distributions and Withholding of Taxes	14
	11.2	Limitation of Rights	14

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11.3	Arbitration of Disputes.	14
11.4	Distributions to Incompetents	16
11.5	Nonalienation of Benefits	16
11.6	Severability	16
11.7	Notice	16
11.8	Gender and Number	17
11.9	Administration and Interpretation Consistent with Code Section 409A	17
11.10	Governing Law	17
11.11	Effective Date	17

iii

VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

WHEREAS, Valero Energy Corporation (the “Company”) originally established the Valero Energy Corporation Supplemental Executive Retirement Plan (the “Plan”), effective January 1, 1983, to provide certain highly compensated, management personnel with a supplement to their benefits under the Valero Pension Plan so as to retain their loyalty and to offer a further incentive to them to maintain and increase their standard of performance; and

WHEREAS, the Plan was subsequently amended and restated, effective January 1, 2008, to reflect the spinoff of liabilities relating to eligible Employees of NuStar Energy, LLC (formerly Valero GP, LLC) into a separate plan effective as of July 1, 2006, and to make certain other changes consistent with Section 409A of the Code; and

WHEREAS, the Plan was further amended, effective as of July 1, 2013, to specifically refer to the Cash Balance Provision of the Valero Pension Plan; and

WHEREAS, the Plan was further amended, effective as of January 1, 2018, to: (i) expand the category of beneficiaries who may be eligible to receive death benefits under the Plan, and provide for the designation of a beneficiary in the event of the death of a Participant following the Participant’s Retirement but prior to payment of the Participant’s benefit; (ii) eliminate the mandatory funding of the Trust; and (iii) make certain additional clarifying changes; and

WHEREAS, the Plan was further amended, effective as of January 1, 2021, to provide for the division of benefits upon receipt of a Qualified Domestic Relations Order; and

WHEREAS, pursuant to Section 9.1, the Committee may amend the Plan at any time by an instrument in writing; and

WHEREAS, the Committee has determined that the Plan should be amended and restated, effective July 1, 2023, to incorporate the three existing amendments and to change the interest rate assumptions used to calculate single lump sum payments of retirement benefits.

NOW, THEREFORE, the Company amends and restates the Plan as follows:

ARTICLE I

DEFINITIONS

All defined terms used in the Valero Pension Plan shall have the same meaning for this Plan, except as otherwise set forth below.

1.1Accrued Benefit. “Accrued Benefit” means, as of any given date of determination, the Retirement benefit calculated under Section 4.1 with Final Average Compensation, but with the offsets for benefits provided by the Valero Pension Plan and Credited Service determined as of that date.

1.2Actuarial Equivalent or Actuarially Equivalent Basis. “Actuarial Equivalent” or “Actuarially Equivalent Basis” means an equality in value of the aggregate amounts expected to be received under different forms of payment based on the same mortality and interest rate assumptions. For this purpose, the mortality and interest rate assumptions used in computing benefits under the Valero

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Pension Plan will be used (as modified by Section 4.1 with respect to a Participant’s Retirement on or after July 1, 2023). If there is no Valero Pension Plan or successor qualified defined benefit plan, then the actuarial assumptions to be used will be those actuarial assumptions deemed appropriate by the actuarial firm, which last served as independent actuary for the Valero Pension Plan prior to its termination or merger had the Valero Pension Plan remained in existence with its last participant census.

1.3Beneficiary.    “Beneficiary” means the Beneficiary of a Participant entitled to receive death benefits under the Valero Pension Plan.

1.4Board of Directors. “Board of Directors” means the Board of Directors of Valero.

1.5Change in Control. “Change in Control” means the occurrence of one or more of the following events:

(a)Change in Ownership of Valero. The acquisition by any one person, or more than one person acting as a group (within the meaning of Code § 409A), of ownership of stock of Valero that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of Valero.

(b)Change in Effective Control of Valero. Either of the following:

(i)The acquisition, during any 12-month period, by any one person, or more than one person acting as a group (within the meaning of Code § 409A), of stock of Valero comprising thirty percent (30%) or more of the total voting power of the stock of Valero; or

(ii)The replacement, during any 12-month period, of a majority of the members of the Board of Directors with directors whose appointment or election is not endorsed by the majority of the members of the Board of Directors before the date of such appointment or election.

(c)Change in Ownership of a Substantial Portion of Valero’s Assets. The acquisition by any one person, or more than one person acting as a group (within the meaning of Code § 409A), during the 12 month period ending on the date of the most recent acquisition by such person or persons, of assets of Valero that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of Valero immediately before such acquisition or acquisitions. For purposes of this provision, “gross fair market value” means the value of the assets of Valero, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

The provisions of this Plan relating to a Change in Control shall be interpreted and administered in a manner consistent with Code section 409A.

1.6Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time.

1.7Company. “Company” means Valero and any Subsidiary adopting the Plan.

1.8Committee. “Committee” means the Human Resources and Compensation Committee of the Board of Directors.

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1.9Covered Compensation. “Covered Compensation” means the average (without indexing) of the Taxable Wage Base for the 35 calendar years ending with the calendar year in which a Participant attains social security retirement age (as defined in Section 415(b)(8) of the Code). A 35-year period shall be used for all Participants regardless of the year of birth of such Participant. In determining a Participant’s Covered Compensation prior to the Participant attaining social security retirement age, it shall be assumed that the Taxable Wage Base in effect at the beginning of the Plan Year in which such determination is made will remain constant for all future years.

1.10Credited Service. “Credited Service” means a Participant’s continuing period of employment with a Company (whether or not contiguous), commencing on the first day for which such Participant is paid, or entitled to payment, for the performance of duties with a Company and terminating with the Participant’s final cessation of participation in the Plan. With respect to any full calendar year in which a Participant receives Eligible Earnings in each payroll period as an active employee, he shall be credited with one year of Credited Service. With respect to any partial calendar year in which a Participant receives Eligible Earnings as an active employee (such as the calendar year in which employment commences or participation ceases) he shall be credited with a fraction of a year of Credited Service, in the same proportion that the number of payroll periods during such calendar year that he received Eligible Earnings as an active employee bears to the total number of payroll periods during such year. All partial years of Credited Service shall be aggregated so that a Participant receives credit for all periods of employment regardless of whether the Credited Service is interrupted. Credited Service shall also include, and a Participant shall be credited with, such additional periods of time, if any, as may have been agreed upon by the Participant and a Company in connection with the Participant’s employment, termination or otherwise. Notwithstanding any other provision of this Plan, for purposes of calculating a Participant’s benefit hereunder, Credited Service shall not include any period of service with a Company for which a Participant has received a payment hereunder, or under the Excess Pension Plan, the NuStar SERP, the NuStar Excess Pension Plan, the Ultramar Diamond Shamrock Corporation Supplemental Executive Retirement Plan, or a lump sum payment made prior to January 1, 2002 under the Ultramar Diamond Shamrock Corporation Employees’ Retirement Plan.

1.11Eligible Earnings. “Eligible Earnings” means all compensation paid or payable by a Company to the employee in the form of base salary or wages and annual performance related bonuses (whether paid or payable in cash or securities or any combination thereof), including therein any amounts of such base salary or wages and annual bonuses earned which, at the employee’s election, in lieu of a cash payment to him, are contributed to a Plan of Deferred Compensation maintained by the Company. During a leave of absence from work, with or without pay, such as disability leave of absence or personal leave of absence, the Participant’s base rate of pay in effect immediately prior to the leave of absence and his most recent annual bonus amount earned shall be used in computing his Eligible Earnings.

1.12Final Average Compensation. “Final Average Compensation” means a Participant’s average monthly Eligible Earnings from any Company for the thirty-six consecutive calendar months that give the highest average monthly rate of Eligible Earnings for the Participant out of all calendar months next preceding the earliest of (a) the date upon which a Participant becomes ineligible for participation in this Plan pursuant to Section 2.2; (b) his Retirement; or (c) the termination of the Plan.

1.13Monthly Covered Compensation. “Monthly Covered Compensation” means the quotient resulting from dividing Covered Compensation by 12.

1.14Monthly FICA Amount. “Monthly FICA Amount” means the quotient resulting from dividing by 12 the Taxable Wage Base in effect or assumed to be in effect at the beginning of the calendar

3

year in which a Participant attains social security retirement age (as defined in Section 415(b)(8) of the Code).

1.15Normal Retirement Date. “Normal Retirement Date” means the first day of the month coincident with or next following the date on which the Participant attains the age of 65 years.

1.16NuStar. “NuStar” means NuStar GP, LLC, formerly known as Valero GP, LLC.

1.17NuStar Excess Pension Plan. “NuStar Excess Pension Plan” means the NuStar Excess Pension Plan, as amended from time to time, or any successor plan.

1.18NuStar SERP. “NuStar SERP” means the NuStar Supplemental Executive Retirement Plan, as amended from time to time, or any successor plan.

1.19Participant. “Participant” means either (a) an employee of a Company who is eligible for and is participating in the Plan or (b) a former employee of a Company who is eligible to receive benefits under the Plan upon such former employee’s Retirement.

1.20Plan. “Plan” means the Valero Energy Corporation Supplemental Executive Retirement Plan as set forth in this document, as amended from time to time.

1.21Plan of Deferred Compensation. “Plan of Deferred Compensation” means the Valero Energy Corporation Executive Deferred Compensation Plan, any successor, alternative or additional nonqualified plan of deferred compensation, and any contributions made under a salary reduction agreement to a Code Section 125 cafeteria plan or Code Section 401(k) cash or deferred arrangement maintained by the Company.

1.22Plan Year. “Plan Year” means the calendar year.

1.23Retirement. “Retirement”, “Retires”, “Retire” or “Retired” means the first day of the month coincident with or next following the date that a Participant incurs a Separation from Service after having attained at least age 55 and completing at least five (5) years of Credited Service.

1.24Rules. “Rules” means the Commercial Arbitration Rules of the American Arbitration Association in effect at the date of commencement of any arbitration hereunder.

1.25Securities Act. “Securities Act” means the Securities Exchange Act of 1934, as amended from time to time.

1.26Separation from Service. “Separation from Service” means a separation from service within the meaning of Code section 409A.

1.27Subsidiary. “Subsidiary” means (i) any corporation 50% or more of whose stock having ordinary voting power to elect directors (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned, directly or indirectly, by Valero, and (ii) any partnership, association, joint venture or other entity in which, Valero, directly or indirectly, has a 50% or greater equity interest at the time.

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1.28Surviving Spouse. “Surviving Spouse” means the spouse of a Participant who is eligible to receive a Qualified Preretirement Survivor Annuity benefit under the Valero Pension Plan.

1.29Trust. “Trust” or “Trust Agreement” shall mean the Valero Energy Corporation Supplemental Executive Retirement Plan Trust as is created by the terms and conditions of said Trust and as may be amended from time to time.

1.30Trustee. “Trustee” means collectively one or more persons or corporations with trust power which have been appointed by the Committee and have accepted the duties of Trustee of the Trust and any and all successor or successors appointed by Valero.

1.31Valero. “Valero” means Valero Energy Corporation, the sponsor of this Plan, and its successors.

1.32Valero Pension Plan. “Valero Pension Plan” means the Valero Energy Corporation Pension Plan, a defined benefit plan qualified under Section 401(a) of the Code, as it may be amended from time to time and any successor qualified defined benefit plan.

1.33Valero Pension Plan Benefit. “Valero Pension Plan Benefit” means the amount of the benefit payable from the Valero Pension Plan (as determined by the actuary for the Valero Pension Plan) under the Formula Provision of Article 4 of the Valero Pension Plan and the Cash Balance Provision of Article 5 of the Valero Pension Plan, as applicable, and as such Articles may be amended from time to time.

ARTICLE II

ELIGIBILITY

2.1Eligibility. An employee shall become a Participant in the Plan as of the date he is selected by the Committee for inclusion as a Participant in the Plan. Ongoing eligibility and participation of Participants shall be determined by the Committee in its sole discretion, and no employee shall have a right to initial or ongoing participation in this Plan.

2.2Frozen Participation. If, at any time, the Committee determines that an employee who is a Participant is no longer eligible to continue to participate, and such employee is still employed by a Company, his Accrued Benefit will be frozen as of the last day of the Plan Year prior to the Plan Year during which he initially became ineligible to participate. He will later be entitled to that frozen Accrued Benefit upon his Retirement (if, at the time of such Retirement, his Accrued Benefit is vested), subject to the requirements of Articles III and IV. The frozen Accrued Benefit will be payable at the time and in the form set forth in Article IV.

Notwithstanding the foregoing provisions, in the event that the Participant has, as of the date of his Retirement, accrued a vested benefit in the Valero Energy Corporation Excess Pension Plan which is greater than his frozen accrued benefit hereunder, such Participant shall be entitled to receive his accrued benefit under the Valero Energy Corporation Excess Pension Plan, and shall not be eligible for any benefits hereunder. Under no circumstances shall a Participant be entitled to benefits under both this Plan and the Valero Energy Corporation Excess Pension Plan. The Surviving Spouse of a Participant whose Accrued Benefit is frozen at the time of the Participant’s death shall not be entitled to any death benefit under this Plan. A Participant whose Accrued Benefit is frozen at the time of incurring a disability shall not accrue any further Credited Service either for accrual or vesting purposes after the disability occurs so

5

long as the Participant’s Accrued Benefit in this Plan is frozen. If the frozen Accrued Benefit is less than the benefit which could otherwise be provided without this limitation, then the benefit will not exceed the Participant’s frozen Accrued Benefit. Additionally, if any of the events described in Article VI should occur, the Participant whose Accrued Benefit is frozen shall be subject to having his frozen Accrued Benefit either restricted in amount or forfeited in accordance with Article VI.

2.3Renewed Eligibility. If an employee who is a Participant becomes ineligible to continue to participate but remains employed by a Company, and the Committee later determines that the employee is again eligible to participate, the Participant will be given Credited Service for the intervening period, will have his Final Average Compensation computed as though the freeze had never occurred, and will be treated for all purposes as though he had not had his participation interrupted.

ARTICLE III

VESTING

Except as otherwise set forth herein, a Participant shall vest in his Accrued Benefits only upon the Participant’s death, disability or Retirement. The foregoing notwithstanding, a Participant’s Accrued Benefit shall become fully vested upon: (i) the occurrence of a Change in Control; (ii) termination of the Plan pursuant to Section 9.1; or (iii) the termination of participation in this Plan by the Subsidiary employing the Participant, if such Participant’s participation in the Plan is not promptly continued through employment by another adopting Subsidiary.

Upon a Participant’s Separation from Service for any reason prior to becoming fully vested hereunder, the Participant and any Surviving Spouse shall forfeit any interest in and under this Plan, and shall have no right to any benefit hereunder.

ARTICLE IV

RETIREMENT BENEFIT

4.1Calculation of Retirement Benefit. Subject to the following provisions of this Section 4.1, the provisions of Section 4.3 and Article III; the benefit payable under the Plan shall be an amount equal to the lump sum of the Accrued Benefit payable for life from Normal Retirement Date where the Accrued Benefit is equal to the sum of (i) plus (ii) minus (iii) where (i) equals: 1.60% of the Participant’s Final Average Compensation multiplied by his number of years of Credited Service; (ii) equals .35% multiplied by the product of his years of Credited Service (not to exceed 35 years) times the excess of his Final Average Compensation over the lesser of (a) 1.25 times his Monthly Covered Compensation or (b) the Monthly FICA Amount; and (iii) equals the Participant’s Valero Pension Plan Benefit. The lump sum amount payable hereunder shall be determined using the lump sum actuarial factors provided for, and/or used under, the Valero Pension Plan. Notwithstanding the foregoing, with respect to a Participant’s Retirement on or after July 1, 2023, the interest rate assumption shall be equal to the average of the annual rate of interest as specified by the Commissioner of the Internal Revenue Service pursuant to Section 417(e)(3)(C) of the Code (including pursuant to any revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin) for the sixty-month period ending with the fifth month prior to the Participant’s Retirement. For example, if a Participant’s Retirement is July 1, 2023, the interest rate assumption equals the average of Internal Revenue Service lump sum interest rates from March 2018 to February 2023.

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4.2Form and Time of Payment. Except as otherwise specifically provided herein, effective for benefit payments commencing as a result of a Participant’s Retirement on or after January 1, 2008, benefits shall be made in a single lump sum payment as of the Participant’s Retirement. Such lump sum amount shall be calculated as of the Participant’s Retirement by the actuary for the Pension Plan applying actuarial factors used under the Pension Plan (as modified by Section 4.1 with respect to a Participant’s Retirement on or after July 1, 2023), and shall be made as soon as practical following the Participant’s Retirement and, in any event, within ninety (90) days thereafter. In the event that the ninety (90) day period spans two calendar years, the benefit payment shall be made within such ninety (90) day period in the first calendar year.

4.3Modification of Pension. The Committee shall have the right to modify the calculation of the benefit payable as to any Participant as it may desire from time to time; provided, however, that any such modification shall not result in a reduction of the benefit payable below the amount set forth above in Section 4.1. The amount of the benefits payable to a Participant under this Plan may be modified by written agreement entered into between the Participant and a Company and approved pursuant to Section 7.6. If so modified, the provisions of such written agreement shall prevail in determining the amount of the benefits payable to the Participant under this Plan. In addition, benefits payable under this Plan to any Participant shall not affect any other right or entitlement a Participant may have by contract or otherwise, except as may be provided in any such contract.

4.4Delay of Certain Payments. With respect to any Participant who is a “Specified Employee”, as defined in Code section 409A and the regulations and rulings issued thereunder, any benefit that becomes payable by reason of such Participant’s Separation from Service shall not commence prior to the date that is six (6) months following such Participant’s Separation from Service (except to the extent that the payment of such benefit is not subject to Code section 409A, or is subject to an exception to such delay in payment). Such delayed payment shall be made in a single lump sum payment as soon as practical following the expiration of such 6-month delay period (and in any event within ninety (90) days thereof) and shall be calculated as of the Participant’s Separation from Service by the actuary for the Pension Plan applying actuarial factors used under the Pension Plan (as modified by Section 4.1 with respect to a Participant’s Retirement on or after July 1, 2023). In the event that the ninety (90) day period spans two calendar years, the benefit payment shall be made within such ninety (90) day period in the first calendar year. The provisions of this Section 4.4 shall not apply (a) with respect to any benefit that becomes payable due to the death of the Participant, or (b) if, at the time of such Participant’s Separation from Service, no stock of the Company is publicly traded on an established securities market or otherwise.

4.5Application of Code Section 409A Transition Relief Provisions. Notwithstanding any other provision of this Plan, between January 1, 2005 and December 31, 2007, the Plan was administered in compliance with the applicable transition relief provided by the U.S. Treasury Department and the Internal Revenue Service under applicable guidance, including Notice 2005-1, the Temporary Regulations issued under Code section 409A, Notice 2007-78 and Notice 2007-86. Specifically, but without limitation, Participants whose Retirement occurred between January 1, 2005 and December 31, 2007, received or commenced their benefits under this Plan at the time and in the form provided for under the Plan as in effect on October 3, 2004, or pursuant to a special form and time of payment election permitted under such transition relief.

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ARTICLE V

DEATH BENEFITS

5.1Death Benefit Prior to Retirement. In the event that a Participant who has attained age 55 and completed five years of Credited Service dies while employed by a Company but has not Retired, the Participant’s Beneficiary shall receive a benefit under the Plan equal to fifty percent (50%) of the amount the Participant would have received under Section 4.1 of the Plan if he had Retired on the date of his death. Such death benefit shall be paid in the form of a single lump sum payment as soon as administratively practical following the Participant’s death (and in any event within ninety (90) days thereafter), and shall be calculated by the actuary for the Pension Plan applying actuarial assumptions used under the Pension Plan (as modified by Section 4.1 with respect to a Participant’s Retirement on or after July 1, 2023). In the event that such ninety (90) day period spans two calendar years, the death benefit payment shall be made within such ninety (90) day period in the second calendar year.

5.2Death Benefit Following Retirement But Prior to Benefit Payment. In the event that a Participant who has Retired dies prior to the payment of the Participant’s benefit under Section 4.2 of the Plan, the Participant’s Beneficiary shall receive the benefit that the Participant would have received under Sections 4.1 and 4.2 of the Plan. Such death benefit shall be paid in the form of a single lump sum payment as soon as administratively practical following the Participant’s death (and in any event within ninety (90) days thereafter). In the event that such ninety (90) days period spans two calendar years, the death benefit payment shall be made within such ninety (90) day period in the second calendar year.

ARTICLE VI

PROVISIONS RELATING TO ALL BENEFITS

6.1Effect of This Article. The provisions of this Article will control over all other provisions of this Plan.

6.2No Duplication of Benefits. It is not intended that there be any duplication of benefits. Therefore, in no event will a Participant and such Participant’s Surviving Spouse qualify for separate benefit payments under Articles IV and V.

6.3Forfeiture Upon Termination for Cause. If the Committee finds, after full consideration of the facts presented on behalf of both the Company and a Participant, that the Participant was discharged by a Company for fraud, embezzlement, theft, commission of a felony, proven dishonesty in the course of his employment by a Company which damaged the Company, or for disclosing trade secrets of a Company, the entire Accrued Benefit of the Participant will be forfeited even though it may have been previously vested, and the Participant and any Surviving Spouse shall have no right to a benefit hereunder. The decision of the Committee as to the cause of a former Participant’s discharge and the damage done to the Company will be final and binding on all parties. No decision of the Committee will affect the finality of the discharge of the Participant by the Company in any manner. Notwithstanding the foregoing, no forfeiture should be permitted pursuant to this Section following Plan termination or a Change in Control unless pursuant to arbitration consistent with the provisions of Section 11.3.

6.4Forfeiture for Competition. If the Committee finds, after full consideration of the facts presented on behalf of the Company and a Participant, that the Participant, at any time within two years following his termination of employment from all Companies and without written consent of a Company, directly or indirectly owns, operates, manages, controls or participates in the ownership (other than

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through ownership of less than 5% of the voting equity securities or other interests of a publicly traded entity), management, operation or control of or is employed by, or is paid as a consultant or other independent contractor by a business which competes with the Company, and if the Participant continues to be so engaged sixty (60) days after written notice has been given to him: (a) the Participant shall, upon the demand of the Committee, repay to Valero the full amount of the payment previously made to the Participant hereunder; or (b) if the Participant has not yet received the payment of his vested Accrued Benefit, the Participant and any Surviving Spouse shall forfeit any rights under this Plan and shall not be entitled to receive any benefit hereunder.

6.5Expenses Incurred in Enforcing the Plan. Valero will pay a Participant for all reasonable legal fees and expenses incurred by him in successfully contesting or disputing his termination of employment by a Company or in successfully seeking to obtain or enforce any benefit provided by this Plan if such termination occurs or a benefit is payable following a Change in Control. Any such fees and expenses shall be paid to the Participant as soon as reasonably practical after they are incurred by the Participant and, in any event, by no later than the end of the year following the year in which they are incurred by the Participant.

6.6No Restrictions on any Portion of Benefits Determined to be Excess Parachute Payments. Notwithstanding that any benefit received or to be received by a Participant in connection with a Change in Control, or the termination of his employment by a Company, would not be deductible, whether in whole or in part, by a Company or any affiliated company, as a result of Section 280G of the Code, the benefit payable under this Plan shall nevertheless not be reduced.

ARTICLE VII

ADMINISTRATION

7.1Committee Appointment. The members of the Human Resources and Compensation Committee of the Board of Directors shall serve as the Committee; provided, that the Board of Directors will have the sole discretion to remove any one or more Committee members and appoint one or more replacement or additional Committee members from time to time. Each Committee member will serve until his or her resignation or removal.

7.2Committee Organization and Voting. The Committee shall be organized and shall conduct its business in accordance with the bylaws of Valero, provided, however, that a member of the Committee who is also a Participant will not vote or act on any matter relating to himself or which is otherwise reasonably likely to enhance the benefits payable to such Participant hereunder.

7.3Powers of the Committee. The Committee will have the exclusive responsibility for the general administration of this Plan according to the terms and provisions of this Plan and will have all powers necessary to accomplish those purposes, including but not by way of limitation the right, power and authority:

(a)to make rules and regulations for the administration of this Plan;

(b)to construe all terms, provisions, conditions and limitations of this Plan;

(c)to correct any defect, supply any omission or reconcile any inconsistency that may appear in this Plan;

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(d)to determine all controversies relating to the administration of this Plan, including but not limited to:

(1)differences of opinion arising between a Company and a Participant except when the difference of opinion relates to the entitlement to, the amount of or the method or timing of payment of a benefit affected by a Change of Control, in which event it shall be decided only pursuant to arbitration as set forth in Section 11.3, and

(2)any question it deems advisable to determine in order to promote the uniform administration of this Plan for the benefit of all interested parties; and

(e)to delegate powers of investment and administration, as well as those clerical and recordation duties of the Committee, as it deems necessary or advisable for the proper and efficient administration of this Plan.

7.4Committee Discretion. The Committee in exercising any power or authority granted under this Plan or in making any determination under this Plan may use its sole discretion and judgment. Any decision made or any act or omission, by the Committee in good faith shall be final and binding on all parties and, except as otherwise set forth in Sections 6.4, 6.5 and 7.3(d)(1), shall not be subject to de novo review.

7.5Reliance Upon Information. The Committee will not be liable for any decision or action taken in good faith in connection with the administration of this Plan. Without limiting the generality of the foregoing, any decision or action taken by the Committee when it relies upon information supplied it by any officer of the Company, the Company’s legal counsel, the Company’s actuary, the Company’s independent accountants or other advisors in connection with the administration of this Plan will be deemed to have been taken in good faith.

7.6Approval of Benefit Modifications. The Chief Executive Officer (“CEO”) of Valero shall have authority to approve enhancements to the Credited Service, or other modifications to the benefits, of any Participant or prospective Participant under the Plan in connection with the employment, retention, retirement or termination of a Participant; provided however, that any such modification made with respect to the benefits of the CEO or President of Valero shall be recommended to and approved by the Board of Directors.

ARTICLE VIII

ADOPTION BY SUBSIDIARIES

8.1Procedure for and Status After Adoption. Any Subsidiary of Valero at the date of adoption of this Plan, and any entity becoming a Subsidiary of Valero after such date of adoption, may adopt this Plan by appropriate action of its board of directors or other governing body. Any power reserved under this Plan to the Company may be exercised separately by each such Subsidiary adopting the Plan; provided, however, that (i) powers reserved under this Plan to the Board of Directors or the Committee shall be exercised only by the Board of Directors of Valero or Committee thereof and (ii) powers reserved under this Plan to Valero shall be exercised only by Valero. Each Subsidiary adopting the Plan delegates to Valero exclusive administrative responsibility for the Plan. However, Valero may allocate the costs of Plan benefits among the Companies in any reasonable manner such that each Company shall bear the costs of participation by those Participants who are or were employees of such Company. Each Subsidiary, by adopting this Plan, and in consideration of the like undertakings of the

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other adopting Subsidiaries, agrees that the obligations and liabilities of the Company(ies) for the payment of benefits to any Participants (and to any person claiming through a Participant) hereunder shall be the joint and several obligation of each Subsidiary adopting the Plan, not solely of the Company employing or previously employing a Participant. Accordingly, each such adopting Subsidiary agrees that, to the extent permitted under-Section 10.4, each Participant (and any person claiming through a Participant) shall have recourse and a right of action to enforce benefits payable under this Plan against any and all Companies contemporaneously participating in the Plan during the period of such Participant’s Credited Service.

8.2Termination of Participation By Adopting Subsidiary. Any Subsidiary adopting this Plan may, by appropriate action of its board of directors or other governing body, terminate its participation in this Plan. The Committee may, in its discretion, also terminate a Subsidiary’s participation in this Plan at any time. The termination of the participation in this Plan by a Subsidiary will not, however, affect the rights of any Participant who is working or has worked for the Subsidiary as to benefits previously vested under Article III of this Plan.

8.3Spinoff Plan. Notwithstanding the foregoing, effective as of July 1, 2006, all benefits accrued under this Plan with respect to Participants employed by NuStar were spun off into the NuStar SERP. In this regard, effective as of July 1, 2006, NuStar established what is now known as the NuStar Pension Plan, a defined benefit plan qualified under Code section 401(a), which will provide benefits to eligible employees of NuStar with respect to service earned by eligible employees of NuStar and its participating affiliated companies from and after July 1, 2006. It is the intent of the Company that the NuStar SERP assumed the current liabilities of this Plan with respect to such NuStar Participants, and shall provide a single supplemental benefit to such employees that is based upon the benefits such Participant receives under the Valero Pension Plan, as well as the NuStar Pension Plan. From and after July 1, 2006, employees of NuStar who had been participating in this Plan ceased participating in this Plan. This Plan shall have no liability of any kind to such individuals. Additionally, from and after July 1, 2006, NuStar ceased being a participating Subsidiary under this Plan.

ARTICLE IX

AMENDMENT AND/OR TERMINATION

9.1Amendment or Termination of the Plan. The Committee may amend or terminate this Plan at any time by an instrument in writing without the consent of any Company.

9.2No Retroactive Effect on Annual Benefits. No amendment will affect the rights of any Participant to the Retirement benefit provided in Article IV previously accrued by the Participant or will change a Participant’s rights under any provision relating to a Change of Control after a Change in Control has occurred without his consent. However, the Board of Directors retains the right at any time to change in any manner the Retirement benefit provided in Article IV but only as to accruals after the date of the amendment.

9.3Effect of Termination. If this Plan is terminated, the accrued benefit of all Participants shall immediately become fully vested, and the benefit of each Participant (determined as of the date of the Plan termination and calculated in the manner provided in this Plan) shall, except as provided in Section 9.4, be paid at the time it would otherwise be paid under the terms of the Plan.

9.4Effect of Change in Control. In the event of a Change in Control, the accrued benefit of all Participants in the Plan shall immediately become fully vested. Additionally, the Committee may,

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within the period beginning thirty (30) days prior to the effective date of the Change in Control, and ending twelve (12) months after the effective date of the Change in Control, make an irrevocable decision to terminate the Plan (and all deferred compensation plans maintained by Valero which must be aggregated with the Plan under Code section 409A) and distribute all benefits to Participants. In the event of such termination following a Change in Control, the accrued benefits of each Participant (determined as of the date of Plan termination and calculated in the manner provided for in this Plan) shall be distributed in the form of a lump sum payment within twelve (12) months following the termination of this Plan. In the absence of such Plan termination, a Change in Control shall not alter the time and manner of the payment of benefits hereunder, and all benefits shall be paid at the time and in the manner as they would otherwise be paid in accordance with the provisions of this Plan.

ARTICLE X

FUNDING

10.1Payments from Trust. As set forth in Section 8.1, the Companies are jointly and severally liable to pay the benefits due under this Plan; however should they fail to do so when a benefit is due, the Participant, Surviving Spouse or other person entitled to payment of a benefit hereunder may apply for payment of such benefit to the Trustee of the Trust, which shall pay such benefit in accordance with the provisions of the Trust Agreement. In any event, if the Trust fails to pay for any reason, the Companies shall remain jointly and severally liable for the payment of all benefits provided by this Plan.

10.2Plan May Be Funded Through Life Insurance. It is specifically recognized that Valero may, but is not required to, purchase life insurance so as to accumulate assets sufficient to fund obligations under this Plan and that Valero may, but is not required to contribute any policy or policies it may purchase and any amount it finds desirable to the Trust or any other trust established to accumulate assets to fund obligations under this Plan. However, under all circumstances, the Participants will have no rights in or to any such policies.

10.3Rabbi Trust. Valero may, but shall not be required to, make such contributions to the Trust for the payment of benefits hereunder as Valero may determine in its sole discretion. In the event that assets in the Trust are insufficient to pay a benefit, or in the event that Valero determines not to use Trust assets to pay a benefit, such benefit shall be paid by the Companies, as set forth in Section 10.2 above.

10.4Ownership of Assets; Release. All policies of insurance or other assets contributed to the Trust (or to any other trust established for the purpose of funding benefits hereunder) pursuant to Sections 10.2, 10.3 or otherwise shall be contributed by Valero, and all such policies or other assets shall be owned solely by Valero immediately prior to such contribution. No Company, other than Valero, shall contribute policies or assets to the Trust. As an internal accounting matter, as between Valero and the other Companies, Valero may charge or allocate all or any part of such contributions to other Companies in any reasonable manner determined by Valero in accordance with generally accepted accounting principles, and may record the amounts so allocated as obligations owing among Valero and such Companies. Valero may also allocate or distribute assets received by it from the Trust pursuant to Section 10.5 hereof to other Companies in any reasonable manner determined by Valero in accordance with generally accepted accounting principles. However, notwithstanding the fact that a Company may be deemed to have a claim against Valero with respect to such contributions or distributions, no Company (other than Valero) shall at any time own or be deemed to own or have any contingent, reversionary or other beneficial interest in any portion of the policies and other assets held in the Trust or any claim, against the Trustee or otherwise, with respect thereto. Each Company (other than Valero), by its adoption

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of this Plan, and in consideration of the mutual covenants herein contained, for itself, its successors, assigns, representatives, administrators, trustees and other persons claiming by, through or under such Company, hereby irrevocably and forever releases and relinquishes (i) any and all rights, claims and interests (beneficial, reversionary, actual, contingent or otherwise), known or unknown, asserted or unasserted, which it has or may have, or may hereafter have, in or with respect to the Trust, the Trust Fund (as such term is defined in the Trust Agreement) and the policies and assets now or hereafter from time to time contributed or contributable thereto, held therein or thereby, or distributable therefrom or thereby, and (ii) any claim, demand, action or cause of action whatsoever which it has or may have, or may hereafter have, against the Trustee, its successors or assigns, with respect thereto.

10.5Reversion of Excess Assets. Assets held pursuant to the Trust shall not be loaned to any Company. However, Valero may, at any time, request the actuary who last performed the annual actuarial valuation of the Valero Pension Plan to determine the Actuarial Equivalent of the Accrued Benefits, assuming the Accrued Benefits to be fully vested (whether they are or not), as of the end of the previous Plan Year. If the fair market value of the assets held in the Trust, as determined by the actuary, exceeds the Actuarial Equivalent of the Accrued Benefits of all such Participants by not less than 25%, then Valero may direct the Trustee to return to Valero that part of the assets which is in excess of 125% of the Actuarial Equivalent of the Accrued Benefits. Additionally, Valero may direct the Trustee to return to Valero any assets of the Trust in order to comply with any legal requirement or to avoid any unintended tax or other adverse consequences as determined by the Committee. Following the termination of the Plan and the final distribution of all Accrued Benefits and the full satisfaction of all obligations of the Plan and the Trust, any remaining assets in the Trust shall revert to Valero.

10.6Repurchase of Valero Stock. In order to facilitate diversification of Plan assets, Valero shall be entitled, from time to time, upon notice to the Trustee, to repurchase shares of Valero equity securities held in the Trust. Such repurchases shall be made for cash or in exchange for other assets having a fair market value, as determined by the Trustee, equal to the fair market value of such Valero securities at such date of purchase.

10.7Participants Must Rely Only on General Credit of the Companies. The provisions of Sections 10.2 and 10.3 notwithstanding, it is specifically recognized by the Companies and the Participants that this Plan is an unsecured corporate commitment and that each Participant (and any Surviving Spouse or other person claiming through a Participant) must rely upon the general credit of the Companies for the fulfillment of their obligations under this Plan. Nothing contained in this Plan or in the Trust Agreement will constitute a representation, covenant or guarantee by any Company that the policies and assets transferred to the Trust (or any other trust established for the purpose of funding benefits hereunder) or the general assets of such Company (or Companies) will be sufficient to pay any or all benefits under this Plan. Neither this Plan nor the Trust creates any secured or priority position, preferential right, lien, claim, encumbrance, right, title or other interest of any kind in any Participant in any policy or other asset held by any Company, contributed to the Trust (or any other trust established for the purpose of funding benefits hereunder) or otherwise designated to be used for payment of any obligations created in this Plan. No policy or other specific asset of any Company has otherwise been or will be set aside, or has been or will be pledged in any way for the performance of obligations under this Plan, which would remove the policy or asset from being subject to the claims of the general creditors of the respective Company. The Trust Agreement (and any other agreement entered into to fund obligations under this Plan) shall specify that, with respect to their benefits under this Plan, the Participants (and any Surviving Spouse or other person claiming through a Participant) are only unsecured general creditors.

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ARTICLE XI

MISCELLANEOUS

11.1Responsibility for Distributions and Withholding of Taxes. Valero shall calculate the amount of any distribution payable to a Participant hereunder, and the amounts of any deductions required with respect to federal, state or local tax withholding, and shall withhold or cause the same to be withheld. However, any and all taxes payable with respect to any distribution or benefit hereunder shall be the sole responsibility of the Participant, not of Valero or any Company, whether or not Valero or any Company shall have withheld or collected from the Participant any sums required to be so withheld or collected in respect thereof and whether or not any sums so withheld or collected shall be sufficient to provide for any such taxes. Without limitation of the foregoing, and except as may otherwise be provided in any separate employment, severance or other agreement between the Participant and any Company, the individual Participant or Surviving Spouse, as the case may be, shall be solely responsible for payment of any excise, income or other tax imposed (i) upon any payment hereunder which may be deemed to constitute an “excess parachute payment” pursuant to Section 4999 of the Code, or (ii) based upon any theory of “constructive receipt” of any lump-sum or other amount hereunder.

11.2Limitation of Rights. Nothing in this Plan will be construed:

(a)to give a Participant or other person claiming through him any right with respect to any benefit except in accordance with the terms of this Plan or an agreement modifying rights under this Plan;

(b)to limit m any way the right of the Company to terminate a Participant’s employment with the Company at any time;

(c)to evidence any agreement or understanding, expressed or implied, that the Company will employ a Participant in any particular position or for any particular remuneration; or

(d)to give a Participant or any other person claiming through him any interest or right under this Plan other than that of any unsecured general creditor.

11.3Arbitration of Disputes.

A.It is agreed that any and all disputes, claims, (whether tort, contract, statutory or otherwise) and/or controversies which relate, in any manner to the Plan shall be submitted to final and binding arbitration. The claims covered by this agreement to arbitrate include, but are not limited to, those which relate to the following:

a.The application and interpretation of the Plan.

b.Forfeitures pursuant to Section 6.5 or 6.6 of the Plan.

c.Eligibility for and the calculation of benefits from the Plan.

d.That in interpreting or applying the provisions of the Plan, the Company has treated the Participant unfairly or discriminated against the Participant in connection with a work-related injury, disease or death, or claim for benefits under the Plan in violation of the Texas

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Commission on Human Rights Act, Title VII of the Civil Rights Act of 1964, as amended, The Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as amended, the Rehabilitation Act of 1973, as amended, or any other provision forbidding discrimination in employment on any basis.

e.That Valero or the Committee in interpreting or applying the provisions of the Plan, breached any contract or covenant (express or implied), committed a tort or act of discrimination (including, but not limited to race, sex, religion, national origin, age, marital status, or medical condition, handicap or disability), or violated any federal, state or other governmental law, statute, regulation, or ordinance.

f.That a Company has discharged or in any manner discriminated against the Participant because the Participant in good faith filed a claim, hired a lawyer to represent him or her in a claim, instituted, or caused to be instituted, in good faith, any proceeding under the Plan or the TWCA, or has testified in any such proceeding.

B.This Arbitration provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-14. Except to the extent herein modified, all arbitration proceedings shall be conducted in accordance with the Rules. The parties hereto agree that, pursuant to Section 9 of the Federal Arbitration Act, a judgment of the United States District Court for the Western District of Texas, San Antonio Division, or of any other court of competent jurisdiction, may be entered upon an award made pursuant to arbitration.

C.The neutral arbitrator (“Arbitrator”) shall be appointed in the manner prescribed in Rule 13 of the Rules. The decision of the Arbitrator selected thereunder shall be final and binding on all parties.

D.Except as may be modified by the Arbitrator for good cause shown, the following procedures shall be followed in addition to those set forth within the Rules themselves. (1) At least twenty (20) days before the arbitration, the parties must exchange lists of witnesses, including any experts, and copies of all exhibits intended to be used at the arbitration. Except for good cause, the Arbitrator may refuse to allow into evidence the testimony of any witness not timely disclosed. In addition, except for good cause, the Arbitrator may exclude from evidence any exhibit not previously tendered to the opposing party in a timely fashion. (2) Each party may take the deposition of one individual and any or all expert witnesses designated by another party. Additional discovery, including but not limited to interrogatories and requests for production of documents, medical or psychological examinations, may be had, upon a showing of substantial need, where the Arbitrator so orders. (3) The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of Texas, or federal law or both as applicable to the claim(s) asserted. (4) The Arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. (5) Rule 31 of the Rules is amended to allow for the use of sworn depositions taken in conformity with the Federal Rules of Civil Procedure. (6) The results of the arbitration shall be confidential and shall not be publicly released or reported by the Arbitrator or by either party.

E.The Participant (or other person claiming through him) shall pay one half of the fees and cost of the Arbitrator. Funds or other appropriate security shall be posted by each party for its share of the Arbitrator’s fee, in an amount and manner determined by the Arbitrator, ten (10) days before the first day of hearing. Each party shall pay for its own cost and attorney’s fees, if any. However, if any party

15

prevails on a statutory claim which affords the prevailing party attorney’s fees, or if there is a written agreement providing for fees, the Arbitrator may award reasonable fees to the prevailing party.

F.This agreement to arbitrate shall survive the termination of Participant’s employment. It can only be revoked or modified by a writing signed by the parties which specifically states an intent to revoke or modify the provisions of this Section 11.3.

G.Should one or more provisions of this Section 11.3 be rendered or declared invalid by reason of any existing or subsequently enacted legislation, or by a decree of a court of competent jurisdiction, such invalidation of such provision or provisions hereof shall not affect the remaining portions of this agreement to arbitrate.

H.Any arbitration proceeding commenced under this Section 11.3 shall, to the extent practicable, be consolidated with any arbitration proceeding relating to the same or similar facts and circumstances between the Trustee and Valero pursuant to the Trust Agreement.

11.4Distributions to Incompetents. Should a Participant or a Surviving Spouse be incompetent at the time any payment is due hereunder, as determined by the Committee in its sole discretion, Valero is authorized to make such payment to the guardian or conservator of the incompetent Participant or Surviving Spouse or directly to the Participant or Surviving Spouse or to apply those funds for the benefit of the incompetent Participant or Surviving Spouse in any manner the Committee determines in its sole discretion.

11.5Nonalienation of Benefits. No right or benefit provided in this Plan will be transferable by the Participant, except upon his death to a Surviving Spouse as provided in this Plan. No right or benefit under this Plan will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same will be void. No right or benefit under this Plan will in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If any Participant or any Surviving Spouse becomes bankrupt or attempts to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this Plan, that right or benefit will, in the discretion of the Committee, cease. In that event, the Committee may have Valero hold or apply the right or benefit or any part of it to the benefit of the Participant or Surviving Spouse, his or her spouse, children or other dependents or any of them in any manner and in any proportion the Committee believes to be proper in its sole and absolute discretion, but is not required to do so. Notwithstanding the foregoing, this provision shall not affect the right of the Committee or its delegate for administration (upon the determination that a judgment, decree or order relating to child support, alimony payments or marital property rights of the spouse, former spouse, child or other dependent of the Participant is a “Qualified Domestic Relations Order” within the meaning of Code section 414(p)), to distribute or establish a separate subaccount of all or any portion of a Participant’s benefits under the Plan to or for the benefit of the beneficiary of the Qualified Domestic Relations Order in a manner determined by the Committee, or its delegate, and permitted under the Plan.

11.6Severability. If any term, provision, covenant or condition of this Plan is held to be invalid, void or otherwise unenforceable, the rest of this Plan will remain in full force and effect and will in no way be affected, impaired or invalidated.

11.7Notice. Any notice or filing required or permitted to be given to a Company, the Committee or a Participant will be sufficient if in writing and hand delivered or sent by U.S. mail to the principal office of Valero, acting on behalf of the Company or Committee, or to the residential mailing

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address of the Participant. Notice will be deemed to be given as of the date of hand delivery or if delivery is by mail, as of the date shown on the postmark.

11.8Gender and Number. If the context requires it, words of one gender when used in this Plan will include the other gender, and words used in the singular or plural will include the other.

11.9Administration and Interpretation Consistent with Code Section 409A. The Plan, as amended and restated, is intended to satisfy the requirements of Code section 409A and the rules and regulations issued thereunder, and shall be construed, interpreted and administered consistent with such intent.

11.10Governing Law. The Plan will be construed, administered and governed in all respects by the laws of the State of Texas.

11.11Effective Date. Except as otherwise provided herein, this amendment and restatement of the Plan is effective as of July 1, 2023.

IN WITNESS WHEREOF, Valero has executed this amendment and restatement of the Supplemental Executive Retirement Plan on July 25, 2023, to be effective as of July 1, 2023.

VALERO ENERGY CORPORATION

By:	/s/ Julia Reinhart
	Julia Reinhart,
	Senior Vice President and Chief Human
	Resources Officer

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EX-31.01

Exhibit 31.01

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, R. Lane Riggs, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Valero Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2023

/s/ R. Lane Riggs

R. Lane Riggs
Chief Executive Officer and President

EX-31.02

Exhibit 31.02

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Jason W. Fraser, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Valero Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2023

/s/ Jason W. Fraser

Jason W. Fraser
Executive Vice President and Chief Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Valero Energy Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ R. Lane Riggs

R. Lane Riggs

Chief Executive Officer and President

July 27, 2023

A signed original of the written statement required by Section 906 has been provided to Valero Energy Corporation and will be retained by Valero Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Valero Energy Corporation (the Company) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jason W. Fraser

Jason W. Fraser

Executive Vice President and Chief Financial Officer

July 27, 2023

A signed original of the written statement required by Section 906 has been provided to Valero Energy Corporation and will be retained by Valero Energy Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 21, 2023
Cover [Abstract]
Document type	10-Q
Document quarterly report	true
Document period end date	Jun. 30, 2023
Document transition report	false
Entity file number	001-13175
Entity registrant name	VALERO ENERGY CORP/TX
Entity incorporation, state or country code	DE
Entity tax identification number	74-1828067
Entity address, address line one	One Valero Way
Entity address, city or town	San Antonio
Entity address, state or province	TX
Entity address, postal zip code	78249
City area code	210
Local phone number	345-2000
Title of 12(b) security	Common Stock, par value $0.01 per share
Trading symbol	VLO
Security exchange name	NYSE
Entity current reporting status	Yes
Entity interactive data current	Yes
Entity filer category	Large Accelerated Filer
Entity small business	false
Entity emerging growth company	false
Entity shell company	false
Entity common stock, shares outstanding		353,132,880
Entity central index key	0001035002
Amendment flag	false
Document fiscal year focus	2023
Document fiscal period focus	Q2
Current fiscal year end date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 5,075	$ 4,862
Receivables, net	10,888	11,919
Inventories	6,961	6,752
Prepaid expenses and other	771	600
Total current assets	23,695	24,133
Property, plant, and equipment, at cost	51,125	50,576
Accumulated depreciation	(20,555)	(19,598)
Property, plant, and equipment, net	30,570	30,978
Deferred charges and other assets, net	6,402	5,871
Total assets	60,667	60,982
Current liabilities:
Current portion of debt and finance lease obligations	1,193	1,109
Accounts payable	10,825	12,728
Accrued expenses	1,117	1,215
Taxes other than income taxes payable	1,491	1,568
Income taxes payable	322	841
Total current liabilities	14,948	17,461
Debt and finance lease obligations, less current portion	10,130	10,526
Deferred income tax liabilities	5,382	5,217
Other long-term liabilities	2,213	2,310
Commitments and contingencies
Valero Energy Corporation stockholders’ equity:
Common stock, $0.01 par value; 1,200,000,000 shares authorized; 673,501,593 and 673,501,593 shares issued	7	7
Additional paid-in capital	6,889	6,863
Treasury stock, at cost; 320,378,393 and 301,372,958 common shares	(22,586)	(20,197)
Retained earnings	42,512	38,247
Accumulated other comprehensive loss	(971)	(1,359)
Total Valero Energy Corporation stockholders’ equity	25,851	23,561
Noncontrolling interests	2,143	1,907
Total equity	27,994	25,468
Total liabilities and equity	$ 60,667	$ 60,982

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Valero Energy Corporation stockholders’ equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,200,000,000	1,200,000,000
Common stock, shares issued	673,501,593	673,501,593
Treasury stock, common shares	320,378,393	301,372,958

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Consolidated Statements of Income (unaudited) - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues	[1]	$ 34,509	$ 51,641	$ 70,948	$ 90,183
Cost of sales:
Cost of materials and other	[2]	29,430	42,946	59,435	77,895
Operating expenses (excluding depreciation and amortization expense reflected below)		1,440	1,626	2,917	3,005
Depreciation and amortization expense		658	590	1,308	1,185
Total cost of sales		31,528	45,162	63,660	82,085
Other operating expenses		2	15	12	34
General and administrative expenses (excluding depreciation and amortization expense reflected below)		209	233	453	438
Depreciation and amortization expense		11	12	21	23
Operating income		2,759	6,219	6,802	7,603
Other income, net		106	33	235	13
Interest and debt expense, net of capitalized interest		(148)	(142)	(294)	(287)
Income before income tax expense		2,717	6,110	6,743	7,329
Income tax expense		595	1,342	1,475	1,594
Net income		2,122	4,768	5,268	5,735
Less: Net income attributable to noncontrolling interests		178	75	257	137
Net income attributable to Valero Energy Corporation stockholders		$ 1,944	$ 4,693	$ 5,011	$ 5,598
Earnings per common share (in dollars per share)		$ 5.41	$ 11.58	$ 13.75	$ 13.75
Weighted-average common shares outstanding (in shares)		358	404	363	406
Earnings per common share – assuming dilution (in dollars per share)		$ 5.40	$ 11.57	$ 13.74	$ 13.74
Weighted-average common shares outstanding – assuming dilution (in shares)		358	404	363	406
Supplemental information:
Includes excise taxes on sales by certain of our foreign operations		$ 1,449	$ 1,254	$ 2,871	$ 2,677

[1] Includes excise taxes on sales by certain of our foreign operations of $1,449 million and $1,254 million for the three months ended June 30, 2023 and 2022, respectively, and $2,871 million and $2,677 million for the six months ended June 30, 2023 and 2022, respectively.

[2] Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net income	$ 2,122	$ 4,768	$ 5,268	$ 5,735
Other comprehensive income (loss):
Foreign currency translation adjustment	257	(442)	391	(429)
Net gain (loss) on pension and other postretirement benefits	(6)	9	(13)	17
Net gain (loss) on cash flow hedges	(47)	50	10	5
Other comprehensive income (loss) before income tax expense (benefit)	204	(383)	388	(407)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(6)	7	(5)	7
Other comprehensive income (loss)	210	(390)	393	(414)
Comprehensive income	2,332	4,378	5,661	5,321
Less: Comprehensive income attributable to noncontrolling interests	154	101	262	140
Comprehensive income attributable to Valero Energy Corporation stockholders	$ 2,178	$ 4,277	$ 5,399	$ 5,181

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Consolidated Statements of Equity (unaudited) - USD ($) $ in Millions	Total	Valero Energy Corporation Stockholders' Equity [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Non-controlling Interests [Member]
Balance as of beginning of period at Dec. 31, 2021	$ 19,817	$ 18,430	$ 7	$ 6,827	$ (15,677)	$ 28,281	$ (1,008)	$ 1,387
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	5,735	5,598				5,598		137
Dividends on common stock	(800)	(800)				(800)
Stock-based compensation expense	47	47		47
Transactions in connection with stock-based compensation plans	3	3		(29)	32
Purchases of common stock for treasury	(1,892)	(1,892)			(1,892)
Contributions from noncontrolling interests	240							240
Distributions to noncontrolling interests	(3)							(3)
Other comprehensive income (loss)	(414)	(417)					(417)	3
Balance as of end of period at Jun. 30, 2022	22,733	20,969	7	6,845	(17,537)	33,079	(1,425)	1,764
Balance as of beginning of period at Mar. 31, 2022	20,410	18,821	7	6,832	(15,794)	28,785	(1,009)	1,589
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	4,768	4,693				4,693		75
Dividends on common stock	(399)	(399)				(399)
Stock-based compensation expense	15	15		15
Transactions in connection with stock-based compensation plans	3	3		(2)	5
Purchases of common stock for treasury	(1,748)	(1,748)			(1,748)
Contributions from noncontrolling interests	75							75
Distributions to noncontrolling interests	(1)							(1)
Other comprehensive income (loss)	(390)	(416)					(416)	26
Balance as of end of period at Jun. 30, 2022	22,733	20,969	7	6,845	(17,537)	33,079	(1,425)	1,764
Balance as of beginning of period at Dec. 31, 2022	25,468	23,561	7	6,863	(20,197)	38,247	(1,359)	1,907
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	5,268	5,011				5,011		257
Dividends on common stock	(746)	(746)				(746)
Stock-based compensation expense	53	53		53
Transactions in connection with stock-based compensation plans	1	1		(27)	28
Purchases of common stock for treasury	(2,417)	(2,417)			(2,417)
Contributions from noncontrolling interests	75							75
Distributions to noncontrolling interests	(101)							(101)
Other comprehensive income (loss)	393	388					388	5
Balance as of end of period at Jun. 30, 2023	27,994	25,851	7	6,889	(22,586)	42,512	(971)	2,143
Balance as of beginning of period at Mar. 31, 2023	27,067	24,977	7	6,877	(21,637)	40,935	(1,205)	2,090
Increase (Decrease) in Stockholders' Equity Roll Forward
Net income	2,122	1,944				1,944		178
Dividends on common stock	(367)	(367)				(367)
Stock-based compensation expense	14	14		14
Transactions in connection with stock-based compensation plans	0			(2)	2
Purchases of common stock for treasury	(951)	(951)			(951)
Distributions to noncontrolling interests	(101)							(101)
Other comprehensive income (loss)	210	234					234	(24)
Balance as of end of period at Jun. 30, 2023	$ 27,994	$ 25,851	$ 7	$ 6,889	$ (22,586)	$ 42,512	$ (971)	$ 2,143

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Consolidated Statements of Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Common stock dividends:
Dividends on common stock (in dollars per share)	$ 1.02	$ 0.98	$ 2.04	$ 1.96

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Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 5,268	$ 5,735
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	1,329	1,208
Loss (gain) on early retirement of debt, net	(11)	50
Deferred income tax expense (benefit)	159	(333)
Changes in current assets and current liabilities	(1,728)	(128)
Changes in deferred charges and credits and other operating activities, net	(335)	(99)
Net cash provided by operating activities	4,682	6,433
Cash flows from investing activities:
Purchases of available-for-sale (AFS) debt securities	(354)	0
Proceeds from sales and maturities of AFS debt securities	251	0
Proceeds from sale of assets	0	32
Investments in nonconsolidated joint ventures	0	(1)
Other investing activities, net	7	4
Net cash used in investing activities	(1,078)	(1,460)
Cash flows from financing activities:
Premiums paid on early retirement of debt	(5)	(48)
Purchases of common stock for treasury	(2,393)	(1,892)
Common stock dividend payments	(746)	(800)
Contributions from noncontrolling interests	75	240
Distributions to noncontrolling interests	(101)	(3)
Other financing activities, net	(1)	(5)
Net cash used in financing activities	(3,520)	(3,642)
Effect of foreign exchange rate changes on cash	129	(61)
Net increase in cash and cash equivalents	213	1,270
Cash and cash equivalents at beginning of period	4,862	4,122
Cash and cash equivalents at end of period	5,075	5,392
Excluding Variable Interest Entities (VIEs) [Member]
Cash flows from investing activities:
Capital expenditures	(311)	(324)
Deferred turnaround and catalyst cost expenditures	(508)	(681)
Cash flows from financing activities:
Proceeds from debt issuances and borrowings	1,450	1,439
Repayments of debt and finance lease obligations	(1,726)	(2,580)
Diamond Green Diesel Holdings LLC (DGD) [Member]
Cash flows from investing activities:
Capital expenditures	(122)	(458)
Deferred turnaround and catalyst cost expenditures	(39)	(13)
Cash flows from financing activities:
Proceeds from debt issuances and borrowings	300	359
Repayments of debt and finance lease obligations	(386)	(365)
Other VIEs [Member]
Cash flows from investing activities:
Capital expenditures	(2)	(19)
Cash flows from financing activities:
Proceeds from borrowings of other VIEs	54	46
Repayments of debt and finance lease obligations	$ (41)	$ (33)

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Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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 have been 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 periods presented. All such adjustments are of a normal recurring nature unless disclosed otherwise. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. 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, 2022.

The balance sheet as of December 31, 2022 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, 2022.

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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Uncertainty

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

UNCERTAINTY

2.    UNCERTAINTY

In September 2022, California adopted Senate Bill No. 1322 (SB 1322), which requires refineries in California to report monthly on the volume and cost of the crude oil they buy, the quantity and price of the wholesale gasoline they sell, and the gross gasoline margin per barrel, among other information. The provisions of SB 1322 were effective January 2023, and we began the required monthly reporting for our two California refineries at that time.

In March 2023, California adopted Senate Bill No. 2 (such statute, together with any regulations contemplated or issued thereunder, SBx 1-2), which, among other things, (i) authorizes the establishment of a maximum gross gasoline refining margin (max margin) and the imposition of a financial penalty for profits above a max margin, (ii) significantly expands the reporting obligations under SB 1322 and the

Petroleum Industry Information Reporting Act of 1980, which include reporting requirements to the California Energy Commission (CEC) for all participants in the petroleum industry supply chain in California (e.g., refiners, marketers, importers, transporters, terminals, producers, renewables producers, pipelines, and ports), (iii) creates the Division of Petroleum Market Oversight within the CEC to analyze the data provided under SBx 1-2, and (iv) authorizes the CEC to regulate the timing and other aspects of refinery turnaround and maintenance activities in certain instances. The provisions of SBx 1-2 became effective June 26, 2023. The CEC has not yet undertaken rulemaking with respect to SBx 1-2, including the establishment of any max margin, the imposition of a financial penalty, or restrictions on turnaround and maintenance activities, and it is uncertain when or whether any such rulemaking will occur. SBx 1-2 imposes increased and substantial reporting requirements, which include daily, weekly, monthly, and annual reporting of detailed operational and financial data on all aspects of our operations in California, much of it at the transaction level. The operational data includes our plans for turnaround and maintenance activities at our two California refineries and the manner in which we expect to address the potential impacts on feedstock and product inventories in California as a result of such turnaround and maintenance activities.

We continue to review and analyze the provisions of SBx 1-2 and the possible impacts to our refining and marketing operations in California. While the CEC has not yet established a max margin, imposed a financial penalty for profits above a max margin, or imposed restrictions on turnaround and maintenance activities, the potential implementation of a financial penalty or any restrictions or delays on our ability to undertake turnaround or maintenance activities creates uncertainty due to the potential adverse effects on us. Any adverse effects on our operations or financial performance in California could indicate that the carrying value of our assets in California is not recoverable, which would result in an impairment loss that could be material. In addition, if the circumstances that trigger an impairment loss result in a reduction in the estimated useful lives of the assets, we may be required to recognize an asset retirement obligation that could be material. Other jurisdictions are contemplating similarly focused legislation or actions.

The ultimate timing and impacts of SBx 1-2 and any other similarly focused legislation or actions are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, legal challenges, and potential changes in law, regulation, or policy, and it is not currently possible to predict the ultimate effects of these matters and developments on us.

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Inventories

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

INVENTORIES

3.    INVENTORIES

Inventories consisted of the following (in millions):

	June 30, 2023		December 31, 2022
Refinery feedstocks	$	1,980	$	1,949
Refined petroleum products and blendstocks	3,773		3,579
Renewable diesel feedstocks and products	585		583
Ethanol feedstocks and products	293		328
Materials and supplies	330		313
Inventories	$	6,961	$	6,752

As of June 30, 2023 and December 31, 2022, the replacement cost (market value) of last-in, first-out (LIFO) inventories exceeded their LIFO carrying amounts by $5.1 billion and $6.3 billion, respectively. Our non-LIFO inventories accounted for $1.0 billion and $1.6 billion of our total inventories as of June 30, 2023 and December 31, 2022, respectively.

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Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT

4.    DEBT

Public Debt

In February 2023, we used cash on hand to purchase and retire a portion of the following notes (in millions):

Debt Purchased and Retired	Principal Amount
6.625% Senior Notes due 2037	$	62
3.650% Senior Notes due 2051	26
4.000% Senior Notes due 2052	45
Various other Valero and Valero Energy Partners (VLP) Senior Notes	66
Total	$	199

In June 2022, we reduced our debt through the acquisition of the $300 million of 4.00 percent Gulf Opportunity Zone Revenue Bonds Series 2010 that are due December 1, 2040, but were subject to mandatory tender on June 1, 2022. We have the option to effectuate a remarketing of these bonds.

In February 2022, we issued $650 million of 4.000 percent Senior Notes due June 1, 2052. Proceeds from this debt issuance totaled $639 million before deducting the underwriting discount and other debt issuance costs. The proceeds and cash on hand were used to purchase and retire a portion of the following notes in connection with cash tender offers that we publicly announced and completed in February 2022 (in millions):

Debt Purchased and Retired	Principal Amount
3.65% Senior Notes due 2025	$	72
2.850% Senior Notes due 2025	507
4.375% VLP Senior Notes due 2026	168
3.400% Senior Notes due 2026	653
Total	$	1,400

Credit Facilities

We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):

				June 30, 2023
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued (a)		Availability
Committed facilities:
Valero Revolver	$	4,000	November 2027	$	—	$	6	$	3,994
Canadian Revolver	C$	150	November 2023	C$	—	C$	5	C$	145
Accounts receivable sales facility (b)	$	1,300	July 2023	$	—	n/a		$	1,300
Committed facilities of VIEs (c):
DGD Revolver (d)	$	400	June 2026	$	50	$	58	$	292
DGD Loan Agreement (e)	$	100	June 2026	$	—	n/a		$	100
IEnova Revolver (f)	$	830	February 2028	$	733	n/a		$	97
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	70	n/a

________________________

(a)Letters of credit issued as of June 30, 2023 expire at various times in 2023 through 2024.

(b)In July 2023, we extended the maturity date of this facility to July 2024.

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

(d)In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026 and (ii) transition the benchmark reference interest rate previously based on the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR). The variable interest rate on the DGD Revolver was 6.980 percent and 5.880 percent as of June 30, 2023 and December 31, 2022, respectively.

(e)The amounts shown for this facility 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. In April 2023, DGD extended the maturity date of this facility to June 2023. In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026, (ii) increase each member’s commitment from $25 million to $100 million, resulting in an increase in aggregate commitments from $50 million to $200 million, and (iii) transition the benchmark reference interest rate previously based on the LIBOR to Term SOFR. The variable interest rate on the DGD Loan Agreement was 6.672 percent as of December 31, 2022.

(f)Both parties to this facility have agreed to use a SOFR as the interest rate applied to outstanding borrowings. The variable interest rate on the IEnova Revolver was 8.740 percent and 7.393 percent as of June 30, 2023 and December 31, 2022, respectively.

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

	Six Months Ended June 30,
	2023		2022
Borrowings:
Accounts receivable sales facility	$	1,450	$	800
DGD Revolver	300		359
IEnova Revolver	54		46
Repayments:
Accounts receivable sales facility	(1,450)		(800)
DGD Revolver	(350)		(359)
DGD Loan Agreement	(25)		—
IEnova Revolver	(38)		(30)

Other Disclosures

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest and debt expense	$	151	$	156	$	303	$	313
Less: Capitalized interest	3		14		9		26
Interest and debt expense, net of capitalized interest	$	148	$	142	$	294	$	287

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Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

EQUITY

5.    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 below) and with respect to our employee stock-based compensation plans.

During the three and six months ended June 30, 2023, we purchased for treasury 8,421,452 shares and 19,414,793 shares, respectively. During the three and six months ended June 30, 2022, we purchased for treasury 14,211,408 shares and 15,757,281 shares, respectively. On October 26, 2022, our Board authorized us to purchase shares of our outstanding common stock for a total cost of up to $2.5 billion with no expiration date, and we completed all authorized share purchases under that program during the second quarter of 2023. On February 23, 2023, 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 2023 Program). As of June 30, 2023, we had $2.5 billion remaining available for purchase under the 2023 Program.

Common Stock Dividends

On July 20, 2023, our Board declared a quarterly cash dividend of $1.02 per common share payable on September 5, 2023 to holders of record at the close of business on August 3, 2023.

Accumulated Other Comprehensive Loss

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

	Three Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,031)	$	(188)	$	14	$	(1,205)	$	(549)	$	(437)	$	(23)	$	(1,009)
Other comprehensive income (loss) before reclassifications	257		—		12		269		(442)		1		(50)		(491)
Amounts reclassified from accumulated other comprehensive loss	—		(6)		(30)		(36)		—		4		69		73
Effect of exchange rates	—		1		—		1		—		2		—		2
Other comprehensive income (loss)	257		(5)		(18)		234		(442)		7		19		(416)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

	Six Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,168)	$	(183)	$	(8)	$	(1,359)	$	(562)	$	(441)	$	(5)	$	(1,008)
Other comprehensive income (loss) before reclassifications	394		—		49		443		(429)		(2)		(114)		(545)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		(45)		(58)		—		11		115		126
Effect of exchange rates	—		3		—		3		—		2		—		2
Other comprehensive income (loss)	394		(10)		4		388		(429)		11		1		(417)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

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Variable Interest Entities

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

6.    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 June 30, 2023, 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 (predominately animal fats, used cooking oils, and inedible distillers corn oils) into renewable diesel and renewable naphtha; and

•Central Mexico Terminals, a collective group of three subsidiaries of Infraestructura Energetica 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, 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):

	DGD		Central Mexico Terminals		Other		Total
June 30, 2023
Assets
Cash and cash equivalents	$	318	$	—	$	26	$	344
Other current assets	1,204		6		31		1,241
Property, plant, and equipment, net	3,748		672		74		4,494
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	432	$	782	$	18	$	1,232
Debt and finance lease obligations, less current portion	680		—		—		680

	DGD		Central Mexico Terminals		Other		Total
December 31, 2022
Assets
Cash and cash equivalents	$	133	$	—	$	16	$	149
Other current assets	1,106		7		32		1,145
Property, plant, and equipment, net	3,785		681		79		4,545
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	626	$	737	$	21	$	1,384
Debt and finance lease obligations, less current portion	693		—		—		693

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.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

7.    EMPLOYEE BENEFIT PLANS

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

	Pension Plans				Other Postretirement Benefit Plans
	2023		2022		2023		2022
Three months ended June 30
Service cost	$	28	$	39	$	1	$	1
Interest cost	30		21		3		2
Expected return on plan assets	(51)		(48)		—		—
Amortization of:
Net actuarial (gain) loss	(1)		13		(2)		—
Prior service credit	(4)		(5)		(1)		(1)
Net periodic benefit cost	$	2	$	20	$	1	$	2
Six months ended June 30
Service cost	$	56	$	77	$	2	$	3
Interest cost	60		42		6		4
Expected return on plan assets	(101)		(96)		—		—
Amortization of:
Net actuarial (gain) loss	(3)		26		(3)		—
Prior service credit	(9)		(9)		(2)		(2)
Net periodic benefit cost	$	3	$	40	$	3	$	5

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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Earnings Per Common Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE

8.    EARNINGS PER COMMON SHARE

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Earnings per common share:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Earnings per common share	$	5.41	$	11.58	$	13.75	$	13.75
Earnings per common share – assuming dilution:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Effect of dilutive securities	—		—		—		—
Weighted-average common shares outstanding – assuming dilution	358		404		363		406
Earnings per common share – assuming dilution	$	5.40	$	11.57	$	13.74	$	13.74

Participating securities include restricted stock and performance awards granted under our 2020 Omnibus Stock Incentive Plan (OSIP) or our 2011 OSIP. Dilutive securities include participating securities as well as outstanding stock options.

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Revenues and Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

REVENUES AND SEGMENT INFORMATION

9.    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):

	June 30, 2023		December 31, 2022
Receivables from contracts with customers, included in receivables, net	$	5,878	$	7,189
Contract liabilities, included in accrued expenses	85		129

During the six months ended June 30, 2023 and 2022, we recognized as revenue $123 million and $72 million that was included in contract liabilities as of December 31, 2022 and 2021, respectively. Revenue recognized related to contract liabilities during the three months ended June 30, 2023 and 2022 was not material.

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 June 30, 2023, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations.

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 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 represents the operations of DGD, a consolidated joint venture as discussed in Note 6, and the associated activities to market renewable diesel and renewable naphtha. The principal products manufactured by DGD and sold by this segment are renewable diesel and renewable naphtha. This segment sells some renewable diesel to the Refining segment, which is then sold to that segment’s customers.

•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 category.

The following tables reflect information about our operating income by reportable segment (in millions):

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Three months ended June 30, 2023
Revenues:
Revenues from external customers	$	31,996	$	1,296	$	1,217	$	—	$	34,509
Intersegment revenues	(3)		950		257		(1,204)		—
Total revenues	31,993		2,246		1,474		(1,204)		34,509
Cost of sales:
Cost of materials and other (a)	27,773		1,643		1,199		(1,185)		29,430
Operating expenses (excluding depreciation and amortization expense reflected below)	1,205		104		128		3		1,440
Depreciation and amortization expense	582		59		19		(2)		658
Total cost of sales	29,560		1,806		1,346		(1,184)		31,528
Other operating expenses	1		—		1		—		2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		209		209
Depreciation and amortization expense	—		—		—		11		11
Operating income by segment	$	2,432	$	440	$	127	$	(240)	$	2,759
Three months ended June 30, 2022
Revenues:
Revenues from external customers	$	49,495	$	855	$	1,291	$	—	$	51,641
Intersegment revenues	11		596		201		(808)		—
Total revenues	49,506		1,451		1,492		(808)		51,641
Cost of sales:
Cost of materials and other (a)	41,313		1,213		1,226		(806)		42,946
Operating expenses (excluding depreciation and amortization expense reflected below)	1,402		58		167		(1)		1,626
Depreciation and amortization expense	565		28		(3)		—		590
Total cost of sales	43,280		1,299		1,390		(807)		45,162
Other operating expenses	14		—		1		—		15
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		233		233
Depreciation and amortization expense	—		—		—		12		12
Operating income by segment	$	6,212	$	152	$	101	$	(246)	$	6,219

________________________

See note (a) on page 20.

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Six months ended June 30, 2023
Revenues:
Revenues from external customers	$	66,403	$	2,231	$	2,314	$	—	$	70,948
Intersegment revenues	—		1,695		480		(2,175)		—
Total revenues	66,403		3,926		2,794		(2,175)		70,948
Cost of sales:
Cost of materials and other (a)	56,283		2,974		2,330		(2,152)		59,435
Operating expenses (excluding depreciation and amortization expense reflected below)	2,466		190		258		3		2,917
Depreciation and amortization expense	1,154		117		39		(2)		1,308
Total cost of sales	59,903		3,281		2,627		(2,151)		63,660
Other operating expenses	11		—		1		—		12
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		453		453
Depreciation and amortization expense	—		—		—		21		21
Operating income by segment	$	6,489	$	645	$	166	$	(498)	$	6,802
Six months ended June 30, 2022
Revenues:
Revenues from external customers	$	86,308	$	1,450	$	2,425	$	—	$	90,183
Intersegment revenues	15		982		328		(1,325)		—
Total revenues	86,323		2,432		2,753		(1,325)		90,183
Cost of sales:
Cost of materials and other (a)	74,919		1,968		2,330		(1,322)		77,895
Operating expenses (excluding depreciation and amortization expense reflected below)	2,595		109		302		(1)		3,005
Depreciation and amortization expense	1,114		54		17		—		1,185
Total cost of sales	78,628		2,131		2,649		(1,323)		82,085
Other operating expenses	32		—		2		—		34
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		438		438
Depreciation and amortization expense	—		—		—		23		23
Operating income by segment	$	7,663	$	301	$	102	$	(463)	$	7,603

________________________

(a)Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Refining:
Gasolines and blendstocks	$	15,229	$	20,604	$	30,277	$	36,164
Distillates	13,992		24,427		30,830		41,871
Other product revenues	2,775		4,464		5,296		8,273
Total Refining revenues	31,996		49,495		66,403		86,308
Renewable Diesel:
Renewable diesel	1,249		817		2,125		1,412
Renewable naphtha	47		38		106		38
Total Renewable Diesel revenues	1,296		855		2,231		1,450
Ethanol:
Ethanol	898		979		1,661		1,854
Distillers grains	319		312		653		571
Total Ethanol revenues	1,217		1,291		2,314		2,425
Revenues	$	34,509	$	51,641	$	70,948	$	90,183

Total assets by reportable segment were as follows (in millions):

	June 30, 2023		December 31, 2022
Refining	$	47,253	$	48,484
Renewable Diesel	5,524		5,217
Ethanol	1,499		1,551
Corporate and eliminations	6,391		5,730
Total assets	$	60,667	$	60,982

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Information [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

10.    SUPPLEMENTAL CASH FLOW INFORMATION

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

	Six Months Ended June 30,
	2023		2022
Decrease (increase) in current assets:
Receivables, net	$	1,225	$	(4,163)
Inventories	(73)		(1,056)
Prepaid expenses and other	(55)		(108)
Increase (decrease) in current liabilities:
Accounts payable	(1,909)		4,240
Accrued expenses	(128)		(126)
Taxes other than income taxes payable	(136)		133
Income taxes payable	(652)		952
Changes in current assets and current liabilities	$	(1,728)	$	(128)

Changes in current assets and current liabilities for the six months ended June 30, 2023 were primarily due to the following:

•The decrease in receivables was due to a decrease in refined petroleum product prices combined with a decrease in sales volumes in June 2023 compared to December 2022;

•The decrease in accounts payable was due to a decrease in crude oil and other feedstock prices combined with a decrease in related volumes purchased in June 2023 compared to December 2022; and

•The decrease in income taxes payable was primarily due to income tax payments made in 2023.

Changes in current assets and current liabilities for the six months ended June 30, 2022 were primarily due to the following:

•The increase in receivables was due to an increase in refined petroleum product prices in June 2022 compared to December 2021, partially offset by a decrease in sales volumes;

•The increase in inventories was due to an increase in inventory volumes valued at higher unit prices in June 2022 compared to December 2021;

•The increase in accounts payable was due to an increase in crude oil and other feedstock prices in June 2022 compared to December 2021, partially offset by a decrease in crude oil and other feedstock volumes purchased; and

•The increase in income taxes payable was primarily due to higher income before income tax expense in the second quarter of 2022.

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

	Six Months Ended June 30,
	2023		2022
Interest paid in excess of amount capitalized, including interest on finance leases	$	273	$	291
Income taxes paid, net	2,410		916

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

	Six Months Ended June 30,
	2023				2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	206	$	54	$	196	$	39
Financing cash flows	—		107		—		86
Changes in lease balances resulting from new and modified leases	237		48		92		164

There were no significant noncash investing and financing activities during the six months ended June 30, 2023 or 2022, except as noted in the table above.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

11.    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 June 30, 2023 and December 31, 2022.

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 on the balance sheet.

	June 30, 2023
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	469	$	—	$	—	$	469	$	(398)	$	—	$	71	$	—
Physical purchase contracts	—		—		—		—		n/a		n/a		—		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	104		98		—		202		n/a		n/a		202		n/a
Total	$	645	$	98	$	6	$	749	$	(398)	$	—	$	351
Liabilities
Commodity derivative contracts	$	398	$	—	$	—	$	398	$	(398)	$	—	$	—	$	(54)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		51		—		51		n/a		n/a		51		n/a
Foreign currency contracts	1		—		—		1		n/a		n/a		1		n/a
Total	$	399	$	106	$	—	$	505	$	(398)	$	—	$	107

	December 31, 2022
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	830	$	—	$	—	$	830	$	(705)	$	(8)	$	117	$	—
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	56		165		—		221		n/a		n/a		221		n/a
Total	$	958	$	169	$	6	$	1,133	$	(705)	$	(8)	$	420
Liabilities
Commodity derivative contracts	$	705	$	—	$	—	$	705	$	(705)	$	—	$	—	$	(149)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Foreign currency contracts	2		—		—		2		n/a		n/a		2		n/a
Total	$	707	$	59	$	—	$	766	$	(705)	$	—	$	61

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 12. 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.

•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 were reflected in the following balance sheet line items (in millions):

	June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	125	$	125
Prepaid expenses and other	104		98		202		56		40		96
Investments in AFS debt securities	$	104	$	98	$	202	$	56	$	165	$	221

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 and six months ended June 30, 2023. There were no AFS debt securities held as of and for the six months ended June 30, 2022.

•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), the California Low Carbon Fuel Standard (LCFS), the Canada Clean Fuel Regulations, 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 and foreign currency swap agreements 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 valued based on quoted foreign currency exchange rates and are categorized in Level 1 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

As previously disclosed in our annual report on Form 10-K for the year ended December 31, 2022, we concluded that our ethanol plant located in Lakota, Iowa (Lakota ethanol plant) was impaired as of December 31, 2022, which resulted in an asset impairment loss of $61 million. The fair value of the Lakota ethanol plant was determined using a combination of the income and market approaches and was classified in Level 3. We employed a probability-weighted approach to possible future cash flow scenarios, including the use of peer company metrics and comparison to a recent sales transaction.

There were no assets or liabilities that were measured at fair value on a nonrecurring basis as of June 30, 2023 and December 31, 2022, except as noted above.

Financial Instruments

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

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Debt (excluding finance lease obligations)	Level 2	$	8,986	$	8,664	$	9,241	$	8,902

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.

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Price Risk Management Activities

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

PRICE RISK MANAGEMENT ACTIVITIES

12.    PRICE RISK MANAGEMENT ACTIVITIES

General

We are exposed to market risks primarily related to the volatility in the price of commodities, foreign currency exchange rates, and the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. 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 11), 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 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 has been approved by our Board.

We primarily use commodity derivative instruments as cash flow hedges and economic hedges. Our objectives for entering into each type of hedge is described below.

•Cash flow hedges – The objective of our cash flow hedges is to lock in the price of forecasted purchases and/or product sales at existing market prices that we deem favorable.

•Economic hedges – Our objectives for holding economic hedges are to (i) manage price volatility in certain feedstock and product inventories and (ii) lock in the price of forecasted purchases and/or product sales at existing market prices that we deem favorable.

As of June 30, 2023, 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).

	Notional Contract Volumes by Year of Maturity
	2023	2024
Derivatives designated as cash flow hedges:
Refined petroleum products:
Futures – long	2,451	—
Futures – short	7,020	—
Derivatives designated as economic hedges:
Crude oil and refined petroleum products:
Futures – long	75,103	59
Futures – short	73,103	302
Corn:
Futures – long	172,335	20
Futures – short	212,675	2,120
Physical contracts – long	40,132	2,084

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 June 30, 2023, we had foreign currency contracts to purchase $614 million of U.S. dollars. All of these commitments matured on or before July 26, 2023.

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 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 $387 million and $221 million for the three months ended June 30, 2023 and 2022, respectively, and $800 million and $523 million for the six months ended June 30, 2023 and 2022, respectively. These amounts are reflected in cost of materials and other.

Fair Values of Derivative Instruments

The following table provides information about the fair values of our derivative instruments as of June 30, 2023 and December 31, 2022 (in millions) and the line items in the balance sheets in which the fair values are reflected. See Note 11 for additional information related to the fair values of our derivative instruments.

As indicated in Note 11, 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:

	Balance Sheet Location	June 30, 2023				December 31, 2022
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Derivatives designated as hedging instruments:
Commodity contracts	Receivables, net	$	7	$	1	$	61	$	44
Derivatives not designated as hedging instruments:
Commodity contracts	Receivables, net	$	462	$	397	$	769	$	661
Physical purchase contracts	Inventories	—		51		4		4
Foreign currency contracts	Accrued expenses	—		1		—		2
Total		$	462	$	449	$	773	$	667

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 approved by our Board. 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 gain (loss) recognized in income and other comprehensive income (loss) due to fair value adjustments of our cash flow hedges (in millions):

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts:
Gain (loss) recognized in other comprehensive income (loss)	n/a	$	31	$	(130)	$	126	$	(294)
Gain (loss) reclassified from accumulated other comprehensive loss into income	Revenues	78		(180)		116		(299)

For cash flow hedges, no component of any derivative instrument’s gains or losses was excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2023 and 2022. For the three and six months ended June 30, 2023 and 2022, cash flow hedges primarily related to forecasted sales of renewable diesel. As of June 30, 2023, the estimated deferred after-tax gain 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 and six months ended June 30, 2023 and 2022 are described in Note 5.

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 the statements of income in which such gains (losses) are reflected (in millions):

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts	Revenues	$	(10)	$	(2)	$	(17)	$	(6)
Commodity contracts	Cost of materials and other	91		(272)		174		(867)
Commodity contracts	Operating expenses (excluding depreciation and amortization expense)	—		6		1		9
Foreign currency contracts	Cost of materials and other	(17)		49		(20)		47
Foreign currency contracts	Other income, net	—		(115)		—		(81)

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income attributable to Valero stockholders	$ 1,944	$ 4,693	$ 5,011	$ 5,598

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

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 have been 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 periods presented. All such adjustments are of a normal recurring nature unless disclosed otherwise. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. 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, 2022.

The balance sheet as of December 31, 2022 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, 2022.

Use of Estimates

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.

Variable interest entities

We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary.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.

Offsetting fair value amounts of commodity derivative contracts

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 on the balance sheet.

Derivatives

We are exposed to market risks primarily related to the volatility in the price of commodities, foreign currency exchange rates, and the price of credits needed to comply with the Renewable and Low-Carbon Fuel Programs. 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 11), 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).”

Derivative instruments collateral requirements

We do not require any collateral or other security to support derivative instruments into which we enter.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consisted of the following (in millions):

	June 30, 2023		December 31, 2022
Refinery feedstocks	$	1,980	$	1,949
Refined petroleum products and blendstocks	3,773		3,579
Renewable diesel feedstocks and products	585		583
Ethanol feedstocks and products	293		328
Materials and supplies	330		313
Inventories	$	6,961	$	6,752

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Debt (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt purchased and retired

In February 2023, we used cash on hand to purchase and retire a portion of the following notes (in millions):

Debt Purchased and Retired	Principal Amount
6.625% Senior Notes due 2037	$	62
3.650% Senior Notes due 2051	26
4.000% Senior Notes due 2052	45
Various other Valero and Valero Energy Partners (VLP) Senior Notes	66
Total	$	199

The proceeds and cash on hand were used to purchase and retire a portion of the following notes in connection with cash tender offers that we publicly announced and completed in February 2022 (in millions):

Debt Purchased and Retired	Principal Amount
3.65% Senior Notes due 2025	$	72
2.850% Senior Notes due 2025	507
4.375% VLP Senior Notes due 2026	168
3.400% Senior Notes due 2026	653
Total	$	1,400

Summary of credit facilities

We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (amounts in millions and currency in U.S. dollars, except as noted):

				June 30, 2023
	Facility Amount		Maturity Date	Outstanding Borrowings		Letters of Credit Issued (a)		Availability
Committed facilities:
Valero Revolver	$	4,000	November 2027	$	—	$	6	$	3,994
Canadian Revolver	C$	150	November 2023	C$	—	C$	5	C$	145
Accounts receivable sales facility (b)	$	1,300	July 2023	$	—	n/a		$	1,300
Committed facilities of VIEs (c):
DGD Revolver (d)	$	400	June 2026	$	50	$	58	$	292
DGD Loan Agreement (e)	$	100	June 2026	$	—	n/a		$	100
IEnova Revolver (f)	$	830	February 2028	$	733	n/a		$	97
Uncommitted facilities:
Letter of credit facilities	n/a		n/a	n/a		$	70	n/a

________________________

(a)Letters of credit issued as of June 30, 2023 expire at various times in 2023 through 2024.

(b)In July 2023, we extended the maturity date of this facility to July 2024.

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

(d)In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026 and (ii) transition the benchmark reference interest rate previously based on the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR). The variable interest rate on the DGD Revolver was 6.980 percent and 5.880 percent as of June 30, 2023 and December 31, 2022, respectively.

(e)The amounts shown for this facility 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. In April 2023, DGD extended the maturity date of this facility to June 2023. In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026, (ii) increase each member’s commitment from $25 million to $100 million, resulting in an increase in aggregate commitments from $50 million to $200 million, and (iii) transition the benchmark reference interest rate previously based on the LIBOR to Term SOFR. The variable interest rate on the DGD Loan Agreement was 6.672 percent as of December 31, 2022.

(f)Both parties to this facility have agreed to use a SOFR as the interest rate applied to outstanding borrowings. The variable interest rate on the IEnova Revolver was 8.740 percent and 7.393 percent as of June 30, 2023 and December 31, 2022, respectively.

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

	Six Months Ended June 30,
	2023		2022
Borrowings:
Accounts receivable sales facility	$	1,450	$	800
DGD Revolver	300		359
IEnova Revolver	54		46
Repayments:
Accounts receivable sales facility	(1,450)		(800)
DGD Revolver	(350)		(359)
DGD Loan Agreement	(25)		—
IEnova Revolver	(38)		(30)

Interest and debt expense, net of capitalized interest

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest and debt expense	$	151	$	156	$	303	$	313
Less: Capitalized interest	3		14		9		26
Interest and debt expense, net of capitalized interest	$	148	$	142	$	294	$	287

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Equity (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Changes in components of accumulated other comprehensive loss

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

	Three Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,031)	$	(188)	$	14	$	(1,205)	$	(549)	$	(437)	$	(23)	$	(1,009)
Other comprehensive income (loss) before reclassifications	257		—		12		269		(442)		1		(50)		(491)
Amounts reclassified from accumulated other comprehensive loss	—		(6)		(30)		(36)		—		4		69		73
Effect of exchange rates	—		1		—		1		—		2		—		2
Other comprehensive income (loss)	257		(5)		(18)		234		(442)		7		19		(416)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

	Six Months Ended June 30,
	2023								2022
	Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total		Foreign Currency Translation Adjustment		Defined Benefit Plans Items		Gains (Losses) on Cash Flow Hedges		Total
Balance as of beginning of period	$	(1,168)	$	(183)	$	(8)	$	(1,359)	$	(562)	$	(441)	$	(5)	$	(1,008)
Other comprehensive income (loss) before reclassifications	394		—		49		443		(429)		(2)		(114)		(545)
Amounts reclassified from accumulated other comprehensive loss	—		(13)		(45)		(58)		—		11		115		126
Effect of exchange rates	—		3		—		3		—		2		—		2
Other comprehensive income (loss)	394		(10)		4		388		(429)		11		1		(417)
Balance as of end of period	$	(774)	$	(193)	$	(4)	$	(971)	$	(991)	$	(430)	$	(4)	$	(1,425)

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summarized balance sheet information of consolidated VIEs

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):

	DGD		Central Mexico Terminals		Other		Total
June 30, 2023
Assets
Cash and cash equivalents	$	318	$	—	$	26	$	344
Other current assets	1,204		6		31		1,241
Property, plant, and equipment, net	3,748		672		74		4,494
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	432	$	782	$	18	$	1,232
Debt and finance lease obligations, less current portion	680		—		—		680

	DGD		Central Mexico Terminals		Other		Total
December 31, 2022
Assets
Cash and cash equivalents	$	133	$	—	$	16	$	149
Other current assets	1,106		7		32		1,145
Property, plant, and equipment, net	3,785		681		79		4,545
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	626	$	737	$	21	$	1,384
Debt and finance lease obligations, less current portion	693		—		—		693

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Periodic benefit cost related to our defined benefit plans, net

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

	Pension Plans				Other Postretirement Benefit Plans
	2023		2022		2023		2022
Three months ended June 30
Service cost	$	28	$	39	$	1	$	1
Interest cost	30		21		3		2
Expected return on plan assets	(51)		(48)		—		—
Amortization of:
Net actuarial (gain) loss	(1)		13		(2)		—
Prior service credit	(4)		(5)		(1)		(1)
Net periodic benefit cost	$	2	$	20	$	1	$	2
Six months ended June 30
Service cost	$	56	$	77	$	2	$	3
Interest cost	60		42		6		4
Expected return on plan assets	(101)		(96)		—		—
Amortization of:
Net actuarial (gain) loss	(3)		26		(3)		—
Prior service credit	(9)		(9)		(2)		(2)
Net periodic benefit cost	$	3	$	40	$	3	$	5

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of earnings per common share, basic and diluted

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Earnings per common share:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Earnings per common share	$	5.41	$	11.58	$	13.75	$	13.75
Earnings per common share – assuming dilution:
Net income attributable to Valero stockholders	$	1,944	$	4,693	$	5,011	$	5,598
Less: Income allocated to participating securities	6		17		16		20
Net income available to common stockholders	$	1,938	$	4,676	$	4,995	$	5,578
Weighted-average common shares outstanding	358		404		363		406
Effect of dilutive securities	—		—		—		—
Weighted-average common shares outstanding – assuming dilution	358		404		363		406
Earnings per common share – assuming dilution	$	5.40	$	11.57	$	13.74	$	13.74

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Revenues and Segment Information (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of contract balances

Contract balances were as follows (in millions):

	June 30, 2023		December 31, 2022
Receivables from contracts with customers, included in receivables, net	$	5,878	$	7,189
Contract liabilities, included in accrued expenses	85		129

Segment information for our reportable segments

The following tables reflect information about our operating income by reportable segment (in millions):

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Three months ended June 30, 2023
Revenues:
Revenues from external customers	$	31,996	$	1,296	$	1,217	$	—	$	34,509
Intersegment revenues	(3)		950		257		(1,204)		—
Total revenues	31,993		2,246		1,474		(1,204)		34,509
Cost of sales:
Cost of materials and other (a)	27,773		1,643		1,199		(1,185)		29,430
Operating expenses (excluding depreciation and amortization expense reflected below)	1,205		104		128		3		1,440
Depreciation and amortization expense	582		59		19		(2)		658
Total cost of sales	29,560		1,806		1,346		(1,184)		31,528
Other operating expenses	1		—		1		—		2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		209		209
Depreciation and amortization expense	—		—		—		11		11
Operating income by segment	$	2,432	$	440	$	127	$	(240)	$	2,759
Three months ended June 30, 2022
Revenues:
Revenues from external customers	$	49,495	$	855	$	1,291	$	—	$	51,641
Intersegment revenues	11		596		201		(808)		—
Total revenues	49,506		1,451		1,492		(808)		51,641
Cost of sales:
Cost of materials and other (a)	41,313		1,213		1,226		(806)		42,946
Operating expenses (excluding depreciation and amortization expense reflected below)	1,402		58		167		(1)		1,626
Depreciation and amortization expense	565		28		(3)		—		590
Total cost of sales	43,280		1,299		1,390		(807)		45,162
Other operating expenses	14		—		1		—		15
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		233		233
Depreciation and amortization expense	—		—		—		12		12
Operating income by segment	$	6,212	$	152	$	101	$	(246)	$	6,219

________________________

See note (a) on page 20.

	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations		Total
Six months ended June 30, 2023
Revenues:
Revenues from external customers	$	66,403	$	2,231	$	2,314	$	—	$	70,948
Intersegment revenues	—		1,695		480		(2,175)		—
Total revenues	66,403		3,926		2,794		(2,175)		70,948
Cost of sales:
Cost of materials and other (a)	56,283		2,974		2,330		(2,152)		59,435
Operating expenses (excluding depreciation and amortization expense reflected below)	2,466		190		258		3		2,917
Depreciation and amortization expense	1,154		117		39		(2)		1,308
Total cost of sales	59,903		3,281		2,627		(2,151)		63,660
Other operating expenses	11		—		1		—		12
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		453		453
Depreciation and amortization expense	—		—		—		21		21
Operating income by segment	$	6,489	$	645	$	166	$	(498)	$	6,802
Six months ended June 30, 2022
Revenues:
Revenues from external customers	$	86,308	$	1,450	$	2,425	$	—	$	90,183
Intersegment revenues	15		982		328		(1,325)		—
Total revenues	86,323		2,432		2,753		(1,325)		90,183
Cost of sales:
Cost of materials and other (a)	74,919		1,968		2,330		(1,322)		77,895
Operating expenses (excluding depreciation and amortization expense reflected below)	2,595		109		302		(1)		3,005
Depreciation and amortization expense	1,114		54		17		—		1,185
Total cost of sales	78,628		2,131		2,649		(1,323)		82,085
Other operating expenses	32		—		2		—		34
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		438		438
Depreciation and amortization expense	—		—		—		23		23
Operating income by segment	$	7,663	$	301	$	102	$	(463)	$	7,603

________________________

(a)Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Refining:
Gasolines and blendstocks	$	15,229	$	20,604	$	30,277	$	36,164
Distillates	13,992		24,427		30,830		41,871
Other product revenues	2,775		4,464		5,296		8,273
Total Refining revenues	31,996		49,495		66,403		86,308
Renewable Diesel:
Renewable diesel	1,249		817		2,125		1,412
Renewable naphtha	47		38		106		38
Total Renewable Diesel revenues	1,296		855		2,231		1,450
Ethanol:
Ethanol	898		979		1,661		1,854
Distillers grains	319		312		653		571
Total Ethanol revenues	1,217		1,291		2,314		2,425
Revenues	$	34,509	$	51,641	$	70,948	$	90,183

Total assets by reportable segment were as follows (in millions):

	June 30, 2023		December 31, 2022
Refining	$	47,253	$	48,484
Renewable Diesel	5,524		5,217
Ethanol	1,499		1,551
Corporate and eliminations	6,391		5,730
Total assets	$	60,667	$	60,982

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2023

Supplemental Cash Flow Information [Abstract]

Schedule of cash flows, supplemental disclosures

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

	Six Months Ended June 30,
	2023		2022
Decrease (increase) in current assets:
Receivables, net	$	1,225	$	(4,163)
Inventories	(73)		(1,056)
Prepaid expenses and other	(55)		(108)
Increase (decrease) in current liabilities:
Accounts payable	(1,909)		4,240
Accrued expenses	(128)		(126)
Taxes other than income taxes payable	(136)		133
Income taxes payable	(652)		952
Changes in current assets and current liabilities	$	(1,728)	$	(128)

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

	Six Months Ended June 30,
	2023		2022
Interest paid in excess of amount capitalized, including interest on finance leases	$	273	$	291
Income taxes paid, net	2,410		916

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

	Six Months Ended June 30,
	2023				2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	206	$	54	$	196	$	39
Financing cash flows	—		107		—		86
Changes in lease balances resulting from new and modified leases	237		48		92		164

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair value of assets and liabilities measured on recurring basis

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 June 30, 2023 and December 31, 2022.

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 on the balance sheet.

	June 30, 2023
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	469	$	—	$	—	$	469	$	(398)	$	—	$	71	$	—
Physical purchase contracts	—		—		—		—		n/a		n/a		—		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	104		98		—		202		n/a		n/a		202		n/a
Total	$	645	$	98	$	6	$	749	$	(398)	$	—	$	351
Liabilities
Commodity derivative contracts	$	398	$	—	$	—	$	398	$	(398)	$	—	$	—	$	(54)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		51		—		51		n/a		n/a		51		n/a
Foreign currency contracts	1		—		—		1		n/a		n/a		1		n/a
Total	$	399	$	106	$	—	$	505	$	(398)	$	—	$	107

	December 31, 2022
							Total Gross Fair Value		Effect of Counter- party Netting		Effect of Cash Collateral Netting		Net Carrying Value on Balance Sheet		Cash Collateral Paid or Received Not Offset
	Fair Value Hierarchy
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	830	$	—	$	—	$	830	$	(705)	$	(8)	$	117	$	—
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Investments of certain benefit plans	72		—		6		78		n/a		n/a		78		n/a
Investments in AFS debt securities	56		165		—		221		n/a		n/a		221		n/a
Total	$	958	$	169	$	6	$	1,133	$	(705)	$	(8)	$	420
Liabilities
Commodity derivative contracts	$	705	$	—	$	—	$	705	$	(705)	$	—	$	—	$	(149)
Blending program obligations	—		55		—		55		n/a		n/a		55		n/a
Physical purchase contracts	—		4		—		4		n/a		n/a		4		n/a
Foreign currency contracts	2		—		—		2		n/a		n/a		2		n/a
Total	$	707	$	59	$	—	$	766	$	(705)	$	—	$	61

The securities were reflected in the following balance sheet line items (in millions):

	June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	125	$	125
Prepaid expenses and other	104		98		202		56		40		96
Investments in AFS debt securities	$	104	$	98	$	202	$	56	$	165	$	221

Carrying amount and estimated fair value of financial instruments

The estimated fair values of cash and cash equivalents, receivables, payables, and operating and finance lease obligations approximate their carrying amounts; the carrying value and fair value of debt is shown in the table below (in millions).

		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Debt (excluding finance lease obligations)	Level 2	$	8,986	$	8,664	$	9,241	$	8,902

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Price Risk Management Activities (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Risk management activities by type of risk

As of June 30, 2023, 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).

	Notional Contract Volumes by Year of Maturity
	2023	2024
Derivatives designated as cash flow hedges:
Refined petroleum products:
Futures – long	2,451	—
Futures – short	7,020	—
Derivatives designated as economic hedges:
Crude oil and refined petroleum products:
Futures – long	75,103	59
Futures – short	73,103	302
Corn:
Futures – long	172,335	20
Futures – short	212,675	2,120
Physical contracts – long	40,132	2,084

Fair values of derivative instruments

The following table provides information about the fair values of our derivative instruments as of June 30, 2023 and December 31, 2022 (in millions) and the line items in the balance sheets in which the fair values are reflected. See Note 11 for additional information related to the fair values of our derivative instruments.

As indicated in Note 11, 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:

	Balance Sheet Location	June 30, 2023				December 31, 2022
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Derivatives designated as hedging instruments:
Commodity contracts	Receivables, net	$	7	$	1	$	61	$	44
Derivatives not designated as hedging instruments:
Commodity contracts	Receivables, net	$	462	$	397	$	769	$	661
Physical purchase contracts	Inventories	—		51		4		4
Foreign currency contracts	Accrued expenses	—		1		—		2
Total		$	462	$	449	$	773	$	667

Effect of derivative instruments on income and other comprehensive income (loss)

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

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts:
Gain (loss) recognized in other comprehensive income (loss)	n/a	$	31	$	(130)	$	126	$	(294)
Gain (loss) reclassified from accumulated other comprehensive loss into income	Revenues	78		(180)		116		(299)

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 the statements of income in which such gains (losses) are reflected (in millions):

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Commodity contracts	Revenues	$	(10)	$	(2)	$	(17)	$	(6)
Commodity contracts	Cost of materials and other	91		(272)		174		(867)
Commodity contracts	Operating expenses (excluding depreciation and amortization expense)	—		6		1		9
Foreign currency contracts	Cost of materials and other	(17)		49		(20)		47
Foreign currency contracts	Other income, net	—		(115)		—		(81)

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Uncertainty (Details)	6 Months Ended
	Jun. 30, 2023 refinery
California [Member]
Concentration Risk [Line Items]
Number of refineries	2

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Schedule of Inventories
Refinery feedstocks	$ 1,980	$ 1,949
Refined petroleum products and blendstocks	3,773	3,579
Renewable diesel feedstocks and products	585	583
Ethanol feedstocks and products	293	328
Materials and supplies	330	313
Inventories	$ 6,961	$ 6,752

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Inventories (Details) (Narrative) - USD ($) $ in Billions	Jun. 30, 2023	Dec. 31, 2022
Inventories (Textual)
Excess of market value over carrying amount of LIFO inventories	$ 5.1	$ 6.3
Amount of non-LIFO inventory	$ 1.0	$ 1.6

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Debt, Public Debt (Details) - USD ($)	1 Months Ended
	Feb. 28, 2023	Jun. 30, 2022	Feb. 28, 2022
Senior Notes [Member]
Debt Purchased and Retired
Debt purchased and retired amount	$ 199,000,000		$ 1,400,000,000
Senior Notes [Member] | 6.625% Valero Senior Notes due 2037 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)	6.625%
Debt purchased and retired amount	$ 62,000,000
Senior Notes [Member] | 3.650% Valero Senior Notes due 2051 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)	3.65%
Debt purchased and retired amount	$ 26,000,000
Senior Notes [Member] | 4.000% Valero Senior Notes due 2052 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)	4.00%		4.00%
Debt purchased and retired amount	$ 45,000,000
Public Debt (Textual)
Face amount of long-term debt issuance			$ 650,000,000
Proceeds from issuance of senior long-term debt			$ 639,000,000
Senior Notes [Member] | Various other Valero and Valero Energy Partners (VLP) Senior Notes [Member]
Debt Purchased and Retired
Debt purchased and retired amount	$ 66,000,000
Senior Notes [Member] | 3.65% Valero Senior Notes due 2025 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)			3.65%
Debt purchased and retired amount			$ 72,000,000
Senior Notes [Member] | 2.850% Valero Senior Notes due 2025 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)			2.85%
Debt purchased and retired amount			$ 507,000,000
Senior Notes [Member] | 4.375% VLP Senior Notes due 2026 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)			4.375%
Debt purchased and retired amount			$ 168,000,000
Senior Notes [Member] | 3.400% Valero Senior Notes due 2026 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)			3.40%
Debt purchased and retired amount			$ 653,000,000
Revenue Bonds [Member] | Gulf Opportunity Zone Revenue Bonds Series 2010 due 2040 [Member]
Debt Purchased and Retired
Interest rate of notes (percent)		4.00%
Public Debt (Textual)
Repayments of long-term debt		$ 300,000,000

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Debt, Credit Facilities (Details)		Jun. 30, 2023 USD ($)	Jun. 30, 2023 CAD ($)	May 31, 2023 USD ($)	Dec. 31, 2022
Valero Revolver [Member] | Credit Facilities [Member]
Line of Credit Facility
Facility amount		$ 4,000,000,000
Outstanding borrowings, long term		0
Availability		3,994,000,000
Valero Revolver Letter of Credit [Member] | Credit Facilities [Member]
Line of Credit Facility
Letters of credit issued	[1]	6,000,000
Canadian Revolver [Member] | Credit Facilities [Member]
Line of Credit Facility
Facility amount			$ 150,000,000
Outstanding borrowings, short-term			0
Availability			145,000,000
Canadian Revolver Letter of Credit [Member] | Credit Facilities [Member]
Line of Credit Facility
Letters of credit issued	[1]		$ 5,000,000
Accounts Receivable Sales Facility [Member] | Credit Facilities [Member]
Line of Credit Facility
Facility amount	[2]	1,300,000,000
Outstanding borrowings, short-term	[2]	0
Availability	[2]	1,300,000,000
DGD Revolver [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Facility amount	[3],[4]	400,000,000
Outstanding borrowings, long term	[3],[4]	50,000,000
Availability	[3],[4]	$ 292,000,000
Interest rate at period end (percent)		6.98%	6.98%		5.88%
DGD Revolver Letter Of Credit [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Letters of credit issued	[1],[3],[4]	$ 58,000,000
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Darling Ingredients Inc. [Member]
Line of Credit Facility
Facility amount				$ 25,000,000
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Facility amount				50,000,000
Interest rate at period end (percent)					6.672%
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Valero Energy Corporation [Member]
Line of Credit Facility
Facility amount				$ 25,000,000
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Darling Ingredients Inc. [Member]
Line of Credit Facility
Facility amount		100,000,000
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Facility amount		200,000,000
DGD Loan Agreement [Member] | Credit Facilities [Member] | Diamond Green Diesel Holdings LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Valero Energy Corporation [Member]
Line of Credit Facility
Facility amount	[3],[5]	100,000,000
Outstanding borrowings, long term	[3],[5]	0
Availability	[3],[5]	100,000,000
IEnova Revolver [Member] | Credit Facilities [Member] | Central Mexico Terminals [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Facility amount	[3],[6]	830,000,000
Outstanding borrowings, long term	[3],[6]	733,000,000
Availability	[3],[6]	$ 97,000,000
Interest rate at period end (percent)		8.74%	8.74%		7.393%
Uncommitted Letter of Credit Facility [Member] | Credit Facilities [Member]
Line of Credit Facility
Letters of credit issued	[1]	$ 70,000,000

[1] Letters of credit issued as of June 30, 2023 expire at various times in 2023 through 2024.

[2] In July 2023, we extended the maturity date of this facility to July 2024.

[3] Creditors of the VIEs do not have recourse against us.

[4] In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026 and (ii) transition the benchmark reference interest rate previously based on the London Interbank Offered Rate (LIBOR) to a secured overnight financing rate (SOFR). The variable interest rate on the DGD Revolver was 6.980 percent and 5.880 percent as of June 30, 2023 and December 31, 2022, respectively.

[5] The amounts shown for this facility 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. In April 2023, DGD extended the maturity date of this facility to June 2023. In June 2023, DGD amended this facility to (i) extend the maturity date to June 2026, (ii) increase each member’s commitment from $25 million to $100 million, resulting in an increase in aggregate commitments from $50 million to $200 million, and (iii) transition the benchmark reference interest rate previously based on the LIBOR to Term SOFR. The variable interest rate on the DGD Loan Agreement was 6.672 percent as of December 31, 2022.

[6] Both parties to this facility have agreed to use a SOFR as the interest rate applied to outstanding borrowings. The variable interest rate on the IEnova Revolver was 8.740 percent and 7.393 percent as of June 30, 2023 and December 31, 2022, respectively.

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Debt, Activity Under Credit Facilities (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Accounts Receivable Sales Facility [Member] | Line of Credit [Member]
Line of Credit Facility
Borrowings, short-term credit facilities	$ 1,450	$ 800
Repayments, short-term credit facilities	(1,450)	(800)
DGD Revolver [Member] | Line of Credit [Member] | DGD [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Borrowings, long-term credit facilities	300	359
Repayments, long-term credit facilities	(350)	(359)
DGD Loan Agreement [Member] | Line of Credit [Member] | DGD [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Repayments, long-term credit facilities	(25)	0
IEnova Revolver [Member] | Line of Credit [Member] | Central Mexico Terminals [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Line of Credit Facility
Borrowings, long-term credit facilities	54	46
Repayments, long-term credit facilities	$ (38)	$ (30)

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Debt, Interest Incurred (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest and Debt Expense, Net of Capitalized Interest
Interest and debt expense	$ 151	$ 156	$ 303	$ 313
Less: Capitalized interest	3	14	9	26
Interest and debt expense, net of capitalized interest	$ 148	$ 142	$ 294	$ 287

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Equity, Narrative (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jul. 20, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Feb. 23, 2023	Oct. 26, 2022
Subsequent Event [Member]
Equity (Textual)
Dividends declared, amount per share (in usd per share)	$ 1.02
Stock Purchase Program Approved October 2022 [Member]
Equity (Textual)
Authorized amount under stock purchase programs							$ 2,500,000,000
Stock Purchase Program Approved February 2023 [Member]
Equity (Textual)
Authorized amount under stock purchase programs						$ 2,500,000,000
Remaining amount authorized under stock purchase program		$ 2,500,000,000		$ 2,500,000,000
Treasury Stock [Member]
Equity (Textual)
Purchases of common stock for treasury (shares)		8,421,452	14,211,408	19,414,793	15,757,281

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Equity, Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Changes in Accumulated Other Comprehensive Loss, By Component, Net of Tax
Balance as of beginning of period	$ 27,067	$ 20,410	$ 25,468	$ 19,817
Other comprehensive income (loss)	210	(390)	393	(414)
Balance as of end of period	27,994	22,733	27,994	22,733
Accumulated Other Comprehensive Loss [Member]
Changes in Accumulated Other Comprehensive Loss, By Component, Net of Tax
Balance as of beginning of period	(1,205)	(1,009)	(1,359)	(1,008)
Other comprehensive income (loss) before reclassifications	269	(491)	443	(545)
Amounts reclassified from accumulated other comprehensive  loss	(36)	73	(58)	126
Effect of exchange rates	1	2	3	2
Other comprehensive income (loss)	234	(416)	388	(417)
Balance as of end of period	(971)	(1,425)	(971)	(1,425)
Foreign Currency Translation Adjustment [Member]
Changes in Accumulated Other Comprehensive Loss, By Component, Net of Tax
Balance as of beginning of period	(1,031)	(549)	(1,168)	(562)
Other comprehensive income (loss) before reclassifications	257	(442)	394	(429)
Amounts reclassified from accumulated other comprehensive  loss	0	0	0	0
Effect of exchange rates	0	0	0	0
Other comprehensive income (loss)	257	(442)	394	(429)
Balance as of end of period	(774)	(991)	(774)	(991)
Defined Benefit Plans Items [Member]
Changes in Accumulated Other Comprehensive Loss, By Component, Net of Tax
Balance as of beginning of period	(188)	(437)	(183)	(441)
Other comprehensive income (loss) before reclassifications	0	1	0	(2)
Amounts reclassified from accumulated other comprehensive  loss	(6)	4	(13)	11
Effect of exchange rates	1	2	3	2
Other comprehensive income (loss)	(5)	7	(10)	11
Balance as of end of period	(193)	(430)	(193)	(430)
Gains (Losses) on Cash Flow Hedges [Member]
Changes in Accumulated Other Comprehensive Loss, By Component, Net of Tax
Balance as of beginning of period	14	(23)	(8)	(5)
Other comprehensive income (loss) before reclassifications	12	(50)	49	(114)
Amounts reclassified from accumulated other comprehensive  loss	(30)	69	(45)	115
Effect of exchange rates	0	0	0	0
Other comprehensive income (loss)	(18)	19	4	1
Balance as of end of period	$ (4)	$ (4)	$ (4)	$ (4)

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Variable Interest Entities (Details) (Narrative)	Jun. 30, 2023 plant subsidiary
Diamond Green Diesel Holdings LLC (DGD) [Member]
Variable Interest Entity (Textual)
Number of renewable diesel plants owned by joint venture | plant	2
Central Mexico Terminals [Member]
Variable Interest Entity (Textual)
Number of subsidiaries | subsidiary	3

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Variable Interest Entities (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 5,075	$ 4,862
Property, plant, and equipment, net	30,570	30,978
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	14,948	17,461
Debt and finance lease obligations, less current portion	10,130	10,526
Variable Interest Entity, Primary Beneficiary [Member]
Assets
Cash and cash equivalents	344	149
Other current assets	1,241	1,145
Property, plant, and equipment, net	4,494	4,545
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	1,232	1,384
Debt and finance lease obligations, less current portion	680	693
Diamond Green Diesel Holdings LLC (DGD) [Member]
Assets
Cash and cash equivalents	318	133
Other current assets	1,204	1,106
Property, plant, and equipment, net	3,748	3,785
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	432	626
Debt and finance lease obligations, less current portion	680	693
Central Mexico Terminals [Member]
Assets
Cash and cash equivalents	0	0
Other current assets	6	7
Property, plant, and equipment, net	672	681
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	782	737
Debt and finance lease obligations, less current portion	0	0
Other VIEs [Member]
Assets
Cash and cash equivalents	26	16
Other current assets	31	32
Property, plant, and equipment, net	74	79
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	18	21
Debt and finance lease obligations, less current portion	$ 0	$ 0

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Employee Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pension Plans [Member]
Components of net periodic benefit cost:
Service cost	$ 28	$ 39	$ 56	$ 77
Interest cost	30	21	60	42
Expected return on plan assets	(51)	(48)	(101)	(96)
Amortization of:
Net actuarial (gain) loss	(1)	13	(3)	26
Prior service credit	(4)	(5)	(9)	(9)
Net periodic benefit cost	2	20	3	40
Other Postretirement Benefit Plans [Member]
Components of net periodic benefit cost:
Service cost	1	1	2	3
Interest cost	3	2	6	4
Expected return on plan assets	0	0	0	0
Amortization of:
Net actuarial (gain) loss	(2)	0	(3)	0
Prior service credit	(1)	(1)	(2)	(2)
Net periodic benefit cost	$ 1	$ 2	$ 3	$ 5

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings per common share:
Net income attributable to Valero stockholders	$ 1,944	$ 4,693	$ 5,011	$ 5,598
Less: Income allocated to participating securities	6	17	16	20
Net income available to common stockholders	$ 1,938	$ 4,676	$ 4,995	$ 5,578
Weighted-average common shares outstanding (in shares)	358	404	363	406
Earnings per common share (in dollars per share)	$ 5.41	$ 11.58	$ 13.75	$ 13.75
Earnings per common share – assuming dilution:
Net income attributable to Valero stockholders	$ 1,944	$ 4,693	$ 5,011	$ 5,598
Less: Income allocated to participating securities	6	17	16	20
Net income available to common stockholders	$ 1,938	$ 4,676	$ 4,995	$ 5,578
Weighted-average common shares outstanding (in shares)	358	404	363	406
Effect of dilutive securities (in shares)	0	0	0	0
Weighted-average common shares outstanding – assuming dilution (in shares)	358	404	363	406
Earnings per common share – assuming dilution (in dollars per share)	$ 5.40	$ 11.57	$ 13.74	$ 13.74

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Revenues and Segment Information, Contract Balances (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Segment Reporting [Abstract]
Receivables from contracts with customers, included in receivables, net	$ 5,878		$ 7,189
Contract liabilities, included in accrued expenses	85		$ 129
Contract Balances (Textual)
Revenue recognized that was included in contract liabilities as of prior year end	$ 123	$ 72

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Revenues and Segment Information, Components of Operating Income (Loss) (Details) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)
Segment Information for our Reportable Segments
Revenues	[1]	$ 34,509	$ 51,641	$ 70,948	$ 90,183
Cost of sales:
Cost of materials and other	[2]	29,430	42,946	59,435	77,895
Operating expenses (excluding depreciation and amortization expense reflected below)		1,440	1,626	2,917	3,005
Depreciation and amortization expense		658	590	1,308	1,185
Total cost of sales		31,528	45,162	63,660	82,085
Other operating expenses		2	15	12	34
General and administrative expenses (excluding depreciation and amortization expense reflected below)		209	233	453	438
Depreciation and amortization expense		11	12	21	23
Operating income		2,759	6,219	$ 6,802	7,603
Segment Information (Textual)
Number of reportable segments | segment				3
Corporate, Reconciling Items And Eliminations [Member]
Segment Information for our Reportable Segments
Revenues		(1,204)	(808)	$ (2,175)	(1,325)
Cost of sales:
Operating income		(240)	(246)	(498)	(463)
Corporate [Member]
Segment Information for our Reportable Segments
Revenues		0	0	0	0
Cost of sales:
General and administrative expenses (excluding depreciation and amortization expense reflected below)		209	233	453	438
Depreciation and amortization expense		11	12	21	23
Intersegment Eliminations [Member]
Segment Information for our Reportable Segments
Revenues		(1,204)	(808)	(2,175)	(1,325)
Cost of sales:
Cost of materials and other	[2]	(1,185)	(806)	(2,152)	(1,322)
Operating expenses (excluding depreciation and amortization expense reflected below)		3	(1)	3	(1)
Depreciation and amortization expense		(2)	0	(2)	0
Total cost of sales		(1,184)	(807)	(2,151)	(1,323)
Other operating expenses		0	0	0	0
Refining [Member]
Segment Information for our Reportable Segments
Revenues		31,996	49,495	66,403	86,308
Refining [Member] | Operating Segments [Member]
Segment Information for our Reportable Segments
Revenues		31,993	49,506	66,403	86,323
Cost of sales:
Cost of materials and other	[2]	27,773	41,313	56,283	74,919
Operating expenses (excluding depreciation and amortization expense reflected below)		1,205	1,402	2,466	2,595
Depreciation and amortization expense		582	565	1,154	1,114
Total cost of sales		29,560	43,280	59,903	78,628
Other operating expenses		1	14	11	32
General and administrative expenses (excluding depreciation and amortization expense reflected below)		0	0	0	0
Depreciation and amortization expense		0	0	0	0
Operating income		2,432	6,212	6,489	7,663
Refining [Member] | Intersegment Eliminations [Member]
Segment Information for our Reportable Segments
Revenues		(3)	11	0	15
Renewable Diesel [Member]
Segment Information for our Reportable Segments
Revenues		1,296	855	2,231	1,450
Renewable Diesel [Member] | Operating Segments [Member]
Segment Information for our Reportable Segments
Revenues		2,246	1,451	3,926	2,432
Cost of sales:
Cost of materials and other	[2]	1,643	1,213	2,974	1,968
Operating expenses (excluding depreciation and amortization expense reflected below)		104	58	190	109
Depreciation and amortization expense		59	28	117	54
Total cost of sales		1,806	1,299	3,281	2,131
Other operating expenses		0	0	0	0
General and administrative expenses (excluding depreciation and amortization expense reflected below)		0	0	0	0
Depreciation and amortization expense		0	0	0	0
Operating income		440	152	645	301
Segment Information (Textual)
Blender's tax credit		388	198	634	354
Renewable Diesel [Member] | Intersegment Eliminations [Member]
Segment Information for our Reportable Segments
Revenues		950	596	1,695	982
Ethanol [Member]
Segment Information for our Reportable Segments
Revenues		1,217	1,291	2,314	2,425
Ethanol [Member] | Operating Segments [Member]
Segment Information for our Reportable Segments
Revenues		1,474	1,492	2,794	2,753
Cost of sales:
Cost of materials and other	[2]	1,199	1,226	2,330	2,330
Operating expenses (excluding depreciation and amortization expense reflected below)		128	167	258	302
Depreciation and amortization expense		19	(3)	39	17
Total cost of sales		1,346	1,390	2,627	2,649
Other operating expenses		1	1	1	2
General and administrative expenses (excluding depreciation and amortization expense reflected below)		0	0	0	0
Depreciation and amortization expense		0	0	0	0
Operating income		127	101	166	102
Ethanol [Member] | Intersegment Eliminations [Member]
Segment Information for our Reportable Segments
Revenues		$ 257	$ 201	$ 480	$ 328

[1] Includes excise taxes on sales by certain of our foreign operations of $1,449 million and $1,254 million for the three months ended June 30, 2023 and 2022, respectively, and $2,871 million and $2,677 million for the six months ended June 30, 2023 and 2022, respectively.

[2] Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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Revenues and Segment Information, Disaggregation of Revenue by Product (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue by Segment
Revenues	[1]	$ 34,509	$ 51,641	$ 70,948	$ 90,183
Refining [Member]
Revenue by Segment
Revenues		31,996	49,495	66,403	86,308
Refining [Member] | Gasoline and Blendstocks [Member]
Revenue by Segment
Revenues		15,229	20,604	30,277	36,164
Refining [Member] | Distillates [Member]
Revenue by Segment
Revenues		13,992	24,427	30,830	41,871
Refining [Member] | Other Product Revenues [Member]
Revenue by Segment
Revenues		2,775	4,464	5,296	8,273
Renewable Diesel [Member]
Revenue by Segment
Revenues		1,296	855	2,231	1,450
Renewable Diesel [Member] | Renewable Diesel [Member]
Revenue by Segment
Revenues		1,249	817	2,125	1,412
Renewable Diesel [Member] | Renewable Naphtha [Member]
Revenue by Segment
Revenues		47	38	106	38
Ethanol [Member]
Revenue by Segment
Revenues		1,217	1,291	2,314	2,425
Ethanol [Member] | Ethanol [Member]
Revenue by Segment
Revenues		898	979	1,661	1,854
Ethanol [Member] | Distillers Grains [Member]
Revenue by Segment
Revenues		$ 319	$ 312	$ 653	$ 571

[1] Includes excise taxes on sales by certain of our foreign operations of $1,449 million and $1,254 million for the three months ended June 30, 2023 and 2022, respectively, and $2,871 million and $2,677 million for the six months ended June 30, 2023 and 2022, respectively.

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Revenues and Segment Information, Assets (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Total Assets by Reportable Segment
Reportable segment assets	$ 60,667	$ 60,982
Corporate and Eliminations [Member]
Total Assets by Reportable Segment
Reportable segment assets	6,391	5,730
Refining [Member] | Operating Segments [Member]
Total Assets by Reportable Segment
Reportable segment assets	47,253	48,484
Renewable Diesel [Member] | Operating Segments [Member]
Total Assets by Reportable Segment
Reportable segment assets	5,524	5,217
Ethanol [Member] | Operating Segments [Member]
Total Assets by Reportable Segment
Reportable segment assets	$ 1,499	$ 1,551

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Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Decrease (increase) in current assets:
Receivables, net	$ 1,225	$ (4,163)
Inventories	(73)	(1,056)
Prepaid expenses and other	(55)	(108)
Increase (decrease) in current liabilities:
Accounts payable	(1,909)	4,240
Accrued expenses	(128)	(126)
Taxes other than income taxes payable	(136)	133
Income taxes payable	(652)	952
Changes in current assets and current liabilities	(1,728)	(128)
Cash Flows Related to Interest and Income Taxes
Interest paid in excess of amount capitalized, including interest on finance leases	273	291
Income taxes paid, net	2,410	916
Operating cash flows
Operating Leases	206	196
Finance Leases	54	39
Financing cash flows
Finance Leases	107	86
Changes in lease balances resulting from new and modified leases, Operating Leases	237	92
Changes in lease balances resulting from new and modified leases, Finance Leases	$ 48	$ 164

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Fair Value Measurements, Recurring (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Assets
Investments in AFS debt securities			$ 0
Fair Value, Recurring [Member]
Assets
Investments in AFS debt securities	$ 202,000,000	$ 221,000,000
Total gross fair value, assets	749,000,000	1,133,000,000
Effect of counterparty netting	(398,000,000)	(705,000,000)
Effect of cash collateral netting	0	(8,000,000)
Net carrying value on Balance Sheet, assets	351,000,000	420,000,000
Liabilities
Blending program obligations	55,000,000	55,000,000
Total gross fair value, liabilities	505,000,000	766,000,000
Effect of counterparty netting	(398,000,000)	(705,000,000)
Effect of cash collateral netting	0	0
Net carrying value on Balance Sheet, liabilities	107,000,000	61,000,000
Fair Value, Recurring [Member] | Cash and Cash Equivalents [Member]
Assets
Investments in AFS debt securities	0	125,000,000
Fair Value, Recurring [Member] | Prepaid Expenses and Other [Member]
Assets
Investments in AFS debt securities	202,000,000	96,000,000
Fair Value, Recurring [Member] | Assets Held in Trust [Member]
Assets
Investments of certain benefit plans	78,000,000	78,000,000
Fair Value, Recurring [Member] | Commodity Contracts [Member]
Assets
Derivative contracts	469,000,000	830,000,000
Effect of counterparty netting	(398,000,000)	(705,000,000)
Effect of cash collateral netting	0	(8,000,000)
Derivative contracts, net assets	71,000,000	117,000,000
Cash collateral received not offset	0	0
Liabilities
Derivative contracts	398,000,000	705,000,000
Effect of counterparty netting	(398,000,000)	(705,000,000)
Effect of cash collateral netting	0	0
Derivative contracts, net liabilities	0	0
Cash collateral paid not offset	(54,000,000)	(149,000,000)
Fair Value, Recurring [Member] | Physical Purchase Contracts [Member]
Assets
Derivative contracts, not subject to netting	0	4,000,000
Liabilities
Derivative contracts, not subject to netting	51,000,000	4,000,000
Fair Value, Recurring [Member] | Foreign Currency Contracts [Member]
Liabilities
Derivative contracts, not subject to netting	1,000,000	2,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Investments in AFS debt securities	104,000,000	56,000,000
Total gross fair value, assets	645,000,000	958,000,000
Liabilities
Blending program obligations	0	0
Total gross fair value, liabilities	399,000,000	707,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Assets
Investments in AFS debt securities	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Prepaid Expenses and Other [Member]
Assets
Investments in AFS debt securities	104,000,000	56,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Assets Held in Trust [Member]
Assets
Investments of certain benefit plans	72,000,000	72,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Commodity Contracts [Member]
Assets
Derivative contracts	469,000,000	830,000,000
Liabilities
Derivative contracts	398,000,000	705,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Physical Purchase Contracts [Member]
Assets
Derivative contracts, not subject to netting	0	0
Liabilities
Derivative contracts, not subject to netting	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Foreign Currency Contracts [Member]
Liabilities
Derivative contracts, not subject to netting	1,000,000	2,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Investments in AFS debt securities	98,000,000	165,000,000
Total gross fair value, assets	98,000,000	169,000,000
Liabilities
Blending program obligations	55,000,000	55,000,000
Total gross fair value, liabilities	106,000,000	59,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Assets
Investments in AFS debt securities	0	125,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Prepaid Expenses and Other [Member]
Assets
Investments in AFS debt securities	98,000,000	40,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Assets Held in Trust [Member]
Assets
Investments of certain benefit plans	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Commodity Contracts [Member]
Assets
Derivative contracts	0	0
Liabilities
Derivative contracts	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Physical Purchase Contracts [Member]
Assets
Derivative contracts, not subject to netting	0	4,000,000
Liabilities
Derivative contracts, not subject to netting	51,000,000	4,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Currency Contracts [Member]
Liabilities
Derivative contracts, not subject to netting	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Investments in AFS debt securities	0	0
Total gross fair value, assets	6,000,000	6,000,000
Liabilities
Blending program obligations	0	0
Total gross fair value, liabilities	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Assets Held in Trust [Member]
Assets
Investments of certain benefit plans	6,000,000	6,000,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Commodity Contracts [Member]
Assets
Derivative contracts	0	0
Liabilities
Derivative contracts	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Physical Purchase Contracts [Member]
Assets
Derivative contracts, not subject to netting	0	0
Liabilities
Derivative contracts, not subject to netting	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Foreign Currency Contracts [Member]
Liabilities
Derivative contracts, not subject to netting	$ 0	$ 0

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Fair Value Measurements, Nonrecurring (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Jun. 30, 2023
Nonrecurring Fair Value Measurements (Textual)
Asset impairment loss	$ 61,000,000
Fair Value, Nonrecurring [Member]
Nonrecurring Fair Value Measurements (Textual)
Assets measured at fair value	0	$ 0
Liabilities measured at fair value	$ 0	$ 0

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Fair Value Measurements, Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Financial liabilities:
Debt (excluding finance lease obligations), at carrying amount	$ 8,986	$ 9,241
Fair Value, Inputs, Level 2 [Member]
Financial liabilities:
Debt (excluding finance lease obligations), at fair value	$ 8,664	$ 8,902

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Price Risk Management Activities (Details) bu in Thousands, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) bu MBbls	Jun. 30, 2022 USD ($)
Price Risk Management Activities (Textual)
Compliance program costs | $	[1]	$ 29,430	$ 42,946	$ 59,435	$ 77,895
Renewable And Low-Carbon Fuel Programs [Member]
Price Risk Management Activities (Textual)
Compliance program costs | $		387	$ 221	$ 800	$ 523
Derivatives Designated as Hedges [Member] | Cash Flow Hedges [Member] | Future, 2022 Maturity [Member] | Long (Purchases) [Member] | Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				2,451
Derivatives Designated as Hedges [Member] | Cash Flow Hedges [Member] | Future, 2022 Maturity [Member] | Short (Sales) [Member] | Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				7,020
Derivatives Designated as Hedges [Member] | Cash Flow Hedges [Member] | Future, 2023 Maturity [Member] | Long (Purchases) [Member] | Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				0
Derivatives Designated as Hedges [Member] | Cash Flow Hedges [Member] | Future, 2023 Maturity [Member] | Short (Sales) [Member] | Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				0
Derivatives Designated as Economic Hedges [Member] | Future, 2022 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				75,103
Derivatives Designated as Economic Hedges [Member] | Future, 2022 Maturity [Member] | Long (Purchases) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				172,335
Derivatives Designated as Economic Hedges [Member] | Future, 2022 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				73,103
Derivatives Designated as Economic Hedges [Member] | Future, 2022 Maturity [Member] | Short (Sales) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				212,675
Derivatives Designated as Economic Hedges [Member] | Future, 2023 Maturity [Member] | Long (Purchases) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				59
Derivatives Designated as Economic Hedges [Member] | Future, 2023 Maturity [Member] | Long (Purchases) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				20
Derivatives Designated as Economic Hedges [Member] | Future, 2023 Maturity [Member] | Short (Sales) [Member] | Crude Oil and Refined Petroleum Products (in thousands of barrels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume				302
Derivatives Designated as Economic Hedges [Member] | Future, 2023 Maturity [Member] | Short (Sales) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				2,120
Derivatives Designated as Economic Hedges [Member] | Physical Contracts, 2022 Maturity [Member] | Long (Purchases) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				40,132
Derivatives Designated as Economic Hedges [Member] | Physical Contracts, 2023 Maturity [Member] | Long (Purchases) [Member] | Corn (in thousands of bushels) [Member]
Volume of Outstanding Contracts
Nonmonetary notional amount of price risk derivatives, volume | bu				2,084
Derivatives Designated as Economic Hedges [Member] | Foreign Exchange Contract, US Dollars [Member]
Price Risk Management Activities (Textual)
Monetary notional amount of derivative liabilities | $		$ 614		$ 614

[1] Cost of materials and other for our Renewable Diesel segment is net of the blender’s tax credit on qualified fuel mixtures of $388 million and $198 million for the three months ended June 30, 2023 and 2022, respectively, and $634 million and $354 million for the six months ended June 30, 2023 and 2022, respectively.

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Price Risk Management Activities, Hedging Instruments by Consolidated Balance Sheet Location (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Derivatives Designated as Hedging Instruments [Member] | Commodity Contracts [Member] | Receivable, Net [Member]
Fair Values of Derivative Instruments
Derivative asset, subject to netting	$ 7	$ 61
Derivative liability, subject to netting	1	44
Derivatives Not Designated as Hedging Instruments [Member]
Fair Values of Derivative Instruments
Derivative asset, total	462	773
Derivative liability, total	449	667
Derivatives Not Designated as Hedging Instruments [Member] | Commodity Contracts [Member] | Receivable, Net [Member]
Fair Values of Derivative Instruments
Derivative asset, subject to netting	462	769
Derivative liability, subject to netting	397	661
Derivatives Not Designated as Hedging Instruments [Member] | Physical Purchase Contracts [Member] | Inventories [Member]
Fair Values of Derivative Instruments
Derivative asset, not subject to netting	0	4
Derivative liability, not subject to netting	51	4
Derivatives Not Designated as Hedging Instruments [Member] | Foreign Currency Contracts [Member] | Accrued Expenses [Member]
Fair Values of Derivative Instruments
Derivative asset, not subject to netting	0	0
Derivative liability, not subject to netting	$ 1	$ 2

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Price Risk Management Activities, Effect of Derivative Instruments on Income and Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Commodity Contracts [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in other comprehensive income (loss)	$ 31	$ (130)	$ 126	$ (294)
Commodity Contracts [Member] | Revenues [Member]
Effect of Derivative Instruments on Income
Gain (loss) reclassified from accumulated other comprehensive loss into income	78	(180)	116	(299)
Commodity Contracts [Member] | Revenues [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in income on derivatives	(10)	(2)	(17)	(6)
Commodity Contracts [Member] | Cost of Materials and Other [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in income on derivatives	91	(272)	174	(867)
Commodity Contracts [Member] | Operating Expenses (Excluding Depreciation and Amortization Expense) [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in income on derivatives	0	6	1	9
Foreign Currency Contracts [Member] | Cost of Materials and Other [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in income on derivatives	(17)	49	(20)	47
Foreign Currency Contracts [Member] | Other Income (Expense), Net [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Effect of Derivative Instruments on Income
Gain (loss) recognized in income on derivatives	$ 0	$ (115)	$ 0	$ (81)