Valero Energy (VLO) 10-K risk factor changes: FY2015 vs FY2014

Our operations are subject to extensive environmental laws and regulations, including those relating to the discharge of materials into the environment, waste management, pollution prevention measures, greenhouse gas [added: (GHG)] emissions, and characteristics and composition of [added: fuels, including] gasoline [added: and diesel.]

[removed: Certain of these laws and regulations could impose obligations to conduct] assessment or remediation efforts at our facilities as well as at formerly owned properties or third-party sites where we have taken wastes for disposal or where our wastes have migrated.

Because environmental laws and regulations are becoming more stringent and new environmental laws and regulations are continuously being enacted or proposed, such as those relating to [removed: greenhouse gas] [added: GHG] emissions and climate change, the level of expenditures required for environmental matters could increase in the future.

Governmental [removed: restrictions on greenhouse gas emissions – including] [added: regulations regarding GHG emissions–including] so-called “cap-and-trade” programs targeted at reducing carbon dioxide [removed: emissions –] [added: emissions–and low carbon fuel standards] could result in [removed: material] increased compliance costs, additional operating restrictions or permitting delays for our business, and an increase in the cost of, and reduction in demand for, the products we produce, which could have a material adverse effect on our financial position, results of operations, and liquidity.

If we experience prolonged interruptions of supply or increases in costs to deliver our products to market, or if the ability of the pipelines, vessels, or railroads to transport feedstocks or products is disrupted because of weather events, accidents, derailment, collision, fire, explosion, [added: governmental regulations, or third-party actions, it could have a material adverse effect on our financial position, results of operations, and liquidity.]

[added: Each rating should be] evaluated independently of any other rating.

Workers at [removed: various] [added: some] of our refineries are covered by collective bargaining agreements.

[added: In addition, future] federal or state labor legislation could result in labor shortages and higher costs, especially during critical maintenance periods.

Our [removed: refining and marketing] operations are subject to various hazards common to the industry, including explosions, fires, toxic emissions, maritime hazards, and natural catastrophes.

New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax [removed: liabilities in the future.]

If our spin-off of CST (the “Spin-off”), or certain internal transactions undertaken in anticipation of the Spin-off, were determined to be taxable for U.S. federal income tax purposes, then we and [added: certain of] our stockholders could be subject to significant tax liability.

[removed: In addition, we would] recognize gain in an amount equal to the excess of the fair market value of shares of CST common stock distributed to our holders on the Spin-off date over our tax basis in such shares of CST common stock.

[added: If we were to become liable] for taxes under the tax matters agreement, that liability could have a material adverse effect on us.

Certain of these laws and regulations could impose obligations to conduct

In addition, in 2015, the U.S., Canada, and the U.K. participated in the United Nations Conference on Climate Change, which led to the creation of the Paris Agreement.

The Paris Agreement will be open for signing on April 22, 2016, and will require countries to review and “represent a progression” in their intended nationally determined contributions (which set GHG emission reduction goals) every five years beginning in 2020.

Restrictions on emissions of methane or carbon dioxide that have been or may be imposed in various U.S. states or at the U.S. federal level or in other countries could adversely affect the oil and gas industry.

Finally, some scientists have concluded that increasing concentrations of GHG emissions in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events.

If any such effects were to occur, it is uncertain if they would have an adverse effect on our financial condition and operations.

For example, in May 2014, the U.S. Department of Transportation (DOT) issued an order requiring rail carriers to provide certain notifications to state agencies along routes used by trains over a certain length carrying crude oil.

In addition, in November 2014, the U.S. DOT issued a final rule regarding safety training standards under the Rail Safety Improvement Act of 2008.

The rule required each railroad or contractor to develop and submit a training program to perform regular oversight and annual written reviews.

In May 2015, the Pipeline and Hazardous Materials Safety Administration and the Federal Railroad Administration issued new final rules for enhanced tank car standards and operational controls for high-hazard flammable trains.

Although we do not believe recently adopted rules will have a material impact on our financial position, results of operations, and liquidity, further changes in law, regulations or industry standards could require us to incur additional costs to the extent they are applicable to us.

liabilities in the future.

In addition, we would

and diesel fuels.

governmental regulations, or third-party actions, it could have a material adverse effect on our financial position, results of operations, and liquidity.

For example, in 2014 the U.S. Department of Transportation (DOT) and Transport Canada (TC) issued proposed regulations for rail car standards and railroad operating requirements for flammable liquids with particular emphasis on shipments of crude oil, gasoline, and ethanol.

The regulations as proposed would require significant physical modifications to rail cars.

We may be required to incur additional costs in connection with these and other future regulations of rail transportation to the extent they are applicable to us.

Each rating should be

In addition, future

If we were to become liable

| • | our anticipated level of capital investments, including deferred [removed: refinery turnaround and catalyst] costs [added: for refinery turnarounds] and [added: catalyst,] capital expenditures for environmental and other purposes, and [added: joint venture investments, and] the effect of [removed: these] [added: those] capital investments on our results of operations; |

| • | demand for, and supplies of, refined products such as gasoline, [removed: diesel fuel,] [added: diesel,] jet fuel, petrochemicals, and ethanol; |

| • | the volatility in the market price of biofuel credits (primarily Renewable Identification Numbers (RINs) needed to comply with the U.S. federal Renewable Fuel [removed: Standard);] [added: Standard) and GHG emission credits needed to comply with the requirements of various GHG emission programs;] |

| • | legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by governmental authorities, including tax and environmental regulations, such as those implemented under the California Global Warming Solutions Act (also known as AB 32), Quebec’s Regulation respecting the cap-and-trade system for greenhouse gas emission allowances (the Quebec cap-and-trade system), and the U.S. EPA’s regulation of [removed: greenhouse gases,] [added: GHGs,] which may adversely affect our business or operations; |

For the year ended December 31, [removed: 2014,] [added: 2015,] we reported net income attributable to Valero stockholders from continuing operations of [removed: $3.7] [added: $4.0] billion, or [removed: $6.97] [added: $7.99] per share (assuming dilution), compared to [removed: $2.7] [added: $3.7] billion, or [removed: $4.96] [added: $6.97] per share (assuming dilution), for the year ended December 31, [removed: 2013.][added: 2014.]

Our operating income increased [removed: $1.9 billion] [added: $456 million] from [removed: 2013 to] 2014 [added: to 2015] as outlined by business segment in the following table (in millions):

| | [removed: |] 2014 | | | | 2013 [added: (c)] | | | | Change | | |

| [removed: Ethanol] [added: Total ethanol operating income] | [added: $] | 786 | | | [added: $] | 491 | | | [added: $] | 295 | | [removed: |]

| Corporate | | [removed: (768] [added: (757] | | ) | | [removed: (826] [added: (768] | | ) | | [removed: 58] [added: 11] | | |

The [removed: $1.7] [added: $2.1] billion increase in refining segment operating income [removed: for 2014] [added: in 2015] compared to [removed: 2013] [added: 2014] was due to [removed: wider discounts for sweet and sour crude oils relative to Brent crude oil,] higher [removed: throughput volumes in our U.S. Gulf Coast region, and higher] margins on [added: gasoline and] other refined products (e.g., petroleum [removed: coke] [added: coke, propane, sulfur,] and [removed: sulfur),] [added: lubes),] partially offset by [removed: weaker] [added: lower discounts for most sweet and sour crude oils relative to Brent crude oil and lower] distillate margins.

Our ethanol segment operating income [removed: increased $295] [added: decreased $590] million in [removed: 2014] [added: 2015] compared to [removed: 2013] [added: 2014] due to lower [removed: corn feedstock costs] [added: ethanol margins that resulted from lower ethanol] and [removed: higher production volumes,] [added: co-product prices,] partially offset by lower [removed: co-product prices and lower ethanol prices.][added: corn feedstock costs.]

Energy markets and margins were volatile during [removed: 2014, especially in the latter part of the year,] [added: 2015,] and we expect them to continue to be volatile in the [removed: near to mid-term.][added: 2016.]

Below is a summary of factors that have impacted or may impact our results of operations during the first quarter of [removed: 2015:][added: 2016:]

| • | Ethanol margins are expected to remain [removed: relatively low] [added: depressed] as long as gasoline prices remain low. |

[removed: | • |] The cost to implement certain provisions of the AB 32 cap-and-trade system and low carbon fuel standard in California and the Quebec cap-and-trade system [removed: may be] [added: are] significant; however, we [removed: expect to recover] [added: are recovering] the majority of these costs from our customers. [removed: |]

Financial Highlights [removed: (a)]

| | 2014 | | | | 2013 [removed: (b)] | | | | Change | | |

| Cost of sales [added: (b)] | 118,141 | | | | 127,316 | | | | (9,175 | | ) |

| Gain on disposition of retained interest in CST Brands, Inc. [removed: (b)] [added: (c)] | — | | | | 325 | | | | (325 | | ) |

| Less: Net income attributable to noncontrolling interests | [removed: 81] [added: 111] | | | | [removed: 8] [added: 81] | | | | [removed: 73] [added: 30] | | |

See note references on page [removed: 31.][added: 32.]

Refining Operating Highlights [removed: (a)]

| [removed: Refining:] [added: Refining (d):] | | | | | | | | | | | |

| Throughput margin per barrel [removed: (c)] [added: (b) (e)] | $ | [removed: 11.28] [added: 11.05] | | | $ | 9.69 | | | $ | [removed: 1.59] [added: 1.36] | |

| Operating income per barrel | $ | [removed: 5.83] [added: 5.60] | | | $ | 4.30 | | | $ | [removed: 1.53] [added: 1.30] | |

| Other products [removed: (d)] [added: (f)] | 423 | | | | 440 | | | | (17 | | ) |

Refining Operating Highlights by Region [removed: (e)][added: (a) (b) (f)]

| Operating income | $ | [removed: 3,484] [added: 3,368] | | | $ | 2,375 | | | $ | [removed: 1,109] [added: 993] | |

| Throughput margin per barrel [removed: (c)] [added: (e)] | $ | [removed: 11.23] [added: 11.03] | | | $ | 9.57 | | | $ | [removed: 1.66] [added: 1.46] | |

| Operating income per barrel | $ | [removed: 5.97] [added: 5.77] | | | $ | 4.27 | | | $ | [removed: 1.70] [added: 1.50] | |

| Operating income | $ | [removed: 1,358] [added: 1,323] | | | $ | 1,293 | | | $ | [removed: 65] [added: 30] | |

| Throughput margin per barrel [removed: (c)] [added: (e)] | $ | [removed: 13.85] [added: 13.63] | | | $ | 13.37 | | | $ | [removed: 0.48] [added: 0.26] | |

| Operating income per barrel | $ | [removed: 8.34] [added: 8.12] | | | $ | 8.15 | | | $ | [removed: 0.19] [added: (0.03] | [added: )] |

| Operating income | $ | [removed: 971] [added: 911] | | | $ | 570 | | | $ | [removed: 401] [added: 341] | |

| Throughput margin per barrel [removed: (c)] [added: (e)] | $ | [removed: 10.38] [added: 10.02] | | | $ | 7.93 | | | $ | [removed: 2.45] [added: 2.09] | |

| Operating income per barrel | $ | [removed: 5.82] [added: 5.46] | | | $ | 3.40 | | | $ | [removed: 2.42] [added: 2.06] | |

| Operating income (loss) | $ | [removed: 71] [added: 53] | | | $ | (27 | ) | | $ | [removed: 98] [added: 80] | |

| Throughput margin per barrel [removed: (c)] [added: (e)] | $ | [removed: 8.79] [added: 8.60] | | | $ | 7.43 | | | $ | [removed: 1.36] [added: 1.17] | |

| Operating income (loss) per barrel | $ | [removed: 0.74] [added: 0.55] | | | $ | (0.27 | ) | | $ | [removed: 1.01] [added: 0.82] | |

| | Year Ended December 31, | | | | | | | | | | [added: |]

Included in our 2015 results was a noncash charge for a lower of cost or market inventory valuation adjustment recorded in December 2015 of $790 million ($624 million after taxes, or $1.25 per share (assuming dilution)), of which $740 million was attributable to our refining segment and $50 million was attributable to our ethanol segment.

This matter is more fully described in Note 6 of Notes to Consolidated Financial Statements.

Included in our 2014 results was a last-in, first-out (LIFO) inventory gain of $233 million ($151 million after taxes, or $0.29 per share (assuming dilution)) primarily related to our refining segment.

| Refining | | $ | 6,973 | | | $ | 5,884 | | | $ | 1,089 | |

| Ethanol | | 142 | | | | 786 | | | | (644 | | ) |

| Total | | $ | 6,358 | | | $ | 5,902 | | | $ | 456 | |

However, excluding the effect of the lower of cost or market inventory valuation adjustment and the LIFO gain discussed above, total operating income for 2015 and 2014 was $7.1 billion and $5.7 billion, respectively, reflecting a $1.4 billion favorable increase between the years, with refining segment operating income of $7.7 billion and $5.6 billion, respectively, (a favorable increase of $2.1 billion) and ethanol segment operating income of $192 million and $782 million, (an unfavorable decrease of $590 million).

In March 2015, we issued $600 million of 3.65 percent senior notes due March 15, 2025 and $650 million of 4.9 percent senior notes due March 15, 2045, and our consolidated subsidiary, VLP, borrowed $200 million under its revolving credit facility (the VLP Revolver), as further described in Note 10 of Notes to Consolidated Financial Statements.

On July 1, 2015, VLP repaid $25 million of the amount borrowed under the VLP Revolver.

On July 13, 2015, our board of directors authorized us to purchase an additional $2.5 billion of our outstanding common stock, with no expiration date to such authorization, and we had $1.3 billion remaining available under that authorization as of December 31, 2015.

Effective November 24, 2015, VLP completed a public offering of 4,250,000 common units at a price of $46.25 per unit and received net proceeds from the offering of $189 million after deducting the underwriting discount and other offering costs.

This transaction is further described in Note 4 of Notes to Consolidated Financial Statements.

| • | Gasoline margins have been volatile, but are expected to recover from seasonal lows in the near term as domestic and export demand is expected to increase. Distillate margins have been negatively impacted by mild winter temperatures and are also expected to recover from their seasonal lows. |

| • | Medium and heavy sour crude oil discounts are expected to remain wide as sour crude oil remains oversupplied. Fuel oil price weakness has also put pressure on heavy sour crude oil discounts. Sweet crude oil discounts are expected to remain weak on lower domestic sweet crude oil production and higher foreign sweet and sour crude oil imports. |

2015 Compared to 2014

| | 2015 | | | | 2014 | | | | Change | | |

| Operating revenues | $ | 87,804 | | | $ | 130,844 | | | $ | (43,040 | ) |

| Cost of sales (excluding the lower of cost or market inventory valuation adjustment) (a) | 73,861 | | | | 118,141 | | | | (44,280 | | ) |

| Lower of cost or market inventory valuation adjustment (b) | 790 | | | | — | | | | 790 | | |

| Refining | 3,795 | | | | 3,900 | | | | (105 | | ) |

| Ethanol | 448 | | | | 487 | | | | (39 | | ) |

| Refining | 1,745 | | | | 1,597 | | | | 148 | | |

| Total costs and expenses | 81,446 | | | | 124,942 | | | | (43,496 | | ) |

| Operating income | 6,358 | | | | 5,902 | | | | 456 | | |

| Income tax expense | 1,870 | | | | 1,777 | | | | 93 | | |

| Net income | 4,101 | | | | 3,711 | | | | 390 | | |

| Continuing operations | $ | 3,990 | | | $ | 3,694 | | | $ | 296 | |

| Total | $ | 3,990 | | | $ | 3,630 | | | $ | 360 | |

| Continuing operations | $ | 7.99 | | | $ | 6.97 | | | $ | 1.02 | |

| Discontinued operations | — | | | | (0.12 | | ) | | 0.12 | | |

| Total | $ | 7.99 | | | $ | 6.85 | | | $ | 1.14 | |

| | 2015 | | | | 2014 | | | | Change | | |

| Operating income | $ | 6,973 | | | $ | 5,884 | | | $ | 1,089 | |

| Residuals | 274 | | | | 230 | | | | 44 | | |

| Other feedstocks | 140 | | | | 134 | | | | 6 | | |

| Total feedstocks | 2,488 | | | | 2,436 | | | | 52 | | |

| Distillates | 1,066 | | | | 1,047 | | | | 19 | | |

| Other products (e) | 408 | | | | 423 | | | | (15 | | ) |

| Total yields | 2,838 | | | | 2,799 | | | | 39 | | |

| | 2015 | | | | 2014 | | | | Change | | |

| | |

| --- | --- |

The increase of $980 million was due primarily to the increase of $1.9 billion in our operating income as shown in the table below.

The increase in our operating income was partially offset by a $325 million nontaxable gain recorded in 2013 related to the disposition of our retained interest in CST, which is more fully described in Notes 3 and 11 of Notes to Consolidated Financial Statements.

| Refining | | $ | 5,884 | | | $ | 4,211 | | | $ | 1,673 | |

| Retail | | — | | | | 81 | | | | (81 | | ) |

| Total | | $ | 5,902 | | | $ | 3,957 | | | $ | 1,945 | |

Higher energy costs and depreciation expense between the periods also impacted our refining segment income.

On May 1, 2013, we completed the separation of our retail business, by spinning off CST as an independent public company.

Therefore, we did not have any retail segment operations in 2014, resulting in the $81 million decrease in retail segment operating income in 2014 compared to 2013.

| • | Discounts in the price of medium sour and heavy sour crude oils as compared to the price of Brent crude oil have widened since year end as producers of those crude oils have attempted to maintain market share in an oversupplied crude oil market. |

| • | Discounts in the price of North American sweet crude oils as compared to the price of Brent crude oil are expected to increase due to a build in U.S. crude oil inventories, driven primarily by (i) increasing imports of medium sour and heavy sour crude oils, (ii) seasonal planned refinery maintenance, and (iii) a crude oil market structure where the future price is higher than the current price of crude oil, which indicates that the crude oil market is oversupplied. |

| • | Refined product margins are expected to strengthen due to an increase in the demand for refined products and the impact on product inventories from refinery maintenance thus far in the first quarter of 2015. |

| • | The market price of biofuel credits (primarily RINs) is expected to remain volatile during 2015. |

| • | The United Steelworkers union and the U.S. refining industry are currently in the process of collective bargaining and strikes have been called at 12 U.S. refineries. We have four refineries that could be targeted for a strike but none has been targeted at this time. Also note our disclosures in Item 1A, “Risk Factors” — Our business may be negatively affected by work stoppages, slowdowns or strikes by our employees, as well as new labor legislation issued by regulators. |

________________

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Retail: | | | | | | | | | | | |

| (a) | In May 2014, we abandoned our Aruba Refinery, except for the associated crude oil and refined products terminal assets that we continue to operate. As a result, the refinery’s results of operations have been presented as discontinued operations and the operating highlights for the refining segment and the U.S. Gulf Coast region exclude the Aruba Refinery for all years presented. This transaction is more fully described in Note 2 of Notes to Consolidated Financial Statements. |

2013.

We estimate that the increase in other refinery products margins during the year ended December 31, 2014 compared to the year ended December 31, 2013 had a positive impact to our refining margin of approximately $430 million.

Ethanol gross margin per gallon increased to $1.06 per gallon for the year ended December 31, 2014 from $0.77 per gallon for the year ended December 31, 2013 due primarily to the following:

Corporate Expenses and Other

2013 Compared to 2012

| | 2013 (b) | | | | 2012 | | | | Change | | |

| Operating revenues | $ | 138,074 | | | $ | 138,393 | | | $ | (319 | ) |

| Cost of sales | 127,316 | | | | 126,485 | | | | 831 | | |

| Refining | 3,710 | | | | 3,513 | | | | 197 | | |

| Retail | 226 | | | | 686 | | | | (460 | | ) |

| Ethanol | 387 | | | | 332 | | | | 55 | | |

| Refining | 1,566 | | | | 1,345 | | | | 221 | | |

| Retail | 41 | | | | 119 | | | | (78 | | ) |

| Asset impairment losses (c) | — | | | | 86 | | | | (86 | | ) |

| Total costs and expenses | 134,117 | | | | 133,349 | | | | 768 | | |

| Operating income | 3,957 | | | | 5,044 | | | | (1,087 | | ) |

| Gain on disposition of retained interest in CST Brands, Inc. (b) | 325 | | | | — | | | | 325 | | |

| Income tax expense | 1,254 | | | | 1,626 | | | | (372 | | ) |

| Net income | 2,728 | | | | 2,080 | | | | 648 | | |

| Continuing operations | $ | 2,714 | | | $ | 3,117 | | | $ | (403 | ) |

To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, including swaps, futures, and options to [removed: hedge:][added: manage the volatility of:]

| • | inventories and firm commitments to purchase inventories generally for amounts by which our current year inventory levels (determined on a [removed: last-in, first-out (LIFO)] [added: LIFO] basis) differ from our previous year-end LIFO inventory levels and |

We use the futures markets for the available liquidity, which provides greater flexibility in transacting our [removed: hedging and trading operations.][added: price risk activities.]

Our positions in commodity derivative instruments are monitored and managed on a daily basis by [removed: a] [added: our] risk control group to ensure compliance with our stated risk management policy that has been approved by our board of directors.

| 10% increase in underlying commodity prices | [removed: $ |] (127 | [removed: )] | [added: )] | [removed: $] | (2 | [added: |] ) |

| 10% increase in underlying commodity prices | [removed: (91] [added: $] | [added: (45] | ) | | [removed: 3] [added: $] | [added: —] | |

| 10% decrease in underlying commodity prices | [removed: 91] [added: 45] | | | | [removed: (2] [added: 5] | | [removed: )] |

See Note [removed: 21] [added: 20] of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, [removed: 2014.][added: 2015.]

We are exposed to market risk related to the volatility in the price of biofuel credits [added: and GHG emission credits] needed to comply with various governmental and regulatory programs.

To manage [removed: this risk,] [added: these risks,] we enter into contracts to purchase these credits when prices are deemed favorable.

As of December 31, [removed: 2014,] [added: 2015,] there was [removed: no] [added: an immaterial amount of] gain or loss in the fair value of derivative instruments that would result from a 10 percent increase or decrease in the underlying price of the contracts.

See Note [removed: 21] [added: 20] of Notes to Consolidated Financial Statements for a discussion about these compliance programs.

The following table provides information about our debt [removed: instruments, excluding capital lease] obligations (dollars in millions), the fair values of which are sensitive to changes in interest rates.

We had no interest rate derivative instruments outstanding as of December 31, [removed: 2014 and 2013.][added: 2015 or 2014.]

| | 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | 2019 | | | | There- after | | | | Total [added: (a)] | | | | Fair Value | | |

| | [removed: 2014] [added: 2016] | | | | [removed: 2015] [added: 2017] | | | | [removed: 2016] [added: 2018] | | | | [removed: 2017] [added: 2019] | | | | [removed: 2018] [added: 2020] | | | | There- after | | | | Total [added: (a)] | | | | Fair Value | | |

| Average interest rate | [removed: 0.9] [added: 1.7] | | % | | — | | % | | — | | % | | — | | % | | [removed: —] [added: 1.5] | | % | | — | | % | | [removed: 0.9] [added: 1.6] | | % | | | | |

As of December 31, [removed: 2014,] [added: 2015,] we had commitments to purchase [removed: $377] [added: $292] million of U.S. dollars.

Our market risk was minimal on [removed: the] [added: these] contracts, as [removed: the majority] [added: all] of them matured on or before January 31, [removed: 2015,] [added: 2016,] resulting in a gain of [removed: $12] [added: $10] million in the first quarter of [removed: 2015.][added: 2016.]

| December 31, 2015: | | | | | | | |

| | December 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | — | | | $ | 950 | | | $ | — | | | $ | 750 | | | $ | 850 | | | $ | 4,474 | | | $ | 7,024 | | | $ | 7,467 | |

| Average interest rate | — | | % | | 6.4 | | % | | — | | % | | 9.4 | | % | | 6.1 | | % | | 6.3 | | % | | 6.6 | | % | | | | |

| Floating rate | $ | 117 | | | $ | — | | | $ | — | | | $ | — | | | $ | 175 | | | $ | — | | | $ | 292 | | | $ | 292 | |

________________________

| | |

| --- | --- |

| (a) | Excludes unamortized discount and fair value adjustments recorded when the debt was acquired in connection with a business combination. |

| December 31, 2013: | | | | | | | |

| Debt: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | $ | 200 | | | $ | 475 | | | $ | — | | | $ | 950 | | | $ | — | | | $ | 4,824 | | | $ | 6,449 | | | $ | 7,559 | |

| Average interest rate | 4.8 | | % | | 5.2 | | % | | — | | % | | 6.4 | | % | | — | | % | | 7.3 | | % | | 6.9 | | % | | | | |

| Floating rate | $ | 100 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 100 | | | $ | 100 | |

We incorporate by reference into this Item our disclosures made in Part II, Item 8 of this report included in Note [removed: 12] [added: 11] of Notes to Consolidated Financial Statements under the caption “Litigation Matters.”

We currently have multiple outstanding Violation Notices (VNs) issued by the [removed: BAAQMD, which we reasonably believe may result in penalties of $100,000 or more.][added: BAAQMD.]

In the [removed: first] [added: fourth] quarter of 2015, we entered into an [removed: Agreement] [added: agreement] to resolve various NOVs, and we continue to work with the SCAQMD to resolve the remaining NOVs.

In our annual report on Form 10-K for the year ended December 31, [removed: 2013,] [added: 2014,] we reported that [removed: our Port Arthur Refinery] [added: we] had received [removed: a] [added: two] proposed [removed: agreed order] [added: Agreed Orders] from the TCEQ [added: resolving multiple violations] that [removed: assessed a penalty of $180,911 for alleged air emission and reporting violations,] [added: occurred at our Port Arthur Refinery between May 2007] and [removed: a Notice of Enforcement (NOE) for unauthorized emissions with potential stipulated penalties of $166,000.][added: April 2013.]

In the fourth quarter of 2015, we entered into an agreement with BAAQMD to resolve various VNs and continue to work with the BAAQMD to resolve the remaining VNs.

We currently have multiple NOVs issued by the SCAQMD.

Quebec Ministry of Environment (QME) (Quebec City Refinery).

In the fourth quarter of 2015, the QME issued a NOV for alleged excess emissions at our Quebec City Refinery.

We are currently working with the QME to resolve the NOV.

We continue to work with the BAAQMD to resolve these VNs.

We currently have multiple NOVs issued by the SCAQMD, which we reasonably believe may result in penalties of $100,000 or more.

In the first quarter of 2014, we received two proposed Agreed Orders from the TCEQ resolving multiple violations that occurred between May 2007 and April 2013, including all the unauthorized emissions, reporting violations, and stipulated penalties in the two NOEs referenced above.

For the fiscal year ended December 31, [removed: 2014][added: 2015]

| One Valero Way | | [removed: 78249] | |

| San Antonio, Texas | | [removed: (Zip Code)] [added: 78249] | |

| (Address of principal executive offices) | | [added: (Zip Code)] | |

See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in [removed: Rule12b-2] [added: Rule 12b-2] of the Exchange Act.

The aggregate market value of the voting and non-voting common stock held by non-affiliates was approximately [removed: $26.5] [added: $31.3] billion based on the last sales price quoted as of June 30, [removed: 2014] [added: 2015] on the New York Stock Exchange, the last business day of the registrant’s most recently completed second fiscal quarter.

As of January [removed: 30, 2015, 514,888,348] [added: 29, 2016, 470,392,665] shares of the registrant’s common stock were outstanding.

We intend to file with the Securities and Exchange Commission a definitive Proxy Statement for our Annual Meeting of Stockholders scheduled for [removed: April 30, 2015,] [added: May 12, 2016,] at which directors will be elected.

Portions of the [removed: 2015] [added: 2016] Proxy Statement are incorporated by reference in Part III of this Form 10-K and are deemed to be a part of this report.

The following table indicates the headings in the [removed: 2015] [added: 2016] Proxy Statement where certain information required in Part III of this Form 10-K may be found.

| Form 10-K Item No. and Caption | | | Heading in [removed: 2015] [added: 2016] Proxy Statement |

| 14. | Principal Accountant Fees and Services | | KPMG [added: LLP] Fees [removed: for Fiscal Years 2014] and [removed: 2013 and] Audit Committee Pre-Approval Policy |

| [Items 1. & [removed: 2.](#s127EBFFE042DFCE1870EAA65BD32D5D8)] [added: 2.](#s0527E8643BA75455A7A1C929F9E1F690)] | [Business and [removed: Properties](#s127EBFFE042DFCE1870EAA65BD32D5D8)] [added: Properties](#s0527E8643BA75455A7A1C929F9E1F690)] | [removed: [1](#s127EBFFE042DFCE1870EAA65BD32D5D8)] [added: [1](#s0527E8643BA75455A7A1C929F9E1F690)] |

| | [Valero’s [removed: Operations](#s60321BC43DB1F2A3129FAA65950AD7F2)] [added: Operations](#s62CA33AC9B5450AEBA0D0C4E92F247E1)] | [removed: [2](#s60321BC43DB1F2A3129FAA65950AD7F2)] [added: [2](#s62CA33AC9B5450AEBA0D0C4E92F247E1)] |

| | [Environmental [removed: Matters](#s74FBE53320C6240EC0CBAA65BDDEE61C)] [added: Matters](#s00B03A5D09205533B9486CB2C74224D7)] | [removed: [11](#sf1ac713ff5e14810bcf68a41ee6c45cb)] [added: [11](#s00B03A5D09205533B9486CB2C74224D7)] |

| [Item [removed: 1A.](#s99ff6c5933fc4d8696df0d2a8b366f2e)] [added: 1A.](#sF0E46E436EE252DCBA80B6F63E84262C)] | [Risk [removed: Factors](#s99ff6c5933fc4d8696df0d2a8b366f2e)] [added: Factors](#sF0E46E436EE252DCBA80B6F63E84262C)] | [removed: [12](#s99ff6c5933fc4d8696df0d2a8b366f2e)] [added: [12](#sF0E46E436EE252DCBA80B6F63E84262C)] |

| [Item [removed: 1B.](#s5051F678105BBE05A343AA65BE2C2F3F)] [added: 1B.](#s55C1FCDCCD375D9FAE3E2F81FF232063)] | [Unresolved Staff [removed: Comments](#s5051F678105BBE05A343AA65BE2C2F3F)] [added: Comments](#s55C1FCDCCD375D9FAE3E2F81FF232063)] | [removed: [18](#s5051F678105BBE05A343AA65BE2C2F3F)] [added: [18](#s55C1FCDCCD375D9FAE3E2F81FF232063)] |

| [Item [removed: 3.](#sD6E1563FE5DD15073384AA65BE5AFA81)] [added: 3.](#sE5B6E8E097AF55DB8BC123BAC689790D)] | [Legal [removed: Proceedings](#sD6E1563FE5DD15073384AA65BE5AFA81)] [added: Proceedings](#sE5B6E8E097AF55DB8BC123BAC689790D)] | [removed: [18](#sD6E1563FE5DD15073384AA65BE5AFA81)] [added: [18](#sE5B6E8E097AF55DB8BC123BAC689790D)] |

| [Item [removed: 4.](#s5BABB77DDE2FEEE0B534AA65BE7ABCE1)] [added: 4.](#s852285265D6B5F8589247106E3985665)] | [Mine Safety [removed: Disclosures](#s5BABB77DDE2FEEE0B534AA65BE7ABCE1)] [added: Disclosures](#s852285265D6B5F8589247106E3985665)] | [removed: [18](#s5BABB77DDE2FEEE0B534AA65BE7ABCE1)] [added: [19](#s852285265D6B5F8589247106E3985665)] |

| [Item [removed: 5.](#s6BD53E689B5342BC8799AA6596806A0B)] [added: 5.](#sDE8EC10A233D5BBD80AAE81A5D1103A0)] | [Market for Registrant’s Common Equity, Related Stockholder [removed: Matters,] [added: Matters] and Issuer Purchases of Equity [removed: Securities](#s6BD53E689B5342BC8799AA6596806A0B)] [added: Securities](#sDE8EC10A233D5BBD80AAE81A5D1103A0)] | [removed: [19](#s6BD53E689B5342BC8799AA6596806A0B)] [added: [20](#sDE8EC10A233D5BBD80AAE81A5D1103A0)] |

| [Item [removed: 6.](#s6B102E77B262AA9CFA7EAA65BF067D3F)] [added: 6.](#s4DC894CBCF6A582BA7EAD3C6ECC90294)] | [Selected Financial [removed: Data](#s6B102E77B262AA9CFA7EAA65BF067D3F)] [added: Data](#s4DC894CBCF6A582BA7EAD3C6ECC90294)] | [removed: [22](#s6B102E77B262AA9CFA7EAA65BF067D3F)] [added: [23](#s4DC894CBCF6A582BA7EAD3C6ECC90294)] |

| [Item [removed: 7.](#s8B0CBB59D29ADAFD2109AA65BF256F2B)] [added: 7.](#s31CB771681625884BD4E7F7C78177716)] | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s8B0CBB59D29ADAFD2109AA65BF256F2B)] [added: Operations](#s31CB771681625884BD4E7F7C78177716)] | [removed: [23](#s8B0CBB59D29ADAFD2109AA65BF256F2B)] [added: [24](#s31CB771681625884BD4E7F7C78177716)] |

| [Item [removed: 7A.](#s73C99B80D618941A4780AA65C0ABF721)] [added: 7A.](#sF2908D82CD9E591783430F886D21F81E)] | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s73C99B80D618941A4780AA65C0ABF721)] [added: Risk](#sF2908D82CD9E591783430F886D21F81E)] | [removed: [52](#s73C99B80D618941A4780AA65C0ABF721)] [added: [52](#sF2908D82CD9E591783430F886D21F81E)] |

| [Item [removed: 8.](#sEDCDDA813FCD6601AC22AA6583BBF654)] [added: 8.](#s3137B2CFFB8657E7862A6715D0C277A0)] | [Financial Statements and Supplementary [removed: Data](#sEDCDDA813FCD6601AC22AA6583BBF654)] [added: Data](#s3137B2CFFB8657E7862A6715D0C277A0)] | [removed: [54](#sEDCDDA813FCD6601AC22AA6583BBF654)] [added: [55](#s3137B2CFFB8657E7862A6715D0C277A0)] |

| [Item [removed: 9.](#sB4F8224D5874C39072A6AA65C849C5AE)] [added: 9.](#s9AFF960CE58C53209B49AF91A894F948)] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sB4F8224D5874C39072A6AA65C849C5AE)] [added: Disclosure](#s9AFF960CE58C53209B49AF91A894F948)] | [removed: [127](#sB4F8224D5874C39072A6AA65C849C5AE)] [added: [126](#s9AFF960CE58C53209B49AF91A894F948)] |

| [Item [removed: 9A.](#s225B2DAC1D67AFA2F7A4AA65C878A785)] [added: 9A.](#s3989301A690952A9AFAA73A2CD220CE4)] | [Controls and [removed: Procedures](#s225B2DAC1D67AFA2F7A4AA65C878A785)] [added: Procedures](#s3989301A690952A9AFAA73A2CD220CE4)] | [removed: [127](#s225B2DAC1D67AFA2F7A4AA65C878A785)] [added: [126](#s3989301A690952A9AFAA73A2CD220CE4)] |

| [Item [removed: 9B.](#s6D05285BC0BB641F1587AA65C8972294)] [added: 9B.](#s1A9C1B18FF1359AB8E1C17E6548CBF40)] | [Other [removed: Information](#s6D05285BC0BB641F1587AA65C8972294)] [added: Information](#s1A9C1B18FF1359AB8E1C17E6548CBF40)] | [removed: [127](#s6D05285BC0BB641F1587AA65C8972294)] [added: [126](#s1A9C1B18FF1359AB8E1C17E6548CBF40)] |

| [PART [removed: III](#sD7140F18FEBC4C5E8CE9AA65C8C613E3)] [added: III](#s59AF2FC1ABB5532BAD1C859A27583119)] | | [added: [127](#s59AF2FC1ABB5532BAD1C859A27583119)] |

| [Item [removed: 10.](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: 10.](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [Directors, Executive Officers and Corporate [removed: Governance](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: Governance](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [removed: [128](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: [127](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] |

| [Item [removed: 11.](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: 11.](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [Executive [removed: Compensation](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: Compensation](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [removed: [128](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: [127](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] |

| [Item [removed: 12.](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: 12.](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: Matters](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [removed: [128](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: [127](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] |

| [Item [removed: 13.](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: 13.](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: Independence](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [removed: [128](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: [127](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] |

| [Item [removed: 14.](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: 14.](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [Principal Accountant Fees and [removed: Services](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: Services](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] | [removed: [128](#s1C095562FCF34CEFBA2BAA65C8E5561B)] [added: [127](#sFB12B610DDDB5FD1BB9AEF6BFDFD4D64)] |

| [Item [removed: 15.](#s04D057695792E3D2C4E8AA6587B14F72)] [added: 15.](#sCF04410BF5D9565C8773852E6756257A)] | [Exhibits and Financial Statement [removed: Schedules](#s1F843A02118D8189F5E5AA659BBE1EB3)] [added: Schedules](#sCF04410BF5D9565C8773852E6756257A)] | [removed: [128](#s1F843A02118D8189F5E5AA659BBE1EB3)] [added: [127](#sCF04410BF5D9565C8773852E6756257A)] |

You should read our forward-looking statements together with our disclosures beginning on page [removed: [23](#s44F6B022117AA59E8188AA65BF540078)] [added: [24](#s15CF7492CFC157ED9AF5FEBE0BEFC069)] of this report under the heading: “CAUTIONARY STATEMENT FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.”

On January 31, [removed: 2015,] [added: 2016,] we had [removed: 10,065] [added: 10,103] employees.

Our refineries can produce conventional gasolines, premium gasolines, gasoline meeting the specifications of the California Air Resources Board (CARB), [removed: diesel fuel,] [added: diesel,] low-sulfur [removed: diesel fuel,] [added: diesel,] ultra-low-sulfur [removed: diesel fuel,] [added: diesel,] CARB [removed: diesel fuel,] [added: diesel,] other distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products.

We market branded and unbranded refined products on a wholesale basis in the U.S., Canada, the Caribbean, the U.K., and Ireland through an extensive bulk and rack marketing network and through approximately [removed: 7,400] [added: 7,500] outlets that carry our brand names.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with (or furnished to) the U.S. Securities and Exchange Commission (SEC) are available on our website (under [removed: “Investor Relations”)] [added: “Investors”)] free of charge, soon after we file or furnish such material.

Our refining segment includes refining [removed: operations, wholesale marketing, product supply] and [removed: distribution, and transportation] [added: marketing] operations in the U.S., Canada, the U.K., Aruba, and Ireland.

10-K 1 vloform10-kx12312015.htm 10-K

| [PART I](#s7E9E50F308B55962A449AF0089EB0B35) | | [1](#s7E9E50F308B55962A449AF0089EB0B35) |

| | [Segments](#s61750E58B6E35FFAA9E572F61481536B) | [1](#s61750E58B6E35FFAA9E572F61481536B) |

| | [Properties](#sB718174B47A15026B0EE379E74C45ABA) | [11](#sB718174B47A15026B0EE379E74C45ABA) |

| [PART II](#sDC5F9047FB265977857D99ADDD6964C2) | | [20](#sDC5F9047FB265977857D99ADDD6964C2) |

| [PART IV](#s37D6FDF7C1385BC894DDD37ADEB11F50) | | [127](#s37D6FDF7C1385BC894DDD37ADEB11F50) |

| [Signature](#sB876B71EC6AD59BDB558A8B5833F85E9) | | [131](#sB876B71EC6AD59BDB558A8B5833F85E9) |

| | | | | 1,720,000 | |

| | | | | 485,000 | |

In 2015, we completed construction and placed into service a new 70,000 BPD crude distillation unit in the West Refinery.

fuels, liquefied petroleum gases, and asphalt.

In 2015, we completed a 15,000 BPD hydrocracker expansion project at this refinery.

In 2015, we completed the final phases of a multi-year project, which increased the refinery’s crude oil processing capacity by approximately 20,000 BPD.

The following table presents the percentages of principal charges and yields (on a combined basis) for the two refineries in this region for the year ended December 31, 2015.

| | distillates | 25 | % |

| | | total | | 1,400 million | | 4,195,000 | | 500 million |

10-K 1 vloform10-kx12312014.htm 10-K

| [PART I](#s39F83D91BDC17064E800AA65BD135394) | | |

| | [Segments](#s2F4742A5D48C8345D199AA65BD61F15C) | [1](#s2F4742A5D48C8345D199AA65BD61F15C) |

| | [Properties](#s547D00CF662E804F06CAAA65BE0CFE23) | [11](#s29381c2ec7234528aa4afd51902092c5) |

| [PART II](#sB3FAADA3D8FFE72EF56BAA65BEB8C3C4) | | |

| [PART IV](#s9E57841904C4351F909FAA65C9242F0A) | | |

| [Signature](#sB5DA21392432AFBD5654AA65C9724B68) | | [132](#sB5DA21392432AFBD5654AA65C9724B68) |

Our ethanol segment primarily includes sales of internally produced ethanol and distillers grains.

| | | | | 1,660,000 | |

| | | | | 465,000 | |

No customer accounted for more than 10 percent of our total operating revenues in 2014.

| | | total | | 1,305 million | | 3,910,000 | | 462 million |

As of January 31, [removed: 2015,] [added: 2016,] there were [removed: 6,213] [added: 5,911] holders of record of our common stock.

The following table shows the high and low sales prices of and dividends declared on our common stock for each quarter of [removed: 2014] [added: 2015] and [removed: 2013.][added: 2014.]

| December 31 | | [removed: $ |] 52.10 | | | [removed: $] | 42.53 | | | [removed: $] | 0.275 | | [added: |]

On January [removed: 23, 2015,] [added: 21, 2016,] our board of directors declared a quarterly cash dividend of [removed: $0.40] [added: $0.60] per common share payable March 3, [removed: 2015] [added: 2016] to holders of record at the close of business on February [removed: 11, 2015.][added: 9, 2016.]

The following table discloses purchases of shares of [removed: Valero’s] [added: our] common stock made by us or on our behalf during the fourth quarter of [removed: 2014.][added: 2015.]

| (a) | The shares reported in this column represent purchases settled in the fourth quarter of [removed: 2014] [added: 2015] relating to (i) our purchases of shares in open-market transactions to meet our obligations under stock-based compensation plans, and (ii) 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. |

The following line graph compares the cumulative total return1 on an investment in our common stock against the cumulative total return of the S&P 500 Composite Index and an index of peer companies (that we selected) for the five-year period commencing December 31, [removed: 2009] [added: 2010] and ending December 31, [removed: 2014.][added: 2015.]

[removed: ][added: ]

| | [removed: 12/2009] [added: 2010] | | | | [removed: 12/2010] [added: 2011] | | | | [removed: 12/2011] [added: 2012] | | | | [removed: 12/2012] [added: 2013] | | | | [removed: 12/2013] [added: 2014] | | | | [removed: 12/2014] [added: 2015] | | |

| 1 | Assumes that an investment in Valero common stock and each index was $100 on December 31, [removed: 2009.] [added: 2010.] “Cumulative total return” is based on share price appreciation plus reinvestment of dividends from December 31, [removed: 2009] [added: 2010] through December 31, [removed: 2014.] [added: 2015.] |

| 2015: | | | | | | | | | | | | |

| December 31 | | $ | 73.88 | | | $ | 58.98 | | | $ | 0.500 | |

| September 30 | | 71.50 | | | | 51.68 | | | | 0.400 | | |

| June 30 | | 64.28 | | | | 56.09 | | | | 0.400 | | |

| March 31 | | 64.49 | | | | 43.45 | | | | 0.400 | | |

| October 2015 | | 1,658,771 | | | $ | 62.12 | | | 842,059 | | | 816,712 | | | $2.0 billion |

| November 2015 | | 2,412,467 | | | $ | 71.08 | | | 212,878 | | | 2,199,589 | | | $1.8 billion |

| December 2015 | | 7,008,414 | | | $ | 70.31 | | | 980 | | | 7,007,434 | | | $1.3 billion |

| Total | | 11,079,652 | | | $ | 69.25 | | | 1,055,917 | | | 10,023,735 | | | $1.3 billion |

| (b) | On July 13, 2015, we announced that our board of directors approved our purchase of $2.5 billion of our outstanding common stock (with no expiration date), which was in addition to the remaining amount available under our $3 billion program previously authorized. During the third quarter of 2015, we completed our purchases under the $3 billion program. As of December 31, 2015, we had $1.3 billion remaining available for purchase under the $2.5 billion program. |

| | As of December 31, | | | | | | | | | | | | | | | | | | | | | | |

| Valero Common Stock | $ | 100.00 | | | $ | 92.15 | | | $ | 153.13 | | | $ | 252.67 | | | $ | 253.28 | | | $ | 371.80 | |

| S&P 500 | 100.00 | | | | 102.11 | | | | 118.45 | | | | 156.82 | | | | 178.29 | | | | 180.75 | | |

| Peer Group | 100.00 | | | | 107.70 | | | | 117.64 | | | | 143.16 | | | | 131.88 | | | | 118.95 | | |

| 2013: | | | | | | | | | | | | |

| December 31 | | 50.54 | | | | 33.20 | | | | 0.225 | | |

| September 30 | | 37.50 | | | | 33.00 | | | | 0.225 | | |

| June 30 | | 45.53 | | | | 33.27 | | | | 0.200 | | |

| March 31 | | 48.97 | | | | 34.05 | | | | 0.200 | | |

| October 2014 | | 3,180,678 | | | $ | 46.27 | | | 302,005 | | | 2,878,673 | | | $ 1.8 billion |

| November 2014 | | 2,001,273 | | | $ | 50.32 | | | 119,047 | | | 1,882,226 | | | $ 1.7 billion |

| December 2014 | | 5,120,398 | | | $ | 48.56 | | | 2,624 | | | 5,117,774 | | | $ 1.5 billion |

| Total | | 10,302,349 | | | $ | 48.20 | | | 423,676 | | | 9,878,673 | | | $ 1.5 billion |

| (b) | On February 28, 2008, we announced that our board of directors approved a $3 billion common stock purchase program. This $3 billion program has no expiration date. |

| Valero Common Stock | $ | 100.00 | | | $ | 139.54 | | | $ | 128.59 | | | $ | 213.68 | | | $ | 352.58 | | | $ | 353.43 | |

| S&P 500 | 100.00 | | | | 115.06 | | | | 117.49 | | | | 136.30 | | | | 180.44 | | | | 205.14 | | |

| Peer Group | 100.00 | | | | 93.33 | | | | 100.51 | | | | 109.79 | | | | 133.61 | | | | 123.08 | | |

The selected financial data for the five-year period ended December 31, [removed: 2014] [added: 2015] was derived from our audited financial statements.

| | Year Ended December 31, [removed: (a)] | | | | | | | | | | | | | | | | | | |

| | [removed: 2014 (b)] [added: 2015 (a)] | | | | [removed: 2013 (c)] [added: 2014] | | | | [removed: 2012] [added: 2013 (b)] | | | | [removed: 2011 (d)] [added: 2012] | | | | [removed: 2010 (e)] [added: 2011 (c)] | | |

| Operating revenues | $ | [removed: 130,844] [added: 87,804] | | | $ | [removed: 138,074] [added: 130,844] | | | $ | [removed: 138,393] [added: 138,074] | | | $ | [removed: 120,607] [added: 138,393] | | | $ | [removed: 82,154] [added: 120,607] | |

| Income from continuing operations | [removed: 3,775] [added: 4,101] | | | | [removed: 2,722] [added: 3,775] | | | | [removed: 3,114] [added: 2,722] | | | | [removed: 2,336] [added: 3,114] | | | | [removed: 1,178] [added: 2,336] | | |

| Earnings per common share from continuing operations – assuming dilution | [removed: 6.97] [added: 7.99] | | | | [removed: 4.96] [added: 6.97] | | | | [removed: 5.61] [added: 4.96] | | | | [removed: 4.11] [added: 5.61] | | | | [removed: 2.07] [added: 4.11] | | |

| Dividends per common share | [removed: 1.05] [added: 1.70] | | | | [removed: 0.85] [added: 1.05] | | | | [removed: 0.65] [added: 0.85] | | | | [removed: 0.30] [added: 0.65] | | | | [removed: 0.20] [added: 0.30] | | |

| Total assets | [removed: 45,550] [added: 44,343] | | | | [removed: 47,260] [added: 45,550] | | | | [removed: 44,477] [added: 47,260] | | | | [removed: 42,783] [added: 44,477] | | | | [removed: 37,621] [added: 42,783] | | |

| Debt and capital lease obligations, less current portion | [removed: 5,780] [added: 7,250] | | | | [removed: 6,261] [added: 5,780] | | | | [removed: 6,463] [added: 6,261] | | | | [removed: 6,732] [added: 6,463] | | | | [removed: 7,515] [added: 6,732] | | |

| [removed: (c)] [added: (b)] | Includes the operations of our retail business prior to its separation from us on May 1, 2013, as further described in Note 3 of Notes to Consolidated Financial Statements. |

| [removed: (d)] [added: (c)] | We acquired the Meraux Refinery on October 1, 2011 and the Pembroke Refinery on August 1, 2011. The information presented for 2011 includes the results of operations from these acquisitions commencing on their respective acquisition dates. |

| (a) | Includes a noncash lower of cost or market inventory valuation adjustment of $790 million, as described in Note 6 of Notes to Consolidated Financial Statements. |

| | |

| --- | --- |

| (a) | As further described in Note 2 of Notes to Consolidated Financial Statements, the results of operations of the Aruba Refinery are reported as discontinued operations for all years presented. |

| (b) | We acquired an idled ethanol plant in the first quarter of 2014, and resumed production during the third quarter of 2014. The information presented in 2014 includes the results of operations for this plant commencing on its acquisition date. |

| (e) | We acquired three ethanol plants in the first quarter of 2010. The information presented for 2010 includes the results of operations of these plants commencing on their respective acquisition dates. |

Our management evaluated the effectiveness of Valero’s internal control over financial reporting as of December 31, [removed: 2014.][added: 2015.]

Management believes that as of December 31, [removed: 2014,] [added: 2015,] our internal control over financial reporting was effective based on those criteria.

Our independent registered public accounting firm has issued an attestation report on the effectiveness of our internal control over financial reporting, which begins on page [removed: [56](#s8d9441724c4740e8b1ae33191868728a)] [added: 57] of this report.

Valero Energy [removed: Corporation and subsidiaries:][added: Corporation:]

We have audited the accompanying consolidated balance sheets of Valero Energy Corporation and subsidiaries (the Company) as of December 31, [removed: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2014.][added: 2015.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Valero Energy Corporation and subsidiaries as of December 31, [removed: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, [removed: 2014,] [added: 2015,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the PCAOB, the Company’s internal control over financial reporting as of December 31, [removed: 2014,] [added: 2015,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 26, 2015] [added: 25, 2016] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We have audited Valero Energy [removed: Corporation’s] [added: Corporation] (the Company’s) internal control over financial reporting as of December 31, [removed: 2014,] [added: 2015,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, Valero Energy Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2014,] [added: 2015,] based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the PCAOB, the consolidated balance sheets of Valero Energy Corporation and subsidiaries as of December 31, [removed: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2014,] [added: 2015,] and our report dated February [removed: 26, 2015] [added: 25, 2016] expressed an unqualified opinion on those consolidated financial statements.

[removed: VALERO ENERGY CORPORATION][added: Valero Energy Corporation:]

| | [added: 2015 | | | |] 2014 | | | | 2013 | | |

| Cash and temporary cash investments | $ | [removed: 3,689] [added: 4,114] | | | $ | [removed: 4,292] [added: 3,689] | |

| Receivables, net | [removed: 5,879] [added: 4,464] | | | | [removed: 8,751] [added: 5,879] | | |

| Inventories | [removed: 6,623] [added: 5,898] | | | | [removed: 5,758] [added: 6,623] | | |

| [removed: Income taxes receivable | 97 | | | | 72 |] [added: •] | [added: income taxes receivable;] |

| Deferred income taxes | [removed: 162] [added: 74] | | | | [removed: 266] [added: 162] | | |

| Prepaid expenses and other | [removed: 164] [added: 204] | | | | [removed: 138] [added: 164] | | |

| Total current assets | [removed: 16,614] [added: 14,972] | | | | [removed: 19,277] [added: 16,614] | | |

| Property, plant, and equipment, at cost | [removed: 35,933] [added: 36,907] | | | | [removed: 33,933] [added: 35,933] | | |

| Accumulated depreciation | [removed: (9,198] [added: (10,204] | | ) | | [removed: (8,226] [added: (9,198] | | ) |

| Property, plant, and equipment, net | [removed: 26,735] [added: 26,703] | | | | [removed: 25,707] [added: 26,735] | | |

| Deferred charges and other assets, net | [removed: 2,201] [added: 2,668] | | | | [removed: 2,276] [added: 2,201] | | |

| Total assets | $ | [removed: 45,550] [added: 44,343] | | | $ | [removed: 47,260] [added: 45,550] | |

| Current portion of debt and capital lease obligations | $ | [removed: 606] [added: 127] | | | $ | [removed: 303] [added: 606] | |

| Accounts payable | [removed: 6,760] [added: 4,907] | | | | [removed: 9,931] [added: 6,760] | | |

| Accrued expenses | [removed: 596] [added: 554] | | | | [removed: 522] [added: 596] | | |

| Taxes other than income taxes | [removed: 1,209] [added: 1,069] | | | | [removed: 1,345] [added: 1,209] | | |

| Income taxes payable | [removed: 433] [added: 337] | | | | [removed: 773] [added: 433] | | |

| Deferred income taxes | [removed: 376] [added: 366] | | | | [removed: 249] [added: 376] | | |

| Total current liabilities | [removed: 9,980] [added: 7,360] | | | | [removed: 13,123] [added: 9,980] | | |

| Debt and capital lease obligations, less current portion | [removed: 5,780] [added: 7,250] | | | | [removed: 6,261] [added: 5,780] | | |

| Deferred income taxes | [removed: 6,607] [added: 6,768] | | | | [removed: 6,601] [added: 6,607] | | |

| Other long-term liabilities | [removed: 1,939] [added: 1,611] | | | | [removed: 1,329] [added: 1,939] | | |

| Additional paid-in capital | [removed: 7,116] [added: 7,064] | | | | [removed: 7,187] [added: 7,116] | | |

| Treasury stock, at cost; [removed: 159,202,872] [added: 200,462,208] and [removed: 137,932,138] [added: 159,202,872] common shares | [removed: (8,125] [added: (10,799] | | ) | | [removed: (7,054] [added: (8,125] | | ) |

| Retained earnings | [removed: 22,046] [added: 25,188] | | | | [removed: 18,970] [added: 22,046] | | |

| Accumulated other comprehensive [removed: income (loss)] [added: loss] | [removed: (367] [added: (933] | | ) | | [removed: 350] [added: (367] | | [added: )] |

| Total Valero Energy Corporation stockholders’ equity | [removed: 20,677] [added: 20,527] | | | | [removed: 19,460] [added: 20,677] | | |

| Noncontrolling interests | [removed: 567] [added: 827] | | | | [removed: 486] [added: 567] | | |

February 25, 2016

| | 2015 | | | | 2014 | | |

| Cost of sales (excluding the lower of cost or market inventory valuation adjustment) | 73,861 | | | | 118,141 | | | | 127,316 | | |

| Lower of cost or market inventory valuation adjustment | 790 | | | | — | | | | — | | |

| _______________________________________________ | | | | | | | | | | | |

| Supplemental information: | | | | | | | | | | | |

| (a) Includes excise taxes on sales by certain of our international operations | $ | 5,980 | | | $ | 5,901 | | | $ | 5,459 | |

| Distributions to noncontrolling interests | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (12 | | ) | | (12 | | ) |

| Net income | — | | | | — | | | | — | | | | 3,990 | | | | — | | | | 3,990 | | | | 111 | | | | 4,101 | | |

| Stock purchases | — | | | | — | | | | (196 | | ) | | — | | | | — | | | | (196 | | ) | | — | | | | (196 | | ) |

| Stock purchases under purchase program | — | | | | — | | | | (2,667 | | ) | | — | | | | — | | | | (2,667 | | ) | | — | | | | (2,667 | | ) |

| Net proceeds from issuance of Valero Energy Partners LP common units | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 189 | | | | 189 | | |

| Distributions to noncontrolling interests | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (45 | | ) | | (45 | | ) |

| Balance as of December 31, 2015 | $ | 7 | | | $ | 7,064 | | | $ | (10,799 | ) | | $ | 25,188 | | | $ | (933 | ) | | $ | 20,527 | | | $ | 827 | | | $ | 21,354 | |

| Net income | $ | 4,101 | | | $ | 3,711 | | | $ | 2,728 | |

| Lower of cost or market inventory valuation adjustment | 790 | | | | — | | | | — | | |

| Investments in joint ventures | (141 | | ) | | (14 | | ) | | (76 | | ) |

| Distribution to other noncontrolling interest | (25 | | ) | | — | | | | — | | |

Market value is determined based on the net realizable value of the inventories.

We compare the market value of inventories to their cost on an aggregate basis, excluding materials and supplies.

If the aggregate market value is less than cost, we record a lower of cost or market inventory valuation adjustment to reflect our inventories at market value.

income.

| • | investments in joint ventures accounted for under the equity method; |

| • | re-imaging costs associated with branded outlets. |

to a formal plan of action.

We present excise taxes on sales by certain of our international operations on a gross basis with supplemental information regarding the amount of such taxes included in revenues provided in a footnote on the statements of income.

Environmental Compliance Program Costs

We purchase credits in the open market to meet our obligations under various environmental compliance programs.

We purchase greenhouse gas (GHG) emission credits to comply with government regulations concerning various GHG emission programs, including cap-and-trade systems, as described in Note 20.

In July 2015, the effective date of the new standard was deferred by one year.

Early adoption is permitted, but not before the original effective date, which was for annual reporting periods beginning after December 15, 2016, including interim reporting periods within those reporting periods.

for certain money market funds.

The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations, but will result in additional disclosures.

In April 2015, the provisions of ASC Subtopic 835-30, “Interest–Imputation of Interest,” were amended to simplify the presentation of debt issuance costs.

The guidance requires that debt issuance costs related to a note be reported in the balance sheet as a direct deduction from the face amount of that note, consistent with debt discounts, and that amortization of debt issuance costs be reported as interest expense.

In August 2015, these provisions were further amended with guidance from the Securities and Exchange Commission staff that they would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.

These provisions are to be applied retrospectively and are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted.

The adoption of this guidance effective January 1, 2016 will not materially affect our financial position or results of operations; however, our debt issuance costs associated with issued debt (other than borrowings on our line-of-credit arrangements) will be reported in the balance sheet as a direct deduction from “debt and capital lease obligations, less current portion” and excluded from “deferred charges and other assets, net.” As of December 31, 2015, debt issuance costs associated with issued debt totaled $42 million.

Debt issuance costs associated with borrowings on our line-of-credit arrangements will continue to be reported in the balance sheet as “deferred charges and other assets, net,” and the related amortization will continue to be reported as interest expense.

Also in April 2015, the provisions of ASC Topic 715, “Compensation–Retirement Benefits” were amended to provide a practical expedient for the measurement date of an entity’s defined benefit pension or other postretirement plans.

February 26, 2015

| Cost of sales | 118,141 | | | | 127,316 | | | | 126,485 | | |

| Refining | 3,900 | | | | 3,710 | | | | 3,513 | | |

| Retail | — | | | | 226 | | | | 686 | | |

| Ethanol | 487 | | | | 387 | | | | 332 | | |

| Asset impairment losses | — | | | | — | | | | 86 | | |

| Balance as of December 31, 2011 | $ | 7 | | | $ | 7,486 | | | $ | (6,475 | ) | | $ | 15,309 | | | $ | 96 | | | $ | 16,423 | | | $ | 22 | | | $ | 16,445 | |

| Net income (loss) | — | | | | — | | | | — | | | | 2,083 | | | | — | | | | 2,083 | | | | (3 | | ) | | 2,080 | | |

| Stock repurchases | — | | | | 10 | | | | (163 | | ) | | — | | | | — | | | | (153 | | ) | | — | | | | (153 | | ) |

| Stock repurchases under buyback program | — | | | | — | | | | (118 | | ) | | — | | | | — | | | | (118 | | ) | | — | | | | (118 | | ) |

| Asset impairment losses | — | | | | — | | | | 1,014 | | |

| Proceeds from the sale of the Paulsboro Refinery | — | | | | — | | | | 160 | | |

| Repayments of debt | (200 | | ) | | (480 | | ) | | (3,612 | | ) |

| | |

| --- | --- |

General

As discussed in Note 2, in May 2014, we abandoned the Aruba Refinery.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

| • | investments in entities that we do not control; and |

| • | other noncurrent assets such as investments of certain benefit plans (related primarily to certain U.S. nonqualified defined benefit plans whose plan assets are not protected from our creditors and therefore cannot be reflected as a reduction from our obligations under those pension plans), debt issuance costs, and various other costs. |

See Notes 2 and 4 for our impairment analysis of our long-lived assets.

Excise taxes on sales by our U.S. retail system were presented on a gross basis.

Cost of Biofuel Credits

meet our obligation.

The effective portion of the gain or

In April 2014, the provisions of Accounting Standards Codification (ASC) Topic 205, “Presentation of Financial Statements,” and ASC Topic 360, “Property, Plant, and Equipment,” were amended to change the criteria for reporting discontinued operations.

The provisions of these amendments modify the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have or will have a major effect on an entity’s operations and financial results.

These amendments require additional disclosures about discontinued operations and new disclosures for other disposals of individually material components of an organization that do not meet the definition of a discontinued operation.

In addition, the guidance allows companies to have significant continuing involvement and continuing cash flows with the discontinued operation.

Early adoption is not permitted.

In January 2015, the provisions of ASC Subtopic 225-20, “Income Statement–Extraordinary and Unusual Items” were amended to eliminate the concept of extraordinary items from U.S. GAAP as part of the FASB’s simplification initiative.

The guidance eliminates the separate presentation of extraordinary items on the income statement, net of tax and the related earnings per share, but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring or to exclude those items from the estimated annual effective tax rate for interim reporting purposes.

These provisions may be applied prospectively or

As a result, the refinery’s results of operations have been presented in this report as discontinued operations for all years presented.

We had suspended operations of the refinery in 2012 and at that time we wrote off the entire carrying value of the refinery’s idled crude oil processing units and related infrastructure (refining assets) and supplies inventories that supported the refining operations; as a result, we recognized an asset impairment loss of $928 million.

In addition, we terminated the employees who supported the refining operations and incurred severance costs of $41 million at that time.

Even though we suspended refining operations in 2012, we continued to maintain the refining assets to allow them to be restarted and did not abandon them until our recent decision to no longer pursue options to restart refining operations.

Selected results of operations of the Aruba Refinery are shown below (in millions).

| Operating revenues | $ | — | | | $ | — | | | $ | 857 | |

| Income (loss) before income taxes | (64 | | ) | | 6 | | | | (1,034 | | ) |

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 December 31, [removed: 2014.][added: 2015.]

The management report on Valero’s internal control over financial reporting required by Item 9A appears in Item 8 on page [removed: 54] [added: 55] of this report, and is incorporated herein by reference.

KPMG LLP’s report on Valero’s internal control over financial reporting appears in Item 8 beginning on page [removed: 56] [added: 57] of this report, and is incorporated herein by reference.

The information required by Items 10 through 14 of Form 10-K is incorporated herein by reference to the definitive proxy statement for our [removed: 2015] [added: 2016] annual meeting of stockholders.

We will file the proxy statement with the SEC [added: on or] before March 31, [removed: 2015.][added: 2016.]

| [Management’s report on internal control over financial [removed: reporting](#sA312BC231D85C18256B1AA65C0F9CEED)] [added: reporting](#sBD45B93DBE7C56ADB75F6C78156B6A8D)] | [removed: [54](#sA312BC231D85C18256B1AA65C0F9CEED)] [added: [55](#sBD45B93DBE7C56ADB75F6C78156B6A8D)] |

| [Reports of independent registered public accounting [removed: firm](#s7ABD0890A4864713CEB6AA65C118D6AD)] [added: firm](#sD63E8B08C9BE54869638526BACC62BD5)] | [removed: [55](#s7ABD0890A4864713CEB6AA65C118D6AD)] [added: [56](#sD63E8B08C9BE54869638526BACC62BD5)] |

| [Consolidated balance sheets as of December 31, [removed: 2014] [added: 2015] and [removed: 2013](#s5619B8C9DEEA62B791CEAA6583CB9550)] [added: 2014](#s2B30A99A035D5FA182E1F273F3E0CD4D)] | [removed: [58](#s5619B8C9DEEA62B791CEAA6583CB9550)] [added: [59](#s2B30A99A035D5FA182E1F273F3E0CD4D)] |

| [Consolidated statements of income for the years ended December 31, [added: 2015,] 2014, [removed: 2013,] and [removed: 2012](#s8E962D38490BAC1260B7AA6583DA2FB5)] [added: 2013](#sA4606CBE057B53199F0E47568E9D0B0C)] | [removed: [59](#s8E962D38490BAC1260B7AA6583DA2FB5)] [added: [60](#sA4606CBE057B53199F0E47568E9D0B0C)] |

| [removed: [Consolidated] [added: Consolidated] statements of comprehensive income for the years ended December 31, [added: 2015,] 2014, [removed: 2013,] and [removed: 2012](#s1D80F694760778BB02C8AA6583EAA26B)] [added: 2013] | [removed: [60](#s1D80F694760778BB02C8AA6583EAA26B)] [added: [61](#s42CC1DDAD6375DC9A151B0387F40A43D)] |

| [Consolidated statements of equity for the years ended December 31, [added: 2015,] 2014, [removed: 2013,] and [removed: 2012](#sA880AE979DD3DD91D4CAAA6583FA1AD9)] [added: 2013](#s7B681DE8C6125A0D9FE105DB7FD4E38E)] | [removed: [61](#sA880AE979DD3DD91D4CAAA6583FA1AD9)] [added: [62](#s7B681DE8C6125A0D9FE105DB7FD4E38E)] |

| [Consolidated statements of cash flows for the years ended December 31, [added: 2015,] 2014, [removed: 2013,] and [removed: 2012](#sB8E985E5660504A60F41AA658476A365)] [added: 2013](#s4C34E5DE9969598082DABB3210197FD0)] | [removed: [62](#sB8E985E5660504A60F41AA658476A365)] [added: [63](#s4C34E5DE9969598082DABB3210197FD0)] |

| [Notes to consolidated financial [removed: statements](#s4B1D10436E227D52F308AA65C270749F)] [added: statements](#s55AA914C69195ED79DB4D30873D72AFD)] | [removed: [63](#s4B1D10436E227D52F308AA65C270749F)] [added: [64](#s55AA914C69195ED79DB4D30873D72AFD)] |

| 3.01 | | \-- | Amended and Restated Certificate of Incorporation of Valero Energy Corporation, formerly known as Valero Refining and Marketing [removed: Company - incorporated] [added: Company–incorporated] by reference to Exhibit 3.1 to Valero’s Registration Statement on Form S-1 (SEC File No. 333-27013) filed May 13, 1997. |

| 3.02 | | \-- | Certificate of Amendment (July 31, 1997) to Restated Certificate of Incorporation of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 3.02 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175). |

| 3.03 | | \-- | Certificate of Merger of Ultramar Diamond Shamrock Corporation with and into Valero Energy Corporation dated December 31, [removed: 2001 - incorporated] [added: 2001–incorporated] by reference to Exhibit 3.03 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175). |

| 3.04 | | \-- | Amendment (effective December 31, 2001) to Restated Certificate of Incorporation of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 3.1 to Valero’s Current Report on Form 8-K dated December 31, 2001, and filed January 11, 2002 (SEC File No. 1-13175). |

| 3.05 | | \-- | Second Certificate of Amendment (effective September 17, 2004) to Restated Certificate of Incorporation of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 3.04 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (SEC File No. 1-13175). |

| 3.06 | | \-- | Certificate of Merger of Premcor Inc. with and into Valero Energy Corporation effective September 1, [removed: 2005 - incorporated] [added: 2005–incorporated] by reference to Exhibit 2.01 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (SEC File No. 1-13175). |

| 3.07 | | \-- | Third Certificate of Amendment (effective December 2, 2005) to Restated Certificate of Incorporation of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 3.07 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2005 (SEC File No. 1-13175). |

| 3.08 | | \-- | Fourth Certificate of Amendment (effective May 24, 2011) to Restated Certificate of Incorporation of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 4.8 to Valero’s Current Report on Form 8-K dated and filed May 24, 2011 (SEC File No. 1-13175). |

| 3.09 | | \-- | Amended and Restated Bylaws of Valero Energy [removed: Corporation - incorporated] [added: Corporation–incorporated] by reference to Exhibit 3.01 to Valero’s Current Report on Form 8-K dated January [removed: 23, 2015] [added: 21, 2016] and filed January [removed: 30, 2015] [added: 26, 2016] (SEC File No. 1-13175). |

| 4.01 | | \-- | Indenture dated as of December 12, 1997 between Valero Energy Corporation and The Bank of New [removed: York - incorporated] [added: York–incorporated] by reference to Exhibit 3.4 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-56599) filed June 11, 1998. |

| 4.02 | | \-- | First Supplemental Indenture dated as of June 28, 2000 between Valero Energy Corporation and The Bank of New York (including Form of 7 3/4% Senior Deferrable Note due [removed: 2005) - incorporated] [added: 2005)–incorporated] by reference to Exhibit 4.6 to Valero’s Current Report on Form 8-K dated June 28, 2000, and filed June 30, 2000 (SEC File No. 1-13175). |

| 4.03 | | \-- | Indenture (Senior Indenture) dated as of June 18, 2004 between Valero Energy Corporation and Bank of New [removed: York - incorporated] [added: York–incorporated] by reference to Exhibit 4.7 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004. |

| 4.04 | | \-- | Form of Indenture related to subordinated debt [removed: securities - incorporated] [added: securities–incorporated] by reference to Exhibit 4.8 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004. |

| 4.05 | | \-- | Specimen Certificate of Common [removed: Stock - incorporated] [added: Stock–incorporated] by reference to Exhibit 4.1 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004. |

| +10.01 | | \-- | Valero Energy Corporation Annual Bonus Plan, amended and restated as of July 29, [removed: 2009 - incorporated] [added: 2009–incorporated] by reference to Exhibit 10.01 to Valero’s Current Report on Form 8-K dated July 29, 2009, and filed August 4, 2009 (SEC File No. 1-13175). |

| +10.02 | | \-- | Valero Energy Corporation Annual Incentive Plan for Named Executive [removed: Officers - incorporated] [added: Officers–incorporated] by reference to Exhibit 10.01 to Valero’s Current Report on Form 8-K dated February 22, 2012, and filed February 27, 2012 (SEC File No. 1-13175). |

| +10.03 | | \-- | Valero Energy Corporation 2005 Omnibus Stock Incentive Plan, amended and restated as of October 1, [removed: 2005 - incorporated] [added: 2005–incorporated] by reference to Exhibit 10.02 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2009 (SEC File No. 1-13175). |

| [removed: +10.04] [added: +10.21] | | \-- | [added: Form of Stock Option Agreement pursuant to the] Valero Energy Corporation 2011 Omnibus Stock Incentive [removed: Plan - incorporated] [added: Plan–incorporated] by reference to [removed: Appendix A] [added: Exhibit 10.21] to Valero’s [removed: Definitive Proxy Statement] [added: Annual Report] on [removed: Schedule 14A] [added: Form 10-K] for the [removed: 2011 annual meeting of stockholders, filed March 18,] [added: year ended December 31,] 2011 (SEC File No. 1-13175). |

| +10.05 | | \-- | Valero Energy Corporation Deferred Compensation Plan, amended and restated as of January 1, [removed: 2008 - incorporated] [added: 2008–incorporated] by reference to Exhibit 10.04 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2008 (SEC File No. 1-13175). |

| +10.09 | | \-- | Valero Energy Corporation Amended and Restated Supplemental Executive Retirement Plan, amended and restated as of November 10, [removed: 2008 - incorporated] [added: 2008–incorporated] by reference to Exhibit 10.08 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2008 (SEC File No. 1-13175). |

| +10.10 | | \-- | Valero Energy Corporation Excess Pension Plan, as amended and restated effective December 31, [removed: 2011 - incorporated] [added: 2011–incorporated] by reference to Exhibit 10.10 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175). |

| +10.11 | | \-- | Form of Indemnity Agreement between Valero Energy Corporation (formerly known as Valero Refining and Marketing Company) and certain officers and [removed: directors - incorporated] [added: directors–incorporated] by reference to Exhibit 10.8 to Valero’s Registration Statement on Form S-1 (SEC File No. 333-27013) filed May 13, 1997. |

| +10.13 | | \-- | Form of Change of Control Severance Agreement (Tier I) between Valero Energy Corporation and executive [removed: officer - incorporated] [added: officer–incorporated] by reference to Exhibit 10.15 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175). |

| +10.15 | | \-- | Form of Change of Control Severance Agreement (Tier II) between Valero Energy Corporation and executive [removed: officer - incorporated] [added: officer–incorporated] by reference to Exhibit 10.16 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2013 (SEC File No. 1-13175). |

| +10.17 | | \-- | Form of Amendment to Change of Control Severance Agreements (to eliminate excise tax gross-up [removed: benefit) - incorporated] [added: benefit)–incorporated] by reference to Exhibit 10.17 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2012 (SEC File No. 1-13175). |

| +10.19 | | \-- | Form of Performance Share Award Agreement pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive [removed: Plan - incorporated] [added: Plan–incorporated] by reference to Exhibit 10.19 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2013 (SEC File No. 1-13175). |

| [removed: *+10.20] [added: +10.20] | | \-- | Form of Performance Share Award Agreement (with Dividend Equivalent Award) pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive [removed: Plan.] [added: Plan–incorporated by reference to Exhibit 10.20 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2014 (SEC File No. 1-13175).] |

| [removed: +10.21] [added: +10.22] | | \-- | Form of [added: Performance] Stock Option Agreement pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive [removed: Plan - incorporated] [added: Plan–incorporated] by reference to Exhibit 10.21 to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2011] [added: 2012] (SEC File No. 1-13175). |

| [removed: +10.22] [added: +10.23] | | \-- | Form of [removed: Performance] [added: Restricted] Stock [removed: Option] Agreement pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive [removed: Plan - incorporated] [added: Plan–incorporated] by reference to Exhibit [removed: 10.21] [added: 10.25] to Valero’s Annual Report on Form 10-K for the year ended December 31, 2012 (SEC File No. 1-13175). |

| [removed: +10.24] [added: 14.01] | | \-- | [removed: Form] [added: Code] of [removed: Restricted Stock Agreement (with acceleration feature) pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive Plan - incorporated] [added: Ethics for Senior Financial Officers–incorporated] by reference to Exhibit [removed: 10.24] [added: 14.01] to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2011] [added: 2003] (SEC File No. 1-13175). |

| [removed: +10.25] [added: 99.01] | | \-- | [removed: Form of Restricted Stock Agreement (without acceleration feature) pursuant to the Valero Energy Corporation 2011 Omnibus Stock Incentive Plan - incorporated] [added: Audit Committee Pre-Approval Policy–incorporated] by reference to Exhibit [removed: 10.25] [added: 99.01] to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2012] [added: 2014] (SEC File No. 1-13175). |

| [removed: 10.26] [added: 10.24] | | \-- | $3,000,000,000 5-Year [removed: Second] [added: Third] Amended and Restated Revolving Credit Agreement, dated as of November [removed: 22, 2013,] [added: 12, 2015,] among Valero Energy Corporation, as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; and the lenders named [removed: therein - incorporated] [added: therein–incorporated] by reference to Exhibit [removed: 10.27] [added: 10.1] to Valero’s [removed: Annual] [added: Current] Report on Form [removed: 10-K for the year ended December 31, 2013] [added: 8-K dated November 12, 2015, and filed November 13, 2015] (SEC File No. 1-13175). |

| *+10.04 | | \-- | Valero Energy Corporation 2011 Omnibus Stock Incentive Plan, amended and restated February 25, 2016. |

| | | | |

| +10.23 | | \-- | Form of Stock Option Agreement pursuant to the Valero Energy Corporation Non-Employee Director Stock Option Plan - incorporated by reference to Exhibit 10.04 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (SEC File No. 1-13175). |

| 14.01 | | \-- | Code of Ethics for Senior Financial Officers - incorporated by reference to Exhibit 14.01 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175). |

| *99.01 | | \-- | Audit Committee Pre-Approval Policy. |