Valero Energy (VLO) 10-K risk factor changes: FY2020 vs FY2019

Each of these risk factors could adversely affect our business, operating results, and/or financial condition, as well as adversely affect the value of an investment in our common [removed: stock.][added: stock or debt securities.]

Our financial results are affected by volatile [removed: refining] margins, which are dependent upon factors beyond our control, including the price of crude [removed: oil] [added: oil, corn,] and [added: other feedstocks and] the market price at which we can sell [removed: refined petroleum] [added: our] products.

Our financial results are [removed: primarily] affected by the relationship, or margin, between [removed: refined petroleum] [added: our] product prices and the prices for crude [removed: oil] [added: oil, corn,] and other feedstocks.

Historically, refining [added: and ethanol] margins have been volatile, and we believe they will continue to be volatile in the future.

Our cost to acquire feedstocks and the price at which we can ultimately sell [removed: refined petroleum] products depend upon several factors beyond our control, including regional and global supply of and demand for crude oil, [added: corn, other feedstocks,] gasoline, diesel, [removed: and] other [removed: feedstocks and] refined petroleum [added: products, and renewable] products.

These in turn depend on, among other things, the availability and quantity of imports, the production levels of U.S. and international suppliers, levels of [removed: refined petroleum] product inventories, productivity and growth (or the lack thereof) of U.S. and global economies, U.S. relationships with foreign governments, political affairs, and the extent of governmental regulation.

The longer-term effects of these and other factors on [removed: refining and marketing] [added: product] margins are uncertain.

We do not produce crude [removed: oil] [added: oil, corn, or all of our other feedstocks] and must purchase all of the [removed: crude oil] [added: feedstocks] we [removed: refine.][added: process.]

We [removed: may] [added: generally] purchase our [removed: crude oil and other refinery] feedstocks long before we [removed: refine] [added: process] them and sell the [removed: refined petroleum] [added: resulting] products.

Price level changes during the period between purchasing feedstocks and selling the [removed: refined petroleum] [added: resulting] products [removed: from these feedstocks] [added: has had, and in the future] could [removed: have] [added: continue to have,] a significant effect on our financial results.

A decline in market [removed: prices] [added: prices, as was experienced during much of 2020, negatively impacted, and] may [added: continue to] negatively [removed: impact] [added: impact,] the carrying value of our inventories.

Lower levels of economic activity could result in declines in energy consumption, including declines in the demand for and consumption of our [removed: refined petroleum] products, which could cause our revenues and margins to decline and limit our future growth prospects.

[removed: Refining] [added: Refining, renewable diesel, and ethanol] margins [removed: are] also [added: can be] significantly impacted by additional [removed: refinery] conversion capacity through the expansion of existing [removed: refineries] [added: facilities] or the construction of new [removed: refineries.][added: refineries or plants.]

These crude oil feedstock differentials vary significantly depending on overall economic conditions and trends and conditions within the markets for crude oil and refined petroleum products, and [removed: they] [added: have declined in certain periods, as was the case for much of 2020, and] could [added: again] decline in the [removed: future, which would have a negative impact on our results of operations.][added: future.]

Compliance with and changes in environmental laws, including proposed climate change laws and regulations, [added: and climate change litigation] could adversely affect our performance.

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, [removed: greenhouse gas (GHG)] [added: GHG] emissions, and characteristics and composition of fuels, including gasoline and diesel.

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

In November 2019, the [removed: current U.S.] [added: previous] administration served notice on the United Nations that the U.S. would withdraw from the Paris [removed: Agreement] [added: Agreement, which ultimately occurred] in 2020.

[removed: Regardless,] [added: Additionally,] the Paris Agreement [removed: could still] [added: may] affect our operations in Canada, the U.K., Ireland, and Latin America.

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

Investor sentiment towards climate change, fossil fuels, and [removed: sustainability] [added: other ESG matters] could adversely affect our [removed: business] [added: business, cost of capital,] and [added: the price of] our stock [removed: price.][added: and other securities.]

There have been efforts in recent [removed: years] [added: years, which have intensified during the COVID-19 pandemic,] aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, [removed: universities] [added: universities,] and other groups, to promote the divestment of [removed: shares] [added: securities] of energy companies, as well as to pressure lenders and other financial services companies to limit or curtail activities with energy companies.

If [removed: these] [added: this or similar divestment] efforts are [removed: successful,] [added: continued, the price of] our [added: common] stock [removed: price] [added: or debt securities,] and our ability to access capital markets [added: or to otherwise obtain new investment or financing,] may be negatively impacted.

Members of the investment community are also increasing their focus on [removed: sustainability practices,] [added: ESG practices and disclosures,] including practices [added: and disclosures] related to GHGs and climate [removed: change,] [added: change] in the energy [removed: industry.][added: industry in particular, and diversity and inclusion initiatives and governance standards among companies more generally.]

As a result, we may face increasing pressure regarding our [removed: sustainability disclosures] [added: ESG practices] and [removed: practices.][added: disclosures.]

Additionally, members of the investment community may screen companies such as ours for [removed: sustainability] [added: ESG] performance before investing in our [removed: stock.][added: common stock or debt securities, or lending to us.]

If we are unable to meet the [removed: sustainability] [added: ESG] standards [added: or investment or lending criteria] set by these [removed: investors,] [added: investors and funds,] we may lose investors, [added: investors may allocate a portion of their capital away from us,] our [removed: stock] [added: cost of capital may increase, the] price [added: of our common stock and debt securities] may be negatively [removed: impacted] [added: impacted,] and our reputation may [added: also] be negatively affected.

Severe weather events, such as storms, [added: hurricanes,] droughts, or floods, could have an adverse effect on our [removed: operations.][added: operations and could increase our costs.]

The RFS program sets annual quotas for the quantity of renewable fuels [removed: (such as ethanol and diesel)] that must be blended into transportation fuels consumed in the U.S. A Renewable Identification Number (RIN) is assigned to each gallon of renewable fuel produced in or imported into the U.S. As a producer of petroleum-based transportation fuels, we are obligated to blend renewable fuels [removed: into the products we produce at a rate that is at least commensurate to the U.S. EPA’s quota and, to the extent we do not, we must purchase RINs in the open market to satisfy our obligation under the RFS program.]

Disruption of our ability to obtain crude [removed: oil] [added: oil, rendered and recycled materials, corn, and other feedstocks] could adversely affect our operations*.*

If one or more of our supply contracts were terminated, or if political events disrupt our traditional [removed: crude oil] [added: feedstock] supply, we believe that adequate alternative supplies [removed: of crude oil] would be available, but it is possible that we would be unable to find alternative sources of supply.

If we are unable to obtain adequate [removed: crude oil] volumes or are able to obtain such volumes only at unfavorable prices, our results of operations could be materially adversely affected, including [added: from] reduced sales volumes of [removed: refined petroleum] products or reduced margins as a result of higher [removed: crude oil] costs.

Any attempt by the U.S. government to withdraw [removed: from or] [added: from, re-enter,] materially modify [added: any] existing international trade [added: agreements, or enter into any new international trade] agreements [added: in the future] could adversely affect our business, financial condition, and results of operations.

The [removed: current U.S.] [added: previous] administration [removed: has] questioned certain existing and proposed trade agreements.

[added: In addition, the previous administration] implemented and proposed various trade tariffs, which have resulted in foreign governments responding with tariffs on U.S. goods.

Changes in U.S. social, political, regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, [removed: development] [added: development,] and investment could adversely affect our business.

For example, the imposition of tariffs or other trade barriers with other countries could affect our ability to obtain feedstocks from international sources, increase our [removed: costs] [added: costs,] and reduce the competitiveness of our products.

While there is currently a lack of certainty around the likelihood, timing, and details of any such policies and reforms, if the current U.S. administration takes action to withdraw from, [added: re-enter,] or materially [removed: modify,] [added: modify any] existing international trade agreements, [added: or to enter into any new international trade agreements in the future,] our business, financial condition, and results of operations could be adversely affected.

We are subject to interruptions and increased costs as a result of our reliance on third-party transportation of crude oil and [added: other feedstocks and] the products that we manufacture.

We use the services of third parties to transport feedstocks to our [removed: facilities] [added: refineries] and [added: plants and] to transport the products we manufacture to market.

Risks Related to COVID-19

The outbreak of COVID-19 has had, and may continue to have, material adverse consequences for general economic, financial, and business conditions, and could materially and adversely affect our business, financial condition, results of operations, and liquidity and those of our customers, suppliers, and other counterparties.

The outbreak of COVID-19 and the responses of governmental authorities and companies, as well as the self-imposed restrictions by many individuals across the world to stem the spread of the virus, have significantly reduced global economic activity; as a result, there has been a dramatic decrease in the number of businesses open for operation, and substantially fewer people across the world have been traveling to work or leaving their homes to procure or provide goods and services.

This has resulted, for example, in a dramatic reduction in airline flights and has reduced the number of cars on the road.

As a result, there has been a decline in the demand for, and thus also the market prices of, crude oil and certain of our products, particularly the refined petroleum products that we manufacture and sell.

Concerns over the negative effects of the COVID-19 pandemic on economic and business prospects across the world have contributed to increased market and crude oil price volatility and have diminished expectations for the global economy.

These factors, coupled with the emergence of decreasing business and consumer confidence and increasing unemployment resulting from the COVID-19 outbreak and the increase in crude oil price volatility, have precipitated an economic slowdown.

The current economic slowdown and period of depressed prices for crude oil and most of our products has had, and may continue to have, significant adverse consequences on our financial condition and the financial condition of our customers, suppliers, and other counterparties.

This has also had, and may continue to have, a

negative effect on our liquidity and our ability to obtain adequate crude oil volumes and other feedstock supplies and to market certain of our products at favorable prices, or at all.

Declines in the market prices of crude oil, other feedstocks, and products below their carrying values in our inventory have required, and may continue to require, us to make certain valuation adjustments (e.g., lower of cost or market (LCM) inventory valuation adjustments) to write down the value of our inventories.

This has in turn had, and may continue to have, a negative impact on our operating income.

The decline in the price of the refined products we sell and the feedstocks we purchase has had, and may continue to have, an adverse impact on other areas of our business and results of operation, such as our revenues and cost of sales.

In addition, a sustained period of low crude oil prices, such as we experienced in 2020, may also result in significant financial constraints on certain producers from which we acquire our crude oil, which could result in long term crude oil supply constraints for our business.

Such conditions could also result in an increased risk that customers, lenders, service and insurance providers, and other counterparties, such as counterparties to our commodity hedging or derivative instruments, or other agreements vital to our operations, may be unable to fully fulfil their obligations in a timely manner, or at all.

Any of the foregoing events or conditions, or other unforeseen consequences of COVID-19, could significantly adversely affect our business and financial condition and the business and financial condition of our customers, suppliers, and other counterparties.

While in the latter part of the second quarter of 2020 certain governmental authorities in the U.S. and abroad began lifting many of the restrictions put in place to slow the spread of COVID-19, which resulted in an increase in the demand and market prices for most of our products relative to what we experienced during the first several months of the pandemic, developments with respect to COVID-19 have been occurring at a rapid pace and the risk remains that circumstances could change.

For instance, many locations where restrictions were lifted, and others where the restrictions were more moderately lifted (such as California in our U.S. West Coast region, and New York, Canada, and the U.K. in our North Atlantic region), have experienced a resurgence in the spread of COVID-19 prompting many governmental authorities to re-impose certain restrictions that had previously been lifted or softened.

In addition, in December 2020, the U.S. Food and Drug Administration (FDA) and Canadian and U.K. regulators each granted emergency-use authorization for multiple COVID-19 vaccines to be used as immunization against the virus.

Although these vaccines may be seen as a key factor in helping to restore public confidence, and thus stimulate and increase economic activity, potentially to pre-pandemic levels, they may not be distributed widely on a timely basis and they may not be effective against new variants of the COVID-19 virus.

Many uncertainties remain with respect to COVID-19, including its resulting economic effects, and we are unable to predict the ultimate economic impacts from COVID-19 on our business and how quickly national economies can recover once the pandemic subsides, the timing or effectiveness of vaccine distributions, the potential for new variants of the virus or whether any recovery will ultimately experience a reversal or other setbacks.

The ultimate extent of the impact of the COVID-19 pandemic will depend largely on future developments, particularly within the geographic areas where we operate, and the related impact on overall economic activity, all of which are currently unknown and cannot be predicted with certainty at this time.

However, the adverse impacts of the economic effects from the COVID-19 pandemic and the uncertainty in the global oil markets on our business have been and will likely continue to be significant.

The adverse effects of the COVID-19 pandemic on our business, financial condition, results of operations, and liquidity have also had, and may continue to have, the effect of heightening many of the other risks described in the other risk factors below, as those risk factors are amended or supplemented by

subsequent Quarterly Reports on Form 10-Q and other reports and documents we file with the U.S. SEC after the date of this Annual Report on Form 10-K for the year ended December 31, 2020.

Risks Related to Our Business, Industry, and Operations

The ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree on and to maintain crude oil price and production controls has also had, and may continue to have, a significant impact on the market prices of crude oil and certain of our products.

Previous declines have had, and any future declines would again have, a negative impact on our results of operations.

Legal, technological, and political developments and evolving market sentiment regarding fuel efficiency and low-carbon fuel standards may decrease the demand for our products and could adversely affect our performance.

Many state, provincial, and national governments across the world have imposed, and may impose in the future, increases in fuel economy standards, low-carbon fuel standards, restrictions on vehicles using petroleum-based fuel, and other policies or regulations (such as tax incentives or subsidies) aimed at steering the public towards less petroleum-dependent modes of transportation, which could reduce demand for our products.

For example, in September 2020 the governor of California issued an executive order seeking to require that sales of all new passenger vehicles be zero-emission by 2035 and medium to heavy duty vehicles be zero-emission by 2045 where feasible.

The executive order also requires state agencies to build out sufficient electric vehicle charging infrastructure.

Other governmental authorities, such as the U.K. and Quebec, have also announced intentions to adopt similar restrictions with respect to the sale of new combustion-engine vehicles.

A reduction in the demand for our products could also result from a shift by consumers to alternative fuel vehicles, whether as a result of technological or scientific advances, consumer or investor sentiment towards our products and their relationship to the environment, or legislation or regulation mandating or encouraging the use of alternative energy sources.

It is not possible at this time to predict the ultimate form, timing, or extent of any such governmental, consumer, or investor actions.

However, a reduction in the demand for our products as a result of any of the foregoing events could materially and adversely affect our business, financial condition, results of operations, and liquidity.

Developments with respect to low-carbon fuel policies and the market for alternative fuels may affect demand for our renewable fuels and could adversely affect our financial performance.

Low-carbon fuel policies, blending credits, and stricter fuel efficiency standards to help reach GHG emissions reduction targets help drive demand for our renewable fuels.

Any changes to, a failure to enforce, or a discontinuation of any of these policies, goals, and initiatives could have a material adverse effect on our renewable fuels businesses.

Similarly, new or changing technologies may be developed, consumers may shift to alternative fuels or alternative fuel vehicles (such as electric or hybrid vehicles) other than the renewable fuels we produce, and there may be new entrants into the renewable fuels production industry that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products, which could also have a material adverse effect on our renewable fuels businesses.

There are no guarantees that the Paris Agreement will not be re-implemented in the U.S. or re-implemented in part by specific U.S. states or local governments.

Members within the scientific community believe that an increasing concentration of GHG emissions in the Earth’s atmosphere may contribute to climate changes that can have significant physical effects, including an increased frequency and severity of these types of events.

In addition, the administration has

We may incur additional costs as a result of our use of rail cars for the transportation of crude oil and the products that we manufacture.

We currently use rail cars for the transportation of some feedstocks to certain of our facilities and for the transportation of some of the products we manufacture to their markets.

We own and lease rail cars for our operations.

Rail transportation is subject to a variety of federal, state, and local regulations, as well as industry practices and customs.

New laws and regulations, and changes in existing laws and regulations, are frequently enacted or proposed, and could result in increased expenditures for compliance, either directly through costs for our owned and leased rail assets, or as passed along to us by rail carriers and operators.

For example, in the past several years, the Department of Transportation and various agencies within the Department of Transportation, including the Surface Transportation Board, the Pipeline and Hazardous Materials Safety Administration, and the Federal Railroad Administration, have issued orders and rules pursuant to the Federal Railroad Safety Act of 1970, the Interstate Commerce Commission Termination Act of 1995, the Rail Safety Improvement Act of 2008, Fixing America’s Surface Transportation Act of 2015 and other statutory authorities concerning such matters as enhanced tank car standards, positive train control and other operational controls, safety training programs, and notification requirements.

The general trend has been toward greater regulation of rail transportation over recent years.

We do not believe these orders and rules will have a material impact on our financial position, results of operations, and liquidity, although further changes in law, regulations, or industry practices could require us to incur additional costs to the extent they are applicable to us.

Significant interruptions in our refining system could also lead to increased volatility in prices for crude oil feedstocks and refined petroleum products, and could increase instability in the financial and insurance markets, making it more difficult for us to access capital and to obtain insurance coverage that we consider adequate.

incidents and may apply to activities regarding personal information that is collected by us, directly or indirectly, from California residents.

Workers at some of our refineries are covered by collective bargaining or similar agreements.

Subsequent changes to our tax liabilities as a result of these audits may subject us to interest and penalties.

On December 22, 2017, tax legislation commonly known as the Tax Cuts and Jobs Act of 2017 (Tax Reform) was enacted.

Among other things, Tax Reform reduced the U.S. corporate income tax rate from 35 percent to 21 percent and implemented a new system of taxation for non-U.S. earnings, including by imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries.

Tax Reform also generally (i) repealed the manufacturing deduction we previously were able to claim, (ii) resulted in a shift from a worldwide system of taxation to a territorial system of taxation, resulting in a minimum tax on the income of international subsidiaries (the GILTI tax) rather than a tax deferral on such earnings in certain circumstances, (iii) limits our annual deductions for interest expense to no more than 30 percent of our “adjusted taxable income” (plus 100 percent of our business interest income) for the year and (iv) permits us to offset only 80 percent (rather than 100 percent) of our taxable income with any net operating losses we generate after 2017.

We have evaluated the effects of Tax Reform, including the one-time deemed repatriation tax and the re-measurement of our deferred tax assets and liabilities, and the provisions of Tax Reform, taken as a whole, did not have an adverse impact on our cash tax liabilities, results of operations, or financial condition.

We have used reasonable interpretations and assumptions in applying Tax Reform, but it is possible that the Internal Revenue Service (IRS) could issue subsequent guidance or take positions on audit that differ from our prior interpretations and assumptions, which could adversely impact our cash tax liabilities, results of operations, and financial condition.

will develop.

The terms of that agreement provide for a transition period, from January 31, 2020 to December 31, 2020, during which the trading relationship between the U.K. and the EU will remain the same while the U.K. and the EU try to negotiate an agreement regarding their future trading relationship.

The ultimate effects of Brexit will depend on whether an agreement is reached, or on the specific terms of any such agreement that is reached, either of which outcomes could adversely impact the ability to trade freely between the U.K. and the EU at the end of the transition period and could negatively impact our competitive position, supplier and customer relationships, and financial performance.

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,” “will,” “may,” [added: “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,”] and similar expressions.

[removed: | • |] [added: -] future refining segment margins, including gasoline and distillate margins; [removed: |]

[removed: | • |] [added: -] future ethanol segment margins; [removed: |]

[removed: | • |] [added: -] future renewable diesel segment margins; [removed: |]

[removed: | • |] [added: -] expectations regarding feedstock costs, including crude oil differentials, and operating expenses; [removed: |]

[removed: | • |] [added: -] anticipated levels of crude oil and refined petroleum product [removed: inventories; |][added: inventories and storage capacity;]

[removed: | • |] [added: -] our anticipated level of capital investments, including deferred turnaround and catalyst cost expenditures, capital expenditures for environmental and other purposes, and joint venture investments, [added: the expected timing applicable to such capital investments] and [added: any related projects, and] the effect of those capital investments on our results of operations; [removed: |]

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

[removed: | • |] [added: -] expectations regarding environmental, tax, and other regulatory initiatives; and [removed: |]

[removed: | • |] [added: -] the effect of general economic and other conditions on refining, [removed: ethanol, and] renewable [removed: diesel] [added: diesel, and ethanol] industry fundamentals. [removed: |]

We based our forward-looking statements on our current expectations, estimates, and projections about [removed: ourselves and] [added: ourselves,] our [removed: industry.][added: industry, and the global economy and financial markets generally.]

We caution that these statements are not guarantees of future performance [added: or results] and involve risks, uncertainties, and assumptions that we cannot predict.

Accordingly, [removed: our] actual results may differ materially from the future performance [added: or results] that we have expressed or forecast in the forward-looking statements.

Differences between actual results and any future performance [added: or results] suggested in these forward-looking statements could result from a variety of factors, including the following:

[removed: | • |] [added: -] acts of terrorism aimed at either our [removed: facilities] [added: refineries and plants] or [removed: other] [added: third-party] facilities that could impair our ability to produce or transport refined petroleum [removed: products] [added: products, renewable diesel, ethanol,] or [added: corn related co-products, or to] receive feedstocks; [removed: |]

[removed: | • |] [added: -] political and economic conditions in nations that produce crude oil or [added: other feedstocks or] consume refined petroleum [removed: products; |][added: products, renewable diesel, ethanol or corn related co-products;]

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

[removed: | • |] [added: -] demand for, and supplies of, crude oil and other feedstocks; [removed: |]

[removed: | • |] [added: -] the ability of the members of [removed: the Organization of Petroleum Exporting Countries] [added: OPEC] to agree on and to maintain crude oil price and production controls; [removed: |]

[removed: | • |] [added: -] the level of consumer demand, including seasonal fluctuations; [removed: |]

[removed: | • | refinery] [added: - refinery, renewable diesel plant or ethanol plant] overcapacity or undercapacity; [removed: |]

[removed: | • |] [added: -] our ability to successfully integrate any acquired businesses into our operations; [removed: |]

[removed: | • |] [added: -] the actions taken by competitors, including both pricing and adjustments to refining capacity [added: or renewable fuels production] in response to market conditions; [removed: |]

[removed: | • |] [added: -] the level of competitors’ imports into markets that we supply; [removed: |]

[removed: | • |] [added: -] accidents, unscheduled shutdowns, [added: weather events, civil unrest, political events, terrorism, cyberattacks,] or other catastrophes [added: or disruptions] affecting our [removed: refineries,] [added: operations, production facilities,] machinery, [removed: pipelines, equipment,] [added: pipelines] and [added: other logistics assets, equipment, or] information systems, or [removed: those] [added: any] of [added: the foregoing of] our [removed: suppliers] [added: suppliers, customers,] or [removed: customers; |][added: third-party service providers;]

[removed: | • |] [added: -] changes in the cost or availability of transportation [added: or storage capacity] for feedstocks and [removed: refined petroleum] [added: our] products; [removed: |]

[removed: | • |] [added: -] the price, availability, and acceptance of alternative fuels and alternative-fuel [removed: vehicles; |][added: vehicles, as well as sentiment and perceptions with respect to GHG emissions more generally;]

[removed: | • |] [added: -] the volatility in the market price of biofuel credits (primarily RINs needed to comply with the RFS) and GHG emission credits needed to comply with the requirements of various GHG emission programs; [removed: |]

[removed: | • |] [added: -] delay of, cancellation of, or failure to implement planned capital projects and realize the various assumptions and benefits projected for such projects or cost overruns in constructing such planned capital projects; [removed: |]

[removed: | • |] [added: -] earthquakes, hurricanes, tornadoes, and irregular weather, which can unforeseeably affect the price or availability of natural gas, crude oil, [removed: grain] [added: rendered] and [added: recycled materials, corn, and] other feedstocks, refined petroleum products, [removed: ethanol, and] renewable [removed: diesel; |][added: diesel, and ethanol;]

[removed: | • |] [added: -] 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; [removed: |]

[removed: | • |] [added: -] legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by governmental authorities, including tariffs and tax and environmental regulations, such as those implemented under the California cap-and-trade system and similar programs, and the U.S. EPA’s [added: or other governmental] regulation of GHGs, which may adversely affect our business or operations; [removed: |]

[removed: | • |] [added: -] changes in the credit ratings assigned to our debt securities and trade credit; [removed: |]

[removed: | • |] [added: -] 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; [removed: |]

[removed: | • |] [added: -] overall economic conditions, including the stability and liquidity of financial markets; and [removed: |]

[removed: | • |] [added: -] other factors generally described in the “RISK FACTORS” section included in Item 1A, “RISK FACTORS” in this report. [removed: |]

The discussions in “OVERVIEW AND [removed: OUTLOOK” and] [added: OUTLOOK,”] “RESULTS OF [removed: OPERATIONS”] [added: OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES”] below include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP).

These non-GAAP financial measures include adjusted operating income [added: (loss)] (including adjusted operating income [added: (loss)] for each of our reportable [removed: segments) and] [added: segments, as applicable);] refining, [removed: ethanol, and] renewable [removed: diesel] [added: diesel, and ethanol] segment [removed: margin.][added: margin; and capital investments attributable to Valero.]

We have included these non-GAAP financial measures to help facilitate the comparison of operating results between [removed: years.][added: years and to help assess our cash flows.]

See the tables in note (f) beginning on page [removed: 39] [added: 46] for reconciliations of [removed: these non-GAAP financial measures] [added: adjusted operating income (loss) (including adjusted operating income (loss) for each of our reportable segments, as applicable) and refining, renewable diesel, and ethanol segment margin] to their most directly comparable U.S. GAAP financial measures.

This discussion and analysis includes the years ended December 31, 2020 and 2019 and comparisons between such years.

The discussions for the year ended December 31, 2018 and comparisons between the years ended December 31, 2019 and 2018 have been omitted from this Annual Report on Form 10-K for the year ended December 31, 2020, as such information can be found in “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed on February 26, 2020.

- the effect, impact, potential duration, or other implications of the COVID-19 pandemic and global crude oil production levels, and any expectations we may have with respect thereto, including with respect to our operations and the production levels of our assets;

- 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;

- the effects of public health threats, pandemics, and epidemics, such as the COVID-19 pandemic, and the adverse impacts thereof on our business, financial condition, results of operations, and liquidity, including, but not limited to, our growth, operating costs, supply chain, labor availability, logistical capabilities, customer demand for our products, and industry demand generally, margins, production and throughput capacity, utilization, inventory value, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally;

- the levels of government subsidies for, and mandates or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies;

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

See the table on page 53 for a reconciliation of capital investments attributable to Valero to its most directly comparable U.S. GAAP financial measure.

Beginning on page 52, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

Business Operations Update

The outbreak of COVID-19 and its development into a pandemic in March 2020 has resulted in significant economic disruption globally, including in North America, Europe, and Latin America, the primary geographic areas where we operate.

In March, governmental authorities around the world took actions, such as stay-at-home orders and other social distancing measures, to slow the spread of COVID-19 that restricted travel, public gatherings, and the overall level of individual movement and in-person interaction across the globe.

These actions significantly reduced global economic activity and negatively impacted many businesses, including our business.

Airlines have dramatically reduced flights and motor vehicle usage has significantly declined, in each case relative to typical pre-pandemic levels.

As a result, in the first half of 2020, there was a decline in the demand for, and thus also the market prices of, most of the transportation fuels that we produce and sell.

There was also a decline in the global demand for crude oil, the primary feedstock for our refined products, resulting in a decline in crude oil prices and production levels.

While the production levels of all types of crude oils have declined, sour crude oil production has declined significantly and by more than production levels for sweet crude oils.

This has reduced the price advantage of sour crude oils relative to sweet crude oils, which has exacerbated the negative impact of lower product prices on our refining margin.6,7

Beginning in the latter part of the second quarter, certain governmental authorities in the U.S. and other countries across the world, particularly those in our U.S. Gulf Coast and U.S. Mid-Continent regions, began lifting many of the restrictions put in place to slow the spread of COVID-19, while governmental authorities in our U.S. West Coast and North Atlantic regions began lifting restrictions on a more moderate basis during the third quarter.

This resulted in an increase in the level of individual movement and travel and, in turn, an increase in the demand and market prices for most of our products relative to what we experienced during the early months of the pandemic.

However, in the second half of 2020, many locations where restrictions were lifted, and others where the restrictions were only more moderately lifted (such as California in our U.S. West Coast region, and New York, Canada, and the U.K. in our North Atlantic region), experienced a resurgence in the spread of COVID-19, which prompted many governmental authorities to reimpose certain restrictions.

In December 2020, the U.S. FDA and Canadian and U.K. regulators each granted emergency-use authorization for multiple COVID-19 vaccines to be used as immunization against the COVID-19 virus.

Although these vaccines may be seen as a key factor in helping to restore public confidence, and thus stimulate and increase economic activity, potentially to pre-pandemic levels, they may not be distributed widely on a timely basis and they may not be effective against new variants of the virus.

Based on these and other circumstances that cannot be predicted, the broader implications of the pandemic on our results of operations and financial position remain uncertain.

As previously noted, the decrease in the demand for transportation fuels has resulted in a significant decrease in the price of refined petroleum products manufactured by our refining segment.

For example, the price of gasoline8 in the U.S. Gulf Coast region where eight of our 15 refineries are located was $68.82 per barrel at the beginning of 2020, fell to $17.65 per barrel at the end of March (a 74 percent decline), and partially recovered to $57.63 per barrel by the end of December (a 16 percent decline over

6 See page 46 for our definition of refining margin and why we believe it is an important financial and operating measure.

7 Sour crude oils typically sell at a discount to the price of benchmark sweet crude oils, which set the price of most refined products.

Therefore, lower prices for sour crude oils that we process have a favorable impact on our refining margin.

8 Gasoline prices quoted represent the price of U.S. Gulf Coast conventional blendstock of oxygenate blending gasoline.

the twelve-month period).

Another example is the price of diesel9 in the U.S. Gulf Coast region, which was $81.71 per barrel at the beginning of 2020, fell to $39.18 per barrel at the end of March (a 52 percent decline), and partially recovered to $60.20 per barrel by the end of December (a 26 percent decline over the twelve-month period).

On February 22, 2021, the prices of gasoline and diesel were $76.62 per barrel and $76.84 per barrel, respectively.

Demand for renewable diesel has not declined due to continued demand for this low-carbon transportation fuel despite the current economic environment; therefore, our renewable diesel segment has not been impacted as were our refining and ethanol segments.

The price of ethanol manufactured by our ethanol segment has also decreased due to a decline in demand.

Because ethanol is primarily blended into gasoline, ethanol demand declined along with the decline in the demand for gasoline.

Prices for the products we sell and the feedstocks we purchase impact our revenues, cost of sales, operating income, and liquidity.

In addition, a decline in the market prices of products and feedstocks below their carrying values in our inventory results in a writedown in the value of our inventories, and a subsequent recovery in market prices results in a write-up in the value of our inventories, not to exceed their previous carrying values.

We wrote down the value of our inventories by $2.5 billion in the first quarter of 2020 due to the significant decline in market prices at that time, but as market prices improved, the writedown was fully reversed by the end of the third quarter.

For the year ended December 31, 2020, we generated an operating loss of $1.6 billion.

| | |

| --- | --- |

| • | the levels of government subsidies for alternative fuels; |

This decrease is the result of a $569 million decrease in net income and a $131 million increase in net income attributable to noncontrolling interests.

The decrease in net income is primarily due to a decrease of $736 million in operating income between the periods, net of the resulting $177 million decrease in income tax expense.

| • | *Refining segment.* Refining segment adjusted operating income decreased by $1.1 billion primarily due to weaker discounts on crude oils and other feedstocks and lower throughput volumes, partially offset by improved distillate margins. This is more fully described on pages 31 and 32. |

| • | *Renewable diesel segment.* Renewable diesel segment adjusted operating income increased by $259 million primarily due to an increase in renewable diesel sales volumes and an increase in the benefit from the blender’s tax credit resulting from an increase in the volume of renewable diesel blended with petroleum-based diesel in 2019 compared to 2018. This is more fully described on pages 34 and 35. |

Below are several factors that have impacted or may impact our results of operations during the first quarter of 2020:

| • | Distillate margins are expected to begin improving due to an anticipated increase in global demand as trade war tensions ease and markets comply with the International Maritime Organization’s lower bunker fuel sulfur specifications, which were effective January 1, 2020. Gasoline margins are expected to remain near current levels. |

| • | Discounts for medium and heavy sour crude oils are expected to remain near current levels as compliance with the new bunker fuel sulfur specifications noted above is expected to reduce demand for high sulfur fuel oils, which compete with sour crude oils as a refining feedstock. |

| • | Our refining operations in the U.K. could be adversely affected by Brexit, which formally occurred on January 31, 2020. Although the legal relationship between the U.K. and the EU has changed, their ongoing relationship will continue to follow the EU’s rules during a transition period that is set to expire on December 31, 2020. During the transition period, the U.K. and the EU are expected to negotiate a new free trade agreement, which could negatively impact the operations of our Pembroke Refinery and our marketing operations in the U.K. and Ireland, as could the failure to reach any agreement. The ultimate effect of Brexit will depend on whether an agreement is reached, or on the specific terms of any agreement that is reached by the U.K. and the EU. See Item 1A “RISK FACTORS”—*Changes in the U.K.’s economic and other relationships with the EU could adversely affect us*. |

| • | Global concern about the coronavirus outbreak could result in lower demand for and consumption of transportation fuels, which would have a negative impact on our results of operations. |

Effective January 1, 2019, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business.

Accordingly, we created a new reportable segment — renewable diesel — because of the growing importance of renewable fuels in the market and the growth of our investments in renewable fuels production.

The renewable diesel segment includes the operations of DGD, which were transferred from the refining segment on January 1, 2019.

Also effective January 1, 2019, we no longer have a VLP segment, and we include the operations of VLP in our refining segment.

This change was made because of the Merger Transaction with VLP, as described in Note 2 of Notes to Consolidated Financial Statements, and the resulting change in how we manage VLP’s operations.

We no longer manage VLP as a business but as logistics assets that support the operations of our refining segment.

Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

Financial Highlights by Segment and Total Company

(millions of dollars)

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

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

________________

Financial Highlights by Segment and Total Company (continued)

| Revenues from external customers | $ | 113,093 | | | $ | 3,428 | | | $ | 508 | | | $ | 4 | | | $ | 117,033 | |

| Intersegment revenues | 25 | | | | 210 | | | | 170 | | | | (405 | | ) | | — | | |

| Total revenues | 113,118 | | | | 3,638 | | | | 678 | | | | (401 | | ) | | 117,033 | | |

| Cost of materials and other (a) | 101,866 | | | | 3,008 | | | | 262 | | | | (404 | | ) | | 104,732 | | |

| Total cost of sales | 107,930 | | | | 3,556 | | | | 357 | | | | (404 | | ) | | 111,439 | | |

| Operating income by segment | $ | 5,143 | | | $ | 82 | | | $ | 321 | | | $ | (974 | ) | | 4,572 | | |

| Income before income tax expense | | | | | | | | | | | | | | | | | 4,232 | | |

| Income tax expense (e) | | | | | | | | | | | | | | | | | 879 | | |

| Net income | | | | | | | | | | | | | | | | | 3,353 | | |

Average Market Reference Prices and Differentials

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

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

Average Market Reference Prices and Differentials, (continued)

Total Company, Corporate, and Other

| Revenues | $ | 108,324 | | | $ | 117,033 | | | $ | (8,709 | ) |

We are exposed to market risks related to the volatility in the price of [removed: crude oil, refined petroleum products] [added: feedstocks] (primarily [removed: gasoline] [added: crude oil] and [removed: distillate), renewable diesel, grain (primarily] corn), [removed: renewable diesel feedstocks,] [added: the products we produce (primarily refined petroleum products),] and natural gas used in our operations.

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

[removed: | • |] [added: -] forecasted [removed: feedstock and refined petroleum product purchases, refined petroleum product sales, renewable diesel sales, or natural gas] purchases [removed: to lock in the price of those forecasted transactions] [added: and/or product sales] at existing market prices that we deem favorable. [removed: |]

[removed: The following sensitivity analysis includes] [added: As of December 31, 2020 and 2019, the amount of gain or loss that would have resulted from a 10 percent increase or decrease in the underlying price for] all of our [added: commodity] derivative instruments entered into for purposes other than trading with which we have market risk [removed: (in millions):][added: was not material.]

| | [added: | |] December [removed: 31,] [added: 31, 2020] | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

See Note [removed: 20] [added: 21] of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, [removed: 2019.][added: 2020.]

As of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the amount of gain or loss in the fair value of derivative instruments that would have resulted from a 10 percent increase or decrease in the underlying price of the contracts was not material.

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

| | [added: | |] December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| | [added: | |] Expected Maturity Dates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| | [added: | |] 2020 (a) | | | | [added: | |] 2021 | | | | [added: | |] 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [removed: There- after] | | [added: There- after] | | [added: | | | |] Total [removed: (b)] [added: (c)] | | | | [removed: Fair Value] | | [added: Fair Value] | [added: | |]

| Fixed rate | [added: | |] $ | — | | | [added: | |] $ | 11 | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 8,474 | | | [added: | |] $ | 8,485 | | | [added: | |] $ | 10,099 | |

| Average interest rate | [added: | |] — | | % | | [removed: 5.0] | | [added: 5 | |] % | | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] 5.2 | | % | | [added: | |] 5.2 | | % | | | | | [added: | |]

| Floating rate [removed: (c)] [added: (d)] | [added: | |] $ | 453 | | | [added: | |] $ | 6 | | | [added: | |] $ | 6 | | | [added: | |] $ | 19 | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | 484 | | | [added: | |] $ | 484 | |

| Average interest rate | [added: | |] 5.0 | | % | | [added: | |] 4.5 | | % | | [added: | |] 4.5 | | % | | [added: | |] 4.5 | | % | | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] 5.0 | | % | | | | | [added: | |]

| | [removed: 2019] [added: | | 2021] (a) | | | | [removed: 2020] | | [added: 2022] | | [removed: 2021] | | | | [removed: 2022] [added: 2023 (b)] | | | | [removed: 2023] | | [added: 2024] | | [removed: There- after] | | | | [added: 2025 | | | | | | There- after | | | | | |] Total [removed: (b)] [added: (c)] | | | | [removed: Fair Value] | | [added: Fair Value] | [added: | |]

| Fixed rate | [added: | |] $ | — | | | [added: | |] $ | [removed: 850] [added: —] | | | [added: | |] $ | [removed: 10] [added: 850] | | | [added: | |] $ | [removed: —] [added: 925] | | | [added: | |] $ | [removed: —] [added: 1,650] | | | [added: | |] $ | [removed: 7,474] [added: 8,474] | | | [added: | |] $ | [removed: 8,334] [added: 11,899] | | | [added: | |] $ | [removed: 8,737] [added: 13,899] | |

[removed: | (a) | As] [added: (a)As] of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] our floating rate debt due in [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] includes [removed: $348] [added: $598] million and [removed: $109] [added: $348] million, respectively, associated with borrowings under the IEnova Revolver for the construction of terminals in Mexico by Central Mexico Terminals. [removed: The IEnova Revolver is only available to the operations of Central Mexico Terminals, and its creditors do not have recourse against us. |]

[removed: | (b) | Excludes] [added: (c)Excludes] unamortized discounts and debt issuance costs. [removed: |]

[removed: | (c) | As] [added: (d)As] of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] we had an interest rate swap associated with [removed: $36] [added: $31] million and [removed: $40] [added: $36] million, respectively, of our floating rate debt resulting in an effective interest rate of 3.85 percent as of each of those reporting dates. [removed: The fair value of the swap was immaterial for all periods presented. |]

See Note 10 of Notes to Consolidated Financial Statements for additional information related to our debt.

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

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

| Average interest rate | | | — | | % | | | | — | | % | | | | 2.7 | | % | | | | 1.2 | | % | | | | 3.1 | | % | | | | 5.1 | | % | | | | 4.4 | | % | | | | | | |

| Floating rate (d) | | | $ | 603 | | | | | $ | 6 | | | | | $ | 595 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,204 | | | | | $ | 1,204 | |

| Average interest rate | | | 3.9 | | % | | | | 3.0 | | % | | | | 1.4 | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | 2.7 | | % | | | | | | |

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

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

| | | | Expected Maturity Dates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

The IEnova Revolver is only available to the operations of Central Mexico Terminals, and its creditors do not have recourse against us.

(b)As of December 31, 2020, our floating rate debt also includes $575 million aggregate principal amount of our Floating Rate Notes issued in September 2020, which are due September 15, 2023.

The fair value of the swap was immaterial for all periods presented.

We are exposed to exchange rate fluctuations on transactions related to our international operations that are denominated in currencies other than the local (functional) currencies of those operations.

To manage our exposure to these exchange rate fluctuations, we use foreign currency contracts.

The following table provides information about our foreign currency contracts (dollars in millions), the fair values of which are sensitive to changes in foreign currency exchange rates.

Contracts that were outstanding as of December 31, 2020 mature on or before April 15, 2021 and those outstanding as of December 31, 2019 matured in 2020.

Currency abbreviations presented below are as follows: U.S. dollars (USD), Canadian dollars (CAD), and pounds sterling (GBP).

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

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

| | | | Receive USD/ Pay CAD | | | | | | Receive USD/ Pay GBP | | | | | | Receive CAD/ Pay USD | | | | | | | | |

| December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | |

| Contract amount | | | $ | 228 | | | | | $ | 97 | | | | | $ | 1,600 | | | | | | | |

| Weighted-average contractual exchange rate | | | 0.78205 | | | | | | 1.34454 | | | | | | 0.78492 | | | | | | | | |

| Fair value liability | | | $ | (1) | | | | | $ | (1) | | | | | $ | (2) | | | | | | | |

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

| December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | |

| Contract amount | | | $ | 406 | | | | | $ | 333 | | | | | $ | 2,250 | | | | | | | |

| Weighted-average contractual exchange rate | | | 0.75911 | | | | | | 1.31201 | | | | | | 0.76217 | | | | | | | | |

| Fair value asset (liability) | | | $ | (6) | | | | | $ | (4) | | | | | $ | 27 | | | | | | | |

See Note 21 of Notes to Consolidated Financial Statements for a discussion about our foreign currency risk management activities.

| | |

| --- | --- |

| | | | | | | | |

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

| | 2019 | | | | 2018 | | |

| Gain (loss) in fair value resulting from: | | | | | | | |

| 10% increase in underlying commodity prices | $ | (39 | ) | | $ | 2 | |

| 10% decrease in underlying commodity prices | 38 | | | | (6 | | ) |

Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values.

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

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

| | December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | — | | % | | 6.1 | | % | | 5.0 | | % | | — | | % | | — | | % | | 5.4 | | % | | 5.5 | | % | | | | |

| Floating rate (c) | $ | 214 | | | $ | 5 | | | $ | 5 | | | $ | 5 | | | $ | 20 | | | $ | — | | | $ | 249 | | | $ | 249 | |

| Average interest rate | 4.6 | | % | | 4.7 | | % | | 4.7 | | % | | 4.7 | | % | | 4.7 | | % | | — | | % | | 4.6 | | % | | | | |

As of December 31, 2019, we had foreign currency contracts to purchase $739 million of U.S. dollars and $2.3 billion of U.S. dollar equivalent Canadian dollars.

Our market risk was minimal on these contracts, as all of them matured on or before February 15, 2020.

We are reporting these proceedings to comply with [added: U.S.] SEC regulations, which require us to disclose certain information about proceedings arising under federal, state, or local provisions regulating the discharge of materials into the environment or protecting the environment if we reasonably believe that such proceedings [removed: will] [added: have the potential to] result in monetary sanctions of [removed: $100,000] [added: $300,000] or more.

In our [removed: annual report] [added: Annual Report] on Form 10-K for the year ended December 31, 2018, we reported that we had an outstanding Notice of Violation [removed: (NOV)] from the U.S. EPA related to violations from a 2015 Mobile Source Inspection.

In our [removed: quarterly report] [added: Quarterly Report] on Form 10-Q for the quarter ended March 31, 2019, we reported that we had received a letter and draft Agreed Final Judgment from the Texas AG related to a contaminated water backflow incident that [removed: occurred at] [added: related to] the Valero Corpus Christi Asphalt Plant.

The draft Agreed Final Judgment [removed: assesses] [added: assessed] proposed penalties in the amount of $1.3 million.

[removed: *BAAQMD*] [added: *U.S. EPA*] (Benicia Refinery).

In the fourth quarter of 2020, we negotiated a final Consent Order with the U.S. EPA resolving the matter upon entry of the Consent Order on December 29, 2020.

On December 11, 2020, the U.S. EPA issued a Notice of Potential Violations and Opportunity to Confer related to a series of inspections conducted by the U.S. EPA in 2019, arising out of the 2017 Pacific Gas and Electric Company power outage, and a 2019 emissions event.

In the fourth quarter of 2019, we received a draft Consent Order from the U.S. EPA proposing penalties of $3.4 million.

We are working with the Texas AG to resolve this matter.

*Texas AG* (Houston Terminal).

In our annual report on Form 10-K for the year ended December 31, 2018, we reported that we had an outstanding Notice of Enforcement (NOE) from the Texas Commission on Environmental Quality (TCEQ), and an outstanding Violation Notice (VN) from the Harris County Pollution Control Services Department, both alleging excess emissions from Tank 003 that occurred during Hurricane Harvey.

On January 27, 2020, the Texas AG filed suit related to this incident against our Houston Terminal in the 419th Judicial District Court of Travis County, Texas, Cause No. D-1-GN-20-000516 seeking injunctive relief and penalties.

*Bay Area Air Quality Management District (BAAQMD)* *and Solano County Department of Resource Management Certified Unified Program Agency (Solano County)* (Benicia Refinery).

In our quarterly report on Form 10-Q for the quarter ended March 31, 2019, we reported that we had received multiple VNs issued by the BAAQMD related to an upset of the Flue Gas Scrubber (FGS) at our Benicia Refinery, and a draft Consent from Solano County related to the FGS incident proposing penalties of $242,840.

In our quarterly report on Form 10-Q for the quarter ended September 30, 2019, we reported that we had resolved the matter with Solano County.

We continue to work with the BAAQMD on a final resolution of the remaining VNs.

In our annual report on Form 10-K for the year ended December 31, 2018, we reported that we had multiple outstanding VNs issued by the BAAQMD.

These VNs are for various alleged air regulation and air permit violations at our Benicia Refinery and asphalt plant.

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

*South Coast Air Quality Management District (SCAQMD*) (Wilmington Refinery).

In our annual report on Form 10-K for the year ended December 31, 2018, we reported that we had outstanding Notices of Violation (NOVs) issued by the SCAQMD.

These NOVs are for alleged reporting violations and excess emissions at our Wilmington Refinery.

We are working with the SCAQMD to resolve these NOVs.

*TCEQ* (Port Arthur).

In our annual report on Form 10-K for the year ended December 31, 2018, we reported that we had an outstanding NOE from the TCEQ alleging unauthorized emissions associated with a November 18, 2017 release of crude oil from the 24-inch fill pipe of Tank T-285.

We are working with the TCEQ to resolve this matter.

[removed: FORM 10-K][added: FORM 10-K]

| ☑ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

| | [added: | |] For the transition period from _______________ to _______________ | [added: | |]

Commission file [removed: number 001-13175][added: number 001-13175]

| Delaware | [added: | |] 74-1828067 | [added: | |]

| (State or other jurisdiction of | [added: | |] (I.R.S. Employer | [added: | |]

| incorporation or organization) | [added: | |] Identification No.) | [added: | |]

San [removed: Antonio, Texas 78249][added: Antonio, Texas 78249]

Registrant’s telephone number, including area code: [removed: (210) 345-2000][added: (210) 345-2000]

| Title of each class | | [added: | | | |] Trading Symbol(s) | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| Common stock | | [added: | | | |] VLO | | [added: | | | |] New York Stock Exchange | [added: | |]

| | [added: | |] Large accelerated filer | | | [added: | | | | | |] ☑ | | [added: | | | |] Accelerated filer | | | | [added: | | | | | | | |] ☐ | | [added: | | | |] Non-accelerated filer | | | | [added: | | | | | | | |] ☐ | | [added: | | | |]

| | | [added: | | | |] Smaller reporting company | | | | | [added: | | | | | | | | | |] ☐ | | [added: | | | |] Emerging growth company | | | | | [added: | | | | | | | | | |] ☐ | | | | [added: | | | | | | | |]

The aggregate market value of the voting and non-voting common stock held by non-affiliates was approximately [removed: $35.5] [added: $24.0] billion based on the last sales price quoted as of June [removed: 28, 2019] [added: 30, 2020] on the New York Stock Exchange, the last business day of the registrant’s most recently completed second fiscal quarter.

As of [removed: January 31, 2020, 409,337,126] [added: February 19, 2021, 408,562,891] 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 April [removed: 30, 2020,] [added: 29, 2021,] at which directors will be elected.

Portions of the [removed: 2020] [added: 2021] 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: 2020] [added: 2021] Proxy Statement where certain information required in Part III of this Form 10-K may be found.

| Form 10-K Item No. and Caption | | | [added: | | | | | |] Heading in [removed: 2020] [added: 2021] Proxy Statement | [added: | |]

| 10. | [added: | |] Directors, Executive Officers and Corporate Governance | | [added: | | | |] *Information Regarding the Board of Directors, Independent Directors, Audit Committee, Proposal No. 1 Election of Directors*, *Information Concerning Nominees and Other Directors,* *Identification of Executive Officers,* and *Governance Documents and Codes of Ethics* | [added: | |]

| 11. | [added: | |] Executive Compensation | | [added: | | | |] *Compensation Committee, Compensation Discussion and Analysis, Executive Compensation, Director Compensation, Pay Ratio Disclosure,* and *Certain Relationships and Related Transactions* | [added: | |]

| 12. | [added: | |] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | [added: | | | |] *Beneficial Ownership of Valero Securities* and *Equity Compensation Plan Information* | [added: | |]

| 13. | [added: | |] Certain Relationships and Related Transactions, and Director Independence | | [added: | | | |] *Certain Relationships and Related Transactions* and *Independent Directors* | [added: | |]

| 14. | [added: | |] Principal Accountant Fees and Services | | [added: | | | |] *KPMG LLP Fees* and *Audit Committee Pre-Approval Policy* | [added: | |]

| | | [added: | | | |] PAGE | [added: | |]

| [Items 1. & [removed: 2.](#sACAB6E51D3815E0E938968873946967E)] [added: 2.](#i5a19b96c11e24c23922f710d6aec513f_22)] | [added: | |] [Business and [removed: Properties](#sACAB6E51D3815E0E938968873946967E)] [added: Properties](#i5a19b96c11e24c23922f710d6aec513f_22)] | [removed: [1](#sACAB6E51D3815E0E938968873946967E)] | [added: | [1](#i5a19b96c11e24c23922f710d6aec513f_22) | | |]

[removed: | | [Overview](#sFB7700547A1C598E83C55AA1688F01C5) | [1](#sFB7700547A1C598E83C55AA1688F01C5) |][added: *Overview*]

| | [added: | |] [Available [removed: Information](#s7B88852DBF0750178D8C0E37F5379599)] [added: Information](#i5a19b96c11e24c23922f710d6aec513f_28)] | [removed: [1](#s7B88852DBF0750178D8C0E37F5379599)] | [added: | [1](#i5a19b96c11e24c23922f710d6aec513f_28) | | |]

| | [added: | |] [Valero’s [removed: Operations](#s8177199AF0655F83A578BBCDB9CCA535)] [added: Operations](#i5a19b96c11e24c23922f710d6aec513f_31)] | [removed: [2](#s8177199AF0655F83A578BBCDB9CCA535)] | [added: | [3](#i5a19b96c11e24c23922f710d6aec513f_31) | | |]

| [Item [removed: 1A.](#s688675FF14C253D4BF8D1B07648FAF84)] [added: 1A.](#i5a19b96c11e24c23922f710d6aec513f_43)] | [added: | |] [Risk [removed: Factors](#s688675FF14C253D4BF8D1B07648FAF84)] [added: Factors](#i5a19b96c11e24c23922f710d6aec513f_43)] | [removed: [10](#s688675FF14C253D4BF8D1B07648FAF84)] | [added: | [13](#i5a19b96c11e24c23922f710d6aec513f_43) | | |]

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| [Item [removed: 3.](#s250FBCFBB6AA5CF6B0F7125FAE04AC22)] [added: 3.](#i5a19b96c11e24c23922f710d6aec513f_49)] | [added: | |] [Legal [removed: Proceedings](#s250FBCFBB6AA5CF6B0F7125FAE04AC22)] [added: Proceedings](#i5a19b96c11e24c23922f710d6aec513f_49)] | [removed: [18](#s250FBCFBB6AA5CF6B0F7125FAE04AC22)] | [added: | [26](#i5a19b96c11e24c23922f710d6aec513f_49) | | |]

| [Item [removed: 4.](#s27C4C256433F5E2381809484BB54CD94)] [added: 4.](#i5a19b96c11e24c23922f710d6aec513f_52)] | [added: | |] [Mine Safety [removed: Disclosures](#s27C4C256433F5E2381809484BB54CD94)] [added: Disclosures](#i5a19b96c11e24c23922f710d6aec513f_52)] | [removed: [19](#s27C4C256433F5E2381809484BB54CD94)] | [added: | [26](#i5a19b96c11e24c23922f710d6aec513f_52) | | |]

| [Item [removed: 5.](#s81E7DFBBEA2D5AA98B451ED6C061D6C0)] [added: 5.](#i5a19b96c11e24c23922f710d6aec513f_58)] | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters [removed: and Issuer] [added: and](#i5a19b96c11e24c23922f710d6aec513f_58)[ ](#i5a19b96c11e24c23922f710d6aec513f_58)[Issuer] Purchases of Equity [removed: Securities](#s81E7DFBBEA2D5AA98B451ED6C061D6C0)] [added: Securities](#i5a19b96c11e24c23922f710d6aec513f_58)] | [removed: [20](#s81E7DFBBEA2D5AA98B451ED6C061D6C0)] | [added: | [27](#i5a19b96c11e24c23922f710d6aec513f_58) | | |]

| [Item [removed: 6.](#s81039C9AD1C951C7A817A792215470DC)] [added: 6.](#i5a19b96c11e24c23922f710d6aec513f_61)] | [added: | |] [Selected Financial [removed: Data](#s81039C9AD1C951C7A817A792215470DC)] [added: Data](#i5a19b96c11e24c23922f710d6aec513f_61)] | [removed: [22](#s81039C9AD1C951C7A817A792215470DC)] | [added: | [29](#i5a19b96c11e24c23922f710d6aec513f_61) | | |]

| [Item [removed: 7.](#s05AF5BC907065C4398B8F3F33375F529)] [added: 7.](#i5a19b96c11e24c23922f710d6aec513f_64)] | [added: | |] [Management’s Discussion and Analysis of Financial Condition [removed: and Results] [added: and](#i5a19b96c11e24c23922f710d6aec513f_64)[ ](#i5a19b96c11e24c23922f710d6aec513f_64)[Results] of [removed: Operations](#s05AF5BC907065C4398B8F3F33375F529)] [added: Operations](#i5a19b96c11e24c23922f710d6aec513f_64)] | [removed: [23](#s05AF5BC907065C4398B8F3F33375F529)] | [added: | [30](#i5a19b96c11e24c23922f710d6aec513f_64) | | |]

| [Item [removed: 7A.](#s22E77261F7D457719C8BAC1141131894)] [added: 7A.](#i5a19b96c11e24c23922f710d6aec513f_112)] | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s22E77261F7D457719C8BAC1141131894)] [added: Risk](#i5a19b96c11e24c23922f710d6aec513f_112)] | [removed: [57](#s22E77261F7D457719C8BAC1141131894)] | [added: | [58](#i5a19b96c11e24c23922f710d6aec513f_112) | | |]

| [Item [removed: 8.](#s0F77071D7DB35880A757A7EBA9627F9A)] [added: 8.](#i5a19b96c11e24c23922f710d6aec513f_115)] | [added: | |] [Financial Statements and Supplementary [removed: Data](#s0F77071D7DB35880A757A7EBA9627F9A)] [added: Data](#i5a19b96c11e24c23922f710d6aec513f_115)] | [removed: [59](#s0F77071D7DB35880A757A7EBA9627F9A)] | [added: | [61](#i5a19b96c11e24c23922f710d6aec513f_115) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [PART I](#i5a19b96c11e24c23922f710d6aec513f_19) | | | | | | [1](#i5a19b96c11e24c23922f710d6aec513f_19) | | |

| | | | [Overview](#i5a19b96c11e24c23922f710d6aec513f_25) | | | [1](#i5a19b96c11e24c23922f710d6aec513f_25) | | |

| | | | [Environmental Stewardship](#i5a19b96c11e24c23922f710d6aec513f_3047) | | | [2](#i5a19b96c11e24c23922f710d6aec513f_3047) | | |

| | | | [Government Regulations](#i5a19b96c11e24c23922f710d6aec513f_37) | | | [10](#i5a19b96c11e24c23922f710d6aec513f_37) | | |

| | | | [Human Capital](#i5a19b96c11e24c23922f710d6aec513f_3036) | | | [11](#i5a19b96c11e24c23922f710d6aec513f_3036) | | |

| | | | [Properties](#i5a19b96c11e24c23922f710d6aec513f_40) | | | [13](#i5a19b96c11e24c23922f710d6aec513f_40) | | |

| [PART II](#i5a19b96c11e24c23922f710d6aec513f_55) | | | | | | [27](#i5a19b96c11e24c23922f710d6aec513f_55) | | |

| | | | | | | | | |

| [PART III](#i5a19b96c11e24c23922f710d6aec513f_253) | | | | | | [139](#i5a19b96c11e24c23922f710d6aec513f_253) | | |

| | | | | | | | | |

| [PART IV](#i5a19b96c11e24c23922f710d6aec513f_259) | | | | | | [140](#i5a19b96c11e24c23922f710d6aec513f_259) | | |

| | | | | | | | | |

| [Signature](#i5a19b96c11e24c23922f710d6aec513f_265) | | | | | | [144](#i5a19b96c11e24c23922f710d6aec513f_265) | | |

| | | | | | | | | |

We also own 13 ethanol plants that produce ethanol and various co-products.

Renewable diesel and ethanol are both low-carbon transportation fuels.

See “VALERO’S OPERATIONS” for additional information about our operations and properties.

Information (including any presentation or report) on our website is not part of, and is not incorporated into, this report or any other report we may file with (or furnish to) the U.S. Securities and Exchange Commission (SEC), whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language therein.

Furthermore, references to our website URLs are intended to be inactive textual references only.

In this same location, we also publish our Environmental, Social and Governance (ESG) company overview, our Sustainability Accounting Standards Board (SASB) Report, our Stewardship and Responsibility Report, and our Review of Climate-Related Risks and Opportunities.

1 DGD is a joint venture with Darling Ingredients Inc. (Darling) and we consolidate DGD’s financial statements.

ENVIRONMENTAL STEWARDSHIP

Our Goals

We strive to manage our business to responsibly meet the world’s demand for reliable and affordable energy and have made multibillion-dollar investments to develop and grow our low-carbon renewable diesel and ethanol businesses.

These renewable fuels businesses have made us one of the world’s largest renewable fuels producers.

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| [PART I](#sF080173577D9546B9E2BCE788F2B2C1B) | | [1](#sF080173577D9546B9E2BCE788F2B2C1B) |

| | [Environmental Matters](#s1BE4EBB19F5453A89EF862A0060F7298) | [9](#s1BE4EBB19F5453A89EF862A0060F7298) |

| | [Properties](#s2D5188495E7956BF9C58ED1CA4F07889) | [9](#s2D5188495E7956BF9C58ED1CA4F07889) |

| [PART II](#s15D1443C67275265A909CD61D4C38D57) | | [20](#s15D1443C67275265A909CD61D4C38D57) |

| [PART III](#s30898A3D34AB5F6C8BC9889FA21C1B8A) | | [146](#s30898A3D34AB5F6C8BC9889FA21C1B8A) |

| [PART IV](#sE016B2CFD40A5823AD5EAC0EB74F1AF9) | | [147](#sE016B2CFD40A5823AD5EAC0EB74F1AF9) |

| [Signature](#s128F51ACC4935697AF44A686F2E0712F) | | [151](#s128F51ACC4935697AF44A686F2E0712F) |

On January 10, 2019, we completed our acquisition of all of the outstanding publicly held common units of Valero Energy Partners LP (VLP) as described in Note 2 of Notes to Consolidated Financial Statements, which is incorporated herein by reference.

Information on our website is not part of this report.

Also effective January 1, 2019, we no longer have a VLP segment, and we include the operations of VLP in our refining segment.

As a result, as of December 31, 2019, we had three reportable segments as follows:

Refining Operations

As of December 31, 2019, our refining operations included 15 petroleum refineries in the U.S., Canada, and the U.K., with a combined total throughput capacity of approximately 3.15 million BPD.

The following table presents the percentages of principal charges and yields (on a combined basis) for all of our refineries for 2019, during which period our total combined throughput volumes averaged approximately 3.0 million BPD.

| Combined Total Refining System Charges and Yields | | | |

| Charges | | | |

| | sour crude oil | 23 | % |

| | sweet crude oil | 54 | % |

| | residual fuel oil | 7 | % |

| | blendstocks | 11 | % |

| Yields | | | |

| | gasolines and blendstocks | 48 | % |

| | distillates | 38 | % |

| | other products (primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur and asphalt) | 14 | % |

Our bulk sales are made to

We also enter into refined petroleum product exchange and purchase agreements.

These agreements help minimize transportation costs, optimize refinery utilization, balance refined petroleum product availability, broaden geographic distribution, and provide access to markets not connected to our refined product pipeline systems.

Exchange agreements provide for the delivery of refined petroleum products by us to unaffiliated companies at our and third-parties’ terminals in exchange for delivery of a similar amount of refined petroleum products to us by these unaffiliated companies at specified locations.

Purchase agreements involve our purchase of refined petroleum products from third parties with delivery occurring at specified locations.

We own 14 ethanol plants with a combined ethanol production capacity of 1.73 billion gallons per year.

As of January 31, [removed: 2020,] [added: 2021,] there were [removed: 5,082] [added: 4,982] holders of record of our common stock.

There can be no assurance that we will pay a dividend [added: in the future] at the rates we have paid historically, or at [removed: all, in the future.][added: all.]

The following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of [removed: 2019.][added: 2020.]

| Period | | [added: | | | |] Total [removed: Number of Shares Purchased] [added: Number of Shares Purchased] | | | [removed: Average Price Paid per] [added: | | | Average Price Paid per] Share | | | | [added: | |] Total Number [removed: of Shares Not Purchased] [added: of Shares Not Purchased] as Part [removed: of Publicly Announced Plans] [added: of Publicly Announced Plans] or Programs (a) | | | [added: | | |] Total Number [removed: of Shares] [added: of Shares] Purchased [removed: as Part] [added: as Part] of [removed: Publicly Announced] [added: Publicly Announced] Plans [removed: or Programs] [added: or Programs] | | | [added: | | |] Approximate [removed: Dollar Value] [added: Dollar Value] of Shares [removed: that May] [added: that May] Yet Be [removed: Purchased Under] [added: Purchased Under] the Plans [removed: or Programs] [added: or Programs] (b) | [added: | |]

[removed: | (a) | The] [added: (a)The] shares reported in this column represent purchases settled in the fourth quarter of [removed: 2019] [added: 2020] 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. [removed: |]

[removed: | (b) | On] [added: (b)On] January 23, 2018, we announced that our board of directors authorized our purchase of up to $2.5 billion of our outstanding common stock (the 2018 Program), with no expiration date. [removed: As of December 31, 2019, we had $1.5 billion remaining available for purchase under the 2018 Program. |]

*The [removed: following] performance graph [added: on the following page] is not “soliciting material,” is not deemed filed with the [added: U.S.] SEC, and is not to be incorporated by reference into any of Valero*’*s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, respectively*.

The following line graph compares the cumulative total [removed: return(a)] [added: return5] on an investment in our common stock against the cumulative total return of the S&P 500 Composite Index and an index of [removed: peer companies] [added: peers] (that we selected) for the five-year period commencing December 31, [removed: 2014] [added: 2015] and ending December 31, [removed: 2019.][added: 2020.]

Our [added: selected] peer group comprises the following [removed: eight companies: BP plc;] [added: ten members: ConocoPhillips;] CVR Energy, Inc.; Delek US Holdings, Inc.; [added: the Energy Select Sector SPDR Fund; EOG Resources, Inc.;] HollyFrontier Corporation; Marathon Petroleum Corporation; [added: Occidental Petroleum Corporation;] PBF Energy Inc.; [removed: Phillips 66;] and [removed: Royal Dutch Shell plc.][added: Phillips 66.]

COMPARISON OF 5 YEAR CUMULATIVE TOTAL [removed: RETURN(a)][added: RETURN5]

[added: Old Peer Group,] and [added: New] Peer Group

[removed: ][added: ]

| | [added: | |] As of December 31, | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| | [removed: 2014] | | [added: 2015] | | [removed: 2015] | | | | 2016 | | | | [added: | |] 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | [added: | | | 2020 | | |]

[removed: | (a) | Assumes that an investment in Valero common stock and each index was $100 on December 31, 2014.] “Cumulative total return” is based on share price appreciation plus reinvestment of dividends from December 31, [removed: 2014] [added: 2015] through December 31, [removed: 2019. |][added: 2020.]

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| October 2020 | | | | | | 13 | | | | | | $ | 39.91 | | | | | 13 | | | | | | — | | | | | | $1.4 billion | | |

| November 2020 | | | | | | 191,256 | | | | | | $ | 43.32 | | | | | 191,256 | | | | | | — | | | | | | $1.4 billion | | |

| December 2020 | | | | | | 11,551 | | | | | | $ | 55.40 | | | | | 11,551 | | | | | | — | | | | | | $1.4 billion | | |

| Total | | | | | | 202,820 | | | | | | $ | 44.01 | | | | | 202,820 | | | | | | — | | | | | | $1.4 billion | | |

________________________

As of December 31, 2020, we had $1.4 billion remaining available for purchase under the 2018 Program.

We have not purchased any shares of our common stock under the 2018 Program since mid-March 2020, and we will evaluate the timing of repurchases when appropriate.

We have no obligation to make purchases under the 2018 Program.

Removed from the prior year’s peer group were BP p.l.c.

and Royal Dutch Shell plc, while ConocoPhillips, EOG Resources, Inc., and Occidental Petroleum Corporation were added.

Also added was the Energy Select Sector SPDR Fund index (XLE), which includes approximately 30 energy companies and serves as a proxy for stock price performance of the energy sector and includes companies with which we compete for capital.

We believe that the revised peer group represents an improved group of companies for making head-to-head performance comparisons in a competitive operating environment that is primarily characterized by U.S.-based companies that have business models predominantly consisting of downstream refining operations, together with similarly sized energy companies that share operating similarities to us, and that are in adjacent segments of the oil and gas industry.

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| Valero Common Stock | | | $ | 100.00 | | | | | $ | 100.78 | | | | | $ | 141.08 | | | | | $ | 118.90 | | | | | $ | 155.00 | | | | | $ | 99.82 | |

| S&P 500 | | | 100.00 | | | | | | 111.96 | | | | | | 136.40 | | | | | | 130.42 | | | | | | 171.49 | | | | | | 203.04 | | |

| Old Peer Group | | | 100.00 | | | | | | 120.01 | | | | | | 152.07 | | | | | | 141.70 | | | | | | 155.42 | | | | | | 96.05 | | |

| New Peer Group | | | 100.00 | | | | | | 113.28 | | | | | | 130.35 | | | | | | 121.31 | | | | | | 125.22 | | | | | | 76.79 | | |

5 Assumes that an investment in Valero common stock and each index was $100 on December 31, 2015.

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

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

| October 2019 | | 332,704 | | | $ | 88.06 | | | 98,396 | | | 234,308 | | | $1.6 billion |

| November 2019 | | 1,565,500 | | | $ | 99.21 | | | 107,914 | | | 1,457,586 | | | $1.5 billion |

| December 2019 | | 393,694 | | | $ | 94.61 | | | 6,984 | | | 386,710 | | | $1.5 billion |

| Total | | 2,291,898 | | | $ | 96.80 | | | 213,294 | | | 2,078,604 | | | $1.5 billion |

____________________________________

| | |

| --- | --- |

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

| Valero Common Stock | $ | 100.00 | | | $ | 146.79 | | | $ | 147.94 | | | $ | 207.10 | | | $ | 174.54 | | | $ | 227.53 | |

| S&P 500 | 100.00 | | | | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | | |

| Peer Group | 100.00 | | | | 88.46 | | | | 106.16 | | | | 134.53 | | | | 125.35 | | | | 137.49 | | |

The selected financial data for the five-year period ended December 31, [removed: 2019] [added: 2020] was derived from our audited financial statements.

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

| | [added: | | 2020 (a) | | | | | |] 2019 | | | | [removed: 2018] | | [added: 2018] | | [removed: 2017 (a)] | | | | [removed: 2016] [added: 2017] (b) | | | | [removed: 2015] [added: | | 2016] (c) | | |

| Revenues | [added: | |] $ | [removed: 108,324] [added: 64,912] | | | [added: | |] $ | [removed: 117,033] [added: 108,324] | | | [added: | |] $ | [removed: 93,980] [added: 117,033] | | | [added: | |] $ | [removed: 75,659] [added: 93,980] | | | [added: | |] $ | [removed: 87,804] [added: 75,659] | |

| Net income [added: (loss)] | [added: | | (1,107) | | | | | |] 2,784 | | | | [added: | |] 3,353 | | | | [removed: 4,156] | | [added: 4,156] | | [removed: 2,417] | | | | [removed: 4,101] [added: 2,417] | | |

| Earnings [added: (loss)] per common share – assuming dilution | [added: | | (3.50) | | | | | |] 5.84 | | | | [added: | |] 7.29 | | | | [removed: 9.16] | | [added: 9.16] | | [removed: 4.94] | | | | [removed: 7.99] [added: 4.94] | | |

| Dividends per common share | [added: | | 3.92 | | | | | |] 3.60 | | | | [added: | |] 3.20 | | | | [removed: 2.80] | | [added: 2.80] | | [removed: 2.40] | | | | [removed: 1.70] [added: 2.40] | | |

| Total assets | [added: | | 51,774 | | | | | |] 53,864 | | | | [added: | |] 50,155 | | | | [removed: 50,158] | | [added: 50,158] | | [removed: 46,173] | | | | [removed: 44,227] [added: 46,173] | | |

| Debt and finance lease obligations, less current portion | [added: | | 13,954 | | | | | |] 9,178 | | | | [added: | |] 8,871 | | | | [removed: 8,750] | | [added: 8,750] | | [removed: 7,886] | | | | [removed: 7,208] [added: 7,886] | | |

[removed: | (a) | Includes] [added: (b)Includes] the impact of [added: the] Tax [removed: Reform] [added: Cuts and Jobs Act of 2017] that was enacted on December 22, 2017 and resulted in a net income tax benefit of $1.9 [removed: billion as described in Note 15 of Notes to Consolidated Financial Statements. |][added: billion.]

[removed: | (b) | Includes] [added: (c)Includes] a noncash [removed: lower of cost or market] [added: LCM] inventory valuation [removed: reserve] adjustment that resulted in a [removed: net] [added: pre-tax] benefit [removed: to our results] of [removed: operations of] $747 million. [removed: |]

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________________________

(a)Includes a charge of $224 million related to the liquidation of last-in, first-out (LIFO) inventory layers.

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_________________________________________________

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| (c) | Includes a noncash lower of cost or market inventory valuation reserve adjustment that resulted in a net charge to our results of operations of $790 million. |

Our management evaluated the effectiveness of Valero’s internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Management believes that as of December 31, [removed: 2019,] [added: 2020,] 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: 62] [added: 64] of this report.

[removed: The] [added: To the] Board of Directors and Stockholders

We have audited the accompanying consolidated balance sheets of Valero Energy Corporation and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] 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: 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] 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, 2020] [added: 23, 2021] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex [removed: judgment.][added: judgments.]

As discussed in Note [removed: 15] [added: 16] to the consolidated financial statements, as of December 31, [removed: 2019,] [added: 2020,] the Company has gross unrecognized tax benefits, excluding related interest and penalties, of [removed: $897] [added: $847] million.

[removed: We identified the assessment of the Company’s gross unrecognized tax benefits as a critical audit matter because complex] [added: Complex] auditor judgment was required in evaluating the Company’s interpretation of income tax laws and assessing the Company’s estimate of the ultimate resolution of its income tax positions.

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

[removed: We tested certain internal controls over the Company’s income tax process, including] [added: This included] controls to evaluate which of the Company’s income tax positions may not be sustained upon examination and estimate the gross unrecognized tax benefits.

[removed: | • | Obtaining] [added: - obtaining] an understanding and evaluating the Company’s income tax positions as filed or intended to be [removed: filed; |][added: filed]

[removed: | • | Evaluating] [added: - evaluating] the Company’s interpretation of income tax laws by developing an independent assessment of the Company’s income tax positions and comparing the results to the Company’s [removed: assessment; |][added: assessment]

[removed: | • | Inspecting] [added: - inspecting] settlements [added: and communications] with applicable taxing [removed: authorities; and |][added: authorities]

[removed: | • | Assessing] [added: - assessing] the expiration of applicable statutes of limitations. [removed: |]

We have audited Valero Energy [removed: Corporation’s] [added: Corporation] and subsidiaries’ (the Company) internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] 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: 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements), and our report dated February [removed: 26, 2020] [added: 23, 2021] expressed an unqualified opinion on those consolidated financial statements.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the [removed: assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial]

[added: assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial] statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

[removed: VALERO ENERGY CORPORATION][added: | Valero Energy Corporation stockholders’ equity: | | | | | | | | | | | |]

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

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | [added: | | |]

| ASSETS | | | | | | | | [added: | | | |]

| Current assets: | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 2,583] [added: 3,313] | | | [added: | |] $ | [removed: 2,982] [added: 2,583] | |

| Inventories | [removed: 7,013] | | [added: 6,038] | | [removed: 6,532] | | | [added: | 7,013 | | |]

| Prepaid expenses and other | [removed: 469] | | [added: 101] | | [removed: 816] | | | [added: | — | | | | | | (74) | | |]

| Total current assets | [removed: 18,969] | | [added: 15,844] | | [removed: 17,675] | | | [added: | 18,969 | | |]

| Property, plant, and equipment, at cost | [removed: 44,294] | | [added: 46,967] | | [removed: 42,473] | | | [added: | 44,294 | | |]

| Accumulated depreciation | [removed: (15,030] | | [removed: )] [added: (16,578)] | | [removed: (13,625] | | [removed: )] | [added: | (15,030) | | |]

| Property, plant, and equipment, net | [removed: 29,264] | | [added: 30,389] | | [removed: 28,848] | | | [added: | 29,264 | | |]

| Deferred charges and other assets, net | [removed: 5,631] | | [added: 5,541] | | [removed: 3,632] | | | [added: | 5,631 | | |]

| Total assets | [added: | |] $ | [removed: 53,864] [added: 51,774] | | | [added: | |] $ | [removed: 50,155] [added: 53,864] | |

| LIABILITIES AND EQUITY | | | | | | | | [added: | | | |]

| Current liabilities: | | | | | | | | [added: | | | |]

| Current portion of debt and finance lease obligations | [added: | |] $ | [removed: 494] [added: 723] | | | [added: | |] $ | [removed: 238] [added: 494] | |

| Accounts payable | [removed: 10,205] | | [added: 6,082] | | [removed: 8,594] | | | [added: | 10,205 | | |]

| Accrued expenses | [removed: 949] | | [added: 994] | | [removed: 630] | | | [added: | 949 | | |]

We identified the assessment of the Company’s gross unrecognized tax benefits as a critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s income tax process.

To the Board of Directors and Stockholders

February 23, 2021

| | | | 2020 | | | | | | 2019 | | |

| Lower of cost or market (LCM) inventory valuation adjustment | | | (19) | | | | | | — | | | | | | — | | | | | |

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| __________________________ | | | | | | | | | | | | | | | | | | | | |

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

| Open market stock purchases | | | — | | | | | | — | | | | | | (1,511) | | | | | | — | | | | | | — | | | | | | (1,511) | | | | | | — | | | | | | (1,511) | | |

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| Open market stock purchases | | | — | | | | | | — | | | | | | (753) | | | | | | — | | | | | | — | | | | | | (753) | | | | | | — | | | | | | (753) | | |

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

| Net income (loss) | | | — | | | | | | — | | | | | | — | | | | | | (1,421) | | | | | | — | | | | | | (1,421) | | | | | | 314 | | | | | | (1,107) | | |

| Open market stock purchases | | | — | | | | | | — | | | | | | (130) | | | | | | — | | | | | | — | | | | | | (130) | | | | | | — | | | | | | (130) | | |

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| Balance as of December 31, 2020 | | | $ | 7 | | | | | $ | 6,814 | | | | | $ | (15,719) | | | | | $ | 28,953 | | | | | $ | (1,254) | | | | | $ | 18,801 | | | | | $ | 841 | | | | | $ | 19,642 | |

| Net income (loss) | | | $ | (1,107) | | | | | $ | 2,784 | | | | | $ | 3,353 | |

| LCM inventory valuation adjustment | | | (19) | | | | | | — | | | | | | — | | |

1.

We own 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day as of December 31, 2020 that are located in the United States (U.S.), Canada, and the United Kingdom (U.K.).

We are also a joint venture partner in DGD, which owns a renewable diesel plant in Norco, Louisiana with a production capacity of 290 million gallons per year as of December 31, 2020.

We also own 13 ethanol plants with a combined production capacity of 1.69 billion gallons per year as of December 31, 2020 that are located in the Mid-Continent region of the U.S. We sell our products primarily in the U.S., Canada, the U.K., Ireland, and Latin America.

As discussed in Note 2, the outbreak of COVID-19 and its development into a pandemic in March 2020 has resulted in significant economic disruption globally.

While demand and market prices for most of our products increased during the second half of 2020 compared to the low product demand during the first half of 2020, developments with respect to COVID-19 have been occurring at a rapid pace and the risk remains that circumstances could change.

For instance, beginning in the latter part of the second quarter of 2020, certain governmental authorities in the U.S. and other countries across the world began lifting many of the restrictions put in place to slow the spread of COVID-19.

However, in the second half of 2020, many locations where restrictions were lifted, and others where the restrictions were only more moderately lifted (such as California in our U.S. West Coast region, and New York, Canada, and the U.K. in our North Atlantic region), experienced a resurgence in the spread of COVID-19, which prompted many governmental authorities to reimpose certain restrictions.

In December 2020, the U.S. Food and Drug Administration and Canadian and U.K. regulators each granted emergency-use authorization for multiple COVID-19 vaccines to be used as immunization against the COVID-19 virus.

| | |

| --- | --- |

February 26, 2020

| | | | | | | | |

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

| Receivables, net | 8,904 | | | | 7,345 | | |

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

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

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

| | Valero Energy Corporation Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance as of December 31, 2016 | $ | 7 | | | $ | 7,088 | | | $ | (12,027 | ) | | $ | 26,366 | | | $ | (1,410 | ) | | $ | 20,024 | | | $ | 830 | | | $ | 20,854 | |

| Net income | — | | | | — | | | | — | | | | 4,065 | | | | — | | | | 4,065 | | | | 91 | | | | 4,156 | | |

| Stock purchases under purchase programs | — | | | | — | | | | (1,307 | | ) | | — | | | | — | | | | (1,307 | | ) | | — | | | | (1,307 | | ) |

| Issuance of Valero Energy Partners LP common units | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 33 | | | | 33 | | |

| Stock purchases under purchase programs | — | | | | — | | | | (1,511 | | ) | | — | | | | — | | | | (1,511 | | ) | | — | | | | (1,511 | | ) |

| Stock purchases under purchase program | — | | | | — | | | | (753 | | ) | | — | | | | — | | | | (753 | | ) | | — | | | | (753 | | ) |

| Other | — | | | | 74 | | | | — | | | | — | | | | — | | | | 74 | | | | — | | | | 74 | | |

| Contributions from noncontrolling interests | — | | | | 32 | | | | 30 | | |

We own and operate 15 petroleum refineries with a combined throughput capacity of approximately 3.15 million barrels per day and 14 ethanol plants with a combined production capacity of approximately 1.73 billion gallons per year as of December 31, 2019.

The petroleum refineries are located in the United States (U.S.), Canada, and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. We are also a joint venture partner in DGD, which owns and operates a renewable diesel plant in Norco, Louisiana.

We sell our products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland, and Latin America.

Approximately 7,000 outlets carry our brand names.

Effective January 1, 2019, we revised our reportable segments to reflect a new reportable segment — renewable diesel.

Also effective January 1, 2019, we no longer have a VLP segment, and we now include the operations of Valero Energy Partners LP and its consolidated subsidiaries (VLP) in our refining segment.

Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

See Note 2 regarding our merger with VLP, which occurred on January 10, 2019, and Note 17 for segment information.

Prior year amounts for capital expenditures and deferred turnaround and catalyst cost expenditures in the consolidated statements of cash flows have been reclassified to conform to the 2019 presentation to separately provide these expenditures for us and our consolidated VIEs.

Actual

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Trade receivables are carried at original invoice amount.

need to replace assets, and evaluation of the manner in which improvements impact the useful life of the group.

If a reasonable

As a result, we consider control to have transferred upon shipment or delivery

Topic 842

Topic 842 increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.

Topic 842 supersedes previous lease accounting requirements under FASB ASC Topic 840, “Leases,” (Topic 840).

We adopted Topic 842 using the optional transition method that permits us to record a cumulative-effect adjustment and apply the new disclosure requirements beginning in 2019 and continue to present comparative period information as required under Topic 840; however, we did not have a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption.

In addition, we elected the transition practical expedient package that permits us to not reassess our prior conclusions about lease identification, lease classification, and initial direct costs under the new standard, as well as the practical expedient that permits us to not assess existing land easements under the new standard.

See “Leases” above for a discussion of our revised accounting policy and also see Note 5 for information on our leases.

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: 2019.][added: 2020.]

The management report on Valero’s internal control over financial reporting required by Item 9A appears in Item 8 on page [removed: 59] [added: 61] 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: 62] [added: 64] 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: 2020] [added: 2021] annual meeting of stockholders.

We expect to file the proxy statement with the [added: U.S.] SEC on or before March 31, [removed: 2020.][added: 2021.]

| | [added: | |] Page | [added: | |]

| [Management’s report on internal control over financial [removed: reporting](#s4B6F5C9EEA77515C8B0B2634E2A3567F)] [added: reporting](#i5a19b96c11e24c23922f710d6aec513f_118)] | [removed: [59](#s4B6F5C9EEA77515C8B0B2634E2A3567F)] | [added: | [61](#i5a19b96c11e24c23922f710d6aec513f_118) | | |]

| [Reports of independent registered public accounting [removed: firm](#sE4E45A80AB7A5E57ADED69996154109E)] [added: firm](#i5a19b96c11e24c23922f710d6aec513f_121)] | [removed: [60](#sE4E45A80AB7A5E57ADED69996154109E)] | [added: | [62](#i5a19b96c11e24c23922f710d6aec513f_121) | | |]

| [Consolidated balance sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018](#s3322274D54C55E999865AFB360AC6331)] [added: 2019](#i5a19b96c11e24c23922f710d6aec513f_130)] | [removed: [64](#s3322274D54C55E999865AFB360AC6331)] | [added: | [66](#i5a19b96c11e24c23922f710d6aec513f_130) | | |]

| [Consolidated statements of income for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s494D9F66212D5A6298206EF7002EFC52)] [added: 2018](#i5a19b96c11e24c23922f710d6aec513f_133)] | [removed: [65](#s494D9F66212D5A6298206EF7002EFC52)] | [added: | [67](#i5a19b96c11e24c23922f710d6aec513f_133) | | |]

| [Consolidated statements of comprehensive income for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s1C34183285C754AC999D872D5CC74B90)] [added: 2018](#i5a19b96c11e24c23922f710d6aec513f_139)] | [removed: [66](#s1C34183285C754AC999D872D5CC74B90)] | [added: | [68](#i5a19b96c11e24c23922f710d6aec513f_139) | | |]

| [Consolidated statements of equity for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s0BDDFE1FACF059B3A339DBEBED47193D)] [added: 2018](#i5a19b96c11e24c23922f710d6aec513f_142)] | [removed: [67](#s0BDDFE1FACF059B3A339DBEBED47193D)] | [added: | [69](#i5a19b96c11e24c23922f710d6aec513f_142) | | |]

| [Consolidated statements of cash flows for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s99800BA6BA955BECB4956D8BF9A05F1A)] [added: 2018](#i5a19b96c11e24c23922f710d6aec513f_145)] | [removed: [68](#s99800BA6BA955BECB4956D8BF9A05F1A)] | [added: | [70](#i5a19b96c11e24c23922f710d6aec513f_145) | | |]

| [Notes to consolidated financial [removed: statements](#s0A2CD11E1C1151D8B02613D0F280009E)] [added: statements](#i5a19b96c11e24c23922f710d6aec513f_148)] | [removed: [69](#s0A2CD11E1C1151D8B02613D0F280009E)] | [added: | [71](#i5a19b96c11e24c23922f710d6aec513f_148) | | |]

| [++2.01](http://www.sec.gov/Archives/edgar/data/1035002/000119312518302059/d636934dex21.htm) | [added: | |] — | [added: | |] [Agreement and Plan of Merger, dated as of October 18, 2018, by and among Valero Energy Corporation; Forest Merger Sub, LLC; Valero Energy Partners LP; and Valero Energy Partners GP LLC–incorporated by reference to Exhibit 2.1 to Valero’s Current Report on Form 8-K dated and filed October 18, 2018 (SEC File No. [removed: 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312518302059/d636934dex21.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312518302059/d636934dex21.htm)] | [added: | |]

| 3.01 | [added: | |] — | [added: | |] Amended and Restated Certificate of Incorporation of Valero Energy Corporation, formerly known as Valero Refining and Marketing 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. | [added: | |]

| [3.02](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w02.txt) | [added: | |] — | [added: | |] [Certificate of Amendment (July 31, 1997) to Restated Certificate of Incorporation of Valero Energy 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. [removed: 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w02.txt)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w02.txt)] | [added: | |]

| [3.03](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w03.txt) | [added: | |] — | [added: | |] [Certificate of Merger of Ultramar Diamond Shamrock Corporation with and into Valero Energy Corporation dated December 31, 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w03.txt)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w03.txt) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w03.txt)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv3w03.txt)] | [added: | |]

| [3.04](http://www.sec.gov/Archives/edgar/data/1035002/000089882202000035/exhibit3-1.txt) | [added: | |] — | [added: | |] [Amendment (effective December 31, 2001) to Restated Certificate of Incorporation of Valero Energy 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000089882202000035/exhibit3-1.txt)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000089882202000035/exhibit3-1.txt) [00](http://www.sec.gov/Archives/edgar/data/1035002/000089882202000035/exhibit3-1.txt)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000089882202000035/exhibit3-1.txt)] | [added: | |]

| [3.05](http://www.sec.gov/Archives/edgar/data/1035002/000103500204000038/f10q093004exh03-04.htm) | [added: | |] — | [added: | |] [Second Certificate of Amendment (effective September 17, 2004) to Restated Certificate of Incorporation of Valero Energy 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500204000038/f10q093004exh03-04.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500204000038/f10q093004exh03-04.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500204000038/f10q093004exh03-04.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500204000038/f10q093004exh03-04.htm)] | [added: | |]

| [3.06](http://www.sec.gov/Archives/edgar/data/1035002/000095013405020997/d30089exv2w01.htm) | [added: | |] — | [added: | |] [Certificate of Merger of Premcor Inc. with and into Valero Energy Corporation effective September 1, 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013405020997/d30089exv2w01.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095013405020997/d30089exv2w01.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095013405020997/d30089exv2w01.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013405020997/d30089exv2w01.htm)] | [added: | |]

| [3.07](http://www.sec.gov/Archives/edgar/data/1035002/000095013406004061/d32462exv3w07.htm) | [added: | |] — | [added: | |] [Third Certificate of Amendment (effective December 2, 2005) to Restated Certificate of Incorporation of Valero Energy 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013406004061/d32462exv3w07.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095013406004061/d32462exv3w07.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095013406004061/d32462exv3w07.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013406004061/d32462exv3w07.htm)] | [added: | |]

| [3.08](http://www.sec.gov/Archives/edgar/data/1035002/000095012311053384/c17847exv4w8.htm) | [added: | |] — | [added: | |] [Fourth Certificate of Amendment (effective May 24, 2011) to Restated Certificate of Incorporation of Valero Energy 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095012311053384/c17847exv4w8.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095012311053384/c17847exv4w8.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095012311053384/c17847exv4w8.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095012311053384/c17847exv4w8.htm)] | [added: | |]

| [3.09](http://www.sec.gov/Archives/edgar/data/1035002/000119312516594127/d162819dex302.htm) | [added: | |] — | [added: | |] [Fifth Certificate of Amendment (effective May 13, 2016) to Restated Certificate of Incorporation of Valero Energy Corporation–incorporated by reference to Exhibit 3.02 to Valero’s Current Report on Form 8-K dated May 12, 2016, and filed May 18, 2016 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312516594127/d162819dex302.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000119312516594127/d162819dex302.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000119312516594127/d162819dex302.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312516594127/d162819dex302.htm)] | [added: | |]

| [3.10](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm) | [added: | |] — | [added: | |] [Amended and Restated Bylaws of Valero Energy Corporation–incorporated by reference to Exhibit 3.01 to Valero’s Current Report on Form 8-K dated September 20, 2017 and filed September 21, 2017 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm)[00](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312517289621/d452366dex301.htm)] | [added: | |]

| [4.01](http://www.sec.gov/Archives/edgar/data/1035002/0001035002-98-000010.txt) | [added: | |] — | [added: | |] [Indenture dated as of December 12, 1997 between Valero Energy Corporation and The Bank of New 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.](http://www.sec.gov/Archives/edgar/data/1035002/0001035002-98-000010.txt) | [added: | |]

| [4.02](http://www.sec.gov/Archives/edgar/data/1035002/000095012900003531/ex4-6.txt) | [added: | |] — | [added: | |] [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 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 [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095012900003531/ex4-6.txt)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095012900003531/ex4-6.txt) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095012900003531/ex4-6.txt)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095012900003531/ex4-6.txt)] | [added: | |]

| [4.03](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w7.txt) | [added: | |] — | [added: | |] [Indenture (Senior Indenture) dated as of June 18, 2004 between Valero Energy Corporation and Bank of New 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.](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w7.txt) | [added: | |]

| [4.04](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w8.txt) | [added: | |] — | [added: | |] [Form of Indenture related to subordinated debt 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.](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w8.txt) | [added: | |]

| [4.05](http://www.sec.gov/Archives/edgar/data/1035002/000119312515084401/d889732dex41.htm) | [added: | |] — | [added: | |] [Indenture dated as of March 10, 2015 between Valero Energy Corporation and U.S. Bank National Association, as trustee-incorporated by reference to Exhibit 4.1 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-202635) filed March 10, 2015.](http://www.sec.gov/Archives/edgar/data/1035002/000119312515084401/d889732dex41.htm) | [added: | |]

| [4.06](http://www.sec.gov/Archives/edgar/data/1583103/000119312516780536/d301629dex41.htm) | [added: | |] — | [added: | |] [Indenture, dated as of November 30, 2016, between Valero Energy Partners LP, as issuer, and U.S. Bank National Association, as trustee–incorporated by reference to Exhibit 4.1 to Valero Energy Partners LP’s Post-Effective Amendment No. 1 to Registration Statement on Form S-3 (Registration File No. 333-208052) filed November 30, 2016.](http://www.sec.gov/Archives/edgar/data/1583103/000119312516780536/d301629dex41.htm) | [added: | |]

| [4.07](http://www.sec.gov/Archives/edgar/data/1035002/000114036119000669/s002623x2_ex4-2.htm) | [added: | |] — | [added: | |] [First Supplemental Indenture (with Parent Guarantee), dated as of January 10, 2019, among Valero Energy Partners LP, as issuer; Valero Energy Corporation, as parent guarantor; and U.S. Bank National Association, as trustee–incorporated by reference to Exhibit 4.2 to Valero’s Current Report on Form 8-K dated and filed January 10, 2019 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000114036119000669/s002623x2_ex4-2.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000114036119000669/s002623x2_ex4-2.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000114036119000669/s002623x2_ex4-2.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000114036119000669/s002623x2_ex4-2.htm)] | [added: | |]

| [4.08](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w1.txt) | [added: | |] — | [added: | |] [Specimen Certificate of Common 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.](http://www.sec.gov/Archives/edgar/data/1035002/000095012904004177/h16034exv4w1.txt) | [added: | |]

| [removed: [*4.09](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm)] [added: [4.09](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm)] | [added: | |] — | [added: | |] [Description of Valero Energy Corporation common stock, $0.01 par [removed: value.](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm)] [added: value–incorporated by reference to Exhibit](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[4.09 to Valero’s Annual Report on Form](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[10-K for the year ended December](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[31, 2019 (SEC File No.](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[001](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm)[\-](http://www.sec.gov/Archives/edgar/data/1035002/000095012310018097/d70408exv10w2.htm)[13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh409-12312019.htm)] | [added: | |]

| [+10.01](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm) | [added: | |] — | [added: | |] [Valero Energy Corporation Annual Bonus Plan, amended and restated as of [removed: February 28,] [added: February](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[28,] 2018–incorporated by reference to Exhibit 10.01 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2017 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500218000010/vloexh1001-12312017.htm)] | [added: | |]

| [removed: [+10.02](http://www.sec.gov/Archives/edgar/data/1035002/000095012310018097/d70408exv10w2.htm)] [added: [+10.02](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)] | [added: | |] — | [added: | |] [Valero Energy Corporation [removed: 2005] [added: 2011] Omnibus Stock Incentive Plan, amended and restated [removed: as of October 1, 2005–incorporated] [added: February](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)[25, 2016–incorporated] by reference to Exhibit [removed: 10.02] [added: 10.04] to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2009] [added: 2015] (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095012310018097/d70408exv10w2.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)] | [added: | |]

| [removed: [+10.03](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)] [added: [+10.04](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm)] | [added: | |] — | [added: | |] [Valero Energy Corporation [removed: 2011 Omnibus Stock Incentive] [added: Deferred Compensation] Plan, amended and restated [removed: February 25, 2016–incorporated] [added: as of January 1, 2008–incorporated] by reference to Exhibit 10.04 to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2015] [added: 2008] (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000069/vloexh1004-12312015.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm)] | [added: | |]

| [removed: [+10.04](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm)] [added: [+10.05](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] | [added: | |] — | [added: | |] [Valero Energy Corporation [removed: Deferred Compensation] [added: Amended and Restated Supplemental Executive Retirement] Plan, amended and restated as of [removed: January 1,] [added: November 10,] 2008–incorporated by reference to Exhibit [removed: 10.04] [added: 10.08] to Valero’s Annual Report on Form 10-K for the year ended December 31, 2008 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w04.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] | [added: | |]

| [removed: [+10.05](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] [added: [+10.06](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm)] | [added: | |] — | [added: | |] [Valero Energy Corporation [removed: Amended and Restated Supplemental Executive Retirement] [added: Excess Pension] Plan, [added: as] amended and restated [removed: as of November 10, 2008–incorporated] [added: effective December 31, 2011–incorporated] by reference to Exhibit [removed: 10.08] [added: 10.10] to Valero’s Annual Report on Form 10-K for the year ended December 31, [removed: 2008] [added: 2011] (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm)] | [added: | |]

| [removed: [+10.06](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm)] [added: [+10.07](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm)] | [added: | |] — | [removed: [Valero] [added: | | [Form of Change of Control Severance Agreement (Tier I) between Valero] Energy Corporation [removed: Excess Pension Plan, as amended] and [removed: restated effective December 31, 2011–incorporated] [added: executive officer–incorporated] by reference to Exhibit [removed: 10.10] [added: 10.15] to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1010.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm)] | [added: | |]

| [removed: [+10.07](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm)] [added: [+10.09](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm)] | [added: | |] — | [added: | |] [Form of Change of Control Severance Agreement (Tier [removed: I)] [added: II-A)] between Valero Energy Corporation and executive officer–incorporated by reference to Exhibit [removed: 10.15] [added: 10.02] to Valero’s [removed: Annual] [added: Current] Report on Form [removed: 10-K for the year ended December 31, 2011] [added: 8-K dated November](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm)[2, 2016, and filed November](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm)[7, 2016] (SEC File [removed: No. 1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1015.htm)] [added: No.](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm) [00](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm)[1-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500216000120/a1002changeofctrlseverance.htm)] | [added: | |]