Valero Energy (VLO) 10-K risk factor changes: FY2023 vs FY2022

Each of these [removed: risk factors] [added: risks] could adversely affect our business, financial condition, results of operations, and/or liquidity, as well [removed: as adversely affect] [added: as, in certain cases,] the value of an investment in our securities.

Our cost to acquire feedstocks and the price at which we can ultimately sell products depend upon several factors beyond our control, including regional and global supplies of and demand for feedstocks (such as crude oil, waste and renewable [removed: feedstocks] [added: feedstocks,] and corn), liquid transportation fuels (such as gasoline, diesel, renewable diesel, and ethanol), and other products.

These in turn depend on, among other things, the availability and quantity of feedstocks and liquid transportation fuels imported into the countries in which we operate, the production levels of suppliers, levels of product inventories, productivity and growth (or the lack thereof) of the U.S. and global economies, the U.S. government’s relationships with foreign governments, political affairs, [removed: and] the extent of government [removed: regulation.][added: regulation, and the events described in many of the other risk factors below.]

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 [removed: and changes in trade flows from events such as the Russia-Ukraine conflict have] [added: has] also had, and [removed: are] [added: is] likely to continue to have, a significant impact on the market prices of crude oil and certain of our products.

Any adverse change in these regulations, policies, and standards (including, for example, changes in the price of carbon or other inputs that affect the value of our low-carbon [removed: fuels), or in our ability to obtain any] [added: fuels, such as] approved fuel pathways, [added: credits, or incentives)] could have a material adverse effect on the margins we receive for our low-carbon [removed: products in certain markets.][added: fuels.]

We do not produce crude oil, [removed: waste and] [added: waste,] renewable [removed: feedstocks,] [added: feedstocks (except inedible distillers] corn [added: oils), corn,] or other primary [removed: feedstocks] [added: feedstocks,] and must purchase nearly all of the feedstocks we process.

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

A decline in market prices [added: for our products and feedstocks] has [removed: had] [added: had,] and could again [removed: have] [added: have,] a negative impact to the carrying value of our inventories.

[removed: Lower economic activity could reduce] [added: A decrease in] the demand for and consumption of our [removed: products, which could cause our revenues and margins] [added: products due] to [removed: decline, limit our future growth prospects] [added: lower economic activity] and [removed: affect our capital allocation decisions.][added: growth]

[removed: A] [added: Additionally, a] significant portion of our profitability is derived from the ability to purchase and process crude oil feedstocks that historically have been cheaper than benchmark crude oils.

These crude oil feedstock differentials vary significantly depending on [added: many factors, including] overall economic conditions and trends and conditions within the markets for crude oil and refined petroleum products.

New developments may make alternative fuel vehicles more affordable or desirable, including improvements in battery and storage technology, increases in driving ranges, increased availability of charging stations and other infrastructure, expanded and more reliable supply chains, [removed: increased inventory,] and improvements in hydrogen fuel cell technology.

For example, several other companies have made, or announced interest in making, investments in renewable [removed: diesel] [added: diesel, SAF, and other low-carbon] projects.

As these projects develop, we will face increased [removed: competition] [added: competition, including] for [removed: waste and renewable] feedstocks and customers, which could reduce our product margins and limit the growth and profitability of our low-carbon fuels businesses.

[removed: Sentiment] [added: We are subject to risks arising from sentiment] towards climate change, fossil fuels, GHG emissions, environmental justice, and other [removed: ESG matters could adversely affect our business] [added: environmental, social,] and [removed: cost of capital.][added: governance (ESG) matters.]

In recent years, a number of advocacy groups, both in the U.S. and internationally, have campaigned for government and private action to promote climate and other ESG-related [removed: change,] [added: changes,] particularly at public companies, through [removed: investment] [added: activities including investment, engagement,] and voting [removed: practices of investment advisors, sovereign wealth funds, pension funds, endowments, and other stockholders.][added: practices.]

These activities have included promoting the divestment of securities of fossil fuel [added: companies, pressuring fossil fuel] companies [added: to commit to future output reductions,] and pressuring lenders, insurers, and other [removed: financial services companies] [added: market participants] to limit or curtail activities with fossil fuel companies.

If these or similar efforts are continued, our ability to access capital [removed: markets or to otherwise] [added: markets,] obtain new [removed: investment,] [added: investment or] financing, or to fully insure our operations may be negatively impacted.

These activities have also aimed to increase the attention on and demand for action related to various ESG matters, which has contributed to increasing societal, investor, and legislative focus and pressure on ESG practices and disclosures, including those related to climate change, GHG emissions targets, business [added: resilience under the assumptions of demand-constrained scenarios, net-zero ambitions, GHG reduction]

For example, ESG-focused [removed: stockholder] activism has [removed: been increasing] [added: increased] in the fossil fuel industry and has resulted in more frequent attempts to effect business or governance changes through mechanisms such as stockholder proposals, vote-no campaigns, and exempt proxy [removed: solicitations, among others.][added: solicitations.]

As a result, we have [removed: faced] [added: faced,] and expect to continue to [removed: face] [added: face,] increasing pressure regarding our ESG [removed: practices] and [added: climate-related] disclosures, including our [added: GHG emissions targets and ambition (including our] methodologies and timelines with respect [removed: thereto,] [added: thereto),] negative publicity, [added: prescriptive stockholder requests,] and demands for ESG-focused [removed: engagement from investors and stakeholders.][added: engagement.]

Responding to such ESG-focused activism has [removed: been] [added: been,] and will likely continue to [removed: be] [added: be,] costly and time-consuming.

Such response efforts [added: have resulted in, and] could [removed: also] [added: continue to] result [removed: in] [added: in,] the implementation of certain [removed: ESG] practices [removed: or] [added: and] disclosures that may present a heightened level of legal and regulatory risk, or that threaten our credibility with other investors and stakeholders.

As a result, our ESG-related [removed: disclosures,] metrics, [added: targets, ambitions,] and [removed: targets] [added: other disclosures,] may not necessarily be calculated [added: or presented] in the same manner or [added: be] comparable to similarly titled measures presented by us in other contexts, or by other companies or third-party [removed: estimates.][added: estimates or disclosures, and our interpretation of reporting standards may differ from those of others.]

While we believe that our ESG disclosures and methodologies reflect our business strategy and are reasonable at the time made or used, as our business or applicable methodologies, standards, or regulations develop and evolve, we may revise or cease reporting or using certain disclosures and methodologies if we determine that they are no longer advisable or [removed: appropriate.][added: appropriate, or are otherwise required to do so.]

[removed: Our operations depend on natural gas and reliable electricity,] [added: Such liabilities] and [removed: such dependency] [added: costs] could materially [added: and] adversely affect our business, financial condition, results of operations, and [removed: liquidity.][added: liquidity.]

Our operations depend on the [removed: use] [added: reliable supply] of natural gas and [removed: reliable] electricity.

We consume [removed: a] significant [removed: volume] [added: amounts] of natural gas and [removed: a significant amount of] electricity to operate our refineries and plants, and natural gas and electricity prices have a [removed: large] [added: measurable] effect on the [added: total] cost of our operations.

We also purchase other commodities whose [removed: price] [added: prices] may vary depending on the prices of natural gas or electricity.

[removed: Prices] [added: The volatility of prices] for both natural gas and electricity [removed: can be volatile and therefore] represent [added: an] ongoing [removed: challenges] [added: challenge] to our operating results.

Additionally, the availability [added: and cost] of natural gas and electricity [removed: can be] [added: have been, and could continue to be,] affected by numerous [removed: events] [added: events,] such as [added: government regulations,] weather (e.g., hurricanes and periods of considerable heat or cold, [removed: like] [added: such as] Winter Storm Uri in 2021), [removed: pipeline and other] logistics interruptions, electric grid outages, cybersecurity incidents, intermittent electricity generation (particularly from wind and solar), hostilities, sanctions, [added: human error,] and supply and demand imbalances for [removed: electricity and] natural [removed: gas.][added: gas and electricity.]

As electrification continues to grow, or if there are increased restrictions or costs imposed on the ability of utilities or power suppliers to utilize certain energy sources (such as through restrictions on fossil fuel or nuclear-generated electricity or ESG pressure not to use such sources of electricity generation), there will likely be increased strains [removed: on,] [added: on] and risks to the integrity, reliability, and resilience of electrical grids, and increased volatility and tightness in natural gas and electricity supplies across the [removed: world, and such events could negatively affect the cost, reliability, and availability of our natural gas and electricity supplies.][added: world.]

[removed: Increased electrification will also] likely increase the intermittency and [removed: variability] [added: decrease the reliability] of electricity [removed: and power] supplies, [added: particularly for grids highly dependent upon wind and solar power,] which would exacerbate the foregoing challenges.

Additionally, increased government regulations and public opposition to pipeline construction and electricity generation and transmission projects [removed: may] [added: have resulted in, and could continue to] result [removed: in] [added: in,] the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to obtain natural gas feedstocks and electricity in a reliable and cost-efficient manner.

Although we actively manage these [removed: costs] [added: risks] through contracting and hedging our exposure to price volatility as appropriate, and by pursuing projects that reduce our reliance on third parties and fortify the resilience of our assets, increases in prices for natural gas and electricity, or disruptions to our supply thereof, [added: have in the past, and] could [added: again,] materially and adversely affect our business, financial condition, results of operations, and liquidity.

We are, therefore, subject to the political, geographic, and economic risks attendant to doing business with suppliers located in, and supplies originating from, [removed: diverse areas.][added: different areas across the world, including global geopolitical and other conflicts and tensions that may impact trade flows and increase transportation costs.]

If we are unable to obtain adequate or optimal volumes or are able to obtain such volumes only at unfavorable prices, our business, financial condition, results of operations, and liquidity could be materially [added: and] adversely affected, including from reduced sales volumes of products or [removed: reduced margins as a result of] higher [added: operating] costs.

For example, U.S. sanctions [removed: concerning] [added: targeting] Russia, Iran, and Venezuela limit, but [added: do] not necessarily ban, the ability of most U.S. companies to engage in [removed: oil] [added: petroleum-related] transactions involving these countries.

U.S. and other government sanctions and actions by governments and private market participants to refrain from purchasing or transporting crude oil and petroleum-based products from particular countries [added: (such as in response to the Russia-Ukraine conflict) have impacted, and may continue to impact, trade flows, and have limited, and may continue to limit, our access to business opportunities in various countries.]

[removed: Should] [added: If] Darling’s supply [removed: be] [added: is] disrupted or [removed: should] [added: if] supply from other sources [removed: become] [added: becomes] limited or only available on unfavorable terms, DGD could be required to develop alternate sources of supply, and it could be required to increase its utilization of waste and renewable feedstocks that produce [removed: lower margin] [added: lower-margin] products.

Although the risks are organized by headings and each risk is discussed separately, many are interrelated.

Factors outside of our control, such as economic uncertainty, inflation (and the potential for increased prices to create demand destruction), persistently high interest rates, public health crises (such as the COVID-19 pandemic), and political unrest or hostilities, have affected, and could continue to affect, economic activity and growth levels of the U.S. and other countries.

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levels has caused, and could again cause, declines in our revenues and margins and could negatively impact our growth prospects and capital allocation decisions.

We are subject to risks arising from industry and market developments that could decrease the demand for our products.

As a result, we believe some parties have reduced or ceased lending to, investing in, or insuring fossil fuel companies.

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plans, actions related to human capital management, political activities, environmental justice, racial equity audits, and governance standards.

ESG has also become an increasingly politically charged issue, and “anti-ESG” sentiment and increased scrutiny and skepticism of ESG policies and practices have resulted in, and could continue to result in, additional demands and strains on companies.

Our operations depend on the reliable supply of natural gas and electricity, which exposes us to various risks.

These events could negatively affect the cost, reliability, and availability of our natural gas and electricity supplies and may cause sporadic outages disrupting our operations.

Growing electrification and rapidly developing and increasing technology use (such as artificial intelligence, computer processing, cryptocurrency mining, and cloud storage, and the data centers and power supplies required to support these activities) will also

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We are subject to risks arising from the potential disruption of our ability to obtain feedstocks.

We source our petroleum-based and low-carbon fuels feedstocks from suppliers throughout the world.

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by market events (such as changes in fertilizer prices and rail disruptions).

Although we actively seek to manage these risks, we have experienced some of these events in the past and could experience additional events in the future.

Some of our competitors also have materially greater financial and other resources

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We are subject to risks arising from an interruption in any of our refineries or plants.

In addition, challenges to or opposition of fossil fuel infrastructure projects continue to make the approval and completion of such projects more difficult and costly.

Despite government support for and acknowledgement of the importance of certain low-carbon fuels and technologies, such as carbon capture and sequestration, there has also been growing regional political and environmental opposition among various groups in certain geographies to many such projects.

Such opposition may be taken into account by government or judicial officials in granting the relevant permits or authorizations, and has previously resulted in, and could again result in, permits and authorizations being challenged, delayed, denied, revoked, appealed, or conditionally granted.

In certain instances, this has resulted in, and could again result in, the cancellation or restructuring of projects.

For example, while we operate the DGD Plants and perform certain day-to-day

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We are subject to risks arising from legal, political, and regulatory developments regarding climate, GHG emissions, and the environment.

CARB’s current Scoping Plan identifies strategies to reduce liquid petroleum consumption in California by 94 percent, and CARB is actively engaged in a series of rulemaking efforts intended to fulfill these objectives.

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emissions goals, including seeking to limit or eliminate petroleum-based fuels by imposing mandates of so-called 100 percent zero-emission vehicle acquisitions, such as EVs and other alternative fuel vehicles, by 2035 and 100 percent zero-emission light-duty vehicle acquisitions by 2027.

Moreover, in April 2023, the EPA announced new, more ambitious proposed standards for model years 2027 to 2032 that the agency expects will drive 67 percent of new light- and medium-duty vehicles, 50 percent of heavy-duty vocational vehicles, 35 percent of short-haul tractors, and 25 percent of long-haul tractors sold in the U.S. to be EVs or other alternative fuel vehicles by 2032.

In July 2023, NHTSA also proposed increasing both the fuel economy standard for passenger cars and light trucks for model years 2027 to 2032 and the fuel efficiency standards for heavy-duty pickup trucks and vans for model years 2030 to 2035.

Additionally, in November 2023, the Federal Highway Administration finalized rules that require certain U.S. state departments of transportation and metropolitan planning organizations to establish declining tailpipe carbon dioxide emissions targets for motor vehicles.

Most recently, in December 2023, the EPA announced final rules intended to sharply reduce emissions of methane and other air pollution from oil and gas operations.

Within such rules, the EPA nearly quadrupled its estimate of the “social cost” of carbon dioxide, a measure that is often used by certain U.S. federal agencies as part of their analyses of the costs and benefits of more stringent climate regulation, which could result in stricter climate rules and regulations that disfavor internal combustion engine vehicles and liquid transportation fuels.

In May 2023, CARB requested the EPA grant a waiver of preemption for Advanced Clean Cars II, and the EPA opened CARB’s request for public hearing and comment in December 2023.

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Clean Fleets to take effect in California and in those states that elect to follow the California program.

Additionally, in July 2023, CARB announced a “Clean Truck Partnership” with various U.S. truck and engine manufacturers and the Truck and Engine Manufacturers Association that is aimed at advancing the development of EVs or other alternative fuel vehicles for the commercial trucking industry regardless of whether the regulatory mandate survives legal challenge.

Economic uncertainty, inflation, cybersecurity incidents, and political unrest or hostilities, including the threat of future terrorist attacks, could affect the economies of the U.S. and other countries.

Inflation could negatively impact our operating costs and increased product prices could result

in demand destruction.

Refining, renewable diesel, and ethanol margins also can be significantly impacted by changes in the worldwide production capacity of such products, whether due to the expansion, closure, or transition of existing facilities, or construction of new facilities, and those product margins will be adversely affected if the worldwide production capacity for such products exceeds demand.

Industry and other developments, and evolving sentiment, regarding fossil fuels and GHG emissions, may decrease the demand for our products and could adversely affect our performance.

As a result, some financial intermediaries, investors, and other capital markets participants have reduced or ceased lending to, investing in, or insuring companies that operate in the fossil fuel industry.

resilience under the assumptions of demand-constrained scenarios, net-zero ambitions, transition plans, actions related to diversity and inclusion, political activities, racial equity audits, and governance standards.

Investors, stakeholders, and other interested parties are also increasingly focusing on issues related to environmental justice.

This has resulted and is likely to continue to result in increased scrutiny, protests, and negative publicity with respect to our business and operations, and those of our counterparties, which could in turn result in the cancellation or delay of projects, the revocation or delay of permits, termination of contracts, lawsuits, regulatory action, and policy change that may adversely affect our business strategy, increase our costs, and adversely affect our reputation and financial performance.

If our ESG disclosures and methodologies are or are perceived by government authorities, investors, or stakeholders to be inadequate, inaccurate, or non-compliant with applicable standards or regulations, or if we discover material inaccuracies therein, our reputation could be negatively impacted, and we could be exposed to litigation and other regulatory actions.

Some capital markets participants are increasingly using ESG as a factor in their assessments, which could impact our cost of capital or access to financing.

There has also been an acceleration in investor demand for ESG investing opportunities, and many institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG-focused investments.

As a result, there has been a proliferation of ESG-focused investment funds and market participants seeking ESG-oriented investment products.

There has also been an increase in third-party providers of company ESG ratings, and an increase in ESG-focused voting policies among proxy advisory firms, portfolio managers, and institutional investors.

Such ESG ratings and voting policies often differ based on the provider and are continually changing.

Recently, backlash from certain governments and investors against ESG funds and investment practices has resulted in increased scrutiny and withdrawals from such funds.

Such backlash has also resulted in “anti-ESG” focused activism and investment funds, which may result in additional strains on company resources.

If we are unable to meet the ESG standards or investment, lending, ratings, or voting criteria and policies set by these parties, we may lose investors, investors may allocate a portion of their capital away from us, we may face increased ESG-focused activism, our cost of capital may increase, and our reputation may also be negatively affected.

Disruption of our ability to obtain crude oil, waste and renewable feedstocks, corn, and other feedstocks could adversely affect our operations.

We source our refining feedstock requirements throughout the world.

(such as in response to the Russia-Ukraine conflict) have impacted and may continue to impact trade flows, and have limited and may continue to limit our access to business opportunities in various countries.

As the volume of renewable diesel produced continues to increase, the competition for waste and renewable feedstocks will likely increase, which could place downward pressure on the margins associated with our Renewable Diesel segment’s products.

We are also required to comply with U.S. and international laws and regulations.

An interruption in one or more of our refineries or plants could adversely affect our business.

Public health crises such as the COVID-19 pandemic have had and may continue to have, adverse impacts on our business, financial condition, results of operations, and liquidity.

The economic effects from the COVID-19 pandemic on our business were and may again be significant.

Although our business has recovered since the onset of the pandemic in March 2020, there continues to be uncertainty and unpredictability about the lingering impacts to the worldwide economy that could negatively affect our business, financial condition, results of operations, and liquidity in future periods.

The extent to which the pandemic and its effects may adversely impact our future business, financial condition, and results of operations, and for what duration and magnitude, depends on factors that are continuing to evolve, are difficult to predict and, in many instances, are beyond our control.

The ultimate outcome of these and other factors may result in many adverse consequences including, but not limited to, reduced availability of critical staff, disruption or delays to supply chains for critical equipment or feedstock, reduced economic activity that negatively impacts demand for our products, and increased administrative, compliance, and operational costs.

In addition, future public health crises could also result in significant economic disruption and other effects that adversely impact our business, financial condition, results of operations, and liquidity in future periods in ways similar to the COVID-19 pandemic and its effects.

The adverse impacts of the COVID-19 pandemic had, and may continue to have, the effect of precipitating or heightening many of the other risks described in this section.

Legal, political, and regulatory developments regarding climate, GHG emissions, or the environment could adversely affect our business, financial condition, results of operations, and liquidity.

As of December 2022, CARB updated its Scoping Plan to identify strategies to achieve statewide carbon neutrality by 2045, including measures to reduce fossil fuel consumption in California by 94 percent by mandating alternative fuel vehicles.

Moreover, the EPA has indicated that it intends in the near future to pursue more stringent GHG emissions standards for model year 2027 and later passenger vehicles and to seek GHG emissions reductions for medium and heavy-duty vehicles pursuant to its “Clean Truck Plan.” Additionally, in July 2022, the Federal Highway Administration proposed rules that would require certain U.S. state departments of transportation and metropolitan planning organizations to establish declining carbon dioxide emissions targets for motor vehicle tailpipe carbon dioxide emissions that align with the current administration’s net-zero targets.

The IRA, which was

This rulemaking will be subject to a grant of a waiver of preemption by the EPA, as was recently reinstated for the Advanced Clean Cars I program.

Moreover, in 2005, the Kyoto Protocol to the 1992 United Nations (U.N.) Framework Convention on Climate Change, which establishes a binding set of GHG emissions targets, became binding on all countries that had ratified it.

In 2015, the U.N. Climate Change Conference in Paris resulted in the creation of the Paris Agreement, which requires countries to review and “represent a progression” in their nationally determined contributions, which set emissions reduction goals every five years beginning in 2020.

The terms of the Paris Agreement and the other executive orders and regulations discussed above are expected to result in additional regulatory actions, which could have a material adverse effect on our business.

These and other legal, political, regulatory, and international accord matters and developments regarding climate change, GHG or other air emissions, fuel efficiency, or the environment, including executive orders that mandate or encourage the use of electric, hybrid, and other alternative fuel vehicles or discourage or ban the use of internal combustion engine vehicles, may increase consumer preferences for, and adoption of, alternative fuel vehicles and decrease demand for our liquid fuels.

This discussion and analysis includes the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and comparison between such years.

The discussion for the year ended December 31, [removed: 2020] [added: 2021] and comparison between the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] have been omitted from this annual report on Form 10-K for the year ended December 31, [removed: 2022,] [added: 2023,] as such information can be found in “ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in our annual report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] which was filed on February [removed: 22, 2022.][added: 23, 2023.]

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,” [added: “ambition,”] “could,” “would,” “should,” “may,” “strive,” “seek,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” and similar expressions.

- the effect, impact, potential duration or timing, or other implications of [removed: the Russia-Ukraine conflict;][added: global geopolitical and other conflicts and tensions;]

- expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, [added: transportation costs,] and operating expenses;

- expectations regarding the levels of, [added: costs] and timing with respect to, the production and operations at our existing refineries and plants, [removed: and] projects under [removed: construction;][added: evaluation, construction, or development, and former projects;]

- our anticipated level of capital investments, including deferred turnaround and catalyst cost expenditures, our expected allocation between, and/or within, growth capital expenditures and sustaining capital expenditures, capital expenditures for environmental and other purposes, and joint venture investments, the expected [added: costs and] timing applicable to such capital investments and any related projects, and the effect of those capital investments on our business, financial condition, results of operations, and liquidity;

- our anticipated level of cash distributions or contributions, such as our dividend payment rate and contributions to our [removed: qualified] pension plans and other postretirement benefit plans;

- our ability to meet future cash [added: and credit] requirements, whether from funds generated from our operations or our ability to access financial markets effectively, and [added: expectations regarding] our [removed: ability to maintain sufficient] liquidity;

[removed: - expectations regarding environmental, tax, and other regulatory matters, including] [added: LEGAL PROCEEDINGS” above,] the anticipated amounts and timing of payment with respect to our deferred tax liabilities, [added: unrecognized tax benefits,] matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated effect thereof on our business, financial condition, results of operations, and liquidity;

- expectations regarding adoptions of new, or changes to [removed: existing, low-carbon fuel standards or policies,] [added: existing Renewable and Low-Carbon Fuel Programs,] blending and tax credits, or efficiency standards that impact demand for renewable fuels; and

- expectations regarding our [added: low-carbon fuels strategy,] publicly announced GHG emissions reduction/displacement targets and [added: ambitions, and] our [removed: current] [added: current, former,] and any future low-carbon projects.

- the effects arising out of [removed: the Russia-Ukraine conflict,] [added: global geopolitical and other conflicts and tensions,] including with respect to changes in trade flows and impacts to crude oil and other markets;

- the ability of the members of [removed: OPEC] [added: OPEC, and other petroleum-producing nations that collectively make up OPEC+,] to agree on and to maintain crude oil price and production controls;

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

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

- the price, availability, technology related to, and acceptance of alternative fuels and alternative-fuel vehicles, as well as sentiment and perceptions with respect to [added: low-carbon projects and] GHG emissions more generally;

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

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

- rulings, judgments, or settlements in litigation or other legal or regulatory matters, [removed: including] [added: such as] unexpected environmental remediation [added: or enforcement] costs, [added: including those] in excess of any reserves or insurance coverage;

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

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

[added: See the tables in note (h)] beginning on page [removed: [52](#i49c5c65895d846069ba9b6fe232d9ecd_6144)] [added: [54](#i6e1f483041e149eab65225e2f1101a35_8264)] for reconciliations of adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) and Refining, Renewable Diesel, and Ethanol segment margin to their most directly comparable GAAP financial measures.

See the table on page [removed: [60](#icb503b1cf48b4c8e8ddbb791a3f4b135_0-0-15-4-189346)] [added: [61](#icc611837bbc44ae8ba1d8825bda39218_0-0-15-4-355173)] for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure.

[removed: On] [added: Also on] page [removed: [59](#ie27cffee210b4b38a6988c8361f7f4e3_18025),] [added: [61](#i3aa3a3fc70644ab689c3d8b42d8119c9_17109),] we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.

Our results for the year ended December 31, [removed: 2022] [added: 2023] were favorably impacted by the [removed: effect from the ongoing recovery in the] [added: continued strong] worldwide demand for petroleum-based transportation [removed: fuels] [added: fuels,] while the worldwide supply of those products remained constrained.

The strong demand for our products and [removed: the increase] [added: continued strength] in refining margins were the primary contributors to [removed: to] us reporting [removed: $11.5] [added: $8.8] billion of net income attributable to Valero stockholders for the year ended December 31, [removed: 2022.][added: 2023.]

Our operating results for [removed: 2022,] [added: 2023,] including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found below under “RESULTS OF [removed: OPERATIONS.”][added: OPERATIONS” beginning on page [46](#i1595bba183964497bf0a8c7fcc6018bb_91).]

Our operations generated [removed: $12.6] [added: $9.2] billion of cash in [removed: 2022.][added: 2023.]

This cash was used to make [removed: $2.7] [added: $1.9] billion of capital investments in our business and return [removed: $6.1] [added: $6.6] billion to our stockholders through purchases of common stock for treasury and dividend payments.

As a result of this [added: and other] activity, our cash and cash equivalents increased by [removed: $740] [added: $562] million during [removed: 2022] [added: 2023] to [removed: $4.9] [added: $5.4] billion as of December 31, [removed: 2022.][added: 2023.]

We had [removed: $10.1] [added: $10.5] billion in liquidity as of December 31, [removed: 2022.][added: 2023.]

The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found below under “LIQUIDITY AND CAPITAL [removed: RESOURCES.”][added: RESOURCES” beginning on page [57](#i1595bba183964497bf0a8c7fcc6018bb_103).]

Results for the Year Ended December 31, [removed: 2022][added: 2023]

For [removed: 2022,] [added: 2023,] we reported net income attributable to Valero stockholders of [removed: $11.5] [added: $8.8] billion compared to [removed: $930 million] [added: $11.5 billion] for [removed: 2021.][added: 2022.]

The [removed: increase] [added: decrease] of [removed: $10.6] [added: $2.7] billion was primarily due to [removed: an increase] [added: a decrease] in operating income of [removed: $13.6] [added: $3.8] billion, partially offset by an increase in [added: “other income, net” of $323 million and a decrease in] income tax expense of [removed: $3.2 billion.][added: $809 million.]

The details of our operating income and adjusted operating income by [removed: segment] [added: segment, where applicable,] and in total are reflected [removed: below.][added: in the following table (in millions).]

Adjusted operating income excludes the adjustments reflected in the tables in note (h) beginning on page [removed: [52](#i49c5c65895d846069ba9b6fe232d9ecd_6144).][added: [54](#i6e1f483041e149eab65225e2f1101a35_8264).]

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

- expectations regarding environmental, tax, and other regulatory matters, including SBx 1-2 and the matters discussed under “ITEM 3.

- legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates,

This global supply and demand imbalance contributed to strong refining margins for 2023.

In addition, we reduced our outstanding debt through the purchase of $199 million of our public debt in 2023.

Many uncertainties remain with respect to the supply and demand imbalance in the petroleum-based products market worldwide.

- Crude oil discounts have widened, consistent with typical seasonal patterns and expected industry-wide refinery maintenance activity in the first quarter of 2024; however, continued sour crude oil production cuts by OPEC+ suppliers and the pending start-up of the Trans Mountain Pipeline expansion may dampen some of the seasonal effect.

In addition, conflict in the Middle East, including impacts on shipping routes and freight costs, could result in increased volatility in the crude oil market and potentially impact crude oil discounts.

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

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

| Revenues from external customers | | | | | | $ | 136,470 | | | | | $ | 3,823 | | | | | $ | 4,473 | | | | | $ | — | | | | | $ | 144,766 | |

| Intersegment revenues | | | | | | 18 | | | | | | 3,168 | | | | | | 1,086 | | | | | | (4,272) | | | | | | — | | |

| Total revenues | | | | | | 136,488 | | | | | | 6,991 | | | | | | 5,559 | | | | | | (4,272) | | | | | | 144,766 | | |

| Cost of materials and other | | | | | | 117,401 | | | | | | 5,550 | | | | | | 4,395 | | | | | | (4,259) | | | | | | 123,087 | | |

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

| Total cost of sales | | | | | | 124,960 | | | | | | 6,139 | | | | | | 4,990 | | | | | | (4,255) | | | | | | 131,834 | | |

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

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

| Operating income by segment | | | | | | $ | 11,511 | | | | | $ | 852 | | | | | $ | 553 | | | | | $ | (1,058) | | | | | 11,858 | | |

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

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

| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cost of sales: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

| | | | 2023 | | | | | | 2022 | | | | | | | | | | | |

| RVO (dollars per barrel) (g) | | | 7.02 | | | | | | 7.72 | | | | | | | | | | | |

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

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

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

| CARBOB 87 gasoline less Brent | | | 28.45 | | | | | | 31.32 | | | | | | | | | | | |

| CARB diesel less Brent | | | 32.79 | | | | | | 40.97 | | | | | | | | | | | |

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

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

| | | | 2023 | | | | | | 2022 | | | | | | | | |

| U.S. Gulf Coast (USGC) used cooking oil (dollars per pound) | | | 0.58 | | | | | | 0.77 | | | | | | | | |

| USGC distillers corn oil (dollars per pound) | | | 0.63 | | | | | | 0.77 | | | | | | | | |

| USGC fancy bleachable tallow (dollars per pound) | | | 0.59 | | | | | | 0.75 | | | | | | | | |

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

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

| | | | | | | 2023 | | | | | | 2022 | | | | | | Change | | |

| Revenues | | | | | | $ | 144,766 | | | | | $ | 176,383 | | | | | $ | (31,617) | |

- the effects and impact of the emergence of new variants of the COVID-19 virus and government responses thereto;

the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business or operations;

See the tables in note (h)

This supply and demand imbalance has contributed to increases in the market prices of petroleum-based transportation fuels (as well as crude oil and other feedstocks that are processed to make these products) and thus in refining margins.

Supply has remained constrained for a variety of reasons, including, but not limited to, effects from refinery closures and disruptions in the crude oil and petroleum-based products markets resulting from the Russia-Ukraine conflict.

Refineries closed over the last two years and other refineries ceased crude oil processing and are transitioning to renewable fuel production.

In addition, these negative impacts to the supply of petroleum-based products were exacerbated during the second quarter of 2022 by the Russia-Ukraine conflict as a result of countries and private market participants responding to the conflict by taking actions to refrain from purchasing and transporting Russian crude oil and petroleum-based products; however, some of the uncertainties and related impacts began dissipating throughout the last six months of 2022.

In addition, we completed various debt reduction and refinancing transactions that reduced our debt by approximately $2.7 billion in 2022, as described in Note 8 of Notes to Consolidated Financial Statements.

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

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

- Crude oil discounts are expected to remain near current levels absent changes in crude oil supply or availability.

Following the start-up of the DGD Port Arthur Plant in the fourth quarter of 2022, DGD’s combined renewable diesel production capacity increased by 470 million gallons per year, from 700 million gallons to approximately 1.2 billion gallons per year.

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

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

| Revenues from external customers | | | $ | 106,947 | | | | | $ | 1,874 | | | | | $ | 5,156 | | | | | $ | — | | | | | $ | 113,977 | |

| Intersegment revenues | | | 14 | | | | | | 468 | | | | | | 433 | | | | | | (915) | | | | | | — | | |

| Total revenues | | | 106,961 | | | | | | 2,342 | | | | | | 5,589 | | | | | | (915) | | | | | | 113,977 | | |

| Cost of materials and other (b) | | | 97,759 | | | | | | 1,438 | | | | | | 4,428 | | | | | | (911) | | | | | | 102,714 | | |

| Total cost of sales | | | 105,016 | | | | | | 1,630 | | | | | | 5,115 | | | | | | (913) | | | | | | 110,848 | | |

| Operating income by segment | | | $ | 1,862 | | | | | $ | 709 | | | | | $ | 473 | | | | | $ | (914) | | | | | 2,130 | | |

| | | | 2022 | | | | | | 2021 | | | | | | | | | | | |

| Brent less Alaska North Slope (ANS) crude oil | | | 0.06 | | | | | | 0.35 | | | | | | | | | | | |

| CARBOB 87 gasoline less ANS | | | 39.10 | | | | | | 24.17 | | | | | | | | | | | |

| CARB diesel less ANS | | | 48.75 | | | | | | 17.60 | | | | | | | | | | | |

| CARBOB 87 gasoline less WTI | | | 43.47 | | | | | | 26.64 | | | | | | | | | | | |

| CARB diesel less WTI | | | 53.12 | | | | | | 20.08 | | | | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | | | | | | | |

| Chicago Board of Trade (CBOT) soybean oil (dollars per pound) | | | 0.71 | | | | | | 0.58 | | | | | | | | |

| Revenues | | | $ | 176,383 | | | | | $ | 113,977 | | | | | $ | 62,406 | |

This increase in revenues was partially offset by an increase in cost of sales of $48.7 billion, which was primarily due to increases in crude oil and other feedstock costs, and an increase in general and administrative expenses (excluding depreciation and amortization expense) of $69 million, which was primarily due to an increase of $30 million in certain employee compensation expenses and a charge of $20 million for an environmental reserve adjustment (see note (e)).

Adjusted operating income increased by $13.4 billion, from $2.3 billion in 2021 to $15.7 billion in 2022.

| Net benefit (charge) from early redemption and retirement of debt | | | $ | 14 | | | | | $ | (193) | | | | | $ | 207 | |

| Asset impairment loss associated with the cancellation of a pipeline extension project by Diamond Pipeline LLC (a nonconsolidated joint venture) | | | — | | | | | | (24) | | | | | | 24 | | |

| Gain on sale of a 24.99 percent membership interest in MVP Terminalling, LLC (MVP) (a nonconsolidated joint venture) | | | — | | | | | | 62 | | | | | | (62) | | |

- Refining segment margin increased by $14.3 billion in 2022 compared to 2021.

◦An increase in gasoline margins had a favorable impact of approximately $2.4 billion.

◦Lower margins on other products had an unfavorable impact of approximately $1.1 billion.

- Refining segment operating expenses (excluding depreciation and amortization expense) increased by $421 million primarily due to increases in costs of compliance with environmental emissions programs associated with the operations of certain of our refineries of $121 million, chemicals and catalyst costs of $103 million, energy costs of $89 million, and maintenance expense of $84 million.

The table on page [46](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/vlo-20221231.htm#i26e61bc6546347ce86e4aff49a1751a5_97-bookmark-1fe37a820d494de0b4f2df2c9d5b77af) reflects market reference prices that we believe had a material impact on the change in our Renewable Diesel segment margin in 2022 compared to 2021.

◦Price risk management activities had an unfavorable impact of $241 million.

Our positions in commodity derivative instruments are monitored and managed on a daily basis by our risk control group to ensure compliance with our stated risk management policy that [removed: has been approved by] [added: is periodically reviewed with] our [removed: Board.][added: Board and/or relevant Board committee.]

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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 commodity derivative instruments entered into for purposes other than trading with which we have market risk was not material.

See Note [removed: 19] [added: 20] of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, [removed: 2022.][added: 2023.]

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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: 19] [added: 20] of Notes to Consolidated Financial Statements for a discussion about these blending programs.

See Note [removed: 8] [added: 9] of Notes to Consolidated Financial Statements for additional information related to our debt.

| | | | December [removed: 31, 2022] [added: 31, 2022] (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | [removed: 2022] [added: 2024] | | | | | | [removed: 2023] [added: 2025] | | | | | | [removed: 2024] [added: 2026] | | | | | | [removed: 2025] [added: 2027] | | | | | | [removed: 2026] [added: 2028] | | | | | | There- after | | | | | | Total | | | | | | Fair Value | | |

| Floating rate | | | $ | [removed: 810] [added: 1,030] | | | | | $ | [removed: 20] [added: —] | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | [removed: 830] [added: 1,030] | | | | | $ | [removed: 830] [added: 1,030] | |

| Average interest rate | | | [removed: 3.5] [added: 8.7] | | % | | | | [removed: 3.9] [added: —] | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | [removed: 3.5] [added: 8.7] | | % | | | | | | |

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the fair value of our foreign currency contracts was not material.

See Note [removed: 19] [added: 20] of Notes to Consolidated Financial Statements for a discussion about our foreign currency risk management activities.

| | | | December 31, 2023 (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | | | $ | 167 | | | | | $ | 441 | | | | | $ | 672 | | | | | $ | 564 | | | | | $ | 1,047 | | | | | $ | 5,374 | | | | | $ | 8,265 | | | | | $ | 8,079 | |

| Average interest rate | | | 1.2 | | % | | | | 3.2 | | % | | | | 4.2 | | % | | | | 2.2 | | % | | | | 4.4 | | % | | | | 5.5 | | % | | | | 4.8 | | % | | | | | | |

| | | | December 31, 2021 (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | | | $ | 300 | | | | | $ | — | | | | | $ | 169 | | | | | $ | 1,374 | | | | | $ | 1,726 | | | | | $ | 7,637 | | | | | $ | 11,206 | | | | | $ | 12,838 | |

| Average interest rate | | | 4.0 | | % | | | | — | | % | | | | 1.2 | | % | | | | 3.0 | | % | | | | 3.9 | | % | | | | 5.0 | | % | | | | 4.5 | | % | | | | | | |

We are reporting [removed: these] [added: the following] proceedings to comply with SEC regulations, which require us to disclose certain information about proceedings arising under [removed: U.S.] federal, state, or local provisions regulating the discharge of materials into the environment or [added: primarily for the purpose of] protecting the environment if [added: a governmental authority is a party to such proceeding and] we reasonably believe that such [removed: proceedings have the potential to] [added: proceeding will] result in monetary sanctions [removed: of $300,000 or more.][added: that exceed a specified threshold.]

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

We are [removed: working] [added: continuing to work] with the [removed: EPA] [added: BAAQMD] to resolve this matter.

In our annual report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] we reported that the Texas AG had filed suit against our Port Arthur Refinery in the 419th Judicial District Court of Travis County, Texas, Cause No. D-1-GN-19-004121, for alleged violations of the Clean Air Act seeking injunctive relief and penalties.

We are [removed: working] [added: continuing to work] with the BAAQMD to resolve [removed: this matter.][added: these matters.]

Pursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceeding is required.

We believe proceedings less than this threshold are not material to our business and financial condition.

In our quarterly report on Form 10-Q for the quarter ended September 30, 2023, we reported that (i) we had received a Notice of Violation (NOV) from the BAAQMD on March 21, 2019 related to atmospheric emissions of hydrogen commingled with non-methane organic compounds at our Benicia Refinery (the 2019 Atmospheric Emissions NOV), (ii) on December 1, 2020, we had received an NOV from the BAAQMD related to pressure relief devices in the Benicia Refinery’s Hydrogen Unit (the 2020 Pressure Relief Device NOV), and (iii) on June 17, 2021, October 11, 2021, and January 26, 2022, we had received certain other compliance-related NOVs related to the 2019 Atmospheric Emissions NOV and the 2020 Pressure Relief Device NOV.

In our quarterly report on Form 10-Q for the quarter ended June 30, 2023, we reported that on May 1, 2023, the BAAQMD issued a compliance-related NOV to our Benicia Refinery related to a pressure relief device.

*BAAQMD* (Benicia Refinery).

In our quarterly report on Form 10-Q for the quarter ended September 30, 2023, we reported that we were in the process of working with the BAAQMD to resolve several other NOVs issued by the BAAQMD to our Benicia Refinery in 2020 and 2019, which primarily relate to various emissions and related compliance issues.

We are continuing to work with the BAAQMD to resolve these matters.

While it is not possible to predict the outcome of the following environmental proceedings, if any one or more of them were decided against us, we believe that there would be no material effect on our financial condition, results of operations, and liquidity.

In our annual report on Form 10-K for the year ended December 31, 2021, we reported that the EPA had issued a Notice of Potential Violations and Opportunity to Confer related to a series of inspections conducted by the EPA arising out of a 2019 emissions event at our Benicia Refinery.

In our annual report on Form 10-K for the year ended December 31, 2021, we reported that we had received a Violation Notice from the BAAQMD related to atmospheric emissions at our Benicia Refinery.

*Texas Commission on Environmental Quality (TCEQ)* (Corpus Christi East Refinery).

In our annual report on Form 10-K for the year ended December 31, 2021, we reported that we had received a Notice of Enforcement from the TCEQ relating to Title V permit deviations at our Corpus Christi East Refinery.

We are working with the TCEQ to resolve this matter.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

[removed: ][added: ]

The aggregate market value of the voting and non-voting common stock held by non-affiliates was approximately [removed: $41.9] [added: $41.4] billion based on the last sales price quoted as of June 30, [removed: 2022] [added: 2023] on the New York Stock Exchange, the last business day of the registrant’s most recently completed second fiscal quarter.

As of February [removed: 17, 2023, 371,150,836] [added: 16, 2024, 332,481,908] 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 May [removed: 9, 2023,] [added: 15, 2024,] at which directors will be elected.

Portions of the [removed: 2023] [added: 2024] Proxy Statement are incorporated by reference in PART III of this Form 10-K and are deemed to be a part of this report.

| [removed: 12.] [added: [Item 12.](#i1595bba183964497bf0a8c7fcc6018bb_2501)] | | | [removed: Security] [added: [Security] Ownership of Certain Beneficial Owners and Management [removed: and Related] [added: and](#i1595bba183964497bf0a8c7fcc6018bb_2501) [Related] Stockholder [removed: Matters | | |] [added: Matters](#i1595bba183964497bf0a8c7fcc6018bb_2501)] | | | [removed: *“Beneficial Ownership of Valero Securities”* and *“Equity Compensation Plan Information”*] [added: [143](#i1595bba183964497bf0a8c7fcc6018bb_2501)] | | |

| [removed: 13.] [added: [Item 13.](#i1595bba183964497bf0a8c7fcc6018bb_2510)] | | | [removed: Certain] [added: [Certain] Relationships and Related Transactions, and Director [removed: Independence | | |] [added: Independence](#i1595bba183964497bf0a8c7fcc6018bb_2510)] | | | [removed: *“Certain Relationships and Related Transactions”* and *“Information Regarding the Board of Directors —* *Independent Directors”*] [added: [143](#i1595bba183964497bf0a8c7fcc6018bb_2510)] | | |

| [removed: 14.] [added: [Item 14.](#i1595bba183964497bf0a8c7fcc6018bb_2519)] | | | [removed: Principal] [added: [Principal] Accountant Fees and [removed: Services | | |] [added: Services](#i1595bba183964497bf0a8c7fcc6018bb_2519)] | | | [removed: *“KPMG LLP Fees”*] [added: [143](#i1595bba183964497bf0a8c7fcc6018bb_2519)] | | |

| [Items 1. and [removed: 2.](#i26e61bc6546347ce86e4aff49a1751a5_22)] [added: 2.](#i1595bba183964497bf0a8c7fcc6018bb_22)] | | | [Business and [removed: Properties](#i26e61bc6546347ce86e4aff49a1751a5_22)] [added: Properties](#i1595bba183964497bf0a8c7fcc6018bb_22)] | | | [removed: [1](#i26e61bc6546347ce86e4aff49a1751a5_22)] [added: [1](#i1595bba183964497bf0a8c7fcc6018bb_22)] | | |

| | | | [Our [removed: Business](#i26e61bc6546347ce86e4aff49a1751a5_25)] [added: Business](#i1595bba183964497bf0a8c7fcc6018bb_25)] | | | [removed: [1](#i26e61bc6546347ce86e4aff49a1751a5_25)] [added: [1](#i1595bba183964497bf0a8c7fcc6018bb_25)] | | |

| | | | [Our Comprehensive Liquid Fuels [removed: Strategy](#i26e61bc6546347ce86e4aff49a1751a5_28)] [added: Strategy](#i1595bba183964497bf0a8c7fcc6018bb_28)] | | | [removed: [1](#i26e61bc6546347ce86e4aff49a1751a5_28)] [added: [1](#i1595bba183964497bf0a8c7fcc6018bb_28)] | | |

| | | | [Environmental Management [removed: Systems](#i26e61bc6546347ce86e4aff49a1751a5_31)] [added: Systems](#i1595bba183964497bf0a8c7fcc6018bb_31)] | | | [removed: [5](#i26e61bc6546347ce86e4aff49a1751a5_31)] [added: [5](#i1595bba183964497bf0a8c7fcc6018bb_31)] | | |

| | | | [Our [removed: Operations](#i26e61bc6546347ce86e4aff49a1751a5_34)] [added: Operations](#i1595bba183964497bf0a8c7fcc6018bb_34)] | | | [removed: [6](#i26e61bc6546347ce86e4aff49a1751a5_34)] [added: [6](#i1595bba183964497bf0a8c7fcc6018bb_34)] | | |

| | | | [Government [removed: Regulations](#i26e61bc6546347ce86e4aff49a1751a5_40)] [added: Regulations](#i1595bba183964497bf0a8c7fcc6018bb_37)] | | | [removed: [13](#i26e61bc6546347ce86e4aff49a1751a5_40)] [added: [13](#i1595bba183964497bf0a8c7fcc6018bb_37)] | | |

| | | | [Human [removed: Capital](#i26e61bc6546347ce86e4aff49a1751a5_43)] [added: Capital](#i1595bba183964497bf0a8c7fcc6018bb_40)] | | | [removed: [14](#i26e61bc6546347ce86e4aff49a1751a5_43)] [added: [14](#i1595bba183964497bf0a8c7fcc6018bb_40)] | | |

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| [Item [removed: 16.](#i26e61bc6546347ce86e4aff49a1751a5_271)] [added: 16.](#i1595bba183964497bf0a8c7fcc6018bb_241)] | | | [Form 10-K [removed: Summary](#i26e61bc6546347ce86e4aff49a1751a5_271)] [added: Summary](#i1595bba183964497bf0a8c7fcc6018bb_241)] | | | [removed: [145](#i26e61bc6546347ce86e4aff49a1751a5_271)] [added: [147](#i1595bba183964497bf0a8c7fcc6018bb_241)] | | |

You should read our forward-looking statements together with our disclosures beginning on page [removed: [36](#i26e61bc6546347ce86e4aff49a1751a5_79)] [added: [39](#i1595bba183964497bf0a8c7fcc6018bb_76)] of this report under the heading “CAUTIONARY STATEMENT FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.” Note references in this report to Notes to Consolidated Financial Statements can be found beginning on page [removed: [76](#i26e61bc6546347ce86e4aff49a1751a5_163),] [added: [77](#i1595bba183964497bf0a8c7fcc6018bb_148),] under [removed: “PART II, ITEM] [added: “ITEM] 8.

We are a joint venture member in [removed: Diamond Green Diesel Holdings LLC (DGD)1,] [added: DGD1,] which owns two renewable diesel plants located in the Gulf Coast region of the U.S. with a combined production capacity of approximately 1.2 billion gallons per year, and we own 12 ethanol plants located in the Mid-Continent region of the U.S. with a combined production capacity of approximately 1.6 billion gallons per year.

We believe that liquid transportation fuels—both petroleum-based and [removed: low-carbon— help] [added: low-carbon—help] meet that demand, and we expect that they will continue to be an essential source of transportation fuels well into the future.

See Note [removed: 11] [added: 12] of Notes to Consolidated Financial Statements regarding our accounting for DGD.

Most of our petroleum refineries operate in locations with current operating cost and/or other advantages, as described below under “OUR OPERATIONS—*Refining*,” and we believe our refineries are positioned to meet the strong worldwide demand for [removed: our] petroleum-based products.

We expect that low-carbon liquid fuels will continue to be a growing part of the energy mix, and we have made multibillion-dollar investments to develop and grow our low-carbon renewable diesel and ethanol businesses, as described below under “OUR OPERATIONS—*Renewable Diesel*,” and “*—Ethanol*.” These businesses have made us [removed: one of] the world’s largest [added: producer of] low-carbon [added: transportation] fuels [removed: producers] and have helped governments across the world achieve their greenhouse gas (GHG) emissions reduction targets, and we continue to seek low-carbon fuel [removed: opportunities and to improve our environmental, social, and governance (ESG) practices.][added: opportunities.]

| [PART I](#i1595bba183964497bf0a8c7fcc6018bb_19) | | | | | | [1](#i1595bba183964497bf0a8c7fcc6018bb_19) | | |

| | | | [Properties](#i1595bba183964497bf0a8c7fcc6018bb_43) | | | [17](#i1595bba183964497bf0a8c7fcc6018bb_43) | | |

| [Item 1](#i1595bba183964497bf0a8c7fcc6018bb_55)[C](#i1595bba183964497bf0a8c7fcc6018bb_55)[.](#i1595bba183964497bf0a8c7fcc6018bb_55) | | | [Cybersecurity](#i1595bba183964497bf0a8c7fcc6018bb_55) | | | [33](#i1595bba183964497bf0a8c7fcc6018bb_55) | | |

| | | | [Information About Our Executive Officers](#i1595bba183964497bf0a8c7fcc6018bb_2399) | | | [36](#i1595bba183964497bf0a8c7fcc6018bb_2399) | | |

| [PART II](#i1595bba183964497bf0a8c7fcc6018bb_64) | | | | | | [37](#i1595bba183964497bf0a8c7fcc6018bb_64) | | |

| [PART III](#i1595bba183964497bf0a8c7fcc6018bb_229) | | | | | | [142](#i1595bba183964497bf0a8c7fcc6018bb_229) | | |

| [PART IV](#i1595bba183964497bf0a8c7fcc6018bb_235) | | | | | | [144](#i1595bba183964497bf0a8c7fcc6018bb_235) | | |

| [Signature](#i1595bba183964497bf0a8c7fcc6018bb_244) | | | | | | [148](#i1595bba183964497bf0a8c7fcc6018bb_244) | | |

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

Canada Low-Carbon Fuel Programs

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

Our recently announced SAF project is expected to produce low-carbon jet fuel and generate Section 45Z tax credits, which should increase the value of that product*.*

The project remains on schedule with completion expected in the first quarter of 2025 for a total cost of $315 million, with half of

2 DGD expects to produce synthetic paraffinic kerosene (SPK), a renewable blending component, using the Hydrotreated Esters and Fatty Acids (HEFA) process.

SPK is also commonly referred to as “SAF” or “neat SAF.” Current aviation regulations allow SPK to be blended up to 50 percent with conventional jet fuel for use in an aircraft.

This blend is commonly referred to as “SAF” or “blended SAF.” This document refers to both SPK and blended SAF as SAF.

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

the cost attributable to us.

Upon completion, the DGD Port Arthur Plant (as defined below under “OUR OPERATIONS—*Renewable Diesel*”) will have the optionality to upgrade approximately 50 percent of its current 470 million gallon renewable diesel annual production capacity to SAF.

In October 2023, Navigator announced that it decided to cancel this project.

We also continue to evaluate various other projects to sequester carbon dioxide.

Built on the success of FMS, our Low Carbon Assurance Program

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

(LCAP) was implemented to further delineate and strengthen our internal processes to assure compliance with applicable low-carbon fuels regulations, policies, and standards.

LCAP defines key regulatory requirements, management expectations, and internal regulatory assurances relating to transportation fuels regulated by low-carbon fuels regulations, policies, and standards.

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

See Note 12 of Notes to Consolidated Financial Statements regarding our accounting for DGD.

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

During the third quarter of 2023, the plant resumed production of fuel-grade ethanol.

Ethanol is

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

In addition, see Note 1 of Notes to Consolidated Financial Statements regarding our accounting for the costs of these programs under *“*Costs of Renewable and Low-Carbon Fuel Programs.”

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

| U.S. | | | | | | 8,239 | | |

| Canada | | | | | | 657 | | |

CROSS-REFERENCE SHEET

The following table indicates the headings in the 2023 Proxy Statement where certain information required in PART III of this Form 10-K may be found.

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

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

| Form 10-K Item No. and Caption | | | | | | | | | Anticipated Heading in 2023 Proxy Statement | | |

| 10. | | | Directors, Executive Officers and Corporate Governance | | | | | | *“Information Regarding the Board of Directors —* *Committees of the Board — Audit Committee —* *Current Audit Committee Members,” “Information* *Regarding the Board of Directors — Committees of the* *Board — Audit Committee — 2022 Meetings,”* *“Proposal No. 1 Election of Directors — Information* *Concerning Director Nominees,” “Proposal No. 1* *Election of Directors — Nominees,” “Identification of* *Executive Officers,”* and *“Miscellaneous — Governance* *Documents and Codes of Ethics”* | | |

| 11. | | | Executive Compensation | | | | | | *“Information Regarding the Board of Directors —* *Committees of the Board — Human Resources and* *Compensation Committee — Compensation Committee* *Interlocks and Insider Participation,” “Compensation* *Discussion and Analysis,” “Executive Compensation,”* *“Director Compensation,” “Pay Ratio Disclosure,”* and *“Certain Relationships and Related Transactions”* | | |

Copies of all documents incorporated by reference, other than exhibits to such documents, will be provided without charge to each person who receives a copy of this Form 10-K upon written request to Valero Energy Corporation, Attn: Secretary, P.O. Box 696000, San Antonio, Texas 78269-6000.

| [PART I](#i26e61bc6546347ce86e4aff49a1751a5_19) | | | | | | [1](#i26e61bc6546347ce86e4aff49a1751a5_19) | | |

| | | | [Properties](#i26e61bc6546347ce86e4aff49a1751a5_46) | | | [17](#i26e61bc6546347ce86e4aff49a1751a5_46) | | |

| [PART II](#i26e61bc6546347ce86e4aff49a1751a5_64) | | | | | | [34](#i26e61bc6546347ce86e4aff49a1751a5_64) | | |

| [PART III](#i26e61bc6546347ce86e4aff49a1751a5_259) | | | | | | [141](#i26e61bc6546347ce86e4aff49a1751a5_259) | | |

| [Item 12.](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [Security Ownership of Certain Beneficial Owners and Management and](#i26e61bc6546347ce86e4aff49a1751a5_262) [Related Stockholder Matters](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [141](#i26e61bc6546347ce86e4aff49a1751a5_262) | | |

| [Item 13.](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [Certain Relationships and Related Transactions, and Director Independence](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [141](#i26e61bc6546347ce86e4aff49a1751a5_262) | | |

| [Item 14.](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [Principal Accountant Fees and Services](#i26e61bc6546347ce86e4aff49a1751a5_262) | | | [141](#i26e61bc6546347ce86e4aff49a1751a5_262) | | |

| [PART IV](#i26e61bc6546347ce86e4aff49a1751a5_265) | | | | | | [141](#i26e61bc6546347ce86e4aff49a1751a5_265) | | |

| [Signature](#i26e61bc6546347ce86e4aff49a1751a5_274) | | | | | | [146](#i26e61bc6546347ce86e4aff49a1751a5_274) | | |

ii

The quotas are set by class of renewable fuel (i.e., biomass-based diesel, cellulosic biofuel, advanced biofuel, and total renewable fuel) and are collectively referred to as the renewable volume obligation (RVO).

Canada Clean Fuel Regulations (CFR)

In addition, Section 45Q provides federal income tax credits to certain taxpayers who capture and sequester, store, or use qualified carbon oxides (e.g., carbon dioxide).

South Dakota.

We expect to be the anchor shipper with those eight ethanol plants connected to the system.

The capture and sequestration of this carbon dioxide should result in the generation of Section 45Q tax credits and the production of a lower CI ethanol product that we expect to market in low-carbon fuel markets, which is expected to result in a higher value for this product.

A third party is expected to construct, own, and operate the system, and our capital investment will be to purchase, install, and connect the applicable carbon capture equipment to the system.

Initial service is anticipated to begin in late 2024.

Building on the success of this system, we are developing a proprietary Low-Carbon Assurance Program designed to provide tools and oversight to assure compliance with the increasingly complex array of low-carbon fuels programs, including compliance with the mandatory independent verifications by the jurisdictions in which we sell our products.

(a)These plants are expected to participate in the carbon capture and sequestration pipeline system discussed in “*Our Low-Carbon Projects”* above.

As such, its current production capacity is approximately 55 million gallons per year of ethanol.

Capital Expenditures Attributable to Compliance with Government Regulations

Other

| U.S. | | | | | | 8,079 | | |

| Canada | | | | | | 655 | | |

| Total | | | | | | 9,743 | | |

Diversity and Inclusion

We believe that having diverse employees and inclusive teams provides strengths and advantages for our success, and our board of directors (Board) and management team strive to promote and improve diversity and inclusion.

Approximately 37 percent of our U.S. employees are Hispanic or Latino, Black or African American, Asian, American Indian or Alaskan Native, Native Hawaiian or Other Pacific Islander, or two or more races.

We strive to recruit and retain diverse employees and foster a culture of inclusion through various efforts, including targeted recruiting strategies aimed at improving our outreach to underrepresented groups and educational and training programs on diversity-related topics, such as objective hiring and the advantages of diverse employees.

Additionally, seven of our 12 current Board members represent diversity of gender or race/ethnicity.

In furtherance of our diversity goals, in 2022 the Board approved a policy, included in our *Corporate Governance Guidelines*, which provides that when our executive officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934) are recruited from outside the company, the initial list of candidates will include qualified gender and racially diverse candidates among the candidates presented.

RISK MANAGEMENT AND STRATEGY

We take an enterprise approach to information security risk management and governance.

Our information security program and framework comprise processes, policies, practices, systems, and technologies that are designed to identify, assess, prioritize, manage, and monitor risks to our information systems, including risks from cybersecurity threats and events and risks associated with the use of third-party service providers.

Our established recovery approach is designed to provide for the ready availability and use of our business-critical processes in the event of any downtime, disaster, or outages.

We also seek to identify and mitigate the risks associated with the use of third-party service providers through the review of their security programs prior to our engagement thereof.

Additionally, our control environment and internal audit process bring a systematic, disciplined approach to evaluate our risk management, control, and governance processes concerning cybersecurity and our information security framework.

We have a cybersecurity Incident Response Plan (IRP) that sets forth a process to obtain information, coordinate activities, assess results, and communicate applicable developments to our employees, law enforcement, other external parties and agencies, and our Board.

The IRP includes the following major components: preparation, detection and analysis, containment, eradication, notification, recovery, reporting, and lessons learned.

Specific incident response playbooks have also been prepared for data breaches, malware, unauthorized remote access, and ransomware, which include applicable legal protocols.

We have also retained certain third-party experts to assist us with various aspects of incident assessment and response in the event those services become necessary or useful.

Typically, we (i) perform periodic tabletop exercises with a company-wide cross-functional team that is facilitated by a third-party expert and is intended to simulate a real-life security incident, (ii) conduct penetration testing as needed and annually conduct Payment Card Industry Data Security Standard testing and firewall reviews, and have periodically engaged a third-party expert to help therewith, (iii) hold annual cybersecurity awareness trainings, and (iv) periodically engage a third-party expert to conduct a review of our information security framework, which helps to identify existing and emerging risks, and mitigate against such risks.

These internal efforts and external third-party reviews also support our ability to regularly assess our information security program and framework against emerging risks, market and industry developments and provide opportunities to make adjustments or enhancements when deemed prudent or necessary.

To date, there have been no cybersecurity incidents that have materially affected us, or that are reasonably likely to materially affect us, including our business strategy, financial condition, or results of operations.

For additional information on the cybersecurity risks we face, see “ITEM 1A.

RISK FACTORS—Cybersecurity and Privacy Related Risks—*We are subject to risks arising from a significant breach of our information systems.*”

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

GOVERNANCE

Our Board’s Role in Cybersecurity Oversight

Oversight of risk management, including with respect to risks from cybersecurity threats, is the responsibility of our Board, which exercises its oversight responsibilities both directly and through its committees.

The Audit Committee of our Board has formal oversight responsibilities established in its committee charter concerning our initiatives and strategies respecting cybersecurity and information technology risks.

At least once annually, the heads of our information services and internal audit teams provide a report to the Audit Committee on cybersecurity and information technology risks, as well as our information security operations, structure, framework, various cybersecurity and information technology metrics, our cybersecurity and information security management and improvement efforts, future projects, and our governance and assessments related to cybersecurity and information technology.

The chair of the Audit Committee reports to the Board a summary of the information presented by the heads of our information services and internal audit teams during their cybersecurity update.

Periodically, the Board also receives reports on such matters directly.

As noted above, the IRP also contains notification procedures to the Board.

Management’s Role in Assessment and Management of Material Risks from Cybersecurity Threats

We have an Information Security Committee (Infosec Committee) consisting of refining, renewable diesel, ethanol, logistics, and information services personnel that meets weekly to evaluate third-party exchange of data and collaborate on strategy for dealing with information security risks and other related matters.

The Infosec Committee reports to our Information Security Oversight Committee (Infosec Oversight Committee) and our Executive Steering Committee on cybersecurity (Executive Steering Committee).

Our Infosec Oversight Committee consists of information services, refining, and internal audit personnel and meets quarterly to discuss network threats and the overall security landscape.

Our Executive Steering Committee consists of management within our information services, internal audit, refining, renewable diesel, ethanol, legal, and logistics teams, and meets twice per year to review and discuss information security metrics and results of security assessments, among other items.

Key members of the Infosec Oversight Committee and the Executive Steering Committee provide a report to the Audit Committee of the Board as discussed above.

Our information services team is led by our Vice President Information Services & Technology, who also chairs the Infosec Oversight Committee and has approximately 25 years of experience in the information technology industry.

Collectively, the members of our Infosec Committee, Infosec Oversight Committee, and Executive Steering Committee have decades of experience within the information technology and/or cybersecurity areas.

On a monthly basis, our Vice President Information Services & Technology provides executive management with an Information Security Scorecard, which includes any cybersecurity events that have occurred.

If a cybersecurity incident is declared under the IRP, we will evaluate whether such incident might have a material adverse impact on our business, financial condition, results of operations, or reputation, among other considerations, and communicate that discussion to executive management, who will then determine if escalation to the Board is warranted and if further disclosure is required to the SEC and/or other government agencies.

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following table lists the names and titles of our executive officers (for purposes of Rule 3b-7 under the Securities Exchange Act of 1934) as of the date of this report.

There is no arrangement or understanding between any executive officer listed below or any other person under which the executive officer was or is to be selected as an officer.

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

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

| Name | | | | | | Current Position | | | | | | Officer Beginning | | | | | | Age as of December 31, 2023 | | |

| R. Lane Riggs | | | | | | Chief Executive Officer and President | | | | | | 2011 | | | | | | 58 | | |

| Jason W. Fraser | | | | | | Executive Vice President and Chief Financial Officer | | | | | | 2015 | | | | | | 55 | | |

| Gary K. Simmons | | | | | | Executive Vice President and Chief Operating Officer | | | | | | 2011 | | | | | | 59 | | |

| Richard J. Walsh | | | | | | Senior Vice President, General Counsel and Secretary | | | | | | 2016 | | | | | | 58 | | |

Mr. Riggs was elected Chief Executive Officer and President, and as a member of our Board effective as of the close of business on June 30, 2023.

He previously served as President and Chief Operating Officer (beginning January 23, 2020), and Executive Vice President and Chief Operating Officer (beginning January 1, 2018), and prior to that as Executive Vice President Refining Operations and Engineering (beginning 2014), and Senior Vice President Refining Operations (beginning 2011).

He has held several leadership positions with Valero overseeing refining operations, supply optimization and crude and feedstock supply, and planning and economics.

Mr. Riggs also previously served on the board of directors of Valero Energy Partners GP LLC (the general partner of Valero Energy Partners LP) from 2014 to 2019.

Mr. Fraser was elected Executive Vice President and Chief Financial Officer effective July 15, 2020.

Prior to that he served as Executive Vice President and General Counsel effective January 1, 2019.

In 2018, he served as Senior Vice President overseeing Valero’s Public Policy & Strategic Planning, Governmental Affairs, Investor Relations, and External Communications functions.

From November 2016 to May 2018, Mr. Fraser served as Vice President Public Policy & Strategic Planning, and from May 2015 to November 2016, he served in London as Vice President Europe, overseeing our European commercial businesses.

Prior to his service in London, he held various leadership positions at our San Antonio headquarters, including Senior Vice President & Deputy General Counsel and Senior Vice President Specialty Products in the Valero family of companies.

Mr. Simmons was elected Executive Vice President and Chief Operating Officer on July 20, 2023.

He previously served as Executive Vice President and Chief Commercial Officer (beginning January 23, 2020), and Senior Vice President Supply, International Operations and Systems Optimization (beginning May 2014), and prior to that as Vice President Crude and Feedstock Supply and Trading (2012 to 2014), and Vice President Supply Chain Optimization (2011 to 2012).

Mr. Simmons has held many leadership positions with Valero, including Vice President and General Manager of our Ardmore and St. Charles refineries.

Mr. Walsh was elected Senior Vice President, General Counsel and Secretary, effective April 22, 2021, and prior to that was elected as Senior Vice President and General Counsel effective July 15, 2020.

Mr. Walsh has responsibility for our legal and governmental affairs, health, safety, and environmental, fuels compliance, risk management, ESG, and compliance/ethics teams.

He previously served as Vice President and Deputy General Counsel from 2016 to 2020.

He joined Valero in 1999 and has served in many different leadership roles within our legal department.

[Table of Content](#i1595bba183964497bf0a8c7fcc6018bb_13)[s](#i1595bba183964497bf0a8c7fcc6018bb_13)

As of January 31, [removed: 2023,] [added: 2024,] there were [removed: 4,562] [added: 4,414] holders of record of our common stock.

The following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of [removed: 2022.][added: 2023.]

| Period | | | | | | Total Number of Shares Purchased (a) | | | | | | Average Price Paid per [removed: Share] [added: Share (b)] | | | | | | | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs [removed: (b)] [added: (c)] | | |

(a)The shares reported in this column include [removed: 145,726] [added: 127,709] shares related to our purchases of shares from our employees [added: (including former 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: (b)On January] [added: (c)On February] 23, [removed: 2018,] [added: 2023,] we announced that our Board authorized [removed: our purchase of up] [added: us] to [removed: $2.5 billion] [added: purchase shares] of our outstanding common stock [added: for a total cost of up to $2.5 billion] with no expiration date, and we completed all authorized share purchases under that program during the [removed: second] [added: fourth] quarter of [removed: 2022.][added: 2023.]

On [removed: July 7, 2022,] [added: September 15, 2023,] we announced that our Board authorized [removed: our purchase of up] [added: us] to [removed: an additional $2.5 billion] [added: purchase shares] of our outstanding common stock [added: for a total cost of up to $2.5 billion] with no expiration [removed: date, and we completed all authorized share purchases under that program during the fourth quarter of 2022.][added: date (the September 2023 Program).]

On [removed: October 26, 2022,] [added: February 22, 2024,] our Board authorized [removed: our purchase of up] [added: us] to [removed: an additional $2.5 billion] [added: purchase shares] of our outstanding common stock [added: for a total cost of up to $2.5 billion] with no expiration [removed: date (the October 2022 Program).][added: date, which is in addition to the amount remaining under the September 2023 Program.]

As of December 31, [removed: 2022,] [added: 2023,] we had [removed: $2.3] [added: $2.2] billion [removed: of our outstanding common stock] remaining available for purchase under [removed: this program.][added: the September 2023 Program.]

*The performance graph below is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, [removed: as amended,] respectively*.

The following line graph compares the cumulative total [removed: return3] [added: return4] on an investment in our common stock against the cumulative total return of the S&P 500 Composite Index and an index of peers (that we selected) for the five-year period commencing December 31, [removed: 2017] [added: 2018] and ending December 31, [removed: 2022.][added: 2023.]

Our selected peer group comprises the following [removed: ten] [added: eleven] members: ConocoPhillips; CVR Energy, Inc.; Delek US Holdings, Inc.; the Energy Select Sector SPDR Fund; EOG Resources, Inc.; HF Sinclair Corporation; [added: LyondellBasell Industries N.V.;] Marathon Petroleum Corporation; Occidental Petroleum Corporation; PBF Energy Inc.; and Phillips 66.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL [removed: RETURN3][added: RETURN4]

Among Valero, the S&P 500 Index, [added: Old Peer Group,] and [added: New] Peer Group

[removed: ][added: ]

| | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | |

[removed: 3] [added: 4] Assumes that an investment in Valero common stock, the S&P 500 index, [added: our old peer group,] and our [added: new] peer group was $100 on December 31, [removed: 2017.][added: 2018.]

Cumulative total return is based on share price appreciation plus reinvestment of dividends from December 31, [removed: 2017] [added: 2018] through December 31, [removed: 2022.][added: 2023.]

| October 2023 | | | | | | 611,778 | | | | | | $ | 124.20 | | | | | | | | | | | 559,399 | | | | | | $3.1 billion | | |

| November 2023 | | | | | | 1,561,401 | | | | | | $ | 124.24 | | | | | | | | | | | 1,487,134 | | | | | | $2.9 billion | | |

| December 2023 | | | | | | 5,324,131 | | | | | | $ | 128.92 | | | | | | | | | | | 5,323,068 | | | | | | $2.2 billion | | |

| Total | | | | | | 7,497,310 | | | | | | $ | 127.56 | | | | | | | | | | | 7,369,601 | | | | | | $2.2 billion | | |

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

LyondellBasell Industries N.V. was added to the prior year’s peer group because of its similarities to us in size, complexity, and exposure to commodity pricing volatility for both its products and feedstocks.

LyondellBasell Industries N.V. also helps to balance the full portfolio of peers by helping ensure accountability of performance both within the core downstream segment of the oil and gas industry, and also in adjacent segments that face similar challenges and opportunities.

| Valero common stock | | | $ | 100.00 | | | | | $ | 130.36 | | | | | $ | 83.95 | | | | | $ | 117.80 | | | | | $ | 206.18 | | | | | $ | 218.29 | |

| S&P 500 Index | | | 100.00 | | | | | | 131.49 | | | | | | 155.68 | | | | | | 200.37 | | | | | | 164.08 | | | | | | 207.21 | | |

| Old Peer Group | | | 100.00 | | | | | | 103.43 | | | | | | 63.56 | | | | | | 103.27 | | | | | | 180.60 | | | | | | 194.27 | | |

| New Peer Group | | | 100.00 | | | | | | 105.09 | | | | | | 69.11 | | | | | | 106.04 | | | | | | 177.48 | | | | | | 192.24 | | |

| October 2022 | | | | | | 94,879 | | | | | | $ | 127.85 | | | | | | | | | | | — | | | | | | $4.1 billion | | |

| November 2022 | | | | | | 5,718,669 | | | | | | $ | 134.80 | | | | | | | | | | | 5,670,935 | | | | | | $3.3 billion | | |

| December 2022 | | | | | | 7,983,898 | | | | | | $ | 122.03 | | | | | | | | | | | 7,980,785 | | | | | | $2.3 billion | | |

| Total | | | | | | 13,797,446 | | | | | | $ | 127.36 | | | | | | | | | | | 13,651,720 | | | | | | $2.3 billion | | |

On February 23, 2023, our Board authorized our purchase of up to an additional $2.5 billion of our outstanding common stock with no expiration date, which is in addition to the amount remaining under the October 2022 Program.

| Valero common stock | | | $ | 100.00 | | | | | $ | 84.28 | | | | | $ | 109.87 | | | | | $ | 70.75 | | | | | $ | 99.28 | | | | | $ | 173.77 | |

| S&P 500 Index | | | 100.00 | | | | | | 95.62 | | | | | | 125.72 | | | | | | 148.85 | | | | | | 191.58 | | | | | | 156.89 | | |

| Peer Group | | | 100.00 | | | | | | 93.30 | | | | | | 96.50 | | | | | | 59.30 | | | | | | 96.35 | | | | | | 168.49 | | |

Our management evaluated the effectiveness of Valero’s internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Management believes that as of December 31, [removed: 2022,] [added: 2023,] 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: [69](#i26e61bc6546347ce86e4aff49a1751a5_142)] [added: [70](#i1595bba183964497bf0a8c7fcc6018bb_127)] of this report.

We have audited the accompanying consolidated balance sheets of Valero Energy Corporation and subsidiaries (the Company) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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: 2022,] [added: 2023,] 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: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] 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: 23, 2023] [added: 22, 2024] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Note [removed: 14] [added: 15] to the consolidated financial statements, as of December 31, [removed: 2022,] [added: 2023,] the Company has gross unrecognized tax benefits, excluding related interest and penalties, of [removed: $284] [added: $186] million.

The Company’s tax positions are subject to examination by local taxing authorities and [removed: the] resolution of such examinations may span multiple years.

Complex auditor judgment was required in evaluating the Company’s interpretation of income tax laws and assessing the Company’s [removed: estimate] [added: determination] of the ultimate resolution of its income tax positions.

We have audited Valero Energy Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] 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: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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: 2022,] [added: 2023,] and the related notes (collectively, the consolidated financial statements), and our report dated February [removed: 23, 2023] [added: 22, 2024] expressed an unqualified opinion on those consolidated financial statements.

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

| | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | | [added: | | |]

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

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

| Cash and cash equivalents | | | [added: | | |] $ | [removed: 4,862] [added: 5,424] | | | | | $ | [removed: 4,122] [added: 4,862] | |

| Receivables, net | | | [removed: 11,919] | | | [added: 12,525] | | | [removed: 10,378] | | | [added: 11,919 | | |]

| Inventories | | | [removed: 6,752] | | | [added: 7,583] | | | [removed: 6,265] | | | [added: 6,752 | | |]

| Prepaid expenses and other | | | [removed: 600] | | | [added: 689] | | | [removed: 400] | | | [added: 600 | | |]

| Total current assets | | | [removed: 24,133] | | | [added: 26,221] | | | [removed: 21,165] | | | [added: 24,133 | | |]

| Property, plant, and equipment, at cost | | | [removed: 50,576] | | | [added: 51,668] | | | [removed: 49,072] | | | [added: 50,576 | | |]

| Accumulated depreciation | | | [removed: (19,598)] | | | [added: (21,459)] | | | [removed: (18,225)] | | | [added: (19,598) | | |]

| Property, plant, and equipment, net | | | [removed: 30,978] | | | [added: 30,209] | | | [removed: 30,847] | | | [added: 30,978 | | |]

| Deferred charges and other assets, net | | | [removed: 5,871] | | | [added: 6,626] | | | [removed: 5,876] | | | [added: 5,871 | | |]

| Total assets | | | [added: | | |] $ | [removed: 60,982] [added: 63,056] | | | | | $ | [removed: 57,888] [added: 60,982] | |

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

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

| Current portion of debt and finance lease obligations | | | [added: | | |] $ | [removed: 1,109] [added: 1,406] | | | | | $ | [removed: 1,264] [added: 1,109] | |

| Accounts payable | | | [removed: 12,728] | | | [added: 12,567] | | | [removed: 12,495] | | | [added: 12,728 | | |]

| Accrued expenses | | | [removed: 1,215] [added: (50)] | | | | | | [removed: 1,253] [added: (5)] | | | [added: | | | 253 | | |]

| Taxes other than income taxes payable | | | [removed: 1,568] | | | [added: 1,452] | | | [removed: 1,461] | | | [added: 1,568 | | |]

| Income taxes payable | | | [removed: 841] | | | [added: 137] | | | [removed: 378] | | | [added: 841 | | |]

| Total current liabilities | | | [removed: 17,461] | | | [added: 16,802] | | | [removed: 16,851] | | | [added: 17,461 | | |]

| Debt and finance lease obligations, less current portion | | | [removed: 10,526] | | | [added: 10,118] | | | [removed: 12,606] | | | [added: 10,526 | | |]

| Deferred income tax liabilities | | | [removed: 5,217] | | | [added: 5,349] | | | [removed: 5,210] | | | [added: 5,217 | | |]

| Other long-term liabilities | | | [removed: 2,310] | | | [added: 2,263] | | | [removed: 3,404] | | | [added: 2,310 | | |]

| Commitments and contingencies | | | | | | | | | | | | [added: | | |]

| Equity: | | | | | | | | | | | | [added: | | |]

| Valero Energy Corporation stockholders’ equity: | | | | | | | | | | | | [added: | | |]

February 22, 2024

February 22, 2024

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

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

| Other income, net | | | 502 | | | | | | 179 | | | | | | 16 | | | | | |

(millions of dollars, except per share amounts)

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 8,835 | | | | | | — | | | | | | 8,835 | | | | | | 314 | | | | | | 9,149 | | |

| Contributions from noncontrolling interests | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 75 | | | | | | 75 | | |

| Balance as of December 31, 2023 | | | $ | 7 | | | | | $ | 6,901 | | | | | $ | (25,322) | | | | | $ | 45,630 | | | | | $ | (870) | | | | | $ | 26,346 | | | | | $ | 2,178 | | | | | $ | 28,524 | |

| Net income | | | | | | $ | 9,149 | | | | | $ | 11,879 | | | | | $ | 1,288 | |

| Purchases of available-for-sale (AFS) debt securities | | | | | | (276) | | | | | | (100) | | | | | | — | | |

| Proceeds from sales and maturities of AFS debt securities | | | | | | 314 | | | | | | 5 | | | | | | — | | |

Reclassifications

Certain prior year amounts in our statements of cash flows have been reclassified to conform to the 2023 presentation.

Prior year amounts for activities related to investments in AFS debt securities have been reclassified from “other investing activities, net” to purchases of AFS debt securities and proceeds from sales and maturities of AFS debt securities.

amortized on a straight-line basis over the period of time estimated to lapse until the next turnaround occurs;

transaction and collected by us from a customer (e.g., sales tax, use tax, value-added tax, etc.).

(collectively, the Renewable and Low-Carbon Fuel Programs).

Earnings per common share – assuming dilution is also determined using the two-class method, unless the treasury stock method is more dilutive.

Potentially dilutive securities are

ASU 2023-07

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*, to improve the disclosures about a public entity’s reportable segments primarily through improved disclosures about significant segment expenses and other segment related items.

We adopted this ASU effective January 1, 2024 and it did not affect our financial position or our results of operations, but will result in additional disclosures.

Accounting Pronouncement Not Yet Adopted

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, to improve income tax disclosures by requiring further disaggregation of information in the rate reconciliation and disaggregation of income taxes paid by jurisdiction.

This ASU also includes certain other amendments intended to improve the effectiveness of income tax disclosures.

We expect to adopt this ASU effective January 1, 2025 and the adoption will not affect our financial position or our results of operations, but will result in additional disclosures.

UNCERTAINTY

In September 2022, California adopted Senate Bill No. 1322 (SB 1322), which requires refineries in California to report monthly on the volume and cost of the crude oil they buy, the quantity and price of the wholesale gasoline they sell, and the gross gasoline margin per barrel, among other information.

The provisions of SB 1322 were effective January 2023.

In March 2023, California adopted Senate Bill No. 2 (such statute, together with any regulations contemplated or issued thereunder, SBx 1-2), which, among other things, (i) authorized the establishment of a maximum gross gasoline refining margin (max margin) and the imposition of a financial penalty for profits above a max margin, (ii) significantly expanded the reporting obligations under SB 1322 and the Petroleum Industry Information Reporting Act of 1980, which include reporting requirements to the California Energy Commission (CEC) for all participants in the petroleum industry supply chain in California (e.g., refiners, marketers, importers, transporters, terminals, producers, renewables producers, pipelines, and ports), (iii) created the Division of Petroleum Market Oversight within the CEC to analyze the data provided under SBx 1-2, and (iv) authorized the CEC to regulate the timing and other aspects of refinery turnaround and maintenance activities in certain instances.

SBx 1-2 imposes increased and substantial reporting requirements, which include daily, weekly, monthly, and annual reporting of detailed

operational and financial data on all aspects of our operations in California, much of it at the transaction level.

The operational data includes our plans for turnaround and maintenance activities at our two California refineries and the manner in which we expect to address the potential impacts on feedstock and product inventories in California as a result of such turnaround and maintenance activities.

The provisions of SBx 1-2 became effective June 26, 2023.

In September 2023, Governor Newsom directed the CEC to immediately begin the regulatory processes concerning the potential imposition of a penalty for exceeding a max margin and the timing of refinery turnarounds and maintenance.

Consequently, in October 2023, the CEC adopted an order instituting an informational proceeding on a max margin and penalty under SBx 1-2, as well as an order initiating rulemaking activity under SBx 1-2.

The CEC indicated in a November 2023 workshop that the latter rulemaking process will be focused on rules relating to the timing of refinery maintenance and turnarounds, as well as the standardization of data collection and reporting; final regulations are expected by July 2024.

It remains uncertain as to what extent any regulations will address the remaining reporting requirements under SBx 1-2.

February 23, 2023

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

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

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

(millions of dollars)

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

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

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

| Balance as of December 31, 2019 | | | $ | 7 | | | | | $ | 6,821 | | | | | $ | (15,648) | | | | | $ | 31,974 | | | | | $ | (1,351) | | | | | $ | 21,803 | | | | | $ | 733 | | | | | $ | 22,536 | |

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

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

but less than one year are classified as short-term investments, which are reflected in prepaid expenses and other on our balance sheet.

information becomes available or circumstances change.

quotas.

The estimated fair values of cash and cash equivalents, receivables,

payables, debt obligations, and operating and finance lease obligations approximate their carrying amounts, except for certain debt as disclosed in Note 18.

To manage commodity price risk, we primarily use cash flow hedges and economic hedges, and we also use fair value hedges from time to time.

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2022-06—“Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” was issued and adopted prospectively by us on December 21, 2022.

Our adoption of this ASU did not have a material impact on our financial statements or related disclosures.

The market value of our LIFO inventories fell below their LIFO inventory carrying amounts as of March 31, 2020, and as a result, we recorded an LCM inventory valuation reserve of $2.5 billion in order to state our inventories at market.

As of September 30, 2020, we reevaluated our inventories and determined that our cost was lower than market.

As a result, our LCM inventory valuation reserve was fully reversed as of September 30, 2020.

The change in our LCM inventory valuation reserve resulted in a net benefit of $19 million for the year ended December 31, 2020 due to the foreign currency translation effect of the portion of the LCM inventory valuation adjustment attributable to our foreign operations.

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

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

| Operating lease cost | | | 165 | | | | | | 156 | | | | | | 61 | | | | | | 52 | | | | | | 434 | | |

| Total lease cost | | | $ | 428 | | | | | $ | 231 | | | | | $ | 64 | | | | | $ | 115 | | | | | $ | 838 | |

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

| 2023 | | | $ | 345 | | | | | $ | 350 | | | | | | | | | | | | | |

| 2024 | | | 240 | | | | | | 287 | | | | | | | | | | | | | | |

| 2025 | | | 163 | | | | | | 278 | | | | | | | | | | | | | | |

| 2026 | | | 125 | | | | | | 254 | | | | | | | | | | | | | | |

| 2027 | | | 81 | | | | | | 224 | | | | | | | | | | | | | | |

| Thereafter | | | 434 | | | | | | 2,069 | | | | | | | | | | | | | | |

Changes in Useful Lives

The plant’s operations permanently ceased at that time and we reduced its estimated useful life, which reduced its net book value to estimated salvage value.

Our ethanol plant in Riga, Michigan was temporarily idled in 2019 due to corn quality issues with the local third-party corn feedstock supply.

Although we expected operations to resume after an improved corn harvest, we completed an evaluation of this plant during the third quarter of 2020 and concluded that it was no longer a strategic asset for our ethanol business.

The additional depreciation expense of $30 million for the year ended December 31, 2020 resulting from this change did not have a material impact on our results of operations nor was there a material impact to our financial position.

There was no current portion of repatriation tax liability as of December 31, 2021, as it was deemed paid in connection with the additional tax net operating loss (NOL) carryback on the superseding 2020 federal income tax return filed in the fourth quarter of 2021.

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: 2022.][added: 2023.]

FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i26e61bc6546347ce86e4aff49a1751a5_133)”] [added: DATA](#i1595bba183964497bf0a8c7fcc6018bb_118)”] on page [removed: [66](#i26e61bc6546347ce86e4aff49a1751a5_136)] [added: [67](#i1595bba183964497bf0a8c7fcc6018bb_121)] of this report, and is incorporated by reference into this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i26e61bc6546347ce86e4aff49a1751a5_133)”] [added: DATA](#i1595bba183964497bf0a8c7fcc6018bb_118)”] beginning on page [removed: [69](#i26e61bc6546347ce86e4aff49a1751a5_142)] [added: [70](#i1595bba183964497bf0a8c7fcc6018bb_127)] of this report, and is incorporated by reference into this item.

(a)None.

(b)During the three months ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) of Valero adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

In 2022, our performance exceeded our 2025 GHG reduction/displacement target, which is three years ahead of schedule.

Accordingly, on February 23, 2023, our Human Resources and Compensation Committee, a committee of our Board, approved a modification to our energy transition performance modifier for performance shares that continues on to our 2035 GHG reduction/displacement target.

[removed: The] [added: No other] information [added: other than what is] required [removed: by] [added: to satisfy] ITEMS 10 through 14 of Form 10-K is incorporated by reference into these items [removed: to] [added: from] the [removed: definitive proxy statement for our 2023 annual meeting of stockholders.][added: 2024 Proxy Statement.]

We expect to file the [removed: proxy statement] [added: 2024 Proxy Statement] with the SEC on or before March 31, [removed: 2023.][added: 2024.]

Information regarding our executive officers appears in PART I of this report under “INFORMATION ABOUT OUR EXECUTIVE OFFICERS.” All other information required by ITEMS 10 through 14 of Form 10-K is incorporated by reference from the discussions under the following anticipated headings in our definitive proxy statement for our 2024 annual meeting of stockholders (the 2024 Proxy Statement).

Copies of all documents incorporated by reference, other than exhibits to such documents, will be provided without charge to each person who receives a copy of this Form 10-K upon written request to Valero Energy Corporation, Attn: Secretary, P.O. Box 696000, San Antonio, Texas 78269-6000.

ITEMS 10-14.

No other information other than what is required to satisfy ITEMS 10 through 14 of Form 10-K is incorporated by reference into these items from such proxy statement.

See the cross-reference sheet on page “[i](#i26e61bc6546347ce86e4aff49a1751a5_10).”

PART IV

In addition to the information regarding our executive officers that appears in PART I of this report under “INFORMATION ABOUT OUR EXECUTIVE OFFICERS,” the disclosures under the following anticipated headings in our 2024 Proxy Statement are incorporated by reference herein:

- “*How Our Board is Structured, Governed, and Operates—Overview of Our Board Committees—Audit Committee—Current Audit Committee Members*;”

*•*“*How Our Board is Structured, Governed, and Operates—Overview of Our Board Committees—Audit Committee—Audit Committee Financial Experts*;”

*•*“*How Our Board is Structured, Governed, and Operates—How Our Director Nominees are Selected*;”

*•*“*Proposal No.* *1—Election of directors—Information Concerning Our Director Nominees*;”

*•*“*Proposal No.* *1—Election of directors—Nominees*;” and

- “*Miscellaneous—Governance Documents and Codes of Ethics*.”

The disclosures under the following anticipated headings in our 2024 Proxy Statement are incorporated by reference herein:

- “*How Our Board is Structured, Governed, and Operates—Overview of Our Board Committees—Human Resources and Compensation Committee—Compensation Committee Interlocks and Insider Participation;”*

*•*“*How Our Board is Structured, Governed, and Operates—Overview of Our Board Committees—Human Resources and Compensation Committee—Limited Delegation of Authority;”*

*•*“*Compensation Discussion and Analysis*;”

*•*“*Human Resources and Compensation Committee Report*;”

*•*“*Executive Compensation*;”

*•*“*Director Compensation*;”

*•*“*Pay Ratio Disclosure*;” and

*•*“*Additional Information—Board Independence, Related Party Matters, and Beneficial Ownership—Certain Relationships and Transactions with Related Persons*.”

The disclosures under the following anticipated headings in our 2024 Proxy Statement are incorporated by reference herein:

*•*“*Additional Information—Board Independence, Related Party Matters, and Beneficial Ownership—Beneficial Ownership of Valero Securities*;” and

*•*“*Equity Compensation Plan Information*.”

The disclosures under the following anticipated headings in our 2024 Proxy Statement are incorporated by reference herein:

*•*“*Additional Information—Board Independence, Related Party Matters, and Beneficial Ownership—Certain Relationships and Transactions with Related Persons*;” and

*•*“*Additional Information—Board Independence, Related Party Matters, and Beneficial Ownership—Independence of Our Directors*.”

The disclosures under the following anticipated heading in our 2024 Proxy Statement are incorporated by reference herein: “*KPMG LLP Fees*.”

PART IV

FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i26e61bc6546347ce86e4aff49a1751a5_133)”] [added: DATA](#i1595bba183964497bf0a8c7fcc6018bb_118)”] of this Form 10-K:

| [Management’s [removed: report] [added: Report] on [removed: internal control over financial reporting](#i26e61bc6546347ce86e4aff49a1751a5_136)] [added: Internal Control Over Financial Reporting](#i1595bba183964497bf0a8c7fcc6018bb_121)] | | | [removed: [66](#i26e61bc6546347ce86e4aff49a1751a5_136)] [added: [67](#i1595bba183964497bf0a8c7fcc6018bb_121)] | | |

| [Reports of [removed: independent registered public accounting firm](#i26e61bc6546347ce86e4aff49a1751a5_139)] [added: Independent Registered Public Accounting Firm](#i1595bba183964497bf0a8c7fcc6018bb_124)] (PCAOB ID: 185) | | | [removed: [67](#i26e61bc6546347ce86e4aff49a1751a5_139)] [added: [68](#i1595bba183964497bf0a8c7fcc6018bb_124)] | | |

| [Consolidated [removed: balance sheets] [added: Balance Sheets] as of December 31, [removed: 2022] [added: 2023] and [removed: 2021](#i26e61bc6546347ce86e4aff49a1751a5_145)] [added: 2022](#i1595bba183964497bf0a8c7fcc6018bb_130)] | | | [removed: [71](#i26e61bc6546347ce86e4aff49a1751a5_145)] [added: [72](#i1595bba183964497bf0a8c7fcc6018bb_130)] | | |

| [Consolidated [removed: statements] [added: Statements] of [removed: income] [added: Income] for the years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020](#i26e61bc6546347ce86e4aff49a1751a5_148)] [added: 2021](#i1595bba183964497bf0a8c7fcc6018bb_133)] | | | [removed: [72](#i26e61bc6546347ce86e4aff49a1751a5_148)] [added: [73](#i1595bba183964497bf0a8c7fcc6018bb_133)] | | |

| [Consolidated [removed: statements] [added: Statements] of [removed: comprehensive income] [added: Comprehensive Income] for the years ended December 31, [removed: 2022,](#i26e61bc6546347ce86e4aff49a1751a5_154) [2021,] [added: 2023,](#i1595bba183964497bf0a8c7fcc6018bb_139) [2022,] and [removed: 2020](#i26e61bc6546347ce86e4aff49a1751a5_154)] [added: 2021](#i1595bba183964497bf0a8c7fcc6018bb_139)] | | | [removed: [73](#i26e61bc6546347ce86e4aff49a1751a5_154)] [added: [74](#i1595bba183964497bf0a8c7fcc6018bb_139)] | | |

| [Consolidated [removed: statements] [added: Statements] of [removed: equity] [added: Equity] for the years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020](#i26e61bc6546347ce86e4aff49a1751a5_157)] [added: 2021](#i1595bba183964497bf0a8c7fcc6018bb_142)] | | | [removed: [74](#i26e61bc6546347ce86e4aff49a1751a5_157)] [added: [75](#i1595bba183964497bf0a8c7fcc6018bb_142)] | | |

| [Consolidated [removed: statements] [added: Statements] of [removed: cash flows] [added: Cash Flows] for the years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020](#i26e61bc6546347ce86e4aff49a1751a5_160)] [added: 2021](#i1595bba183964497bf0a8c7fcc6018bb_145)] | | | [removed: [75](#i26e61bc6546347ce86e4aff49a1751a5_160)] [added: [76](#i1595bba183964497bf0a8c7fcc6018bb_145)] | | |

| [Notes to [removed: consolidated financial statements](#i26e61bc6546347ce86e4aff49a1751a5_163)] [added: Consolidated Financial Statements](#i1595bba183964497bf0a8c7fcc6018bb_148)] | | | [removed: [76](#i26e61bc6546347ce86e4aff49a1751a5_163)] [added: [77](#i1595bba183964497bf0a8c7fcc6018bb_148)] | | |

| [removed: [3](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm)[.](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm)[1](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm)[0](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm)] [added: [3.10](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm)] | | | — | | | [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 March 15, 2022 and filed March 18, 2022 (SEC File No. 001-13175)](http://www.sec.gov/Archives/edgar/data/1035002/000119312522079486/d275417dex301.htm). | | |

| [4.04](http://www.sec.gov/Archives/edgar/data/1035002/000119312515084401/d889732dex41.htm) | | | — | | | [Indenture dated as of March 10, 2015 between Valero Energy Corporation and U.S. Bank National Association, as [removed: trustee-incorporated] [added: 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) | | |

| [removed: [+10.06](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] [added: [+10.06](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000103/a6302023exh1001.htm)] | | | — | | | [Valero Energy Corporation [removed: Amended and Restated] Supplemental Executive Retirement Plan, [added: as] amended and restated [removed: as of November 10, 2008–incorporated] [added: effective July 1, 2023–incorporated] by reference to Exhibit [removed: 10.08] [added: 10.01] to Valero’s [removed: annual] [added: quarterly] report on Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December 31, 2008] [added: June 30, 2023] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013409003971/d66469exv10w08.htm)] [added: 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000103/a6302023exh1001.htm)] | | |

| [removed: [+10.13](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1013-12312019.htm)] [added: [+10.13](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1021.htm)] | | | — | | | [Form of [removed: Performance Share Agreement (2019 and prior outstanding grants)–incorporated] [added: Stock Option Agreement–incorporated] by reference to Exhibit [removed: 10.13] [added: 10.21] to Valero’s annual report on Form 10-K for the year ended December 31, [removed: 2019] [added: 2011] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1013-12312019.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1021.htm)] | | |

| [removed: [+10.14](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1013.htm)] [added: [+10.14](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1021.htm)] | | | — | | | [Form of Performance [removed: Share Agreement (2020 grant–first tranche)–incorporated] [added: Stock Option Agreement–incorporated] by reference to Exhibit [removed: 10.13] [added: 10.21] to Valero’s annual report on Form 10-K for the year ended December 31, [removed: 2020] [added: 2012] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1013.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1021.htm)] | | |

| [removed: [+10.15](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1021.htm)] [added: [+10.15](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1017.htm)] | | | — | | | [Form of [added: Restricted] Stock [removed: Option Agreement–incorporated] [added: Agreement (2020 and 2021 grants)–incorporated] by reference to Exhibit [removed: 10.21] [added: 10.17] to Valero’s annual report on Form 10-K for the year ended December 31, [removed: 2011] [added: 2020] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500212000008/a2011ex1021.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1017.htm)] | | |

| [removed: [+10.16](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1021.htm)] [added: [+10.24](http://www.sec.gov/Archives/edgar/data/1035002/000103500222000007/a12312021exh1026.htm)] | | | — | | | [Form of [removed: Performance] [added: Restricted] Stock [removed: Option Agreement–incorporated] [added: Agreement (current)–incorporated] by reference to Exhibit [removed: 10.21] [added: 10.26] to Valero’s annual report on Form 10-K for the year ended December 31, [removed: 2012] [added: 2021] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1021.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500222000007/a12312021exh1026.htm)] | | |

| [removed: [+10.17](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1025.htm)] [added: [+10.16](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1017-12312019.htm)] | | | — | | | [removed: [Form of Restricted Stock] [added: [Long-Term Incentive] Agreement [removed: (2019] [added: dated as of December 18, 2019, between Valero Energy Corporation] and [removed: prior outstanding grants)–incorporated] [added: R. Lane Riggs–incorporated] by reference to Exhibit [removed: 10.25] [added: 10.17] to Valero’s annual report on Form 10-K for the year ended December 31, [removed: 2012] [added: 2019] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500213000008/a2012ex1025.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1017-12312019.htm)] | | |

| [removed: [+10.18](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1017.htm)] [added: [+10.20](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1001.htm)] | | | — | | | [Form of [removed: Restricted Stock] [added: Amended and Restated Performance Share] Agreement (2020 [added: grant–second] and [removed: 2021 grants)–incorporated] [added: third tranches)–incorporated] by reference to Exhibit [removed: 10.17] [added: 10.01] to Valero’s [removed: annual] [added: quarterly] report on Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December] [added: March] 31, [removed: 2020] [added: 2021] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh1017.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1001.htm)] | | |

| [removed: [+10.19](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1017-12312019.htm)] [added: [+10.17](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1001.htm)] | | | — | | | [removed: [Long-Term Incentive Agreement dated as] [added: [Form] of [removed: December 18, 2019, between Valero Energy Corporation and R. Lane Riggs–incorporated] [added: Stock Unit Award Agreement for Non-Employee Directors (standard)–incorporated] by reference to Exhibit [removed: 10.17] [added: 10.01] to Valero’s [removed: annual] [added: current] report on Form [removed: 10-K for the year ended December 31,] [added: 8-K dated April 30, 2019, and filed May 1,] 2019 (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500220000007/vloexh1017-12312019.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1001.htm)] | | |

| [removed: [+10.20](http://www.sec.gov/Archives/edgar/data/1035002/000119312520175729/d920682dex101.htm)] [added: [10.19](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm)] | | | — | | | [removed: [Letter] [added: [Fifth Amended and Restated Revolving Credit] Agreement, dated [removed: June 18, 2020, between] [added: as of November 22, 2022, among] Valero Energy [removed: Corporation] [added: Corporation, as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent;] and [removed: Donna M. Titzman–incorporated] [added: the lenders named therein–incorporated] by reference to Exhibit [removed: 10.1] [added: 99.1] to Valero’s current report on Form 8-K dated [removed: June 18, 2020,] [added: November 22, 2022,] and filed [removed: June] [added: November] 22, [removed: 2020] [added: 2022] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312520175729/d920682dex101.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm)] | | |

| [removed: [+10.21](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1001.htm)] [added: [+10.18](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1002.htm)] | | | — | | | [Form of Stock Unit Award Agreement for Non-Employee Directors [removed: (standard)-incorporated] [added: (with one-year hold provision)–incorporated] by reference to Exhibit [removed: 10.01] [added: 10.02] to Valero’s current report on Form 8-K dated April 30, 2019, and filed May 1, 2019 (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1001.htm)] [added: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1002.htm)] | | |

| [removed: [+10.24](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1001.htm)] [added: [+10.22](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1001.htm)] | | | — | | | [Form of Amended and Restated Performance Share Agreement [removed: (2020 grant–second and third tranches)–incorporated] [added: (2021 grant–third tranche)–incorporated] by reference to Exhibit 10.01 to Valero’s quarterly report on Form 10-Q for the quarter ended March 31, [removed: 2021] [added: 2023] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1001.htm)] [added: 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1001.htm)] | | |

| [removed: [+10.25](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1002.htm)] [added: [+10.21](https://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1002.htm)] | | | — | | | [Form of Performance Share Agreement (2021 [removed: grant] [added: grant–second tranche] and [removed: current)–incorporated] [added: 2022 grant–first tranche)–incorporated] by reference to Exhibit 10.02 to Valero’s quarterly report on Form 10-Q for the quarter ended March 31, 2021 (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1002.htm)] [added: 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500221000068/a3312021exh1002.htm)] | | |

| [removed: [+10.26](http://www.sec.gov/Archives/edgar/data/1035002/000103500222000007/a12312021exh1026.htm)] [added: [+10.26](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1004.htm)] | | | — | | | [Form of [removed: Restricted Stock Agreement (current)–incorporated] [added: Aircraft Time Sharing Agreement–incorporated] by reference to Exhibit [removed: 10.26] [added: 10.04] to Valero’s [removed: annual] [added: quarterly] report on Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December] [added: March] 31, [removed: 2021] [added: 2023] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500222000007/a12312021exh1026.htm)] [added: 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1004.htm)] | | |

| [removed: [14.01](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv14w01.txt)] [added: [+10.25](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1003.htm)] | | | — | | | [removed: [Code] [added: [Form] of [removed: Ethics for Senior Financial Officers–incorporated] [added: Performance Share Agreement (2023 grant and current)–incorporated] by reference to Exhibit [removed: 14.01] [added: 10.03] to Valero’s [removed: annual] [added: quarterly] report on Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December] [added: March] 31, [removed: 2003] [added: 2023] (SEC File No. [removed: 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000095013404003420/d13299exv14w01.txt)] [added: 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1003.htm)] | | |

| [removed: [*21.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh2101.htm)] [added: [*21.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh2101.htm)] | | | — | | | [Valero Energy Corporation [removed: subsidiaries.](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh2101.htm)] [added: subsidiaries.](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh2101.htm)] | | |

| [removed: [*23.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh2301.htm)] [added: [*23.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh2301.htm)] | | | — | | | [Consent of KPMG LLP dated February [removed: 23, 2023.](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh2301.htm)] [added: 22, 2024.](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh2301.htm)] | | |

| [removed: [*24.01](#i26e61bc6546347ce86e4aff49a1751a5_274)] [added: [*24.01](#i1595bba183964497bf0a8c7fcc6018bb_244)] | | | — | | | [Power of Attorney dated February [removed: 23, 2023] [added: 22, 2024] (on the signature page of this Form [removed: 10-K).](#i26e61bc6546347ce86e4aff49a1751a5_274)] [added: 10-K).](#i1595bba183964497bf0a8c7fcc6018bb_244)] | | |

| [removed: [*31.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3101.htm)] [added: [*31.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3101.htm)] | | | — | | | [Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal executive [removed: officer.](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3101.htm)] [added: officer.](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3101.htm)] | | |

| [removed: [*31.02](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3102.htm)] [added: [*31.02](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3102.htm)] | | | — | | | [Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal financial [removed: officer.](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3102.htm)] [added: officer.](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3102.htm)] | | |

| [removed: [32.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3201.htm)] [added: [32.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3201.htm)] | | | — | | | [Section 1350 Certifications (under Section 906 of the Sarbanes-Oxley Act of [removed: 2002).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000027/a12312022exh3201.htm)] [added: 2002).](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh3201.htm)] | | |

(a)1.

| [+10.23](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1002.htm) | | | — | | | [Form of Amended and Restated Performance Share Agreement (2022 grant–second and third tranches)–incorporated by reference to Exhibit 10.02 to Valero’s quarterly report on Form 10-Q for the quarter ended March 31, 2023 (SEC File No. 001-13175).](https://www.sec.gov/Archives/edgar/data/1035002/000103500223000054/a3312023exh1002.htm) | | |

| [*97.01](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh9701.htm) | | | — | | | [Executive Compensation Clawback Policy.](https://www.sec.gov/Archives/edgar/data/1035002/000103500224000007/a12312023exh9701.htm) | | |

(a) 1.

| | | | | | | | | |

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

| [+10.22](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1002.htm) | | | — | | | [Form of Stock Unit Award Agreement for Non-Employee Directors (with one-year hold provision)-incorporated by reference to Exhibit 10.02 to Valero’s current report on Form 8-K dated April 30, 2019, and filed May 1, 2019 (SEC File No. 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312519132506/d714915dex1002.htm) | | |

| [10.23](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) | | | — | | | [Fifth Amended and Restated Revolving Credit Agreement, dated as of November](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) [](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm)[22, 2022, among Valero Energy Corporation, as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; and the lenders named therein–incorporated by reference to Exhibit](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) [99](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm)[.1 to Valero’s current report on Form 8-K dated](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) [November 22, 2022](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm)[, and filed](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) [November 22, 2022](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) [(SEC File No. 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312522291119/d396276dex991.htm) | | |

| [14.02](http://www.sec.gov/Archives/edgar/data/1035002/000119312521022709/d108410dex141.htm) | | | — | | | [Valero Energy Corporation Code of Business Conduct and Ethics–incorporated by reference to Exhibit 14.1 to Valero’s current report on Form 8-K dated January 26, 2021, and filed January 29, 2021 (SEC File No. 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000119312521022709/d108410dex141.htm) | | |

| [99.01](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh9901.htm) | | | — | | | [Audit Committee Pre-Approval Policy–incorporated by reference to Exhibit 99.01 to Valero’s annual report on Form 10-K for the year ended December 31, 2020 (SEC File No. 001-13175).](http://www.sec.gov/Archives/edgar/data/1035002/000103500221000051/a12312020exh9901.htm) | | |

| | | | | | | [removed: *Chairman of the Board and Chief] [added: *Chief] Executive [removed: Officer*] [added: Officer and President*] | | |

Date: February [removed: 23, 2023][added: 22, 2024]

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints [removed: Joseph W.][added: R.]

| /s/ Joseph W. Gorder | | | | | | [added: Executive] Chairman of the Board [removed: and Chief Executive Officer (Principal Executive Officer)] | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Jason W. Fraser | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Fred M. Diaz | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ H. Paulett Eberhart | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Marie A. Ffolkes | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Kimberly S. Greene | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Deborah P. Majoras | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Eric D. Mullins | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Donald L. Nickles | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Robert A. Profusek | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |

| /s/ Randall J. Weisenburger | | | | | | Director | | | | | | February [removed: 23, 2023] [added: 22, 2024] | | |