18571678cc7aa9c12c861e27783e9e9a2378e65e950bf7c52fd9fb035415cc75

| Metric (Unit) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Renewable Volume Obligation ($/barrel) | N/A | $8.20 **[0001035002-23-000052_a3312023exh9901earningsrel.htm:8]** | $7.69 **[0001035002-23-000103_vlo-20230630.htm:34]** | $7.42 **[0001035002-23-000110_vlo-20230930.htm:35]** | $4.77 **[0001035002-24-000004_a12312023exh9901earningsre.htm:11]** | $3.68 **[0001035002-24-000020_a3312024exh9901earningsrel.htm:7]** | $3.39 **[0001035002-24-000051_vlo-20240630.htm:33]** | $3.89 **[0001035002-24-000056_vlo-20240930.htm:34]** |
| California LCFS Carbon Credit ($/metric ton) | $65.78 **[0001035002-23-000010_a12312022exh9901earningsre.htm:12]** | $65.68 **[0001035002-23-000054_vlo-20230331.htm:28]****[0001035002-23-000052_a3312023exh9901earningsrel.htm:8]** | $80.81 **[0001035002-23-000103_vlo-20230630.htm:34]** | $74.46 **[0001035002-23-000110_vlo-20230930.htm:35]** | $68.71 **[0001035002-24-000004_a12312023exh9901earningsre.htm:11]** | $63.55 **[0001035002-24-000022_vlo-20240331.htm:29]** | $51.29 **[0001035002-24-000051_vlo-20240630.htm:33]** | $53.65 **[0001035002-24-000056_vlo-20240930.htm:34]** |
| USGC Used Cooking Oil ($/pound) | $0.62 **[0001035002-23-000052_a3312023exh9901earningsrel.htm:8]** | $0.62 **[0001035002-23-000054_vlo-20230331.htm:28]****[0001035002-23-000052_a3312023exh9901earningsrel.htm:8]** | $0.57 **[0001035002-23-000101_a6302023exh9901earningsrel.htm:9]** | $0.61 **[0001035002-23-000108_a9302023exh9901earningsrel.htm:9]** | N/A | $0.40 **[0001035002-24-000022_vlo-20240331.htm:29]** | $0.42 **[0001035002-24-000051_vlo-20240630.htm:33]** | $0.46 **[0001035002-24-000056_vlo-20240930.htm:34]** |
| USGC Distillers Corn Oil ($/pound) | N/A | $0.63 **[0001035002-23-000052_a3312023exh9901earningsrel.htm:8]** | $0.60 **[0001035002-23-000101_a6302023exh9901earningsrel.htm:9]** | $0.72 **[0001035002-23-000110_vlo-20230930.htm:35]** | $0.63 **[0001035002-24-000007_vlo-20231231.htm:58]** | $0.48 **[0001035002-24-000022_vlo-20240331.htm:29]** | $0.47 **[0001035002-24-000051_vlo-20240630.htm:37]** | $0.48 **[0001035002-24-000054_a9302024exh9901earningsrel.htm:9]** |
| USGC Fancy Bleachable Tallow ($/pound) | $0.60 **[0001035002-23-000010_a12312022exh9901earningsre.htm:12]** | $0.60 **[0001035002-24-000022_vlo-20240331.htm:29]** | $0.57 **[0001035002-23-000101_a6302023exh9901earningsrel.htm:9]** | $0.68 **[0001035002-23-000110_vlo-20230930.htm:35]** | $0.59 **[0001035002-24-000004_a12312023exh9901earningsre.htm:11]** | $0.41 **[0001035002-24-000022_vlo-20240331.htm:29]** | $0.43 **[0001035002-24-000050_a6302024exh9901earningsrel.htm:9]** | $0.47 **[0001035002-24-000056_vlo-20240930.htm:34]** |
| Refining Margin ($ million) | $6,318 **[0001035002-23-000010_a12312022exh9901earningsre.htm:9]** | $5,900 **[0001035002-23-000054_vlo-20230331.htm:34]** | $4,220 **[0001035002-23-000103_vlo-20230630.htm:46]** | $5,414 **[0001035002-23-000110_vlo-20230930.htm:46]** | $3,553 **[0001035002-24-000004_a12312023exh9901earningsre.htm:9]** | $3,534 **[0001035002-24-000022_vlo-20240331.htm:34]** | $3,052 **[0001035002-24-000051_vlo-20240630.htm:41]** | $2,413 **[0001035002-24-000056_vlo-20240930.htm:42]****[0001035002-24-000054_a9302024exh9901earningsrel.htm:6]****[0001035002-24-000056_vlo-20240930.htm:35]** |
| Renewable Diesel Margin ($ million) | $373 **[0001035002-23-000010_a12312022exh9901earningsre.htm:10]** | $349 **[0001035002-23-000054_vlo-20230331.htm:34]** | $603 **[0001035002-23-000103_vlo-20230630.htm:46]** | $262 **[0001035002-23-000110_vlo-20230930.htm:46]** | $227 **[0001035002-24-000004_a12312023exh9901earningsre.htm:9]** | $345 **[0001035002-24-000022_vlo-20240331.htm:34]** | $254 **[0001035002-24-000051_vlo-20240630.htm:41]****[0001035002-24-000050_a6302024exh9901earningsrel.htm:7]** | $196 **[0001035002-24-000054_a9302024exh9901earningsrel.htm:7]****[0001035002-24-000056_vlo-20240930.htm:42]** |
| Ethanol Margin ($ million) | $252 **[0001035002-23-000010_a12312022exh9901earningsre.htm:10]** | $189 **[0001035002-23-000054_vlo-20230331.htm:34]** | $275 **[0001035002-23-000103_vlo-20230630.htm:46]** | $342 **[0001035002-23-000110_vlo-20230930.htm:46]** | $358 **[0001035002-24-000004_a12312023exh9901earningsre.htm:9]** | $195 **[0001035002-24-000022_vlo-20240331.htm:34]** | $247 **[0001035002-24-000051_vlo-20240630.htm:41]** | $305 **[0001035002-24-000056_vlo-20240930.htm:42]** |
| Cost of Meeting Credit Obligations ($ million) | N/A | $413 **[0001035002-23-000054_vlo-20230331.htm:18]** | $387 **[0001035002-23-000103_vlo-20230630.htm:23]** | $438 **[0001035002-23-000110_vlo-20230930.htm:24]** | N/A | $204 **[0001035002-24-000022_vlo-20240331.htm:19]** | $173 **[0001035002-24-000051_vlo-20240630.htm:23]** | $156 **[0001035002-24-000056_vlo-20240930.htm:24]** |
| Renewable Diesel Sales Volume (thousand gallons/day) | 2,443 **[0001035002-23-000010_a12312022exh9901earningsre.htm:10]** | 2,988 **[0001035002-23-000052_a3312023exh9901earningsrel.htm:6]** | 4,400 **[0001035002-23-000101_a6302023exh9901earningsrel.htm:7]****[0001035002-23-000103_vlo-20230630.htm:37]** | 2,992 **[0001035002-23-000108_a9302023exh9901earningsrel.htm:7]** | 3,773 **[0001035002-24-000004_a12312023exh9901earningsre.htm:9]** | 3,729 **[0001035002-24-000020_a3312024exh9901earningsrel.htm:6]** | 3,492 **[0001035002-24-000051_vlo-20240630.htm:35]** | 3,544 **[0001035002-24-000054_a9302024exh9901earningsrel.htm:7]** |
| Throughput Volume (thousand barrels/day) | 3,042 **[0001035002-23-000010_a12312022exh9901earningsre.htm:9]** | 2,930 **[0001035002-23-000052_a3312023exh9901earningsrel.htm:6]** | 2,969 **[0001035002-23-000101_a6302023exh9901earningsrel.htm:7]** | 3,022 **[0001035002-23-000108_a9302023exh9901earningsrel.htm:7]** | 3,000 **[VLO_3370812_3]** | 2,760 **[0001035002-24-000020_a3312024exh9901earningsrel.htm:5]** | 3,010 **[0001035002-24-000050_a6302024exh9901earningsrel.htm:6]** | 2,884 **[0001035002-24-000054_a9302024exh9901earningsrel.htm:6]** |

afa77520d0d4fcbae82254b967201079752d0dea9a32ecac2aa7fbce0e7c6dd4

- Total Revenue: $30,756 million (-13% YoY)  **[0001035002-24-000007_vlo-20231231.htm:82]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:3]**   
- Refining Segment: $29,336 million (-13% YoY)  **[0001035002-24-000007_vlo-20231231.htm:57]** **[0001035002-24-000007_vlo-20231231.htm:123]** **[0001035002-24-000007_vlo-20231231.htm:122]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:4]**   
- **Renewable Diesel**: $1,246 million (-69% YoY)  **[0001035002-24-000007_vlo-20231231.htm:57]** **[0001035002-24-000007_vlo-20231231.htm:123]** **[0001035002-24-000007_vlo-20231231.htm:122]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:4]**   
- Ethanol: $1,114 million (-47% YoY)  **[0001035002-24-000007_vlo-20231231.htm:57]** **[0001035002-24-000007_vlo-20231231.htm:123]** **[0001035002-24-000007_vlo-20231231.htm:122]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:4]**   
- Operating Income (EBIT): $348 million (-78% YoY)  **[0001035002-24-000007_vlo-20231231.htm:82]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:3]**   
- **Net Income**: $281 million (-81% YoY)  **[0001035002-24-000007_vlo-20231231.htm:82]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:3]**   
- EPS (Diluted): $0.88 (-76% YoY)  **[0001035002-24-000007_vlo-20231231.htm:82]** **[0001035002-25-000002_a12312024exh9901earningsre.htm:3]**   

ee58495bade6a7522850c23f716e8f3e1ccd4b4f6a47a62d98638b2ac840c0e8

| Segment / Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Refining Segment (Million USD)** | **39,566**  **[0001035002-23-000010_a12312022exh9901earningsre.htm:4]**  | **34,407**  **[0001035002-23-000054_vlo-20230331.htm:12]**  | **31,996**  **[0001035002-23-000103_vlo-20230630.htm:33]**  | **36,521**  **[0001035002-23-000110_vlo-20230930.htm:34]**  | **33,546**  **[0001035002-24-000004_a12312023exh9901earningsre.htm:4]**  | **30,143**  **[0001035002-24-000022_vlo-20240331.htm:14]**  | **33,044**  **[0001035002-24-000051_vlo-20240630.htm:32]**  | **31,332**  **[0001035002-24-000056_vlo-20240930.htm:33]**  |
| **Renewable Diesel Segment (Million USD)** | **1,066**  **[0001035002-23-000010_a12312022exh9901earningsre.htm:4]**  | **935**  **[0001035002-23-000054_vlo-20230331.htm:12]**  | **1,296**  **[0001035002-23-000103_vlo-20230630.htm:33]**  | **759**  **[0001035002-23-000110_vlo-20230930.htm:34]**  | **833**  **[0001035002-24-000004_a12312023exh9901earningsre.htm:4]**  | **702**  **[0001035002-24-000022_vlo-20240331.htm:14]**  | **554**  **[0001035002-24-000051_vlo-20240630.htm:32]**  | **632**  **[0001035002-24-000056_vlo-20240930.htm:33]**  |
| **Ethanol Segment (Million USD)** | **1,114**  **[0001035002-23-000010_a12312022exh9901earningsre.htm:4]**  | **1,097**  **[0001035002-23-000054_vlo-20230331.htm:12]**  | **1,217**  **[0001035002-23-000103_vlo-20230630.htm:33]**  | **1,124**  **[0001035002-23-000110_vlo-20230930.htm:34]**  | **1,035**  **[0001035002-24-000004_a12312023exh9901earningsre.htm:4]**  | **914**  **[0001035002-24-000022_vlo-20240331.htm:14]**  | **892**  **[0001035002-24-000051_vlo-20240630.htm:32]**  | **912**  **[0001035002-24-000056_vlo-20240930.htm:33]**  |
| **Total Revenue (Million USD)** | **41,746**  **[0001035002-23-000010_a12312022exh9901earningsre.htm:4]**  | **36,439**  **[0001035002-23-000054_vlo-20230331.htm:12]**  | **34,509**  **[0001035002-23-000103_vlo-20230630.htm:33]**  | **38,404**  **[0001035002-23-000110_vlo-20230930.htm:34]**  | **35,414**  **[0001035002-24-000004_a12312023exh9901earningsre.htm:4]**  | **31,759**  **[0001035002-24-000022_vlo-20240331.htm:14]**  | **34,490**  **[0001035002-24-000051_vlo-20240630.htm:32]**  | **32,876**  **[0001035002-24-000056_vlo-20240930.htm:33]**  |

1bf2deef9e4aa698ca00d458ccbac347d5ff2022f2a5d2b0700f2bde59384580

Valero Energy Corporation is a multinational company engaged in the manufacturing and marketing of petroleum-based and low-carbon liquid transportation fuels and petrochemical products **[0001035002-24-000007_vlo-20231231.htm:3]** **[0001035002-24-000007_vlo-20231231.htm:85]**. The company operates through three main segments: Refining, Renewable Diesel, and Ethanol, with a strong emphasis on petroleum-based products while also expanding into low-carbon fuel markets **[0001035002-24-000007_vlo-20231231.htm:3]** **[0001035002-24-000056_vlo-20240930.htm:19]**. Valero's product offerings include gasolines, blendstocks, distillates, renewable diesel, renewable naphtha, ethanol, and distillers grains **[0001035002-24-000056_vlo-20240930.htm:19]**.

1. **Refining Segment** - Operates petroleum refineries that produce gasolines, blendstocks, distillates, and other products, serving as the largest contributor to Valero's revenues.
2. **Ethanol Segment** - Operates ethanol plants that produce ethanol and distillers grains, contributing significantly to the company's revenue.
3. **Renewable Diesel Segment** - Involves the operations of Diamond Green Diesel (DGD), a joint venture, producing renewable diesel and renewable naphtha.

374f944db754bd0004a02b307205b7c1f2c9d5de11d64c0dc8c37a94deadc5d5

1. Given the increasing regulatory pressures in California and the mention of considering "all options are on the table," can you elaborate on the specific strategic alternatives Valero is evaluating for its West Coast operations, and what factors would trigger a potential exit from the California refining market?  **[VLO_3403640_6]** 

2. With inflation impacting maintenance costs and challenges in controlling operating expenses, how sustainable is your current cost structure, and what additional measures are you implementing to mitigate these cost pressures, especially if energy costs like natural gas begin to rise?  **[VLO_3403640_20]** 

3. Considering the expected net refining capacity additions and closures in 2025 and uncertainties around demand recovery, how confident are you in your forecast of tightening balances and improved refining margins, and what contingencies are in place if supply-demand dynamics do not materialize as anticipated?  **[VLO_3403640_7]** 

4. Despite reports that ethanol margins are "really crumbling on paper," Valero is guiding to record ethanol production volumes; can you explain how you justify increasing production in a low-margin environment, and what risks do you foresee if export markets do not absorb this additional volume as expected?  **[VLO_3403640_22]** 

5. In light of strong product exports appearing to be more of a push from the U.S. rather than a pull from international markets, and with falling frac spreads, how do you assess the sustainability of export premiums, and what strategies do you have if export markets become less favorable and domestic inventories begin to rise?  **[VLO_3403640_25]** 

a7e684042dadd91267d16ec282f28349bcf66496bea16a28be6cae7069225000

| Program Details          | Program 1               | Program 2               |
|--------------------------|-------------------------|-------------------------|
| Approval Date            | February 22, 2024  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**  | September 19, 2024  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**  |
| End Date/Duration        | No expiration date  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**  | No expiration date  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**  |
| Total additional amount  | **$2.5 billion**  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**    | **$2.5 billion**  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**    |
| Remaining authorization  | **$2.1 billion**  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**    | **$2.5 billion**  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**    |
| Details                  | Part of capital allocation strategy  **[VLO_3403640_5]** **[VLO_3394294_5]** **[VLO_3380708_6]**  | New authorization  **[0001035002-24-000056_vlo-20240930.htm:53]** **[0001035002-24-000056_vlo-20240930.htm:12]** **[0001035002-24-000056_vlo-20240930.htm:47]**  |

71c73644704f96a85cee1e1e67059a457046b18ca4ae529593892ff8f9c822d4

2552d6160cede73771e60fba88df4058b86158e9fe72f18399b6c74679f51c7e

United States

Canada

U.K. and Ireland

Mexico and Peru

Other countries

Total Revenue

0f6e468d3a90bb7b54cc4d225ee55a576074b3863eeb19bb8ca94ac546da880b

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  1. **Refining Throughput Volumes**:
     - Gulf Coast: **1.83 million to 1.88 million barrels per day**  **[VLO_3403640_3]** .
     - Mid-Continent: **425,000 to 445,000 barrels per day**  **[VLO_3403640_3]** .
     - West Coast: **230,000 to 250,000 barrels per day**  **[VLO_3403640_3]** .
     - North Atlantic: **380,000 to 400,000 barrels per day**  **[VLO_3403640_3]** .
  2. **Refining Cash Operating Expenses**: **$4.60 per barrel**  **[VLO_3403640_3]** .
  3. **Renewable Diesel Segment**:
     - Sales Volumes: **1.2 billion gallons** in 2024  **[VLO_3403640_3]** .
     - Operating Expenses: **$0.45 per gallon**, including **$0.18 per gallon** for noncash costs  **[VLO_3403640_3]** .
  4. **Ethanol Segment**:
     - Production: **4.7 million gallons per day**  **[VLO_3403640_3]** .
     - Operating Expenses: **$0.37 per gallon**, including **$0.05 per gallon** for noncash costs  **[VLO_3403640_3]** .
  5. **Net Interest Expense**: **$140 million**  **[VLO_3403640_3]** .
  6. **Depreciation and Amortization Expense**: **$690 million**  **[VLO_3403640_3]** .
  7. **General and Administrative (G&A) Expenses**: **$975 million** for 2024  **[VLO_3403640_3]** .
  8. **Capital Investments**: **$2 billion** for 2024  **[VLO_3403640_2]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  1. **Refining Throughput Volumes for Q3 2024**:
     - Gulf Coast: **1.77 million to 1.82 million barrels per day**  **[VLO_3394294_3]** .
     - Mid-Continent: **405,000 to 425,000 barrels per day**  **[VLO_3394294_3]** .
     - West Coast: **235,000 to 255,000 barrels per day**  **[VLO_3394294_3]** .
     - North Atlantic: **390,000 to 410,000 barrels per day**  **[VLO_3394294_3]** .
  2. **Refining Cash Operating Expenses**: **$4.70 per barrel**  **[VLO_3394294_3]** .
  3. **Renewable Diesel Segment**:
     - Sales Volumes: **1.2 billion gallons** in 2024  **[VLO_3394294_3]** .
     - Operating Expenses: **$0.45 per gallon**, including **$0.18 per gallon** for noncash costs  **[VLO_3394294_3]** .
  4. **Ethanol Segment**:
     - Production: **4.6 million gallons per day**  **[VLO_3394294_3]** .
     - Operating Expenses: **$0.40 per gallon**, including **$0.05 per gallon** for noncash costs  **[VLO_3394294_3]** .
  5. **Net Interest Expense**: **$140 million**  **[VLO_3394294_3]** .
  6. **Depreciation and Amortization Expense**: **$690 million**  **[VLO_3394294_3]** .
  7. **General and Administrative (G&A) Expenses**: **$975 million** for 2024  **[VLO_3394294_3]** .
  8. **Capital Investments**: **$2 billion** for 2024  **[VLO_3394294_2]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  1. **Capital Investments**: **$2 billion** for 2024  **[VLO_3380708_3]** .
  2. **Refining Throughput Volumes for Q2 2024**:
     - Gulf Coast: **1.79 million to 1.84 million barrels per day**  **[VLO_3380708_3]** .
     - Mid-Continent: **410,000 to 430,000 barrels per day**  **[VLO_3380708_3]** .
     - West Coast: **245,000 to 265,000 barrels per day**  **[VLO_3380708_3]** .
     - North Atlantic: **430,000 to 450,000 barrels per day**  **[VLO_3380708_3]** .
  3. **Refining Cash Operating Expenses**: **$4.55 per barrel**  **[VLO_3380708_3]** .
  4. **Renewable Diesel Segment**:
     - Sales Volumes: **1.2 billion gallons** in 2024  **[VLO_3380708_3]** .
     - Operating Expenses: **$0.45 per gallon**, including **$0.18 per gallon** for noncash costs  **[VLO_3380708_3]** .
  5. **Ethanol Segment**:
     - Production: **4.5 million gallons per day**  **[VLO_3380708_3]** .
     - Operating Expenses: **$0.38 per gallon**, including **$0.05 per gallon** for noncash costs  **[VLO_3380708_3]** .
  6. **Net Interest Expense**: **$140 million**  **[VLO_3380708_3]** .
  7. **Depreciation and Amortization Expense**: **$710 million**  **[VLO_3380708_3]** .
  8. **General and Administrative (G&A) Expenses**: **$975 million** for 2024  **[VLO_3380708_3]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  1. **Capital Investments**: **$2 billion** for 2024  **[VLO_3370812_4]** .
  2. **Refining Throughput Volumes for Q1 2024**:
     - Gulf Coast: **1.52 million to 1.57 million barrels per day**  **[VLO_3370812_4]** .
     - Mid-Continent: **415,000 to 435,000 barrels per day**  **[VLO_3370812_4]** .
     - West Coast: **235,000 to 255,000 barrels per day**  **[VLO_3370812_4]** .
     - North Atlantic: **435,000 to 455,000 barrels per day**  **[VLO_3370812_4]** .
  3. **Refining Cash Operating Expenses**: **$5.10 per barrel**  **[VLO_3370812_4]** .
  4. **Renewable Diesel Segment**:
     - Sales Volumes: **1.2 billion gallons** in 2024  **[VLO_3370812_4]** .
     - Operating Expenses: **$0.45 per gallon**, including **$0.18 per gallon** for noncash costs  **[VLO_3370812_4]** .
  5. **Ethanol Segment**:
     - Production: **4.5 million gallons per day**  **[VLO_3370812_4]** .
     - Operating Expenses: **$0.37 per gallon**, including **$0.05 per gallon** for noncash costs  **[VLO_3370812_4]** .
  6. **Net Interest Expense**: **$150 million**  **[VLO_3370812_4]** .
  7. **Depreciation and Amortization Expense**: **$700 million**  **[VLO_3370812_4]** .
  8. **General and Administrative (G&A) Expenses**: **$975 million** for 2024  **[VLO_3370812_4]** .

f8acb9ce42de52541be396ac2c9543da401fa4a202f9e8392daf3e4ad7b049bd

2cb16c178545c1d0cad202c947c3b3b7b3472af92f0f6d82aa5075b3809cba6a

- ConocoPhillips  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- CVR Energy, Inc.  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- Delek US Holdings, Inc.  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- Energy Select Sector SPDR Fund  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- EOG Resources, Inc.  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- HF Sinclair Corporation  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- LyondellBasell Industries N.V.  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- Marathon Petroleum Corporation  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- Occidental Petroleum Corporation  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- PBF Energy Inc.  **[0001035002-24-000007_vlo-20231231.htm:48]** 
- Phillips 66  **[0001035002-24-000007_vlo-20231231.htm:48]** 

077d8b320366375846b6bb3a5e06146c8b84b9fb30b659152099f3fb51d138fd

279f8703870ef0efe378250def9c4c5220d7cec264cac4298c8d7105d973620d

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

11843bde56172266dd80a1a7472b7ca9e62550b04ac15debae66b24593d18db5

Renewable Volume Obligation ($/barrel)

California LCFS Carbon Credit ($/metric ton)

USGC Used Cooking Oil ($/pound)

USGC Distillers Corn Oil ($/pound)

USGC Fancy Bleachable Tallow ($/pound)

Refining Margin ($ million)

Renewable Diesel Margin ($ million)

Ethanol Margin ($ million)

Cost of Meeting Credit Obligations ($ million)

Renewable Diesel Sales Volume (thousand gallons/day)

Throughput Volume (thousand barrels/day)

8c4f51b1dbff9b299a600a61ea2450a34380c7c5d22b97036fe395afcf293cf7

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name             | Position                                           | Start Date             | Short Bio                                                                                                                                                                                                                     |
|------------------|----------------------------------------------------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| R. Lane Riggs    | Chief Executive Officer, President, and Chairman of the Board | CEO & President: **June 30, 2023** <br> Chairman: **December 31, 2024** | R. Lane Riggs is the CEO and President of Valero Energy Corporation. He has been with Valero for over two decades, holding various leadership positions. He will become Chairman of the Board on December 31, 2024  **[0001035002-24-000014_vlo-20240325.htm:28]** **[0001035002-24-000007_vlo-20231231.htm:46]** **[0001193125-24-247579_d894344d8k.htm:1]** . |
| Jason W. Fraser  | Executive Vice President and Chief Financial Officer | **July 15, 2020**      | Jason W. Fraser is the Executive Vice President and CFO at Valero. He has held various leadership roles, including Executive Vice President and General Counsel, and has been with Valero since 2015  **[0001035002-24-000007_vlo-20231231.htm:46]** **[0001035002-23-000040_vlo-20230322.htm:57]** .                  |
| Gary K. Simmons  | Executive Vice President and Chief Operating Officer | **July 20, 2023**      | Gary K. Simmons is the Executive Vice President and COO at Valero. He has held various leadership positions, including Chief Commercial Officer, and has been with Valero for several years  **[0001035002-24-000007_vlo-20231231.htm:46]** **[0001035002-23-000040_vlo-20230322.htm:57]** .                           |
| Richard J. Walsh | Senior Vice President, General Counsel, and Secretary | **April 22, 2021**     | Richard J. Walsh oversees Valero's legal and governmental affairs, health, safety, and environmental compliance. He has been with Valero since 1999 and has held various leadership roles within the legal department  **[0001035002-24-000007_vlo-20231231.htm:46]** **[0001035002-23-000040_vlo-20230322.htm:58]** . |
| Joseph W. Gorder | Executive Chairman                                  | **July 1, 2023**       | Joseph W. Gorder has been serving as the Executive Chairman since July 1, 2023, after retiring as CEO. He has been a member of Valero's board since 2014 and will retire on December 31, 2024  **[0001193125-24-247579_d894344d8k.htm:1]** **[0001035002-24-000014_vlo-20240325.htm:22]** **[0001035002-23-000040_vlo-20230322.htm:28]** .                       |

f8411db8e640c2bee4e327da73db3253828c05fe76f1a8dc095fa1c08f6dd4d8

**Quarterly guidance for Q4 2024:**
- **Gulf Coast throughput volumes**: 1.83–1.88 million bpd  **[VLO_3403640_3]**  (raised from 1.77–1.82 million bpd  **[VLO_3394294_3]** )  
- **Mid-Continent throughput volumes**: 425,000–445,000 bpd  **[VLO_3403640_3]**  (raised from 405,000–425,000 bpd  **[VLO_3394294_3]** )  
- **West Coast throughput volumes**: 230,000–250,000 bpd  **[VLO_3403640_3]**  (lowered from 235,000–255,000 bpd  **[VLO_3394294_3]** )  
- **North Atlantic throughput volumes**: 380,000–400,000 bpd  **[VLO_3403640_3]**  (lowered from 390,000–410,000 bpd  **[VLO_3394294_3]** )  
- **Refining cash operating expenses**: $4.60 per barrel  **[VLO_3403640_3]**  (lowered from $4.70 per barrel  **[VLO_3394294_3]** )  

**Annual guidance for 2024:**
- **Renewable diesel sales volumes**: 1.2 billion gallons  **[VLO_3403640_3]**  (no change from 1.2 billion gallons  **[VLO_3394294_3]** )  
- **Renewable diesel operating expenses**: $0.45 per gallon  **[VLO_3403640_3]**  (no change from $0.45 per gallon  **[VLO_3394294_3]** )  
- **Ethanol production**: 4.7 million gallons per day  **[VLO_3403640_3]**  (raised from 4.6 million gallons per day  **[VLO_3394294_3]** )  
- **Ethanol operating expenses**: $0.37 per gallon  **[VLO_3403640_3]**  (lowered from $0.40 per gallon  **[VLO_3394294_3]** )  
- **Net interest expense**: $140 million  **[VLO_3403640_3]**  (no change from $140 million  **[VLO_3394294_3]** )  
- **Depreciation and amortization expense**: $690 million  **[VLO_3403640_3]**  (no change from $690 million  **[VLO_3394294_3]** )  
- **General and administrative (G&A) expenses**: $975 million  **[VLO_3403640_3]**  (no change from $975 million  **[VLO_3394294_3]** )  
- **Capital investments**: $2 billion  **[VLO_3403640_2]**  (no change from $2 billion  **[VLO_3394294_2]** )  

28dc762503941ec2ee692b2f992fbc663fa14c301fcf05a81c61bfc64290dd2a

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 2004  **[0001035002-24-000007_vlo-20231231.htm:78]**    | Present  | Current auditor   |

2e0b557276977fdc7ac52739a03f4bcf0ac5a83a782a5cfd9fc2ca6bf21c2772

6bbe24f8d45b5c4c9e56e6b903e2c922ae9c81b5a7f1935af3c59f283c578678

- **Significant decline in refining segment operating income** from **$3.4 billion in Q3 2023** to **$565 million in Q3 2024** indicates weaker financial performance.  **[VLO_3403640_2]**
- **Inflation has increased costs** for maintenance, catalysts, and chemicals, making it harder to keep expenses under control.  **[VLO_3403640_20]**
- **Uncertainty in global refining markets** due to potential oversupply and timing of refinery closures and new capacity additions may lead to pressure on refining margins.  **[VLO_3403640_7]**

8c31bbf91aa2e8eeeaac9352105f2534b2c660a3ac65c725caf8dfa306acf6f9

131d17704217011e0a673396caa03acbcf1ea58de03bee22cd4ab1f97824ce68

- Total Revenue: $32,876 million (‑14% YoY)  **[0001035002-23-000110_vlo-20230930.htm:17]** **[0001035002-24-000056_vlo-20240930.htm:33]** **[0001035002-24-000056_vlo-20240930.htm:19]** **[0001035002-24-000056_vlo-20240930.htm:17]**   
- Refining Segment: $31,335 million (‑14% YoY)  **[0001035002-23-000110_vlo-20230930.htm:17]** **[0001035002-24-000056_vlo-20240930.htm:33]** **[0001035002-24-000056_vlo-20240930.htm:19]** **[0001035002-24-000056_vlo-20240930.htm:17]**   
- Renewable Diesel: $1,225 million (+**61%** YoY)  **[0001035002-23-000110_vlo-20230930.htm:17]** **[0001035002-24-000056_vlo-20240930.htm:33]** **[0001035002-24-000056_vlo-20240930.htm:19]** **[0001035002-24-000056_vlo-20240930.htm:17]**   
- Operating Income: $507 million (‑**86%** YoY)  **[0001035002-23-000110_vlo-20230930.htm:18]** **[0001035002-23-000110_vlo-20230930.htm:4]** **[0001035002-24-000056_vlo-20240930.htm:4]**   
- Net Income: $393 million (‑**83%** YoY)  **[0001035002-23-000110_vlo-20230930.htm:4]** **[0001035002-23-000110_vlo-20230930.htm:6]** **[0001035002-24-000056_vlo-20240930.htm:4]**   
- Diluted EPS: $1.19 (‑**84%** YoY)  **[0001035002-23-000110_vlo-20230930.htm:4]** **[0001035002-24-000056_vlo-20240930.htm:4]**   

82f09580c99d0f386e488eedfc902601012046d8cdc930a0cff801f4baf83383

- **Valero possesses strong feedstock flexibility and supply resilience**, particularly in sourcing heavy crude oil. They can source feedstocks from **anywhere around the world**, which mitigates risks from tariffs or supply disruptions.  **[VLO_3413735_8]** **[VLO_3413735_7]**
- **Improved capture rates in the North Atlantic and Gulf Coast regions** were achieved due to blending more butane into high RVP gasoline and leveraging discounted Maya crude, which **reduced crude costs and enhanced margins**.  **[VLO_3413735_13]**
- **Operating in maximum diesel mode** to capitalize on strong diesel margins, optimizing their yield towards diesel production, which is favorable for earnings.  **[VLO_3413735_14]**

e82101665971dabf65010fc92ebfdcfaf99607e8b7b35348624b04cb89dd4b93

- **Potential tariffs on Canadian crude imports could reduce Valero's access to heavy crude feedstocks**, leading to lower refinery throughput and affecting clean product yields. As Gary Simmons stated, "there is a point where if heavy feedstocks become limited, it affects rate and production of clean products, certainly from our assets".  **[VLO_3413735_7]**
- **Increased sustaining capital expenditures in 2025 may indicate higher maintenance costs or operational challenges**. Lane Riggs mentioned the sustaining capital expenditure is expected to be about **$1.6 billion**, noting that "if it gets lumpy on the higher side... the only thing it can be is additional turnaround work".  **[VLO_3413735_26]**
- **Operational issues in the West Coast refineries are impacting margins**, with maintenance work at Benicia affecting throughput and capture rates. Greg Bram explained that "it impacted not so much throughput there, but it impacted the amount of transportation fuel we could make and so that had an impact on the capture rate".  **[VLO_3413735_23]**

df93322695bc6b24a5ca0a1f4a17ce7b70440dc3577bb6a422974b46f9001ead

1. **Impact of Tariffs on Heavy Crude Supply**  
   **Q:** How would tariffs on Canada and Mexico affect heavy crude supply and refining?  
   **A:** Gary Simmons explained that while fundamentals suggest supportive quality differentials due to turnaround activities and refinery closures like Lyondell and Grangemouth, discussions on sanctions and tariffs are currently driving the market. Until there is resolution, significant moves in quality differentials are not expected.  **[VLO_3413735_12]** 

2. **Supply-Demand Balances and Crack Outlook**  
   **Q:** What's the outlook for supply-demand balances and crack spreads this year?  
   **A:** Gary Simmons noted that gasoline demand looks good, with sales up **2% year-over-year**, and expects U.S. gasoline demand to be fairly flat compared to last year. Diesel sales are also up about **1%**, and he anticipates a **gradual tightening** of supply-demand balances throughout the year, leading to improved crack spreads.  **[VLO_3413735_5]** 

3. **Capital Allocation in Lower Crack Environment**  
   **Q:** How should we think about payout ratios if cracks don't recover?  
   **A:** Jason Fraser and Homer Bhullar indicated that even in a low-margin environment, Valero can honor its minimum payout commitment of **40% to 50%** without leaning on the balance sheet or drawing down cash. They emphasized the company's earnings capacity and flexibility in capital allocation.  **[VLO_3413735_6]** 

4. **Renewable Diesel Performance and Outlook**  
   **Q:** Why did renewable diesel perform better than expected, and what's the outlook?  
   **A:** Eric Fisher attributed the strong performance partly to a one-time inventory optimization at year-end. He mentioned that, with the new **45V PTC** replacing the blenders tax credit, incentives are now carbon intensity-based, which favors Diamond Green Diesel's waste oil feedstock flexibility. While overall incentives are lower, Valero's platform is well-positioned in this new policy environment.  **[VLO_3413735_10]** 

5. **Potential Refinery Closures and Crude Availability**  
   **Q:** How are refinery closures affecting crude availability and Gulf Coast dynamics?  
   **A:** Gary Simmons observed that the shutdown of Lyondell has made more Canadian barrels available as they have backed off the market. However, discussions on tariffs and sanctions have muted any market impact from these closures so far.  **[VLO_3413735_17]** 

6. **Maximizing Diesel Production Amid Market Conditions**  
   **Q:** Are you operating in maximum diesel mode given strong diesel margins?  
   **A:** Greg Bram confirmed that Valero is in **max diesel mode** due to current crack spreads. He stated that they will monitor the market to adjust yields if gasoline cracks strengthen during the gasoline season.  **[VLO_3413735_14]** 

7. **Industry Utilization and Inventory Tightness**  
   **Q:** Can the industry maintain high utilization levels, and what if it can't?  
   **A:** Gary Simmons noted that maintaining high utilization is assumed in current supply-demand balances. He cautioned that any major weather events or unreliability could tighten markets quickly, as product inventories are within **10%** of last year's levels when diesel cracks were much higher.  **[VLO_3413735_18]** 

8. **Impact of Policy Changes on Biofuel Economics**  
   **Q:** How will policy changes affect biofuel economics in early 2025?  
   **A:** Eric Fisher explained that the transition from the blenders tax credit to the **45V PTC** reduces incentives, particularly for non-waste oils, leading to potential negative margins. He emphasized that while overall incentives are lower, Valero's focus on waste oils positions them advantageously.  **[VLO_3413735_19]** 

9. **Energy Cost Reduction Opportunities**  
   **Q:** Is there room to reduce energy costs amid higher natural gas prices?  
   **A:** Greg Bram stated that with current low energy costs, especially in North America, there is limited incentive for projects to reduce energy consumption further. He noted that while efficiency is always a goal, significant investments for energy reduction are hard to justify unless natural gas or power costs increase markedly.  **[VLO_3413735_22]** 

10. **Ethanol Market Outlook and E15 Policies**  
    **Q:** What's the outlook for ethanol and the impact of E15 policies?  
    **A:** Eric Fisher mentioned that the ethanol market faces challenges with high inventories and production rates, keeping margins below mid-cycle. While E15 adoption could be positive, logistical challenges persist, and significant growth in the U.S. is uncertain. Canada may move to E15 this year under their CFR program.  **[VLO_3413735_24]** 

11. **Capital Expenditure and Turnaround Activities**  
    **Q:** Is the higher sustaining CapEx indicative of increased turnaround activity?  
    **A:** Lane Riggs clarified that the sustaining CapEx of **$1.6 billion** includes expected turnaround activities. Variations from the average are mainly due to the level of turnaround work planned for the year.  **[VLO_3413735_26]** 

12. **Impact of Foreign Trade Zones on Tariffs**  
    **Q:** Can foreign trade zones help mitigate the impact of tariffs?  
    **A:** Richard Walsh explained that until the specifics of any tariffs are known, it's uncertain how foreign trade zones might mitigate their impact. While Valero has foreign trade zones and benefits from them in terms of exports, it's unclear if they would offset domestic tariffs.  **[VLO_3413735_26]** 

13. **Heavy Sour Crude Processing and Coking Economics**  
    **Q:** How did you optimize heavy sour crude processing despite tight fuel oil?  
    **A:** Greg Bram noted that as fuel oil prices narrowed differentials, they pivoted toward heavy crude as an alternative, aided by the new Port Arthur Coker. This shift increased heavy crude processing without impacting throughput negatively.  **[VLO_3413735_11]** 

14. **Regional Performance Variances**  
    **Q:** What drove the differences in regional performance this quarter?  
    **A:** Greg Bram explained that the West Coast saw lower capture rates due to maintenance at Benicia, impacting transportation fuel production. The Mid-Continent region benefited from higher throughput and improved capture rates due to favorable market incentives and less backwardated crude structures.  **[VLO_3413735_23]** 

15. **Sustainable Aviation Fuel (SAF) Operations**  
    **Q:** Can you update us on your SAF operations and economics?  
    **A:** Eric Fisher reported a successful startup of the SAF project ahead of schedule and under budget. The unit demonstrated a wide range of operability exceeding project goals, providing flexibility to optimize production between SAF and renewable diesel based on market conditions. They anticipate increased SAF demand due to the **2% mandate** in the EU and UK.  **[VLO_3413735_20]** 

5fde78cab59786a5e27939cf6db93bb3e82ff0472491bd73b1742ee097e863ce

Valero lowered feedstock costs via discounted Maya crude, boosting Q4 diesel margins. Gasoline demand rose 2% YoY and diesel 1%, driving firmer crack spreads. Despite potential tariffs and a $1.6B sustaining CapEx plan, Valero still aims for a 40–50% payout ratio.

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454bfb2ebd565d7a7ab3b458a267b7cff8b1cb355b17bfd371d0132b4217acc7

**Quarterly guidance for Q1 2025**  
- **Refining Throughput Volumes (Gulf Coast)**: 1.72–1.77M bpd  **[VLO_3413735_4]**  (lowered from 1.83–1.88M bpd  **[VLO_3403640_3]** )  
- **Refining Throughput Volumes (Mid-Continent)**: 415K–435K bpd  **[VLO_3413735_4]**  (lowered from 425K–445K bpd  **[VLO_3403640_3]** )  
- **Refining Throughput Volumes (West Coast)**: 190K–210K bpd  **[VLO_3413735_4]**  (lowered from 230K–250K bpd  **[VLO_3403640_3]** )  
- **Refining Throughput Volumes (North Atlantic)**: 455K–475K bpd  **[VLO_3413735_4]**  (raised from 380K–400K bpd  **[VLO_3403640_3]** )  
- **Refining Cash Operating Expenses**: $4.95 per barrel  **[VLO_3413735_4]**  (raised from $4.60 per barrel  **[VLO_3403640_3]** )  
- **Ethanol Production Volumes**: 4.6M gallons per day  **[VLO_3413735_4]**  (lowered from 4.7M gallons per day  **[VLO_3403640_3]** )  
- **Ethanol Operating Expenses**: $0.41 per gallon  **[VLO_3413735_4]**  (raised from $0.37 per gallon  **[VLO_3403640_3]** )  
- **Net Interest Expense**: $130M  **[VLO_3413735_4]**  (lowered from $140M  **[VLO_3403640_3]** )  
- **Depreciation & Amortization**: $710M  **[VLO_3413735_4]**  (raised from $690M  **[VLO_3403640_3]** )  

**Annual guidance for FY 2025**  
- **Renewable Diesel Sales Volumes**: 1.2B gallons  **[VLO_3413735_4]**  (no change from 1.2B gallons  **[VLO_3403640_3]** )  
- **Renewable Diesel Operating Expenses**: $0.51 per gallon  **[VLO_3413735_4]**  (raised from $0.45 per gallon  **[VLO_3403640_3]** )  
- **General & Administrative (G&A) Expenses**: $985M  **[VLO_3413735_4]**  (raised from $975M  **[VLO_3403640_3]** )  
- **Capital Investments**: $2B  **[VLO_3413735_4]**  (no change from $2B  **[VLO_3403640_3]** )  

b2cf47525947824052dcc3827d774bf60e39d43394405b5293d7f9fe4926f441

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43e207ac1117992650cd00ccedbfd71eb6d3e0a88001ecfeaf7606add21b677b

| Year | Amount Due (in millions) | Debt Type                  | Interest Rate | % of Total Debt                                                                 |
|----------|------------------------------|--------------------------------|-------------------|------------------------------------------------------------------------------------|
| 2024     | $1,016 **[0001035002-24-000056_vlo-20240930.htm:3]**               | Current Portion of Debt        | N/A               | 9.4% = (1,016 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:3]**                                             |
| 2024     | $329 **[0001035002-24-000056_vlo-20240930.htm:11]**                 | IEnova Revolver                | 9.2% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 3.0% = (329 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:11]** **[0001035002-24-000056_vlo-20240930.htm:49]**                                       |
| 2025     | $441 **[0001035002-24-000056_vlo-20240930.htm:49]**                 | Fixed Rate Debt                | 3.2% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 4.1% = (441 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:49]**                                               |
| 2026     | $672 **[0001035002-24-000056_vlo-20240930.htm:49]**                 | Fixed Rate Debt                | 4.2% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 6.2% = (672 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:49]**                                               |
| 2027     | $564 **[0001035002-24-000056_vlo-20240930.htm:49]**                 | Fixed Rate Debt                | 2.2% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 5.2% = (564 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:49]**                                               |
| 2028     | $1,047 **[0001035002-24-000056_vlo-20240930.htm:49]**               | Fixed Rate Debt                | 4.4% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 9.7% = (1,047 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:49]**                                             |
| Thereafter | $5,374 **[0001035002-24-000056_vlo-20240930.htm:49]**             | Fixed Rate Debt                | 5.5% **[0001035002-24-000056_vlo-20240930.htm:49]**      | 49.7% = (5,374 / 10,806) * 100 **[0001035002-24-000056_vlo-20240930.htm:49]**                                            |

99bf117a5bf70ccfb2891d05a528e945ba386a8d95596a9a199624c1dc8ec940

- **Valero returned 73% of adjusted net cash provided by operating activities to shareholders in Q4 2023**, resulting in a **60% payout ratio for the full year**, and reduced share count by **11% in 2023** and **19% since year-end 2021**.  **[VLO_3370812_32]**
- **Strong performance in the North Atlantic segment** due to **improved crude costs**, **strong commercial margins**, and processing **Syncrude at a $7 discount to Brent**, leading to higher capture rates.  **[VLO_3370812_10]**
- **Expectations of stronger refining margins in Q1 2024**, supported by **heavy industry-wide turnaround activity** and **colder weather**, which could lead to higher heating oil demand and favorably impact year-on-year comparisons.  **[VLO_3370812_14]**

d2cf5826e2dc85dd0fe39637599829946f25acfa1bdc72cffed7a371cd57b534

- **Valero returned $1.4 billion to shareholders in Q1 2024**, achieving a **payout ratio of 74%**, which is above their target floor of 40–50%, and plans to continue returning excess cash through share buybacks.  **[VLO_3380708_6]** **[VLO_3380708_15]**
- **Commercial interest in Sustainable Aviation Fuel (SAF) exceeds Valero's current capacity**, prompting engineering on a second project, indicating strong growth prospects in their renewable fuels business.  **[VLO_3380708_16]**
- **Global petroleum demand is expected to outpace new refinery capacity additions significantly**, leading to several years of tight refining markets and strong margins, which Valero is positioned to capitalize on.  **[VLO_3380708_10]** **[VLO_3380708_4]**

38c272733d4f99205ee2646f5750116ec1b192deb249de712b6afa5d41adc4c0

- **Uncertainty in Renewable Diesel Capacity**: Valero's renewable diesel volumes may be impacted in 2024 due to upcoming catalyst changes and the conversion to sustainable aviation fuel (SAF), with potential changes in capacity not yet determined. Eric Fisher stated, "we're not sure what capacity will look like... until we get the project on the ground and start it up."  **[VLO_3370812_27]**
- **Higher Operating Expenses per Barrel with Lower Throughput**: Operating expenses are largely fixed, so declining throughput could lead to higher costs per barrel. As Lane Riggs explained, "the more barrels we run, the better that metric work."  **[VLO_3370812_29]**
- **Weaker Product Margins in Certain Regions**: Weather-related demand impacts have led to softer markets and weaker product margins in the Mid-Continent and West Coast regions. Gary Simmons noted that "we've seen that market a little bit softer than maybe you would typically see for this time of year."  **[VLO_3370812_8]**

3e624976b8cef5d37217d970d9629613ff61699c794e9f35050e9f661f662bd8

- **Increasing competition for waste oil feedstocks in the Renewable Diesel segment is driving up feedstock costs, which may pressure margins going forward.**  **[VLO_3394294_18]**
- **Global refinery overcapacity, with net additions exceeding pre-COVID levels, could lead to a surplus in refining capacity and put downward pressure on margins.**  **[VLO_3394294_6]**
- **Weakening diesel demand in China, reportedly down by as much as 10%, could negatively impact global demand for refined products and affect Valero's export opportunities.**  **[VLO_3394294_20]**

b2287614f58e0927ab0018d8e02aede563c3f2dc68e1a3b23af6e3667950f1d2

1. **Cash Flow Payout and Share Buybacks**  
   **Q:** Is the $1B share buyback level sustainable?  
   **A:** Management indicated that given their strong balance sheet and desire not to build more cash, they had a payout of **74%** this quarter, above the long-term commitment of **40-50%**.  **[VLO_3380708_6]**  In periods of strong fundamentals, excess cash flow is expected to continue towards buybacks, making the $1 billion repurchase level sustainable.  **[VLO_3380708_6]** 

2. **Returns of Capital Framework**  
   **Q:** Will you change your capital return framework?  
   **A:** Management is comfortable being above the **40-50%** payout target over a consistent period.  **[VLO_3380708_15]**  They view it as a long-term indication through the cycle and suggest that recent quarters' actions are indicative of future behavior regarding cash.  **[VLO_3380708_15]** 

3. **Product Demand Outlook and Diesel Margins**  
   **Q:** Outlook for diesel and jet margins after pullback?  
   **A:** Despite recent pullbacks, Valero sees strong **diesel demand**, with sales **2% higher** than last year.  **[VLO_3380708_4]**  They expect gasoline demand to be flat to slightly up, and believe diesel margins are too weak and need to strengthen, as negative margins in Europe and Asia indicate capacity needs to run.  **[VLO_3380708_4]** 

4. **Renewable Diesel and SAF Market Outlook**  
   **Q:** Outlook for renewable diesel and SAF profitability?  
   **A:** While 2024 may remain challenging due to capacity additions, the longer-term outlook for renewable diesel (RD) and sustainable aviation fuel (SAF) is positive.  **[VLO_3380708_13]**  Upcoming global mandates and programs in **2025** are expected to increase demand, benefiting Valero's diversification into SAF.  **[VLO_3380708_13]** 

5. **DGD SAF Project and Margins**  
   **Q:** Economic expectations for the upcoming SAF project?  
   **A:** The SAF project is on track for **Q4 start-up**.  **[VLO_3380708_7]**  Management expects margins supported by state and federal tax credits like **45Z**, **BTC**, or **PTC**, and strong interest from buyers, meeting their project return thresholds.  **[VLO_3380708_7]** 

6. **Refining Capacity Additions and Market Tightness**  
   **Q:** Will new refining capacity affect supply dynamics?  
   **A:** After this year's peak in capacity additions, global petroleum demand is expected to outpace new refinery capacity, leading to several years of tightness in the market.  **[VLO_3380708_10]** 

7. **Impact of Lighter Crude Mix**  
   **Q:** How does lighter crude mix affect refining?  
   **A:** The global average crude gravity increased by about **1.5 degrees**, leading to lower utilization since refineries are designed for heavier crudes.  **[VLO_3380708_12]**  This trend causes derated units and challenges in processing the lighter slate.  **[VLO_3380708_12]** 

8. **Crude Differentials and Availability**  
   **Q:** Expectations on crude differentials and supply?  
   **A:** Differentials widened in Q1 due to lower demand, but are expected to remain tight until OPEC production increases in late 2024.  **[VLO_3380708_8]**  Valero is not experiencing feedstock availability issues but prefers wider differentials.  **[VLO_3380708_8]** 

9. **M&A Appetite for Refining Assets**  
   **Q:** Has your outlook on refining M&A changed?  
   **A:** Valero continues to evaluate opportunities but remains disciplined, understanding the full costs to run refineries.  **[VLO_3380708_20]**  They did not engage in recent large deals but may consider assets if they become available.  **[VLO_3380708_20]** 

10. **West Coast Market and Lighter Crude Slate**  
    **Q:** Outlook for West Coast market this summer?  
    **A:** Valero anticipates heightened volatility and prices dependent on refinery operations.  **[VLO_3380708_21]**  Importing into California is challenging, and recent demand has returned to normal patterns after weather-related dips.  **[VLO_3380708_21]** 

11. **Refinery Turnaround Activities**  
    **Q:** Should we expect lighter fall turnarounds?  
    **A:** Valero had heavy turnarounds in Q1, with throughput reflecting this.  **[VLO_3380708_14]**  Future turnaround activities will be lighter, driven by margin outlooks and seasonal considerations, with Q4 expected to be typical.  **[VLO_3380708_14]** 

12. **Gasoline vs. Diesel Production Strategy**  
    **Q:** Will you shift focus to gasoline production?  
    **A:** Production mix is influenced by intermediate feedstock availability, especially VGO.  **[VLO_3380708_9]**  Currently, VGO availability is sufficient, allowing Valero to operate conversion units fully; future shifts depend on market conditions.  **[VLO_3380708_9]** 

13. **Potential for Additional SAF Projects**  
    **Q:** Is there demand for more SAF projects?  
    **A:** Commercial interest exceeds capacity of the first SAF project.  **[VLO_3380708_16]**  Engineering on a second project is underway, but timing of announcements depends on market developments and internal decisions.  **[VLO_3380708_16]** 

14. **Project Execution and Timeliness**  
    **Q:** How do you deliver projects ahead of schedule?  
    **A:** Valero attributes timely project execution to a culture of high discipline, accountability, and teamwork.  **[VLO_3380708_11]**  They ensure competent people are in the right roles with clear visibility and alignment throughout the organization.  **[VLO_3380708_11]** 

15. **Mexican Market and Exports**  
    **Q:** What are your views on Mexico's fuel demand?  
    **A:** Valero's sales in Mexico are over **100,000 barrels per day**, consistent with historic levels.  **[VLO_3380708_19]**  Demand remains strong, and they expect growth with the upcoming Altamira terminal enhancing competitiveness.  **[VLO_3380708_19]** 

16. **Asia Refining Margins**  
    **Q:** Are Asian refining margins at a floor?  
    **A:** Negative margins in Singapore and Europe suggest margins have hit a floor.  **[VLO_3380708_17]**  Capacity needs to run, so margins are expected to improve from current lows.  **[VLO_3380708_17]** 

17. **Naphtha Exports and Octane Economics**  
    **Q:** Impact of falling naphtha exports on octane?  
    **A:** Significant changes require petrochemical demand for naphtha to pick up, tied to crude prices.  **[VLO_3380708_5]**  High crude prices hinder naphtha's competitiveness in petrochems, leading it to blend into gasoline and affect octane economics.  **[VLO_3380708_5]** 

edfb039f7d6cc9cb45b09e30a7973c1b618d16bfdc65153a770db2b189f9a3c6

1. **Capital Allocation in Low Margins**  
   **Q:** Will you maintain buybacks if margins stay low?  
   **A:** Valero intends to continue returning capital to shareholders even in a lower margin environment, thanks to its strong balance sheet and low-cost operations. They have committed to a minimum of **40–50%** of cash flow from operations going to shareholders, and all excess free cash flow will support buybacks.  **[VLO_3403640_5]** 

2. **California Refinery Strategy**  
   **Q:** Any update on California refinery plans?  
   **A:** Facing increased regulatory pressures in California, Valero is considering all strategic options for its operations there. Historically, they have minimized capital expenditures in the state due to policy challenges, and now all alternatives are being evaluated as they assess their future in California.  **[VLO_3403640_6]** **[VLO_3403640_10]** 

3. **Refining Margins Outlook**  
   **Q:** How do you see refining margins evolving?  
   **A:** Valero expects tightening balances in refining markets due to modest net capacity additions of about **300,000 barrels per day** and demand growth of **700,000 barrels per day** in 2025. Timing of refinery closures and new capacity will impact margins, and they anticipate an extended period of tighter balances leading to improved margins beyond next year.  **[VLO_3403640_7]** **[VLO_3403640_9]** **[VLO_3403640_15]** 

4. **Renewables and Sustainable Aviation Fuel**  
   **Q:** What's the outlook for your renewable fuels business?  
   **A:** The startup of the sustainable aviation fuel unit is ahead of schedule and under budget, with strong commercial interest from airlines and freight carriers. Valero expects positive policy tailwinds in 2025, including the Inflation Reduction Act, European SAF mandates, and potential RIN price increases, which should enhance returns exceeding their minimum after-tax threshold of **25%**.  **[VLO_3403640_8]** **[VLO_3403640_16]** **[VLO_3403640_19]** 

5. **Operating Expenses**  
   **Q:** How are you keeping OpEx low?  
   **A:** Valero continues to manage operating expenses through disciplined cost control, maintaining a focus on low-cost operations. While lower natural gas prices have helped, they are actively working to offset inflation impacts on maintenance, catalyst, and chemical costs to sustain their cost advantage.  **[VLO_3403640_20]** 

6. **Capture Rates Improvement**  
   **Q:** What needs to improve capture rates?  
   **A:** Improvement in capture rates depends on factors like reduced crude market backwardation and better pricing for secondary products such as propylene and naphtha. As petrochemical demand improves, these factors should enhance margins and capture rates.  **[VLO_3403640_18]** 

7. **Diesel Demand Trends**  
   **Q:** Is diesel demand improving?  
   **A:** Valero has seen a recent increase in diesel demand, with a **5% year-over-year** rise in the last two weeks. This suggests strengthening markets, and with tighter inventories, it could support higher diesel margins heading into winter.  **[VLO_3403640_12]** 

8. **Port Arthur Coker Economics**  
   **Q:** How is the Port Arthur coker performing?  
   **A:** The Port Arthur coker project is meeting return expectations set during funding, benefiting from processing heavy sour crude into light products. As sour crude differentials fluctuate, Valero anticipates capturing additional value from this asset.  **[VLO_3403640_21]** 

9. **Naphtha Exports Outlook**  
   **Q:** What's driving naphtha export strength?  
   **A:** Increased naphtha exports are due to reduced supply from hydroskimmer run cuts and improving petrochemical demand. Valero expects this trend to continue, supporting margins for naphtha and related products.  **[VLO_3403640_17]** 

10. **Ethanol Volumes and Margins**  
    **Q:** Why are ethanol volumes at record levels?  
    **A:** Valero has expanded ethanol production capacity and is leveraging export opportunities amid strong global demand. Despite margin pressures, the company is taking advantage of the abundant U.S. corn supply and increased international interest in ethanol-blended fuels.  **[VLO_3403640_22]** 

e50ce536678b4cbaa91c6e21c8ee4e0aa35534ff9c6d2d68c5ba7454e22b47ec

- **Valero achieved a 10% year-over-year uptick in diesel sales**, attributed to their wholesale team's efforts and refinery rationalizations that allowed for market share growth.  **[VLO_3394294_14]**
- **Anticipated growth in exports to Mexico with the new Altamira terminal starting up before the end of the year**, enhancing competitiveness in the Northern Mexico market and supporting volume growth.  **[VLO_3394294_17]**
- **Positive outlook on ethanol margins due to cheap natural gas and corn prices**, with expectations for continued profitability into next year barring any significant weather events.  **[VLO_3394294_24]**

2e5662b81665b4c55f64fafa8b4e4d518181f36e4d24e586bca5e4b747a11b72

1. **Return of Capital and Payout Ratio**  
   **Q:** Will payout exceed 40-50% target in 2024?  
   **A:** Management expects to exceed their **40-50% payout target**  **[VLO_3370812_6]** **[VLO_3370812_12]** , given their **strong balance sheet** and **historical payouts averaging 57%** before COVID.  **[VLO_3370812_6]**  They view the **40-50% as a floor** when the balance sheet is strong, with excess cash going towards buybacks.  **[VLO_3370812_6]** **[VLO_3370812_12]** 

2. **Market Outlook for Clean Products**  
   **Q:** What's the supply and demand outlook for gasoline and diesel?  
   **A:** Demand for gasoline is following typical seasonal patterns and is **in line with last year**.  **[VLO_3370812_7]**  Diesel demand is up **7%** in their system.  **[VLO_3370812_7]**  They expect tight supply-demand balances similar to last year, with **1.5 million barrels per day** of new capacity coming online and demand growth of over **1 million barrels per day**.  **[VLO_3370812_7]**  Refinery maintenance and colder weather may tighten inventories in coming weeks.  **[VLO_3370812_7]** 

3. **Renewable Diesel Margins and Outlook**  
   **Q:** Will renewable diesel margins improve in Q1?  
   **A:** Yes, margins are expected to be stronger in Q1 due to lag effects from importing low-carbon-intensity feedstocks.  **[VLO_3370812_13]**  Adjusting for the lag, capture rates would have been **93%** in Q4.  **[VLO_3370812_13]**  The longer supply chain with foreign feedstocks created a lag that affected Q4 results.  **[VLO_3370812_13]** 

4. **Impact of New Refining Capacity**  
   **Q:** How will new international refining capacity affect markets?  
   **A:** They anticipate **1.5 million barrels per day** of new refining capacity coming online, with demand growth of over **1 million barrels per day**, keeping supply-demand balances similar to last year.  **[VLO_3370812_7]**  They believe new capacity will take longer to ramp up, delaying its impact until later in the year.  **[VLO_3370812_7]** 

5. **Shipping Disruptions and Russian Impact**  
   **Q:** How do shipping disruptions and Russian issues affect you?  
   **A:** Increased freight rates due to shipping disruptions provide a crude cost advantage over global competitors.  **[VLO_3370812_11]**  Russian refinery issues have tightened the naphtha market, which may affect octane values.  **[VLO_3370812_17]** **[VLO_3370812_24]** 

6. **Capital Expenditure Plans**  
   **Q:** Is higher maintenance planned in 2024?  
   **A:** There's substantial turnaround activity planned for Q1, but they don't expect it to impact capture rates.  **[VLO_3370812_22]**  Industry-wide, a heavy maintenance season is anticipated.  **[VLO_3370812_22]** 

7. **Feedstock Costs and Renewable Diesel**  
   **Q:** How will feedstock costs affect renewable diesel margins?  
   **A:** Additional capacity may narrow margins, but feedstock prices are coming down.  **[VLO_3370812_20]**  Waste oils, with a carbon intensity advantage over vegetable oils, will remain competitively advantageous.  **[VLO_3370812_20]**  Diversifying into Sustainable Aviation Fuel (SAF) reduces reliance on renewable diesel margins.  **[VLO_3370812_20]** **[VLO_3370812_16]** 

8. **Sustainable Aviation Fuel (SAF) Market**  
   **Q:** How is the SAF market developing?  
   **A:** They are in discussions with airlines and cargo carriers, using models to offset carbon footprints.  **[VLO_3370812_16]**  They expect to finalize several contracts and foresee no issues moving all the volume from their project.  **[VLO_3370812_16]** 

9. **Constraints on Buybacks and Cash Balance**  
   **Q:** Why did cash balance increase despite high payouts?  
   **A:** They aim to maintain a minimum cash balance of **$4 billion**.  **[VLO_3370812_32]**  With a net debt-to-cap ratio of **18%**, there's no pressing need to pay down debt.  **[VLO_3370812_32]**  The cash balance build results from strong cash flows and disciplined capital allocation.  **[VLO_3370812_32]** 

10. **Operational Expenses and Cost Management**  
    **Q:** What's driving higher refining OpEx?  
    **A:** Higher electricity prices and cost inflation pressures have increased OpEx.  **[VLO_3370812_28]**  They are working to rein in costs and remain committed to being best in class with expenses.  **[VLO_3370812_28]** **[VLO_3370812_29]**  OpEx metrics are expected to improve with higher throughput.  **[VLO_3370812_29]** 

11. **Asset Base Strategy**  
    **Q:** Any changes to asset base, especially in California?  
    **A:** While California is a tough place to operate and getting tougher, they continue to evaluate assets but remain disciplined.  **[VLO_3370812_18]**  They see transportation fuels being structurally short and look at opportunities through that lens.  **[VLO_3370812_18]** 

12. **Octane Blending Outlook**  
    **Q:** How will octane blending impact financials?  
    **A:** Similar dynamics as last year are expected, with increased light sweet crude creating more naphtha.  **[VLO_3370812_24]**  Naphtha oversupply pressures octane values, but unless prolonged outages reduce naphtha supply, they don't foresee significant changes.  **[VLO_3370812_24]**  They are fairly balanced on octane needs.  **[VLO_3370812_24]** 

13. **Summer Grade Gasoline Inventory**  
    **Q:** Is there a risk of tight summer gasoline due to low inventories?  
    **A:** There's no economic incentive to produce and store summer grade gasoline now.  **[VLO_3370812_19]**  Current inventories are largely winter grade, but they expect this to work off over the next few months.  **[VLO_3370812_19]**  Refiners may have held inventories due to weak Gulf Coast basis.  **[VLO_3370812_19]** 

14. **Impact of TMX Pipeline on Heavy Crude Supply**  
    **Q:** Will TMX startup affect heavy crude availability?  
    **A:** They don't expect TMX to materially impact their Gulf Coast system.  **[VLO_3370812_31]**  They anticipate Gulf Coast barrels from Western Canada to continue, with TMX decreasing exports from the U.S. Gulf Coast.  **[VLO_3370812_31]** 

15. **Growth in Mexico Market**  
    **Q:** How is demand in the Mexican market?  
    **A:** Their business in Mexico is growing nicely, with volumes up **16%** year-over-year.  **[VLO_3370812_24]** **[VLO_3370812_25]**  They now have **250 branded sites**, making them the largest growing brand in Mexico.  **[VLO_3370812_24]**  They expect continued growth, with Mexican gasoline demand recovering to pre-COVID levels.  **[VLO_3370812_25]** 

16. **Cold Weather Impact on Operations**  
    **Q:** Did recent cold weather affect operations?  
    **A:** There were some small operational issues, but nothing material that would impact quarterly results.  **[VLO_3370812_26]**  Throughput guidance remains unchanged.  **[VLO_3370812_26]** 

17. **SAF Production Capacity**  
    **Q:** Will renewable diesel volumes stay above nameplate capacity?  
    **A:** They kept guidance at **1.2 billion gallons**, with some catalyst changes this year.  **[VLO_3370812_27]**  Converting to SAF may change capacity, as units run differently in that mode.  **[VLO_3370812_27]** 

18. **Marketing Operations and Demand Insights**  
    **Q:** Any insights on local demand in Mexico and the Caribbean?  
    **A:** Their volumes are up **16%** year-over-year in Mexico, with business growing.  **[VLO_3370812_24]**  They expect continued growth in gasoline demand in Mexico.  **[VLO_3370812_25]** 

19. **Capture Rates and Commercial Optimization**  
    **Q:** How are you optimizing capture rates?  
    **A:** Their commercial team is highly effective, with everyone understanding their roles.  **[VLO_3370812_9]**  Alignment across the company and a focus on reliability contribute to strong capture rates.  **[VLO_3370812_9]** 

20. **North Atlantic Margin Strength**  
    **Q:** What drove strong margins in the North Atlantic?  
    **A:** Improved crude costs, especially in Canada, strong commercial margins, and lower compliance costs contributed to higher capture rates.  **[VLO_3370812_10]**  Syncrude traded at **$7 below Brent**, benefiting their system.  **[VLO_3370812_10]** 

48745b804f996334e56fd7b122c013f815c4943c2c4911ab627e8c2c79b45645

- Valero's Sustainable Aviation Fuel (SAF) project finished **ahead of schedule** and **under budget**, demonstrating exceptional project execution and is expected to **exceed the minimum return threshold of after-tax 25%**, with strong commercial interest from airlines and freight carriers.  **[VLO_3403640_8]**
- Valero anticipates **tightening refining balances** with product demand exceeding capacity additions beyond next year, leading to an **extended period with tighter refining margins**, supporting long-term refining fundamentals.  **[VLO_3403640_7]**
- Increased supply of heavy sour crude from OPEC, Canada, and Venezuela is expected to **widen sour crude differentials**, positively impacting Valero's refining margins.  **[VLO_3403640_15]**

7676322bcc1e25812ea86d7873d6e6577345685715bec93667e0fdca517cfba2

- **Tight crude differentials are narrowing refining margins and are expected to remain tight through most of the year until OPEC production ramps back up, potentially impacting profitability**.  **[VLO_3380708_8]**
- **Weak diesel margins due to market conditions, including continued Russian diesel exports, could negatively affect Valero's earnings as diesel is currently "too weak"**.  **[VLO_3380708_5]**
- **High cash flow payout ratios (74% in the first quarter), above their long-term target of 40-50%, may not be sustainable, potentially impacting future shareholder returns**.  **[VLO_3380708_6]** **[VLO_3380708_15]**

e63d4b854bb4d7b4f1812dc38dd21a510201a946d84cb3169b631e2486894bf3

1. **Supply/Demand Balance**  
   **Q:** What is your view on current supply/demand balance?  
   **A:** Gary Simmons noted that U.S. gasoline demand is **flat year-over-year**, while diesel demand is down slightly. Increased refinery runs in the Middle East and sluggish economic activity led to inventory restocking and weaker margins. However, he believes the market has found a bottom, and long-term fundamentals are bullish due to limited new refining capacity and continued demand growth.  **[VLO_3394294_4]** 

2. **Capital Returns**  
   **Q:** How will you approach buybacks and capital returns?  
   **A:** Homer Bhullar stated they have funded **over $17 billion** in shareholder returns since 2020 without leveraging the balance sheet. With a payout ratio of **87%** for the second quarter and **80%** year-to-date, they plan to continue leaning into buybacks, expecting any excess free cash flow to go towards share buybacks.  **[VLO_3394294_5]** 

3. **Margin Outlook**  
   **Q:** Has your outlook on refining margins changed?  
   **A:** Lane Riggs affirmed their belief in a higher margin environment going forward. Despite recent margin weaknesses, he noted that refineries are making cuts at historically mid-cycle economic environments, reinforcing their view of higher margins for capital and higher mid-cycle margins in the future.  **[VLO_3394294_11]** 

4. **Market Share Growth**  
   **Q:** How have you grown market share in diesel sales?  
   **A:** Gary Simmons attributed the **10% year-over-year increase** in their diesel sales to their wholesale team's efforts and refinery rationalizations during COVID, which allowed them to expand market share.  **[VLO_3394294_14]** 

5. **West Coast Dynamics**  
   **Q:** What's happening with West Coast operations and TMX impact?  
   **A:** Lane Riggs explained that the West Coast is their highest-cost region, with margins impacted by higher imports and softer demand. Gary Simmons added that the impact of the TMX pipeline is expected in the third quarter, reducing crude costs by **$1.50 to $2** per barrel relative to Brent.  **[VLO_3394294_7]** **[VLO_3394294_16]** 

6. **Heavy Sour Differentials**  
   **Q:** What is your outlook for Gulf Coast heavy sour differentials?  
   **A:** Gary Simmons expects wider heavy sour differentials in the longer term as more OPEC production returns to the market, potentially late this year or early next year, creating meaningful and sustainable wider differentials.  **[VLO_3394294_12]** 

7. **Renewable Diesel to SAF Transition**  
   **Q:** What uplift do you expect from shifting RD to SAF?  
   **A:** Eric Fisher indicated that Sustainable Aviation Fuel (SAF) offers a premium over Renewable Diesel (RD), providing stronger margins. While specifics weren't disclosed, he expressed confidence that they will meet their project economics and that the outlook is positive.  **[VLO_3394294_13]** 

8. **Policy Impact**  
   **Q:** How might policy changes affect your operations?  
   **A:** Richard Walsh discussed that the removal of Chevron deference may lead to less agency overreach and more consistent judicial review, impacting interpretations on mandates like vehicle electrification. He anticipates these changes could happen more quickly than traditionally expected.  **[VLO_3394294_8]** **[VLO_3394294_9]** 

9. **Capture Rates**  
   **Q:** Have structural changes affected your capture rates?  
   **A:** Greg Bram noted that lower Q2 capture rates were due to seasonal RVP changes, strong crude market backwardation impacting acquisition costs by **$0.80 to $0.90** per barrel, weaker co-product prices, and fewer opportunity feedstocks. He expects these factors to improve in future periods.  **[VLO_3394294_23]** 

10. **Ethanol Margins**  
    **Q:** How sustainable is the uptick in ethanol margins?  
    **A:** Eric Fisher is positive about the ethanol outlook into next year, citing cheap natural gas and corn prices due to large carryout inventories. Regarding the Summit carbon capture project, while not their own, they view carbon sequestration as supportive for ethanol and plan to participate once operational.  **[VLO_3394294_24]** 

d44551627f43f9a4fe71d778897db1dcacb8dc12fff248a9b6eab472357e46f0

Valero Energy Corp (VLO)

Financials