VLO 10-K & 10-Q changes, risk factors and insider trading
Valero Energy Corp. · NYSE · Petroleum Refining · CIK 1035002 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We are subject to risks arising from the availability and prices of natural gas, electricity, and water.”
New heading “The availability and prices of our feedstocks and other critical supplies expose us to risks.”
New heading “We are subject to risks arising from our operations and business activities outside of the U.S.”
New heading “Differences in competitors’ businesses or resources may at times provide them a competitive advantage.”
New heading “Our pursuit of capital and other strategic projects and actions exposes us to various risks.”
New heading “Our investments in joint ventures and other entities limit our ability to manage risk.”
New heading “We do not maintain insurance coverage that fully protects against all potential losses and liabilities.”
New heading “We are exposed to risks arising from various labor-related matters.”
Removed heading “We are subject to risks arising from sentiment towards climate-related matters, fossil fuels, GHG emissions, and other sustainability-related matters.”
Removed heading “We are subject to risks related to the costs and availability of our feedstocks and other critical supplies.”
Removed heading “We are subject to risks arising from our refining and marketing operations outside of the U.S.”
Removed heading “Competitors that produce their own supply of feedstocks, own their own retail sites, operate in different regions, or have greater financial resources may have a competitive advantage.”
Removed heading “Large capital and other strategic projects can take many years to complete, and the legal regulatory, and political environments or other market conditions may change or deteriorate over time.”
Removed heading “Our investments in joint ventures and other entities decrease our ability to manage risk.”
Removed heading “We are subject to risks arising from severe weather events.”
Removed heading “Our business may be negatively affected by work stoppages, slowdowns, or strikes, as well as by new legislation or an inability to attract and retain sufficient labor, and increased costs related thereto.”
Removed heading “Our ability to adequately insure losses or liabilities arising from various hazards exposes us to risks.”
Largest changes
“We have operations, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in any of these markets, including due to actual or alleged violations of law; expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; differential treatment of state-owned entities; property disputes; economic instability; …”see in full comparison
“We have operations and business activities, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in or otherwise affecting any of these markets, including due to actual or alleged violations of laws or regulations (such as anti-bribery, anti-corruption, anti-money laundering, and foreign corrupt practices violations); expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; …”see in full comparison
“We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables from suppliers throughout the world. …”see in full comparison
“Our operations depend on the reliable supply of natural gas and electricity. We consume significant amounts of natural gas and electricity to operate our refineries and plants, and natural gas and electricity prices have a measurable effect on the total cost of our operations. We also purchase other commodities whose prices may vary depending on the prices of natural gas or electricity. The volatility of prices for both natural gas and electricity represent an ongoing challenge to our operating results. …”see in full comparison
We could face increased climate‐related litigation with respect to our operations, disclosures, or products.see in full comparisonGovernmentsGovernments, non-governmental organizations, and private parties across the world have filed lawsuits or initiated regulatory action against fossil fuel companies. Such lawsuits and actions often allege noncompliance with applicable laws or regulations, or personal injury or damages they attribute to perceived climate-relatedmatters,harms, and seek damages and/or abatement under various tort and other theories, including under consumer protection, human rights, or constitutional provisions. We have been named as a co-defendant in a lawsuit in state court by a county in Oregon seeking significant damages and abatement under various tort theories (including deceptive disclosures). We have also been named as a co-defendant in a federal class-action lawsuit in California alleging antitrust and consumer protection claims related to costs of complying with the LCFS. While we intend to vigorously defend against theallegations.allegationsHowever,in those pending actions, the ultimateoutcomeoutcomes andimpactimpacts to usof such litigationcannot be predicted with certainty at this time,andwe could incur substantial legal costs and reputational damage associated with defending suchmatter,matters, and an adverse ruling could require us to pay significant damages.SimilarFrom time to time, we have also been subject to, and expect to continue to be subject to, other litigation related to environmental, health, and safety incidents or other accidents arising in the normal course of our operations. Our industry in particular has been subject to a rising number of lawsuitsmayseekingbesubstantialfileddamage awards in such matters, which have been exacerbated by recent legal, judicial, and jury-related trends in certain jurisdictions where we operate. We have faced, and expect to continue to face, increased risks related to such matters and the outcome of pending or future claims for such matters could have a material adverse effect on our business, financial condition, results of operations, and liquidity. Governments and private parties are also increasingly filing lawsuits or initiating regulatory action based on allegations that certain public statements and disclosures by companies regarding climate- and otherjurisdictions.sustainability-related matters are false or misleading “greenwashing” that violate deceptive trade practices, consumer protection statutes, or other similar laws and regulations, or are fraudulent or misleading under certain corporate or securities laws and regulations.
“The U.S. federal government under the current administration has also implemented and indicated the potential for new or revised tariffs, duties, sanctions, and other actions with respect to U.S. and foreign trade, manufacturing, and investment, and some foreign governments have in turn implemented or indicated the potential for similar responses impacting U.S. goods and/or foreign operations and business dealings of U.S. companies. …”see in full comparison
Full comparison: every changed paragraph (84)
RisksBUSINESS, RelatedINDUSTRY, toAND OurOPERATIONS Business, Industry, and OperationsRISKS
Our financial results are affected by volatile margins, which are dependent upon factors beyond our control, including the priceprices ofwe pay to acquire feedstocks and the market priceprices at which we can sell our products.
Our financial results are affected by the relationship,margin or(i.e., margin,the difference) between our product prices and the prices for crude oil, corn, and other feedstocks that we purchase, which can vary greatly based on global and regional market conditions, as well as by type and class of product or feedstock. Historically, product margins have been volatile, and we believe they will continue to be volatile in the future. OurThe costprices we pay to acquire feedstocks and the pricemarket prices at which we can ultimately sell our products depend upon several factors beyond our control,factors, including global and regional supplies, inventory levels, and availability of and demand for feedstocks (such as crude oil, waste and renewable feedstocks, and corn), liquid transportation fuels (such as gasoline, diesel, renewable diesel, SAF, and ethanol),fuels, and other products. These in turn depend on, among other things, global and regional production levelslevels, or capacities of suppliers and competitors,competitors; operational costs and flexibility (including natural gasgas, electricity, and electricitywater availability and costs,costs); transportation and logistics availability and costs; proximity and access to product and feedstock supplies and markets; economic activity and growth levels (or the lack thereof),; U.S. and foreign relations,relations (including tariffs, duties, sanctions, or other trade restrictions); political affairs,affairs; government regulations,regulations; 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) and other petroleum-producing nations that collectively make up OPEC+ to agree on and to maintain crude oil price and production controls has also had, and is likely to continue to have, a significant impact on the market prices of crude oil and certain of our products. Although several refinery closures have recently been announced or are in process and others are expected in the future, there have also been recent additions to global refining capacity, which create risks and uncertainties related to product margins, volatility, and market perceptions of the refining industry. Regarding low-carbon fuels margins, see also, among other risk factors set forth below, “The availability and prices of our feedstocks and other critical supplies expose us to risks,” and “We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels.”
SomeMany of these factors are interrelated, beyond our control, can vary globally orand regionallyregionally, and may change quickly, adding to market volatility, while others may have longer-term effects. The longer-term effects of these and other factors on product marginsthat are uncertain. We do not produce crudeany oil,of wasteour or renewableprimary feedstocks (exceptother inediblethan DCOs produced by our ethanol plants), corn, or other primary feedstocks, and must purchase nearly all of the feedstocks we process. We generally purchase our feedstocks long before we process them and sell the resulting products. Price level changes during the period between purchasing feedstocks and selling the resulting products have had, and could continue to have, a significant effect on our financial results. A decline in market prices for our products and feedstocks has also had, and could again have, a negative impact to the carrying value of our inventories. Factors outside of our control, such as economic, legal, regulatory, and political uncertainties,uncertainties; global geopolitical and other conflicts and tensions,tensions; inflation (and the potential for increased prices to reduce demand),; prolonged periods of high interest rates,rates; and public health crises (such as thepandemics COVID-19or pandemicepidemics) have negatively affected, and many such factors could continue to negatively affect, economic activity and growth levels of the U.S. and other countries. In turn, the demand for and consumption of our products, and also our revenues, margins, growth prospects, and capital allocation decisions have been and could again be negatively impacted.
and other countries. In turn, the demand for and consumption of our products, and also our revenues, margins, growth prospects, and capital allocation decisions have been and could again be negatively impacted.
We are subject to risks arising from the availability and prices of natural gas, electricity, and water.
Our operations depend on the reliable supply of natural gas, electricity, and water. We consume significant amounts of natural gas, electricity, and water to operate our refineries and plants, and the prices thereof can have a measurable effect on the total cost of our operations. Volatility in the prices for natural gas and electricity, in particular, is an ongoing risk to such costs. We also purchase other commodities whose prices may vary depending on the prices of natural gas, electricity, and water. The availability and prices of natural gas, electricity, and water have been, and could continue to be, affected by numerous events, such as (as applicable) government regulations or actions (including sanctions); rationing and curtailment; rate increases; weather (e.g., droughts, hurricanes, and periods of extreme heat or cold); logistics interruptions; electric grid outages; cybersecurity incidents; intermittent electricity generation (particularly from wind and solar); hostilities; terrorism; protests; human error; population and industry growth; infrastructure or supply mismanagement; and supply and demand imbalances.
For example, the real-time market structure of the largest grid operator in Texas exposes many of our refineries and operations located in Texas to “scarcity pricing” during periods of supply and demand imbalance. 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, or other pressure not to use, fossil fuel or nuclear-generated electricity), there will likely be increased strains 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 world. 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 (AI), computer processing, cryptocurrency mining, and cloud storage, as well as the data centers and power supplies required to support these activities) will also likely increase the intermittency and decrease the reliability of electricity supplies, particularly for grids highly dependent upon wind and solar power, which exacerbate the foregoing challenges, including by increasing costs. Government and private impediments and opposition to certain infrastructure projects (including pipelines) have also resulted in, and could continue to result in, the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to transport and obtain natural gas, electricity, and water in a reliable and cost-efficient manner. We actively manage these risks through contracting and, in the case of natural gas and electricity, hedging, as appropriate, and by pursuing projects that reduce our reliance on third parties and fortify the resilience of our assets and supplies. However, increases in the prices for natural gas and electricity, and disruptions to our supplies thereof, have had, and could again have, a material adverse effect on our business, financial condition, results of operations, and liquidity. Certain of our refineries in Texas have also recently experienced various water supply challenges that remain ongoing to various degrees and in certain instances have resulted in, or are expected to result in, additional capital expenditures and/or ongoing costs. We could experience additional water supply challenges in the future.
The availability and prices of our feedstocks and other critical supplies expose us to risks.
We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables, from suppliers throughout the world. We are, therefore, subject to the legal, political, geographic, and economic risks attendant to doing business with suppliers located in, and supplies originating from, different areas across the world. If one or more of our supply contracts were terminated, or if legal, government, political, or other developments (including global geopolitical and other conflicts and tensions) were to disrupt our traditional feedstock and other critical supplies, we believe that adequate alternative supplies would be available, but it is possible that we would be unable to obtain adequate or optimal alternative sources of supply, or would be able to do so only at unfavorable prices or costs. Our refineries and plants without access to waterborne deliveries or offtake must rely on rail, pipeline, or ground transportation and thus have been, and will likely continue to be, more susceptible to such risks. If we are unable to obtain adequate or optimal supplies, or are able to do so only at unfavorable prices or costs, our business, financial condition, results of operations, and liquidity could be materially and adversely affected, including from reduced product sales volumes, curtailed production, lower product margins, and higher operating costs. The U.S. and other governments can also prevent or restrict us from doing business involving other countries. U.S. and other government sanctions and actions by governments and private parties to refrain from purchasing or transporting crude oil and petroleum-based products from particular countries (such as Russia and Iran) have impacted, and may continue to impact, trade flows and our access to certain business opportunities. There is also ongoing uncertainty regarding the ultimate impacts of recent events involving Venezuela, including with respect to foreign trade and product margins, among others. Feedstock sourcing has also been the subject of scrutiny for certain crude oils we process, and shifting legislative, regulatory, and market sentiment regarding various sources of crude oil supply has previously resulted in adverse consequences with respect to our refineries, such as the denial or delay of permits to construct refinery projects that facilitate the processing of crude oil from particular sources. Similar events may occur in the future. Comparable scrutiny and shifting sentiment have occurred with respect to certain feedstocks for our low-carbon fuels business as described in the paragraph below and in the cross-reference therein.
The U.S. federal government under the current administration has also implemented and indicated the potential for new or revised tariffs, duties, sanctions, and other actions with respect to U.S. and foreign trade, manufacturing, and investment, and some foreign governments have in turn implemented or indicated the potential for similar responses impacting U.S. goods and/or foreign operations and business dealings of U.S. companies. While there continues to be a lack of certainty around the ongoing likelihood, timing, and details with respect to the continuation or future invalidation, expansion, revision, or implementation of such actions, as well as the impact of litigation and consequent court orders, such actions have in certain instances had, and could again have, an adverse effect on our ability to obtain optimal or adequate volumes of feedstocks and other critical supplies at favorable prices and costs. Our Refining and Ethanol segments have not been significantly impacted to date by recent U.S. tariffs and foreign duties. However, DGD’s foreign feedstock supplies have recently been impacted, and could continue to be impacted, by U.S. tariffs, as well as by many of the other developments discussed in “We are subject to risks arising from the Renewable and Low-Carbon Fuel Programs, and other regulations, policies, international certifications, and standards impacting low-carbon fuels.” The impacts thereof have been compounded by the fact that U.S.-produced renewable diesel and SAF have recently been subject to duties in several foreign jurisdictions, while similar duties have not been broadly applied to imports into the U.S. of foreign renewable diesel and SAF (as finished products), nor have foreign jurisdictions broadly levied tariffs similar to the U.S. on feedstocks that foreign renewable diesel and SAF producers may import and use to produce such products outside the U.S. These events have at times made DGD’s use of certain feedstocks (particularly foreign feedstocks) economically impractical, and resulted in reduced margins, curtailed production, and potentially reduced access to certain product markets due to competitive cost disadvantages, which have had, and could continue to have, an adverse impact on its and our business, financial condition, results of operations, and liquidity.
Our Ethanol segment relies on corn sourced from local farmers and commercial elevators in the Mid-Continent region of the U.S. and such supply is acutely exposed to the effects that weather and other environmental events in that region can have on the amount or timing of crop production. Crop production is also affected by government policies (such as farming subsidies and the Renewable and Low-Carbon Fuel Programs), and market events (such as changes in fertilizer prices and rail disruptions). Reductions or delays in crop production from these and other events could negatively impact the availability and price of corn for our Ethanol segment, and such events have occurred periodically.
We are subject to risks arising from our operations and business activities outside of the U.S.
We have operations and business activities, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in or otherwise affecting any of these markets, including due to actual or alleged violations of laws or regulations (such as anti-bribery, anti-corruption, anti-money laundering, and foreign corrupt practices violations); expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; differential treatment or goals of state-owned entities; property disputes; economic or political instability; currency exchange rates; restrictions on the transfer of funds; tariffs, duties, and sanctions; fees; taxes or penalties; transportation delays; import and export controls; price controls; labor unrest; security issues; government decisions (including designations with respect to terrorist organizations), orders, mandates, investigations, regulations, and issuances or revocations of permits and authorizations; global geopolitical and other conflicts and tensions; changing regulatory, judicial, and political environments (such as recent changes in Mexico’s federal judiciary, hydrocarbon laws and regulations, and procedures for challenging tax authority rulings); developments with respect to policies, standards, and incentives impacting low-carbon fuels; and other developments impacting foreign trade and related matters (including any de-globalized supply chains or the diversification of historic trade patterns). Such events could result in the halting, curtailing, or cessation of operations at impacted facilities; commercial restrictions; delay, denial, or cancellation of projects, permits, and authorizations; decreased access to important business foreign opportunities and more unreliable supply chains; and increased costs, liabilities, and burdens; among other adverse impacts, and could result in a material adverse effect on our business, financial condition, results of operations, and liquidity. Although we actively seek to manage these risks, we have experienced, and may again experience, certain of these events.
In addition to our own logistics assets, we use the services of third parties to transport feedstocks to our refineries and plants and to transport our products to market. If the ability of the logistics assets used to transport our feedstocks or products is disrupted, or there are increased prices or costs with respect thereto, whether because of labor issues; weather events; dock or port availability; water levels of key waterways for trade; pipeline, rail, trucking, or maritime disruptions; cybersecurity incidents; accidents; derailments; collisions; fires; explosions; natural catastrophes; spills; public health crises; terrorism; hostilities; rate increases; or other government or third-party actions (including protests and human error), it could have a material adverse effect on our business, financial condition, results of operations, and liquidity. 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.
Differences in competitors’ businesses or resources may at times provide them a competitive advantage.
The refining and marketing industry is highly competitive with respect to both feedstock supply and refined petroleum product markets. We compete with many companies for available supplies of crude oil and other feedstocks, as well as for third-party retail outlets for our petroleum-based products, and other customers. We do not produce any of our primary feedstocks (other than DCOs produced by our ethanol plants) and we do not have a company-owned retail network. Some of our competitors, however, obtain a significant portion of their feedstocks from company-owned crude oil production, have extensive networks of retail sites, have different revenue streams (such as from chemicals, midstream, or integrated operations), and operate in different regions. Such competitors are at times able to offset or avoid losses or decreased profitability from downstream operations, or in challenging regions, with such other operations, and may be better positioned to withstand periods of reduced product margins or feedstock disruptions. Some of our competitors also have materially greater financial and other resources than we have and may have a greater ability to respond to the inherent volatility of our industry.
Our refineries and plants are our principal operating assets and are subject to planned and unplanned downtime and interruptions. Our operations could also be subject to significant interruption if any of our refineries or plants were to experience a major accident or mechanical failure; be damaged by severe weather and natural disasters/acts of nature (such as hurricanes, winter storms, and earthquakes); or man-made disruptions (such as cybersecurity incidents, terrorism, protests, or human error); or otherwise be forced to shut down or curtail operations. Any such interruption could materially and adversely affect our earnings (to the extent not recoverable through insurance) because of lost productivity and repair and other costs. Significant operational interruptions could also lead to increased volatility in the price of our feedstocks and many of our products. We have experienced some of these events in the past, and although we focus on maintaining safe, stable, and reliable operations, we may experience additional events in the future.
Our pursuit of capital and other strategic projects and actions exposes us to various risks.
We engage in capital and other strategic projects based on many factors, including the forecasted project economics; legal, regulatory, and political environments; the expected return on the capital to be deployed; and the anticipated impact to our future cash flows. Such projects can take many years to complete, during which time such environments or other market conditions may change from our forecast, as has recently occurred with certain low-carbon projects in our Renewable Diesel segment. Supply chain or other market or economic disruptions (including inflation) may also delay projects or increase the costs associated therewith. As a result, such projects may not be completed on schedule or budget, or at all, and may not achieve their expected returns, which could negatively impact our business, financial condition, results of operations, and liquidity.
In addition, challenges to or opposition of certain fossil fuel and infrastructure projects (including pipelines), as well as certain low-carbon projects (such as carbon sequestration and carbon capture and storage), continue to make the approval and completion of such projects more difficult and costly. Certain of these events have resulted in, and could again result in, the cancellation or restructuring of projects, costs and charges related thereto, a decreased market outlook, and/or impacts under our capital allocation framework.
We also regularly assess our facilities and operations in light of market dynamics and the regulatory environment and have taken, and may in the future take, strategic actions to optimize our portfolio of assets, including those described in Note 2 of Notes to Consolidated Financial Statements with respect to our operations in California. While we expect overall positive results from these strategic actions, there is no assurance that the anticipated benefits will materialize or continue. Unforeseen delays, costs, negative publicity, litigation, enforcement, and other difficulties may arise, including in adapting our other operations and fulfilling our contractual obligations, that negatively impact the actual results and execution of such strategic actions compared to our expectations. Such events could result in changes in our financial and accounting estimates and assumptions and adversely affect our business, financial condition, results of operations, and liquidity.
Our investments in joint ventures and other entities limit our ability to manage risk.
We conduct some of our operations through joint ventures in which we share control over certain economic, legal, and business interests with other joint venture members. We also conduct some of our operations through entities in which we have a minority or no equity ownership interest, such as the variable interest entities (VIEs) described in Note 12 of Notes to Consolidated Financial Statements. The other joint venture members and the third-party equity holders of the VIEs have certain economic, business, or legal interests, opportunities, or goals that are inconsistent with or different from our own, have different liquidity needs or financial condition characteristics than our own, are subject to different legal or contractual obligations than we are, and may be unable to meet their obligations, each of which exposes us to risks. For example, while we operate the DGD Plants and perform certain day-to-day operating and management functions for DGD, we do not have full control of every aspect of DGD’s business and certain significant decisions concerning DGD require approval from the other joint venture member, including acquiring or disposing of assets above a certain dollar threshold, making certain changes to its business plan, raising debt or equity capital, altering its distribution policy, and certain other transactions. While we consolidate certain VIEs, we do not have full control of every aspect of these VIEs, their debt or financing decisions that are reflected in our consolidated financial statements, or the actions taken by their third-party equity holders, some of which have affected, and could continue to affect, our business, legal position, financial condition, results of operations, and liquidity. Failure by us, an entity in which we have a joint venture interest, or the VIEs to adequately manage the risks associated with such entities, and any differences in views among us and such third parties, could prevent or delay actions we prefer to take; expose us to legal, regulatory, and reputational risks; and have a material adverse effect on our business, financial condition, results of operations, and liquidity.
A reduction in the demand for our products could result from events and trends such as increases in fuel efficiency, decreases in travel or fuel consumption levels, and a transition by consumers to alternative fuel vehicles, such as electric vehicles (EVs) and hybrid vehicles, in each case, whether as a result of government mandatesmandates, incentives, or incentives,actions (including foreign dumping), industry developments, societal changes, or sentiment or perception with respect to our products, or fossil fuels and GHG emissions generally. New developments may alter consumer fuel or energy preferences or 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, autonomous driving capabilities, improvements in hydrogen fuel cell technology, and other technological changes. Any such developments could increase consumer acceptance and result in greater market penetration of alternative fuel vehicles or otherwise decrease the demand for our products. There may also be new entrants into the low-carbon fuels industry or developments by current competitors that could meet demandthe formarket’s lower-carbon transportation fuels and modes of transportationdemands in a more efficient or less costly manner than our technologies and products. OtherCompetition companieswithin havethe made,global orethanol announcedindustry interestalso incontinues making,to investmentsgrow. inThe renewabledemand diesel,for SAF,many and other low-carbon projects. As a result,of our low-carbon fuels businessesmay havesignificantly faced,decline without sufficient and willcontinued likelygovernment continuesupport and incentives therefor, and if our competitors are able to face,capture increasedthe competitionbenefits forfrom feedstockssuch government support and customers.incentives to a greater degree than we are it may place us at a competitive disadvantage. While we cannot currently predict the ultimate form, timing, or extent of these developments, any such event could materially and adversely affect our margins and sales volumes, and in turn our business, financial condition, results of operations, and liquidity.
We are subject to risks arising from sentiment towards climate-related matters, fossil fuels, GHG emissions, and other sustainability-related 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-related and other sustainability-related initiatives through activities including public pressure, investment, engagement, and voting practices. These activities have included promoting the divestment of securities of fossil fuel companies, pressuring such companies to commit to future output reductions, to align with net-zero commitments, or to implement costly practices or technology to reduce GHG emissions, and pressuring lenders, insurers, investors, and other market participants to otherwise limit or curtail activities with or involving fossil fuel companies. As a result, we believe some parties have reduced or ceased lending to, investing in, or insuring fossil fuel companies. If these or similar efforts are continued or increased, it could negatively impact our operating costs and capital allocation decisions, as well as our ability to access capital markets, obtain new investment or financing, or to adequately insure our business and operations.
These activities have also contributed to increasing societal, investor, and legislative focus and pressure on additional actions and disclosures related to, among others, climate-related matters, GHG emissions and reduction targets, business resilience under the assumptions of demand-constrained scenarios, net-zero ambitions, alignment with third-party frameworks, human capital management, political activities, environmental justice, and racial equity audits. This has included more frequent attempts to effect business or governance changes through mechanisms such as stockholder proposals, vote-no campaigns, exempt proxy solicitations, and other public pressure. As a result, we have faced, and expect to continue to face, increasing pressure regarding our efforts and disclosures with respect to GHG emissions reductions/displacements (including our methodologies and timelines with respect thereto) and other sustainability-related matters, including negative publicity, prescriptive stockholder requests, and demands for engagement thereon. Sentiment towards many environmental, social, and governance (ESG)-related practices has also become increasingly politically charged, and scrutiny and skepticism thereof and “anti-ESG” sentiment has caused, and could continue to cause, additional demands on companies.
Responding to such focus and pressure has been, and will likely continue to be, costly and time-consuming. The methodologies, standards, and requirements for tracking and reporting GHG emissions and other sustainability-related matters have not been standardized or harmonized, and many continue to evolve. Our interpretations of various voluntary or required reporting standards may also differ from those of others. As a result, our metrics, targets, and other disclosures with respect to such matters may not necessarily be calculated or presented in the same manner or be comparable to similarly titled measures presented by us in other contexts, or to disclosures by others. We believe that our disclosures and methodologies related to such matters reflect our business strategy and are reasonable at the time made or used. However, as our business, strategy, low-carbon projects, market and financial conditions, and/or applicable methodologies, standards, or requirements continue to develop and evolve, we may significantly revise or cease reporting or using certain such disclosures and methodologies if we determine that they are no longer advisable or appropriate, or we are otherwise required to do so. Any actual or perceived failure by us to achieve our publicly disclosed targets or long-term ambition with respect to GHG emissions reductions/displacements within the timelines we have announced, or at all, or a revision thereof or to our other sustainability-related disclosures, could cause reputational harm, and expose us to litigation or regulatory enforcement, among other negative impacts.
We are subject to risks arising from the costclimate- and availabilityother ofsustainability-related natural gasadvocacy and electricity.pressure.
In recent years, a number of climate- and other sustainability-related advocacy groups, both in the U.S. and internationally, have campaigned for government and private action to promote various climate- and other sustainability-related disclosure frameworks, actions, and initiatives. As a result, we have faced, and may continue to face, pressure regarding our efforts and disclosures related to such matters (e.g., GHG emissions reductions/displacements and our methodologies and timelines with respect thereto), including through requests by potential counterparties for certain written declarations or representations, negative publicity, special-interest driven stockholder requests and voting, prescriptive proxy advisory firm and scoring agency expectations and policies, and demands for engagement.
The methodologies, standards, and requirements for tracking and reporting many climate- and other sustainability-related matters, such as GHG emissions, have not been standardized or harmonized, and many continue to evolve. Our interpretations of various reporting standards may also differ from those of others. As a result, our metrics, targets, and other disclosures with respect to such matters may not necessarily be calculated or presented in the same manner or be comparable to similarly titled measures presented by us in other contexts, or to disclosures by others. We believe that our disclosures and methodologies related to such matters reflect our business strategy and are reasonable at the time made or used. However, as our business, strategy, low-carbon projects, market and financial conditions, and/or applicable methodologies, standards, or requirements continue to develop and evolve, we may revise or cease reporting or using any or all such disclosures and methodologies if we determine that they are no longer appropriate, or we are otherwise required to do so. We may also be pressured or compelled to disclose information that may not be feasible or obtainable. Any actual or perceived failure by us with respect to our disclosures and actions on such matters, including a revision thereto, could cause reputational and commercial harm, and expose us to litigation or enforcement, among other negative impacts.
Our operations depend on the reliable supply of natural gas and electricity. We consume significant amounts of natural gas and electricity to operate our refineries and plants, and natural gas and electricity prices have a measurable effect on the total cost of our operations. We also purchase other commodities whose prices may vary depending on the prices of natural gas or electricity. The volatility of prices for both natural gas and electricity represent an ongoing challenge to our operating results. Additionally, the availability and cost of natural gas and electricity have been, and could continue to be, affected by numerous events, such as government regulations, rate increases, weather (e.g., hurricanes and periods of extreme heat or cold), logistics interruptions, electric grid outages, cybersecurity incidents, intermittent electricity generation (particularly from wind and solar), hostilities, terrorism, protests, sanctions, human error, and supply and demand imbalances for natural gas and electricity. For example, the real-time market structure of the largest grid operator in Texas exposes many of our refineries and operations located in Texas to “scarcity pricing” during periods of supply and demand imbalance. 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, or other pressure not to use, fossil fuel or nuclear-generated electricity), there will likely be increased strains 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 world. 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 (AI), computer processing, cryptocurrency mining, and cloud storage, and the data centers and power supplies required to support these activities) will also likely increase the intermittency and decrease the reliability of electricity supplies, particularly for grids highly dependent upon wind and solar power, which would exacerbate the foregoing challenges, including increasing costs. Increased government regulations and opposition to pipeline construction and electricity generation and transmission projects have also resulted in, and could continue to result in, the underinvestment in, or unavailability of, the infrastructure and logistics assets needed to obtain natural gas and electricity in a reliable and cost-efficient manner. While we actively manage these 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 supplies thereof, have had, and could again have, a material adverse effect on our business, financial condition, results of operations, and liquidity.
We are subject to risks related to the costs and availability of our feedstocks and other critical supplies.
We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables from suppliers throughout the world. We are, therefore, subject to the political, geographic, and economic risks attendant to doing business with suppliers located in, and supplies originating from, different areas across the world, including global geopolitical and other conflicts and tensions (such as the Russia-Ukraine conflict and turmoil in the Middle East and other producing regions) that have impacted, and may continue to impact, trade flows and transportation costs. If one or more of our supply contracts were terminated, or if political or other events were to disrupt our traditional feedstock and other critical supplies, we believe that adequate alternative supplies would be available, but it is possible that we would be unable to find adequate or optimal alternative sources of supply. Our refineries and plants without access to waterborne deliveries or offtake must rely on rail, pipeline, or ground transportation and thus have been, and will likely continue to be, more susceptible to such risks. If we are unable to obtain adequate or optimal volumes, or are able to obtain such volumes only at increased prices or costs, our business, financial condition, results of operations, and liquidity could be materially and adversely affected, including from reduced product sales volumes or higher operating costs. The U.S. government can also prevent or restrict us from doing business in or with other countries. For example, U.S. sanctions targeting Russia, Iran, and Venezuela limit or ban the ability of most U.S. companies to engage in 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 have impacted, and may continue to impact, trade flows, and our access to business opportunities in various countries. The U.S. federal government under the current presidential administration has also implemented and indicated the potential for new or revised tariffs, duties, sanctions, and other actions with respect to U.S. and foreign trade, manufacturing, and investment, and some foreign governments have in turn implemented or indicated the potential for similar responses impacting U.S. goods and/or foreign operations and businesses dealings of U.S. companies. While there is currently a lack of certainty around the likelihood, timing, and details of many such actions, similar events have in the past had, and could again have, an adverse effect on our ability to obtain optimal or adequate volumes of feedstocks and other critical supplies at favorable prices and costs.
Although the other joint venture member in DGD supplies some of DGD’s waste feedstock at competitive pricing, DGD must still secure a significant amount of its waste and renewable feedstock requirements from other sources. If DGD’s traditional feedstock supplies are disrupted, or become limited or only available on unfavorable terms, or if U.S. policies (such as recent IRS guidance regarding the 45Z tax credit under the IRA) disfavor foreign feedstock supplies making their use economically impracticable, DGD could be required to develop alternate sources of supply and increase its use of certain feedstocks that result in lower-margin products or curtail production. As the production of renewable diesel and other low-carbon fuels has increased, as well as the competition for feedstocks, DGD has increasingly been required to source a greater amount of its feedstocks from international sources, which intensifies its exposure to political, geographic, regulatory, tax, and economic risks associated with international sourcing of supplies. Any such disruption to DGD’s feedstock supply could adversely impact its and our business, financial condition, results of operations, and liquidity.
Our Ethanol segment relies on corn sourced from local farmers and commercial elevators in the Mid-Continent region of the U.S., and such supply is acutely exposed to the effects that weather and other environmental events in that region can have on the amount or timing of crop production. Crop production is also affected by government policies (such as farming subsidies and low-carbon fuels incentives) and by market events (such as changes in fertilizer prices and rail disruptions). Reductions or delays in crop production from these or other events could reduce and disrupt the supply of, or otherwise increase our costs to obtain, corn for our Ethanol segment, and such events have occurred periodically.
We are subject to risks arising from our refining and marketing operations outside of the U.S.
We have operations, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in any of these markets, including due to actual or alleged violations of law; expropriation or impoundment of assets; failure of foreign governments and state-owned entities to honor their contracts; differential treatment of state-owned entities; property disputes; economic instability; currency exchange rates, including the value of the Canadian dollar, the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to the U.S. dollar; restrictions on the transfer of funds; duties and tariffs; fees; taxes or penalties; transportation delays; import and export controls; labor unrest; security issues; government decisions, orders, mandates, investigations, regulations, and issuances or revocations of permits and authorizations; the effects of military conflicts; and changing regulatory, judicial, and political environments, including changes impacting foreign trade and related matters. The occurrence of any such event could result in the halting, curtailing, or cessation of operations at impacted facilities; commercial restrictions; delay, denial, or cancellation of projects, permits, and authorizations; and increased costs, fines, penalties, and burdens; any of which could result in a material adverse effect on our business, financial condition, results of operations, and liquidity. 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. As noted above, various governments across the world have implemented or indicated the potential for new or revised tariffs, duties, sanctions and other actions with respect to U.S. and foreign trade, manufacturing, and investment. While there is currently a lack of certainty around the likelihood, timing, and details of many such actions, similar events have in the past had, and could again have, an adverse effect on our foreign operations and investments, and the competitiveness of our products globally.
In addition to our own logistics assets, we use the services of third parties to transport feedstocks to our refineries and plants and to transport our products to market. If the ability of the logistics assets used to transport our feedstocks or products is disrupted, or there are increased prices or costs with respect thereto, whether because of labor issues, weather events, dock availability, water levels of key waterways for trade, pipeline, rail, trucking, or maritime disruptions, cybersecurity incidents, accidents, derailments, collisions, fires, explosions, natural catastrophes, spills, public health crises, terrorism, hostilities, rate increases, or other government or third-party actions (including protests and human error), it could have a material adverse effect on our business, financial condition, results of operations, and liquidity. 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.
Competitors that produce their own supply of feedstocks, own their own retail sites, operate in different regions, or have greater financial resources may have a competitive advantage.
The refining and marketing industry is highly competitive with respect to both feedstock supply and refined petroleum product markets. We compete with many companies for available supplies of crude oil and other feedstocks, and for third-party retail outlets for our petroleum-based products. We do not produce any of our primary feedstocks (except inedible DCOs) and we do not have a company-owned retail network. Some of our competitors, however, obtain a significant portion of their feedstocks from company-owned production, have extensive networks of retail sites, have different revenue streams (such as from chemicals or integrated operations), and operate in different regions. Such competitors are at times able to offset or avoid losses or decreased profitability from downstream operations generally, or in challenging regions, with such other operations, and may be better positioned to withstand periods of depressed product margins or feedstock disruptions. Some of our competitors also have materially greater financial and other resources than we have and may have a greater ability to bear the economic risks inherent to our industry.
Our refineries, DGD Plants, and ethanol plants are our principal operating assets and are subject to planned and unplanned downtime and interruptions. Our operations could also be subject to significant interruption if any of our refineries or plants were to experience a major accident or mechanical failure, be damaged by severe weather or natural disasters (such as hurricanes), or man-made disruptions (such as cybersecurity incidents, terrorism, protests, or human error), or otherwise be forced to shut down or curtail operations. Any such interruption could materially and adversely affect our earnings (to the extent not recoverable through insurance) because of lost productivity and repair and other costs. Significant operational interruptions could also lead to increased volatility in the price of our feedstocks and many of our products. We have experienced some of these events in the past, and although we focus on maintaining safe, stable, and reliable operations, we may experience additional events in the future.
Large capital and other strategic projects can take many years to complete, and the legal regulatory, and political environments or other market conditions may change or deteriorate over time.
We engage in capital and other strategic projects based on many factors, including the forecasted project economics, legal, regulatory, and political environments, and the expected return on the capital to be deployed. Such projects can take many years to complete, during which time such environments or other market conditions may change from our forecast, particularly with respect to low-carbon projects such as those related to SAF and carbon capture and sequestration. Supply chain disruptions may also delay projects or increase the costs associated therewith. As a result, such projects may not be completed on schedule or budget, or at all, and may not achieve their expected returns, which could negatively impact our business, financial condition, results of operations, and liquidity.
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 various government and third-party 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, environmental, and other opposition to many such projects. Such opposition may affect grants of the relevant permits or authorizations by government or judicial officials, or grants of easements or rights-of-way by land owners, and has previously resulted in, and could again result in, permits and other authorizations being challenged, delayed, denied, revoked, appealed, or granted subject to onerous conditions. In certain instances, this has resulted in, and could again result in, the cancellation or restructuring of projects and costs and charges related thereto.
Our investments in joint ventures and other entities decrease our ability to manage risk.
We conduct some of our operations through joint ventures in which we share control over certain economic, legal, and business interests with other joint venture members. We also conduct some of our operations through entities in which we have a minority or no equity ownership interest, such as the variable interest entities (VIEs) described in Note 12 of Notes to Consolidated Financial Statements. The other joint venture members and the third-party equity holders of the VIEs have certain economic, business, or legal interests, opportunities, or goals that are inconsistent with or different from our own, have different liquidity needs or financial condition characteristics than our own, are subject to different legal or contractual obligations than we are, and may be unable to meet their obligations, each of which exposes us to risks. For example, while we operate the DGD Plants and perform certain day-to-day operating and management functions for DGD, we do not have full control of every aspect of DGD’s business and certain significant decisions concerning DGD require approval from the other joint venture member, including acquiring or disposing of assets above a certain dollar threshold, making certain changes to its business plan, raising debt or equity capital, altering its distribution policy, and certain other transactions. While we consolidate certain VIEs, we do not have full control of every aspect of these VIEs, their debt or financing decisions that are reflected in our consolidated financial statements, or the actions taken by their third-party equity holders, some of which have affected, and could continue to affect, our business, legal position, financial condition, results of operations, and liquidity. Failure by us, an entity in which we have a joint venture interest, or the VIEs to adequately manage the risks associated with such entities, and any differences in views among us and such third parties, could prevent or delay actions we prefer to take, expose us to legal, regulatory, and reputational risks, and have a material adverse effect on our business, financial condition, results of operations, and liquidity.
We are subject to risks arising from legal, regulatory, and political developments regarding climate-related matters, GHG emissions,climate- and theenvironmental-related environment,matters, or that are adverse to or restrict refining and marketing operations.
Certain government authorities across the world have, in recent years, imposed, announced, or considered various laws, regulations, policies, and actions designed to facilitate less petroleum-dependent modes of transportation, which could reduce demand for our petroleum-based products and/or all liquid transportation fuels. Such laws, regulations, policies, and actions have in certain instances included increases in fuel economy or efficiency standards; stricter tailpipe emissions standards; low-carbon fuel standards; restrictions and bans on vehicles using internal combustion engines; limitations on using certain petroleum-based products and biofuel feedstocks; and tariffs, duties, and incentives. Under the current administration in the U.S., a number of legal, regulatory, and political actions have been taken or proposed that have resulted in, or may result in, many of these laws, regulations, policies, and actions being modified, rescinded, invalidated, revoked, or eliminated, and others have been delayed or relaxed across the world. However, the ultimate timing and outcome of many such actions are currently unknown and are subject to uncertainty due to pending or future legal, regulatory, and political actions.
Many government authorities across the world have imposed, and may impose in the future, laws, regulations, and policies designed to facilitate less petroleum-dependent modes of transportation (e.g., increases in fuel economy or efficiency standards, low-carbon fuel standards, restrictions and bans on vehicles using internal combustion engines, tariffs, duties, tax incentives, and EV subsidies), which could reduce demand for our petroleum-based products and/or all liquid transportation fuels. For example, CARB’s current Scoping Plan identifies strategies to reduce liquid petroleum consumption in California by 94 percent by 2045, and CARB has approved a series of related rulemakings discussed below. The European Union (EU), the U.K., Canada, and Quebec have each adopted what they refer to as “zero-emissions vehicle” mandates and other government authorities across the world, such as Mexico, Quebec, and other U.S. states have also announced, adopted, or are considering, restrictions on the sale of new internal combustion engine vehicles, stricter tailpipe emissions standards, and/or limitations on or penalties on the use of certain petroleum-based products and biofuel feedstocks.
The U.S. federal government under the previous presidential administration was also aggressive in the scope, magnitude, and number of actions it took for the stated purpose of addressing GHG emissions and other environmental matters, including efforts to limit or eliminate petroleum-dependent modes of transportation. For example, the previous administration utilized a “whole of government” approach to climate-related initiatives that sought to organize and deploy the full capacity of the U.S. federal government in novel and coordinated ways to limit or eliminate the use of most petroleum-based products. The previous administration also issued a number of related executive orders seeking to limit or eliminate petroleum-based fuels by imposing mandates of so-called 100 percent zero-emission vehicle acquisitions and setting ambitious decarbonization goals. These actions contributed to a number of U.S. federal rulemakings and other actions, as well as similar actions by U.S. state and local governments, that disfavor petroleum-dependent modes of transportation and in many cases ignore or downplay the full life cycle carbon footprint of EVs, and thereby seek to inappropriately advantage EVs over internal combustion engine vehicles. For example, the EPA issued its “Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emission Standards,” revising the GHG emissions standards for light-duty vehicles for 2023 and later model years at a level that cannot be achieved by internal combustion engine vehicles through improvements in combustion efficiency. The National Highway Traffic Safety Administration (NHTSA) also similarly issued its “CAFE Standards for MY 2024-26 Passenger Cars and Light Trucks,” increasing the corporate average fuel economy and carbon dioxide standards for certain passenger cars and light-duty trucks such that automakers cannot demonstrate compliance without increasing the sales of EVs. Together, these federal regulations seek to significantly increase the market penetration of EVs and other alternative fuel vehicles and reduce U.S. gasoline consumption. The IRA also includes substantial subsidies to promote EVs and other alternative fuel vehicles. 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. Moreover, in March 2024, the EPA announced new, more ambitious emissions standards for light-, medium-, and heavy-duty vehicles for model years 2027 to 2032 that the agency expects will drive a significant increase in the percentage of new vehicles sold in the U.S. to be EVs or other alternative fuel vehicles. In May 2024, the EPA published final rules intended to sharply reduce emissions of methane and other air pollution from oil and gas operations, and 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 regulations on GHG emissions. In June 2024, NHTSA also issued final rules increasing both the fuel economy standard for passenger cars and light trucks for model years 2027 to 2031 and the fuel efficiency standards for heavy-duty pickup trucks and vans for model years 2030 to 2035.
The current U.S. presidential administration has expressed a different approach with respect to U.S. climate, environmental, and energy policies and has revoked many of the previous administration’s executive orders and directives, and has indicated an intention to modify or eliminate many of the aforementioned laws and regulations, several of which are also currently being litigated, or may be subject to future legal challenges. However, the ultimate timing and outcome with respect to any modifications or eliminations of such laws and regulations, which would likely require action by the U.S. Congress or a federal agency or department, as well as pending or future litigation, are currently unknown and are subject to considerable uncertainty. It is also currently uncertain whether and to what extent any U.S. state and local governments will still pursue the prior administration’s agenda on such matters.
In addition to these U.S. federal measures, in March 2022, the EPA reinstated a waiver of preemption under federal law authorizing California to implement its “Advanced Clean Cars I” rule requiring sales of increasing percentages of alternative fuel vehicles, thereby also reviving other U.S. states’ ability to adopt standards identical to California’s. In November 2022, California approved its “Advanced Clean Cars II” rulemaking, which similarly requires an increasing percentage of “zero-emission” light-duty vehicle sales through 2035, at which time 100 percent of new light-duty vehicle sales in California must be zero-emission vehicles. The EPA recently granted CARB’s request for a waiver of preemption for Advanced Clean Cars II and other preemption waiver requests. Several other U.S. states have already adopted, or are expected to adopt, similar laws, regulations, or mandates. California is also pursuing similar zero-emission vehicle mandates for medium- and heavy-duty vehicles via its “Advanced Clean Trucks” rulemaking and its “Advanced Clean Fleets” rulemaking. 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 mandates survive legal challenge. While many of these measures are currently being litigated, or may in the future be subject to legal challenges, we face a risk that automakers will nevertheless move forward with changing their manufacturing and marketing practices.
Moreover, there have been various international climate accords and multilateral agreements aimed at reducing GHG emissions. While the current U.S. presidential administration has ordered the U.S. withdrawal from the 2015 Paris Agreement, and many international accords and multilateral agreements are not legally binding, they have in certain instances resulted in, and are expected to continue to result in, additional government and regulatory actions across the world that are adverse to our industry. Incentives to conserve energy or use renewable energy could also negatively impact our industry.
Government authorities across the world have also announced, imposed, or are considering, taxes or penalties on fossil fuel companies for profits or windfalls, or margins above a certain level, carbon border adjustments, fees, and other regulations that are adverse to or restrict refining and marketing operations, could increase costs, and limit profitability. For example, California’s Senate Bill No. 2 (such statute, together with any regulations contemplated or issued thereunder, SBx 1-2) and Assembly Bill No. 1 (ABx 2-1), as described in Note 2 of Notes to Consolidated Financial Statements, present considerable uncertainty and risks for us.
Certain U.S. state and local governments, foreign governments, and private parties across the world continue to pursue various efforts designed to either directly or indirectly facilitate less petroleum-dependent modes of transportation, or that are otherwise adverse to our industry, including actions and incentives to conserve energy or use renewable energy, as well as those efforts discussed in “We are subject to risks arising from litigation, government action, and mandatory disclosure rules related to climate- and other sustainability-related matters, or aimed at the fossil fuel industry.” Government authorities across the world have announced, imposed, or are considering (as applicable) taxes or penalties on fossil fuel companies for profits, windfalls, margins, or prices above a certain level, carbon border adjustments, fees, and other regulations that are adverse to or restrict refining and marketing operations, could increase costs, and limit profitability. For example, California’s Senate Bill No. 2 (such statute, together with any regulations contemplated or issued thereunder, SBx 1-2) and Assembly Bill No. 1 continue to present considerable uncertainty and risks for us. Mexico has also implemented an informal, nationwide retail price cap on regular gasoline that could be expanded to other fuels, or could become legally binding. These legal, regulatory, and political developments, as well as other similarly focused laws and regulations, such as, among others,as the California, Quebec and other cap-and-trade programs,programs; the U.K. Emissions Trading Scheme,Scheme; the Renewable and Low-Carbon Fuel Programs,Programs; the South Coast Air Quality Management District’s Rule 1109.1 – Emissions of Oxides of Nitrogen from Petroleum Refineries and Related Operations,Operations; CARB’s Control Measure for Ocean-Going Vessels At Berth Rule and its Airborne Toxic Control Measure for Commercial Harbor Craft,Craft; reductions in the National Ambient Air Quality Standards,Standards; bans or restrictions on certain chemicals, feedstocks, products, or processes (such as hydrofluoric acid alkylation),; and other laws relatedand toregulations climate,concerning climate- and environmental-related matters (including GHG emissions,emissions), oras environmental,well health,as orhealth- and safety-related matters (such as industrial safety matters,ordinances), have in certain instances resulted in, and are expected to continue to result in, increased costs and capital expenditures that impact our ability to effectively and profitably operate and maintain our facilities. These include things such as (i) restrictions on certain refinery operations, (ii) and requirements to modify our operations or install new emissions controls or other equipment, and (iii) costs to administer our obligations under the Renewable and Low-Carbon Fuel Programs. Such risks areremain particularly acute in California due to the pace and scope of anti-fossil fuel developments there.California.
Many of these matters and developments (including SBx 1-2 and ABx 2-1) are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, pending or future legal challenges, and potential or future changes in law, regulation, or policy, as noted above, and it is not currently possible to predict the ultimate effects thereof on us. However, such events could adversely restrict or affect our refining and marketing operations and limit our profitability; cause us to make changes with respect to our business plan,business, strategy, operations, and assets, includingas well as our current financial and accounting estimates and assumptions; cause a reduction in demand for our products; and result in negative publicity, litigation, and regulatory enforcement;enforcement, each of which could materially and adversely affect our business, financial condition, results of operations, and liquidity. See also Note 2 of Notes to Consolidated Financial Statements.
As described under “ITEMS 1. and 2. BUSINESS AND PROPERTIES—OUR COMPREHENSIVE LIQUID FUELS STRATEGY—Regulations, Policies, and Standards Driving Low-Carbon Fuel Demand,” government authorities across the world have issued, are considering issuing, and/or are altering existing low-carbon fuel regulations, policies, and standards to address GHG emissions and the percentage of low-carbon fuels in the transportation fuel mix. Wewe strategically market our low-carbon fuels based on regional policies, regulations, standards, feedstock preferences, CI scores, and our ability to obtain fuel pathways, credits, certifications, and incentives. A significant portion of our low-carbon fuels are sold in California, Canada, the U.K., and the U.K.European RegardingUnion the RFS, in June 2023, the EPA announced final rules that increase RVOs for 2023, 2024, and 2025, and in December 2024, the EPA proposed partially waiving the compliance year 2024 RVO for cellulosic biofuel, extending the reporting deadline for 2024, and revising certain biogas provisions. Regarding the LCFS, in November 2024, CARB approved updates thereto that set targets to reduce the CI of California’s transportation fuel pool by 30 percent by 2030 and by 90 percent by 2045, increase support for so called “zero-emissions” infrastructure, and make more transit agencies eligible to generate credits, although such amendments were recently paused.(EU).
Regarding the RFS, in June 2025, the EPA announced proposed rules (RFS Set II) that would, among other things, impose increased RVOs for 2026 and 2027, particularly with respect to biomass-based diesel, while also proposing to (i) reduce by 50 percent the number of RINs that may be generated for U.S. domestically produced renewable fuels made from foreign feedstocks, as well as for imports into the U.S. of finished renewable fuel; (ii) reduce the equivalency values for biomass-based diesel and renewable diesel produced through hydrogenation, which is used by DGD for renewable diesel and SAF production, resulting in fewer RINs generated for each gallon produced; and (iii) partially waive cellulosic biofuel volumes for 2025. In 2025, the EPA also issued decisions on hundreds of small refinery exemption (SRE) petitions that were pending, and granted full or partial exemptions on a majority of such petitions spanning RFS compliance years 2016-2024, which remain subject to ongoing litigation. As part of this action, the EPA also outlined a process for refineries granted SREs that had already retired RINs for compliance to have their RINs un-retired and returned. While RINs for compliance years prior to 2023 have expired and are expected to have little to no value, RINs for compliance years 2023 and thereafter can be used by small refineries granted SREs to update previous compliance filings, which is expected to allow up to approximately 20 percent per compliance year of a particular refinery’s RINs to be carried forward into subsequent years. In September 2025, the EPA also issued a supplemental notice of proposed rulemaking for the proposed 2026 and 2027 RFS Set II rules that co-proposes to reallocate to RFS obligated parties (such as us) either 100 percent or 50 percent of the SRE exempted volumes that were granted for 2023 and 2024, as well as those projected to be granted for 2025 as part of the ongoing RFS Set II rulemaking (which would increase our 2026-2027 RVO obligations even further). While the final RFS Set II rules have not been finalized, the EPA’s proposals present considerable risks that the final RFS Set II rules could require RVOs for 2026-2027 that are infeasible, significantly impact RIN prices and availability, and adversely impact both our Refining and Renewable Diesel segments. The EPA has indicated it intends to finalize these rules in the first quarter of 2026, but this may be further delayed and subject to litigation, which could also delay the 2025 RFS compliance deadlines and result in additional risks and uncertainty.
Management's Discussion & Analysis (MD&A)
New heading “Cash Flows for the Year Ended December 31, 2025”
New heading “Asset Retirement Obligations”
New heading “Fair Value Measurements”
Removed heading “Cash Flows for the Year Ended December 31, 2023”
Largest changes
“Our results, particularly for our Renewable Diesel segment, were also negatively impacted by trade and other policy changes during 2025. For instance, the U.S. federal government implemented new or revised tariffs, duties, and other actions with respect to U.S. and foreign trade, manufacturing, and investment that impacted our business operations during 2025. Although energy commodities, including crude oil and refined petroleum products, are generally exempt from the recently effective U.S. …”see in full comparison
“•Expected reductions in refining capacity in the U.S. and Europe, unplanned outages at Russian refineries due to the Russia-Ukraine conflict, and a prolonged ramp-up of new capacity in emerging markets continue to support utilization of remaining global refining capacity.”see in full comparison
“(d)In March 2025, we approved a plan with respect to the operations at our Benicia Refinery and currently intend to idle the processing units and cease refining operations by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, we evaluated the assets of the Benicia and Wilmington refineries for impairment as of March 31, 2025 and concluded that the carrying values of these assets were not recoverable. …”see in full comparison
•Crude oil differentials are expected tosee in full comparisonremainwidenrelativelyasstable.a result of an increase in sour crude oil production from OPEC+ suppliers and recent developments involving the Venezuelan government and associated sanctions. However, potential sanction adjustments related toIran,Iran and Russia,andongoing uncertainty in Venezuela, and the continued Russia-Ukraineconflict, and potential U.S. tariffs on crude imports from Canada and Mexicoconflict could result in increased volatility in the crude oil market and potentially impact crude oil differentials.
“Details of the asset impairment loss and associated expected asset retirement obligations recognized during the year ended December 31, 2025 related to our Benicia and Wilmington refineries are included in Notes 2 and 8 of Notes to Consolidated Financial Statements.”see in full comparison
“On July 4, 2025, the OBBB was enacted, which resulted in a broad range of changes to the Code, as more fully described in Note 15 of Notes to Consolidated Financial Statements. These changes and other provisions of this legislation did not have a material effect on our financial condition, results of operations, and liquidity in 2025. However, certain provisions of this legislation become effective over time and may require further clarification through regulations and other guidance issued by the U.S. Department of the Treasury and the IRS. …”see in full comparison
Full comparison: every changed paragraph (115)
This report, including without limitation our disclosures below under “OVERVIEW AND OUTLOOK,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “believe,” “expect,” “plan,” “intend,” “scheduled,” “estimate,” “project,” “projection,” “predict,” “budget,” “forecast,” “goal,” “guidance,” “target,” “ambition,” “could,” “would,” “should,” “may,” “strive,” “seek,” “pursue,” “potential,” “opportunity,” “aimed,” “considering,” “continue,” “evaluate,” and similar expressions.
•expectations regarding feedstock costs, including crude oil differentials, product prices for each of our segments, transportation costs, and operating expenses (including natural gas, electricity, and water availability and prices);
•our plans, actions, assets, and operations in California and expected timing and cost of obligations and other financial statement impacts;
•expectations regarding environmental, tax, and other regulatory matters, including the matters discussed in NoteNotes 2 and 15 of Notes to Consolidated Financial Statements and under “ITEM 3. LEGAL PROCEEDINGS,” the anticipated amounts and timing of payment with respect to our deferred tax liabilities, unrecognized tax benefits, matters impacting our ability to repatriate cash held by our foreign subsidiaries, and the anticipated or potential effects thereof on our business, financial condition, results of operations, and liquidity;
•the effect of general economic and other conditions, including inflation and economic activity levels, on refining, renewable diesel, SAF, and ethanol industry fundamentalsfundamentals, as well as our capital allocation;
•expectations regarding our low-carbon fuels strategy, publicly announceddisclosed GHG emissions reductionreductions/displacementdisplacements targets and long-term ambition,target, and our current, former, and any future low-carbon projects.
•demand for, and supplies of, crude oil and other feedstocks, as well as other critical materials and supplies;
•the levels of government subsidies for, and executive orders, mandates, or other policies with respect to, alternative fuels, alternative-fuel vehicles, and other low-carbon technologies or initiatives, including those related to carbon capture,sequestration, carbon sequestration,capture and storage, and low-carbon fuels, or affecting the price of natural gasgas, electricity, and/or electricitywater;
•natural disasters/acts of nature and severe weather events, such as earthquakes, storms, hurricanes, droughts, floods, wildfires, and other weathersimilar 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, SAF, ethanol, and corn-related co-products;
•legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by government authorities, environmental regulations, changes to income tax rates, introductionprofits, of a global minimum tax, profits,procedures, windfall, margin, or other taxes or penalties, tax changes or restrictions impacting the foreign repatriation of cash, actions implemented under SBx 1-2 and related regulation, actions implemented under the Renewable and Low-Carbon Fuel Programs, including changes to volume requirements or other obligations or exemptions under the RFS, and actions arising from the EPA’s or other government agencies’ regulations, policies, or initiatives concerning GHGs, including mandates for or bans of specific technology, which may adversely affect our business, financial condition, results of operations, and liquidity;
•changing economic, regulatory, and political environments and related events in the various countries in which we operate or otherwise do business, including tariffs, duties, and other trade restrictions, de-globalized supply chains or the diversification of historic trade patterns, expropriation or impoundment of assets, failure of foreign governments and state-owned entities to honor their contracts, property disputes, economic instability, restrictions on the transfer of funds, duties and tariffs,tariffs and their effects on trading relationships, transportation delays, import and export controls, labor unrest, security issues involving key personnel, and decisions, investigations, regulations, issuances or revocations of permits and other authorizations, government shutdowns, and other actions, policies, and initiatives by federal, state, local, and other jurisdictions applicable to us;
•the operating, financing, and distribution decisions of our joint ventures orventures, other joint venture members, and other consolidated VIEs,VIEs that we do not control;
The following discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP financial measures include Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); Refining,Refining Renewablesegment Diesel,adjusted operating expenses (excluding depreciation and Ethanolamortization segment marginexpense); and capital investments attributable to Valero. We have included these non-GAAP financial measures to help facilitate the comparison of operating results between years, to help assess our cash flows, and because we believe they provide useful information as discussed further below. SeeRefer to the tables in note (bf), beginning on page 5253, for the reconciliations of Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); and Refining,adjusted RenewableRefining Diesel,operating expenses (excluding depreciation and Ethanolamortization segment marginexpense) to their most directly comparable GAAP financial measures. Also in note (bf), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 5961 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure.measure, Alsoand also on page 59,61, 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, 20242025 were supported by stablestrong worldwide demand for petroleum-based transportation fuels.fuels, Inwhile addition,worldwide oursupply focusof onthose reliable,products low-costremained operationsconstrained. favorably impactedHowever, our results despitewere aalso weakerimpacted marginby environmentthe asset impairment loss of $1.1 billion ($877 million after taxes) associated with our operations in 2024.California, as described in Note 2 of Notes to Consolidated Financial Statements.
Our results, particularly for our Renewable Diesel segment, were also negatively impacted by trade and other policy changes during 2025. For instance, the U.S. federal government implemented new or revised tariffs, duties, and other actions with respect to U.S. and foreign trade, manufacturing, and investment that impacted our business operations during 2025. Although energy commodities, including crude oil and refined petroleum products, are generally exempt from the recently effective U.S. tariffs, our Renewable Diesel segment was subject to new tariffs on renewable feedstocks imported into the U.S. These tariffs have at times made the use of certain feedstocks, particularly foreign-sourced feedstocks, economically impractical and resulted in reduced margins. We have taken actions to mitigate the impact of tariffs and duties on our business, including utilizing established free-trade zones, adjusting our feedstock slates, and optimizing our supply chain. Also, a significant portion of the new tariffs and existing duties we incurred are eligible for recovery through duty drawback claims, and we have implemented processes that allow us to file such claims in an efficient and timely manner.
In addition, effective January 1, 2025, the blender’s tax credit, which offered a tax incentive of $1.00 per gallon to blenders of certain renewable fuels, was replaced by the clean fuel production credit. The clean fuel production credit is a tax credit available for qualifying sales of certain low-carbon transportation fuels produced in the U.S. and the value of the credit is dependent on the CI of the fuel, among other factors. The transition to the clean fuel production credit has resulted in fewer volumes being eligible for a tax credit as well as lower credit values for fuels that were previously incentivized under the blender’s tax credit, which had a negative impact on our Renewable Diesel segment margins.
For a discussion on the risks and uncertainties with respect to trade and other policy matters discussed above, see “ITEM 1A. RISK FACTORS—BUSINESS, INDUSTRY, AND OPERATIONS RISKS—The availability and prices of our feedstocks and other critical supplies expose us to risks.”
WeFor the year ended December 31, 2025, we reported $2.8$2.3 billion of net income attributable to Valero stockholders driven by strong demand for theour yearproducts endedand Decembercontinued 31,strength 2024.in refining margins. Our operating results for 2024,2025, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 46.
Our operations generated $6.7$5.8 billion of cash in 2024.2025. ThisAlso, cash,we issued $650 million of 5.150 percent Senior Notes due February 15, 2030 during 2025, as described in Note 9 of Notes to Consolidated Financial Statements. The cash generated by our operations, along with cashthe onnet hand,proceeds from our debt issuance, was used to make $2.1$1.9 billion of capital investments in our business andbusiness, return $4.3$4.0 billion to our stockholders through purchases of common stock for treasury and dividend payments.payments, Inand addition,repay we reduced our outstanding debt during 2024 through the repayment of the $167$440 million outstanding principal balance of our 1.200public percent Senior Notesdebt that matured in March 2024.2025. As a result of this and other activity,activity during the year, our cash, cash equivalents, and restricted cash decreasedincreased by $595$36 million during 2024 to $4.8$4.9 billion as of December 31, 2024.2025. We had $9.6$9.8 billion in liquidity as of December 31, 2024.2025. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 55.57.
For 2024,2025, we reported net income attributable to Valero stockholders of $2.8$2.3 billion compared to $8.8$2.8 billion for 2023.2024. The decrease of $6.1$422 billionmillion was primarily due to a decreasedecreases in operating income of $8.1$574 billion,million and “other income, net” of $119 million, partially offset by a decrease in net income taxattributable expenseto noncontrolling interests of $1.9$338 billion.million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustmentadjustments reflected in the tables in note (bf) beginning on page 52.53.
While our operating income decreased by $8.1$574 billionmillion in 20242025 compared to 2023,2024, adjusted operating income also decreasedincreased by $8.1$615 billionmillion primarily due to the following:
•Refining segment. Refining segment adjusted operating income decreasedincreased by $7.5$1.3 billion primarily due to lowerhigher gasoline andgasoline, distillate (primarily diesel) margins, a decline in crude oil differentials,, and aother decreaseproduct margins and an increase in throughput volumes, partially offset by a decreasedecline in crude oil and other feedstock differentials and increases in adjusted operating expenses (excluding depreciation and amortization expense). and depreciation and amortization expense.
•Renewable Diesel segment. Renewable Diesel segment operating income decreased by $345$663 million primarily due to lowerhigher feedstock costs and a decline in the value of low-carbon fuel tax incentives, partially offset by higher product prices (primarily renewable diesel), partiallyand offseta bydecrease lowerin feedstockoperating costs.expenses (excluding depreciation and amortization expense).
•Ethanol segment. Ethanol segment adjusted operating income decreasedincreased by $254$59 million primarily due to lowerhigher ethanol prices and corn-relatedan co-productincrease prices,in production volumes, partially offset by lowerhigher corn prices and an increase in productionoperating volumes.expenses (excluding depreciation and amortization expense).
Many uncertainties remain with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic activity and its resulting impact on product supply and demand, as well as any effect thatincluding the uncertainty described in Note 2effects of Notestariffs to Consolidated Financial Statements or other political or regulatory developments may have on us,thereon, we have noted several factors below that have impacted or may impact our results of operations during the first quarter of 2025.2026.
•Global demand for gasoline, diesel, and jet fuel continues to rise, with growth in demand for jet fuel outpacing growth of other primary petroleum-based transportation fuels. In addition, colder temperatures across the North Atlantic and moderation in biofuel consumption growth are expected to support petroleum-based diesel demand.
•Expected reductions in refining capacity in the U.S. and Europe, unplanned outages at Russian refineries due to the Russia-Ukraine conflict, and a prolonged ramp-up of new capacity in emerging markets continue to support utilization of remaining global refining capacity.
•Gasoline and diesel demand have exceeded pre-pandemic levels and are expected to follow typical seasonal patterns. Jet fuel demand continues to improve, outpacing gasoline and diesel demand growth, and is approaching pre-pandemic levels in the U.S.
•Combined light product (gasoline, diesel, and jet fuel) inventories across the U.S. and Europe remain comparable to recent historical levels. Expected reductions in refining capacity in 2025 should support high utilization of refining capacity.
•Crude oil differentials are expected to remainwiden relativelyas stable.a result of an increase in sour crude oil production from OPEC+ suppliers and recent developments involving the Venezuelan government and associated sanctions. However, potential sanction adjustments related to Iran,Iran and Russia, andongoing uncertainty in Venezuela, and the continued Russia-Ukraine conflict, and potential U.S. tariffs on crude imports from Canada and Mexicoconflict could result in increased volatility in the crude oil market and potentially impact crude oil differentials.
The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (bf) beginning on page 52,53, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 5253 through 54.56.
Revenues decreased by $14.9$7.2 billion in 20242025 compared to 20232024 primarily due to decreases in product prices for the petroleum-based transportation fuels associated with sales made by our Refining segment. This decrease in revenuesrevenues, along with the effect of an asset impairment loss of $1.1 billion in 2025 (see note (d)), was partially offset by a decrease in cost of sales of $6.8$7.8 billion primarily due to decreases in crude oil and other feedstock costs. These changes resulted in an $8.1 billion decrease in operating income, from $11.9 billion in 2023 to $3.8 billion in 2024.
Adjusted operatingOperating income also decreased by $8.1$574 billion, from $11.9 billionmillion in 20232025; tohowever, adjusted operating income, which excludes the adjustments in the table in note (f), increased by $615 million, from $3.8 billion in 2024.2024 to $4.4 billion in 2025. The components of this $8.1$615 billionmillion decreaseincrease in adjusted operating income are discussed by segment in the segment analyses that follow.
Income“Other taxincome, expensenet” decreased by $1.9$119 billionmillion in 20242025 compared to 20232024 primarily asdue ato resultlower ofinterest income on cash driven by a decrease in incomeinterest beforerates incomein tax expense.2025.
Net income attributable to noncontrolling interests decreased by $338 million in 2025 compared to 2024 primarily due to lower earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 12 of Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis beginning on page 51.
Refining segment operating income decreasedincreased by $7.5$69 billionmillion in 20242025 compared to 2023.2024; however, Refining segment adjusted operating income, which excludes the adjustmentadjustments in the table in note (bf), also decreasedincreased by $7.5$1.3 billion in 20242025 compared to 2023.2024. The components of this decreaseincrease in the adjusted results, along with the reasons for the changes in those components, are outlined below.
•Refining segment margin decreasedincreased by $7.8$2.1 billion in 20242025 compared to 2023.2024.
The decreaseincrease in Refining segment margin was primarily due to the following:
◦AAn decreaseincrease in distillate (primarily diesel) margins had ana unfavorablefavorable impact of approximately $4.3$1.8 billion.
◦AAn decreaseincrease in margins for products other than gasoline marginsand distillates had ana unfavorablefavorable impact of approximately $2.4$940 billion.million.
◦A decline in crude oil differentials had an unfavorable impact of approximately $585 million.
◦AAn decreaseincrease in throughputgasoline volumes of 67,000 barrels per daymargins had ana unfavorablefavorable impact of approximately $260$650 million.
◦An increase in throughput volumes of 76,000 barrels per day had a favorable impact of approximately $340 million.
◦A decline in crude oil differentials had an unfavorable impact of approximately $1.1 billion.
◦A decline in differentials for other feedstocks had an unfavorable impact of approximately $600 million.
•Refining segment adjusted operating expenses (excluding depreciation and amortization expense), decreasedwhich excludes the adjustment in the table in note (f), increased by $262$430 million primarily due to decreasesincreases in energy costs of $149$197 million, propertycertain taxesemployee compensation expenses of $52$84 million, and chemicalsmaintenance and catalyst costsexpenses of $39$69 million.
•Refining segment depreciation and amortization expense increased by $363 million primarily due to incremental depreciation expense of approximately $300 million related to our plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Notes to Consolidated Financial Statements.
Renewable Diesel segment operating income decreased by $345$663 million in 20242025 compared to 20232024. primarilyThe duecomponents toof athis decreasedecrease, along with the reasons for the changes in Renewablethose Dieselcomponents, segmentare marginoutlined of $319 million.below.
•Renewable Diesel segment margin decreased by $703 million in 2025 compared to 2024.
Renewable Diesel segment margin is primarily affected by the price for the renewablelow-carbon dieselfuels that we sellsell, the value of the related low-carbon fuel tax credits, and the cost of the feedstocks that we process. The table on page 49 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in 20242025 compared to 2023.2024.
◦An increase in the cost of the feedstocks processed during the period had an unfavorable impact of approximately $940 million. During 2025, we became subject to newly imposed tariffs on certain foreign-sourced renewable feedstocks, resulting in higher costs for those feedstocks. Furthermore, these tariffs resulted in increased demand for qualifying domestic feedstocks and, consequently, higher market prices for domestic-sourced feedstocks. See “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 43 for additional discussion.
◦A decline in the value of tax incentives for low-carbon fuels had an unfavorable impact of approximately $675 million. Effective January 1, 2025, the blender’s tax credit was replaced by the clean fuel production credit. This transition resulted in a reduction in the volumes of fuel eligible for a tax credit, as well as lower credit values for certain fuels that were previously incentivized under the blender’s tax credit regime. See “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 43 for additional discussion.
•A◦An decreaseincrease in product prices, primarily renewable diesel, had ana unfavorablefavorable impact of approximately $2.0$880 billion.million.
•Renewable Diesel segment operating expenses (excluding depreciation and amortization expense) decreased by $42 million primarily due to decreases in outside services of $22 million and chemicals and catalysts costs of $19 million.
•A decrease in the cost of the feedstocks that we process had a favorable impact of approximately $1.7 billion.
Ethanol segment operating income decreasedincreased by $265$86 million in 20242025 compared to 20232024; however, Ethanol segment adjusted operating income, which excludes the adjustment in the table in note (bf), decreasedincreased by $254$59 million in 20242025 compared to 20232024. primarilyThe duecomponents toof athis decreaseincrease in Ethanolthe segmentadjusted marginresults, ofalong $236with million.the reasons for the changes in those components, are outlined below.
•Ethanol segment margin increased by $136 million in 2025 compared to 2024.
The decreaseincrease in Ethanol segment margin was primarily due to the following:
•A◦An decreaseincrease in ethanol prices had ana unfavorablefavorable impact of approximately $875$150 million.
•A decrease in prices for the co-products that we produce, primarily DDGs and inedible DCOs, had an unfavorable impact of approximately $300 million.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “First Six Months Results”
New heading “Financial Highlights by Segment and Total Company”
New heading “Financial Highlights by Segment and Total Company (continued)”
New heading “Average Market Reference Prices and Differentials”
New heading “Average Market Reference Prices and Differentials (continued)”
New heading “Total Company, Corporate, and Other”
New heading “Refining Segment Results”
New heading “Renewable Diesel Segment Results”
New heading “Ethanol Segment Results”
Largest changes
“•An increase in throughput volumes of 57,000 barrels per day had a favorable impact of approximately $200 million. During the first six months of 2026, we idled the processing units and ceased operation of the fuel production units at our Benicia Refinery, which was completed by the end of April 2026. In addition, in March 2026, an incident at our Port Arthur Refinery prompted a full shutdown of the refinery followed by a phased restart of the processing units by the end of the second quarter of 2026. …”see in full comparison
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•expectations regarding adoptions of new, or changes to existing, low-carbon fuel regulations, policies, and standards issued by governments across the world to address greenhouse gas (GHG) emissions and the percentage of low-carbon fuels in the transportation fuel mix, including, but not limited to, the Renewable and Low-Carbon Fuel Programs, blending and tax credits, efficiency standards, or other waivers, benefits, or incentives that impact the demand for low-carbon fuels; and
•the ability of the members of the Organization of the Petroleum Exporting Countries (OPEC), and other petroleum-producing nations thatto collectively make up OPEC+, to agree on and to maintain crude oil price and production controls;
•delay of, cancellation of, or failure to implement planned capital or other strategic projects and realize the various assumptions and benefits projected for such projects or cost overruns in executing such planned projects;
The following discussions in “OVERVIEW AND OUTLOOK,” “RESULTS OF OPERATIONS,” and “LIQUIDITY AND CAPITAL RESOURCES” include references to financial measures that are not defined under GAAP. These non-GAAP financial measures include Refining, Renewable Diesel, and Ethanol segment margin; adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable); and capital investments attributable to Valero. We have included these non-GAAP financial measures to help facilitate the comparison of operating results between periods, to help assess our cash flows, and because we believe they provide useful information as discussed further below. Refer to the tables in note (bc), beginning on page 44,57, for the reconciliations of Refining, Renewable Diesel, and Ethanol segment margin and adjusted operating income (including adjusted operating income for each of our reportable segments, as applicable) to their most directly comparable GAAP financial measures. Also in note (bc), we disclose the reasons why we believe our use of such non-GAAP financial measures provides useful information. See the table on page 4963 for a reconciliation of capital investments attributable to Valero to its most directly comparable GAAP financial measure. Beginning on page 48,62, we disclose the reasons why we believe our use of this non-GAAP financial measure provides useful information.
Our results for the second quarter and first quartersix months of 2026 benefited from strong global demand for petroleum-based transportation fuels amid constrained worldwide supply. Geopolitical developments disruptedcontinued to disrupt global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand. These conditions led to higher market prices for petroleum-based transportation fuels, as well as increased prices for crude oil and other feedstocks used in their production. Despite higher feedstock costs, the spread between product prices and input costs resulted in strong refining margins during the second quarter and first quartersix months of 2026. However, refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results.
Our results for the second quarter and first quartersix months of 2026 were also impacted by actionsthe takenphased underidling ourof planprocessing withunits respectand tocessation theof refining operations ofat our Benicia Refinery.Refinery, During the quarter, we began idling the processing units through a phased approach and ceased operation of the fuel production units. In accordance with our plan, full idling of all processing unitswhich was completed inby Aprilthe 2026.end of April. See Note 2 of Condensed Notes to Consolidated Financial Statements for additional information related to our Benicia Refinery.
In addition, on March 23, 2026, our Port Arthur Refinery experienced a fire in one of its distillate hydrotreater units, which prompted a full shut-down of the refinery. The refinery resumed operations in April 2026 at reduced throughput rates and returned to normal throughput rates during the second quarter. As a result of the dateoutage and the phased restart of thisthe quarterlyprocessing report on Form 10-Q,units, the refineryrefinery’s hasthroughput resumedvolumes operations at reduced capacity. This incident did not have a material effect on our results of operations forduring the firstsecond quarter of 2026.2026 were lower than typical throughput rates. See Note 5 of Condensed Notes to Consolidated Financial Statements for additional information related to this event.incident.
The strong demand for our products and continued strength in refining margins are the primary contributors to us reporting $1.3$3.7 billion and $5.0 billion of net income attributable to Valero stockholders for the firstsecond quarter of 2026.2026 and the first six months of 2026, respectively. Our operating results, including operating results by segment, are described in the following summary under “FirstSecond Quarter Results” and “First Six Months Results,” and detailed descriptions can be found under “RESULTS OF OPERATIONS” beginning on page 37.43.
Our operations generated $1.4$7.0 billion of cash during the first quartersix months of 2026. Also, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036 during the first quartersix months of 2026, as described in Note 4 of Condensed Notes to Consolidated Financial Statements. The cash generated by our operations was used to make $448$798 million of capital investments in our business and return $932$3.6 millionbillion to our stockholders through purchases of common stock for treasury and dividend payments. As a result of these items, along with the net proceeds from our debt issuance and other activities, our cash, cash equivalents, and restricted cash increased by $1.0$3.2 billion during the first quartersix months of 2026 to $5.9$8.1 billion as of MarchJune 31,30, 2026. We had $10.8$12.7 billion in liquidity as of MarchJune 31,30, 2026. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found under “LIQUIDITY AND CAPITAL RESOURCES” beginning on page 46.60.
FirstSecond Quarter Results
For the firstsecond quarter of 2026, we reported net income attributable to Valero stockholders of $1.3$3.7 billion compared to a net loss of $595$714 million for the firstsecond quarter of 2025. The increase of $1.9$3.0 billion was primarily due to an increase in operating income of $2.6$4.2 billion, partially offset by an increase in income tax expense of $666$815 million and an increase in net income attributable to noncontrolling interests of $404 million. The details of our operating income (loss) and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (bc) beginning on page 44.57.
While our operating income increased by $2.6$4.2 billion in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, adjusted operating income also increased by $1.5$4.2 billion primarily due to the following:
•Refining segment. Refining segment adjusted operating income increased by $1.2$3.2 billion primarily due to higher gasoline and distillate (primarily diesel) margins, an increase in crude oil differentials, and an increase in throughput volumes, partially offset by lowera gasoline margins and an increasedecline in depreciationsweet andcrude amortizationoil expense.differentials.
•Renewable Diesel segment. Renewable Diesel segment operating income increased by $280$796 million primarily due to higher product prices (primarily renewable diesel) and an increase in clean fuel production credits recognized on qualifying sales,, partially offset by higher feedstock prices.costs.
•Ethanol segment. Ethanol segment operating income increased by $70$264 million primarily due to lower corn prices, the recognition of clean fuel production credits in 2026, higher ethanol and ancorn-related increaseco-product inprices, productionand volumes.lower corn prices.
First Six Months Results
For the first six months of 2026, we reported net income attributable to Valero stockholders of $5.0 billion compared to $119 million for the first six months of 2025. The increase of $4.9 billion was primarily due to an increase in operating income of $6.8 billion, partially offset by an increase in income tax expense of $1.5 billion and an increase in net income attributable to noncontrolling interests of $520 million. The details of our operating income and adjusted operating income, where applicable, by segment and in total are reflected below (in millions). Adjusted operating income excludes the adjustments reflected in the tables in note (c) beginning on page 57.
While our operating income increased by $6.8 billion in the first six months of 2026 compared to the first six months of 2025, adjusted operating income increased by $5.7 billion primarily due to the following:
•Refining segment. Refining segment adjusted operating income increased by $4.4 billion primarily due to higher gasoline and distillate (primarily diesel) margins and an increase in throughput volumes, partially offset by a decline in sweet crude oil differentials.
•Renewable Diesel segment. Renewable Diesel segment operating income increased by $1.1 billion primarily due to higher product prices (primarily renewable diesel) and an increase in clean fuel production credits recognized on qualifying sales, partially offset by higher feedstock costs.
•Ethanol segment. Ethanol segment operating income increased by $334 million primarily due to the recognition of clean fuel production credits in 2026, higher ethanol and corn-related co-product prices, and lower corn prices.
Many uncertainties exist with respect to the supply and demand balances in petroleum-based product markets worldwide. While it is difficult to predict future worldwide economic and geopolitical activity and the resulting impact on product supply and demand, we have noted several factors below that have impacted or may impact our results of operations during the secondthird quarter of 2026.
•GlobalAlthough global demand for gasoline, diesel, and jet fuel remainshas strong;been however,resilient, demand growth has moderated amid market disruptions related to ongoing conflict in the Middle East.
•Continued disruption to global refining capacity is expected due to unplanned outages at refineries and export infrastructure in the Middle East and Russia resulting from ongoing conflicts in those regionsregions, as well as reduced production in other regions driven by crude supply constraints. As a result, global refined product inventories are expected to remain low.
•Crude oil differentials are expected to remain volatile as reductions in Middle Eastern sour crude oil production are expected to be only partially offset by incremental crude oil supply from other regions. In addition, ongoing conflict in the Middle East continues to disrupt global transportation routes,routes. resultingHowever, inuse higherof freightalternative coststransportation routes that partially bypass the Strait of Hormuz, coordinated releases from strategic petroleum reserves, and increased crude oil production from other regions could contributemitigate tosupply furtherdisruptions and ease volatility in the crude oil market.
•Renewable diesel demand is expected to riseremain drivenstrong byas ana result of the increase in the renewable volume obligations (RVOs) imposed by the EPA for 2026 and 2027, particularly with respect to biomass-based diesel.
•On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery’s distillate hydrotreater units, which is more fully discussed in Note 5 of Condensed Notes to Consolidated Financial Statements. As of the date of this quarterly report on Form 10-Q, the Port Arthur Refinery has resumed operations at reduced capacity. For the second quarter of 2026, we expect throughput volumes for our Gulf Coast region to range between 1.690 to 1.740 million barrels per day, which reflects the anticipated reduction in volumes for our Port Arthur Refinery.
The following tables, including the reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures in note (bc) beginning on page 44,57, highlight our results of operations, our operating performance, and market reference prices that directly impact our operations. Note references in this section can be found on pages 4457 through 46.59.
The following table includes selected financial data for the total company, corporate, and other for the firstsecond quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Revenues increased by $2.1$14.6 billion in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 primarily due to increases in product prices for the petroleum-based transportation fuels (primarily diesel) associated with sales made by our Refining segment. This increase in revenues, along with the effect of an asset impairment loss of $1.1 billion in the first quarter of 2025 (see note (a)),revenues was partially offset by an increase in cost of sales of $578$10.4 millionbillion primarily due to increases in crude oil and other feedstock costs. These changes resulted in a $4.2 billion increase in operating income, from $997 million in the second quarter of 2025 to $5.2 billion in the second quarter of 2026.
Operating income increased by $2.6 billion in the first quarter of 2026; however, adjustedAdjusted operating income, which excludes the adjustments in the table in note (bc), also increased by $1.5$4.2 billion, from $235$1.0 millionbillion in the firstsecond quarter of 2025 to $1.8$5.2 billion in the firstsecond quarter of 2026. The primary components of this $1.5$4.2 billion increase in adjusted operating income are discussed by segment in the segment analyses that follow.
Income tax expense increased by $666$815 million in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 primarily as a result of higher income before income tax expense.
Net income attributable to noncontrolling interests increased by $404 million in the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher earnings associated with DGD, whose operations compose our Renewable Diesel segment. See Note 7 of Condensed Notes to Consolidated Financial Statements regarding our accounting for DGD and the Renewable Diesel segment analysis on page 48.
The following table includes selected financial and operating data of our Refining segment for the firstsecond quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Refining segment operating income increased by $2.3$3.2 billion in the firstsecond quarter of 2026; however,2026. Refining segment adjusted operating income, which excludes the adjustments in the table in note (bc), also increased by $1.2$3.2 billion in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.2025 Theprimarily primarydue componentsto of thisan increase in theRefining adjustedsegment results,margin alongof with$3.1 the reasons for the changes in those components, are outlined below.billion.
•Refining segment margin increased by $1.4 billion in the first quarter of 2026 compared to the first quarter of 2025.
Refining segment margin is primarily affected by the prices for the petroleum-based transportation fuels that we sell and the cost of crude oil and other feedstocks that we process. The table on page 3945 reflects market reference prices and differentials that we believe impacted our Refining segment margin in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.
◦•An increase in distillate (primarily diesel) margins had a favorable impact of approximately $1.1$2.9 billion.
◦An increase in crude oil differentials had a favorable impact of approximately $390 million.
◦An increase in throughput volumes of 86,000 barrels per day had a favorable impact of approximately $120 million. As discussed in “OVERVIEW AND OUTLOOK—Overview—Business Operations Update” beginning on page 34 and in Note 2 of Condensed Notes to Consolidated Financial Statements, we began idling the processing units through a phased approach and ceased operation of the fuel production units at our Benicia Refinery during the first quarter of 2026. While these actions resulted in lower volumes at our Benicia Refinery, the overall impact was more than offset by increased volumes at our other refineries, resulting in higher aggregate volumes in the first quarter of 2026 compared to the first quarter of 2025.
◦A•An decreaseincrease in gasoline margins had ana unfavorablefavorable impact of approximately $340$980 million.
•A decline in sweet crude oil differentials had an unfavorable impact of approximately $780 million.
•Refining segment depreciation and amortization expense increased by $138 million primarily due to incremental depreciation expense of approximately $100 million related to our plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026, as described in Note 2 of Condensed Notes to Consolidated Financial Statements.
The following table includes selected financial and operating data of our Renewable Diesel segment for the firstsecond quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Renewable Diesel segment operating income increased by $280$796 million in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 primarily due to an increase in Renewable Diesel segment margin of $297$825 million.
Renewable Diesel segment margin is primarily affected by the prices for the renewable fuels that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of the feedstocks that we process. The table on page 4046 reflects market reference prices that we believe impacted our Renewable Diesel segment margin in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.
•An increase in product prices, primarily renewable diesel, had a favorable impact of approximately $380$1.0 million.billion.
•An increase in clean fuel production credits recognized on qualifying sales had a favorable impact of $127 million.
•An increase in the cost of the feedstocks that we process had an unfavorable impact of approximately $190$200 million.
The following table includes selected financial and operating data of our Ethanol segment for the firstsecond quarter of 2026 and 2025. The selected financial data is derived from the Financial Highlights by Segment and Total Company tables, unless otherwise noted.
Ethanol segment operating income increased by $70$264 million in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 primarily due to an increase in Ethanol segment margin of $80$272 million.
Ethanol segment margin is primarily affected by prices for the ethanol and corn-related co-products that we sell, the recognition of clean fuel production credits on qualifying sales, and the cost of corn that we process. The table on page 4046 reflects market reference prices that we believe impacted our Ethanol segment margin in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025.
•A decrease in corn prices had a favorable impact of approximately $40 million.
•The recognition of clean fuel production credits had a favorable impact of $20$99 million. Provisions of the One Big Beautiful Bill Act (OBBB) became effective on January 1, 2026, making certain ethanol produced and sold by us eligible for the clean fuel production credit. During the second quarter of 2026, updated emissions modeling methodologies were released and additional actions were taken that increased the amount of clean fuel production credits generated from qualifying ethanol sales. Accordingly, we recognized clean fuel production credits on qualifying sales of ethanol duringin the threesecond monthsquarter endedof March2026, 31,along with an amount related to qualifying sales in the first quarter of 2026.
•An increase in productionethanol volumes of 153,000 gallons per dayprices had a favorable impact of approximately $10$90 million.
•An increase in prices for the corn-related co-products that we produce, primarily dry distillers grains (DDGs) and inedible DCOs, had a favorable impact of approximately $50 million.
•A decrease in corn prices had a favorable impact of approximately $30 million.
Financial Highlights by Segment and Total Company
Financial Highlights by Segment and Total Company (continued)
Average Market Reference Prices and Differentials
VLO insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (1 insider, 3 trade dates, 22,500 shares, about $5.7M). Net open-market shares: -22,500 (purchases minus sales); net value about -$5.7M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-18 | Reymond Robert L |
Option exercise | 924 | — | — |
| 2026-09-16 | Simmons Gary K. |
Gift | 4,000 | — | — |
| 2026-08-21 | Walsh Richard Joe |
Gift | 3,104 | — | — |
| 2026-06-29 | Fisher Eric A |
Open-market sale | 7,500 | $268.17 | $2.0M |
| 2026-06-18 | Fisher Eric A |
Open-market sale | 7,500 | $236.90 | $1.8M |
| 2026-05-18 | Fisher Eric A |
Open-market sale | 7,500 | $251.61 | $1.9M |
| 2026-05-06 | Wilkins Rayford Jr |
Disposition to issuer | 304 | $239.26 | $72.7K |
| 2026-05-06 | Wilkins Rayford Jr |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Ffolkes Marie A |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Ffolkes Marie A |
Disposition to issuer | 511 | $239.26 | $122.3K |
| 2026-05-06 | Greene Kimberly S, |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Greene Kimberly S, |
Disposition to issuer | 511 | $239.26 | $122.3K |
| 2026-05-06 | Eberhart Paulett |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Eberhart Paulett |
Disposition to issuer | 511 | $239.26 | $122.3K |
| 2026-05-06 | Diaz Fred M |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Diaz Fred M |
Disposition to issuer | 511 | $239.26 | $122.3K |
| 2026-05-06 | Mullins Eric D. |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Majoras Deborah P |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Majoras Deborah P |
Disposition to issuer | 511 | $239.26 | $122.3K |
| 2026-05-06 | Weisenburger Randall J |
Option exercise | 1,381 | — | — |
| 2026-05-06 | Weisenburger Randall J |
Disposition to issuer | 304 | $239.26 | $72.7K |
Well-known investors holding VLO (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 2,020,410 | $526.2M | 0.18% | Added 193% |
| Two Sigma Investments | 2026-06-30 | 1,283,485 | $334.3M | 0.25% | Added 86% |
| Millennium Management (Israel Englander) | 2026-06-30 | 804,483 | $209.5M | 0.14% | Reduced 40% |
| Bridgewater Associates | 2026-06-30 | 285,001 | $74.2M | 0.3% | Added 113% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 260,471 | $67.8M | 0.16% | Added 21% |
| Renaissance Technologies | 2026-06-30 | 130,988 | $34.1M | 0.05% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 128,064 | $33.4M | 0.02% | Reduced 44% |
| Semper Augustus (Chris Bloomstran) | 2026-06-30 | 37,893 | $9.9M | 1.12% | Reduced 14% |
| D. E. Shaw & Co. | 2026-06-30 | 31,866 | $8.3M | 0.01% | New position |
| PRIMECAP Management | 2026-06-30 | 26,000 | $6.8M | 0.0% | No change |