Valero Energy (VLO) investor relations material

Strategic focus and operational excellence

• Maintains a premier refining portfolio with global scale, high complexity, and extensive connectivity, enabling feedstock and product optimization across markets.

• Demonstrates industry-leading operational reliability, safety, and environmental performance, achieving best-ever results in 2025.

• Consistently operates as the lowest-cost producer among peers, leveraging U.S. Gulf Coast advantages and flexible logistics assets.

• Growth projects are focused on cost control, optimization, and margin expansion, with a 25% after-tax IRR hurdle rate for investments.

• Expands global wholesale supply and product exports, with over 1.5 million barrels per day of ratable supply and a strong presence in Latin America and other high-growth markets.

Capital discipline and shareholder returns

• Delivers disciplined capital allocation, maintaining a strong balance sheet and investment grade credit rating, targeting a 20–30% net debt-to-capital ratio.

• Sustaining capex is targeted at approximately $1.4 billion in 2026, with growth capex focused on high-return projects.

• Achieves a peer-leading free cash flow yield and average payout ratio of 70% since 2014 (59% excluding 2020), with a minimum annual payout ratio of 40–50%.

• Reduced shares outstanding by 46% since 2012 and 27% since 2021, while growing the annual dividend per share at a 15% CAGR since 2012.

• Demonstrates lower volatility in earnings and free cash flow compared to peers, with a 10-year average free cash flow of $3.6 billion.

Low-carbon fuels leadership and sustainability

• Leading producer of renewable diesel and sustainable aviation fuel (SAF), with Diamond Green Diesel (DGD) capacity reaching 1.2 billion gallons per year.

• Completed a large-scale SAF project at Port Arthur in 4Q 2024, capable of upgrading up to 50% of renewable diesel capacity to SAF.

• Renewable diesel and ethanol segments deliver high returns, with renewable diesel reducing lifecycle GHG emissions by up to 80% and ethanol by at least 30%.

• Pursues further carbon intensity reductions through carbon sequestration and innovative projects, exceeding 2025 GHG reduction targets.

• Advocates for environmental excellence, with significant investments in flare-gas recovery, energy efficiency, and carbon capture.