10-KPeriod: FY2025

VALERO ENERGY CORP/TX Annual Report, Year Ended Dec 31, 2025

Filed February 25, 2026For Securities:VLO

Summary

Valero Energy Corporation (VLO) reported strong operational performance for the year ended December 31, 2025, with net income attributable to stockholders of $2.3 billion. This was driven by robust demand for petroleum-based transportation fuels and favorable refining margins, although partially offset by an $1.1 billion asset impairment loss related to its California operations and negative impacts from trade and policy changes affecting its Renewable Diesel segment. The company generated $5.8 billion in cash from operations, which was used to fund capital investments, return $4.0 billion to stockholders through dividends and share repurchases, and repay debt. Valero's diversified business model spans Refining, Renewable Diesel, and Ethanol segments. The Refining segment demonstrated strength with increased margins and throughput volumes, contributing significantly to adjusted operating income. The Renewable Diesel segment faced headwinds from higher feedstock costs and changes in tax incentives but saw a favorable impact from higher product prices. The Ethanol segment also experienced margin improvement and increased production volumes. The company maintains a strong liquidity position with $9.8 billion in total liquidity as of December 31, 2025, and continues to invest in its low-carbon fuels business, having invested $6.0 billion to date.

Financial Highlights

48 data points
Beta

Revenue

$122.69B

4.4% Gross Margin

Net Income

$2.35B

1.9% Net Margin

EPS (Diluted)

$7.57

Total Assets

$57.99B

Cash & Equivalents

$4.69B

Free Cash Flow

$5.83B

Financial Statements
Beta
Revenue$122.69B
Cost of Revenue$117.25B
Gross Profit$5.43B
Operating Income$3.18B
Interest Expense$556.00M
Net Income$2.35B
EPS (Basic)$7.57
EPS (Diluted)$7.57
Shares Outstanding (Basic)309.00M
Shares Outstanding (Diluted)309.00M

Key Highlights

  • 1Valero reported a net income of $2.3 billion for the year ended December 31, 2025, supported by strong refining margins and demand for its products.
  • 2The company generated $5.8 billion in cash flow from operations and returned $4.0 billion to shareholders via dividends and share repurchases.
  • 3An asset impairment loss of $1.1 billion was recognized related to the company's California operations, specifically the Benicia and Wilmington refineries.
  • 4The Renewable Diesel segment experienced a decrease in operating income due to higher feedstock costs and a decline in the value of low-carbon fuel tax incentives.
  • 5The company invested $1.9 billion in capital investments, with a significant portion directed towards sustaining operations and continuing its low-carbon fuels growth strategy.
  • 6Valero maintained a strong liquidity position with $9.8 billion in total liquidity as of December 31, 2025.
  • 7The company announced a new $2.5 billion share repurchase authorization, adding to the remaining amount from a previous program.

Frequently Asked Questions

Valero's financial performance in 2025 was primarily driven by strong demand for petroleum-based transportation fuels and favorable refining margins, which boosted the Refining segment's adjusted operating income. This was partially offset by an $1.1 billion asset impairment loss on its California refineries and negative impacts on the Renewable Diesel segment from higher feedstock costs and changes in tax incentives.

The Renewable Diesel segment faced challenges from increased feedstock costs, partly due to new tariffs on certain foreign feedstocks, and a transition from the blender's tax credit to the clean fuel production credit, which resulted in lower credit values. Valero is mitigating these impacts through strategies like utilizing free-trade zones, adjusting feedstock slates, optimizing its supply chain, and pursuing duty drawback claims. The company is also focused on maximizing product prices and managing operating expenses.

Valero anticipates continued global demand growth for gasoline, diesel, and jet fuel, with jet fuel demand outpacing others. Expected reductions in global refining capacity, combined with ongoing geopolitical events affecting Russian refineries, are expected to support higher utilization of existing capacity. Crude oil differentials are predicted to widen, although volatility in the crude oil market may persist. Ethanol demand is expected to follow seasonal patterns, and renewable diesel demand is anticipated to remain consistent.

Valero has approved a plan to idle the processing units at its Benicia Refinery by the end of April 2026. This decision led to an $1.1 billion asset impairment loss recognized in 2025, incremental depreciation expenses of approximately $300 million, and $50 million in employee transition costs. The company is also evaluating strategic alternatives for its remaining operations in California.