01—Abstract
Summary
Summary of the 10-K filed February 25, 2026. Cited figures are marked; the original filing is the authoritative source.
Valero Energy Corporation (VLO) reported strong operational performance for the year ended December 31, 2025, with net income attributable to stockholders of $2.3 billiona.
This was driven by robust demand for petroleum-based transportation fuels and favorable refining margins, although partially offset by an $1.1 billionb 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 billionc 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.
02—Key points
Key Highlights
- Valero 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.
- The company generated $5.8 billion in cash flow from operations and returned $4.0 billion to shareholders via dividends and share repurchases.
- An asset impairment loss of $1.1 billion was recognized related to the company's California operations, specifically the Benicia and Wilmington refineries.
- The 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.
- The company invested $1.9 billion in capital investments, with a significant portion directed towards sustaining operations and continuing its low-carbon fuels growth strategy.
- Valero maintained a strong liquidity position with $9.8 billion in total liquidity as of December 31, 2025.
- The company announced a new $2.5 billion share repurchase authorization, adding to the remaining amount from a previous program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Valero Energy kept $0.02.
- Revenue$122.69B100.0%
- Cost of revenue−$117.25B95.6%
- Gross profit$5.43B4.4%
- Operating costs−$2.25B1.8%
- Operating income$3.18B2.6%
- Interest, other & tax−$833.0M0.7%
- Net income$2.35B1.9%
Where FY2025 revenue went
$122.69B- Cost of revenue: $117.25B, 96% of revenue
- Net income: $2.35B, 1.9% of revenue
- Operating costs: $2.25B, 1.8% of revenue
- Interest, other & tax: $833.0M, 0.7% of revenue
Kept 1.9% as net incomeNet income $2.35B · 1.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 25, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $122.69B$129.88B | −5.5% |
| Cost of Revenue | $117.25B$125.08B | −6.3% |
| Gross Profit | $5.43B$4.80B | +13.0% |
| Operating Income | $3.18B$3.75B | −15.3% |
| Interest Expense | $556.00M$556.00M | 0.0% |
| Net Income | $2.35B$2.77B | −15.2% |
| EPS (Basic) | $7.57$8.58 | −11.8% |
| EPS (Diluted) | $7.57$8.58 | −11.8% |
| Shares Outstanding (Basic) | 309.00M322.00M | −4.0% |
| Shares Outstanding (Diluted) | 309.00M322.00M | −4.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of Valero's financial performance in 2025?
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.
How is Valero managing the challenges in its Renewable Diesel segment?
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.
What is Valero's outlook for 2026?
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.
What is the significance of the Benicia Refinery idling plan?
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.
06—Continue