Valero has invested $5.8 billion in low-carbon fuels businesses as of December 31, 2024, and expects additional growth opportunities in this area. This signals a strategic shift towards renewable energy sources and a commitment to long-term sustainability.

The SAF project at the DGD Port Arthur Plant was successfully completed in the fourth quarter of 2024, providing the plant the optionality to upgrade approximately 50 percent of its renewable diesel annual production capacity to neat SAF. This enhances Valero's product mix and positions them to capture future demand for sustainable aviation fuel.

Valero continues to evaluate investments in economic, low-carbon projects, including carbon capture and sequestration, alcohol-to-jet fuel, and additional low-carbon hydrogen opportunities. These projects are intended to lower the CI of their products and potentially benefit from tax credits.

Management successfully completed the SAF project at the DGD Port Arthur Plant in the fourth quarter of 2024, demonstrating their ability to execute large-scale projects on time.

Management emphasizes maintaining safe, stable, and reliable operations at their refineries and plants. This focus is critical for minimizing downtime and maximizing productivity.

Management actively manages risks through contracting and hedging exposure to price volatility in natural gas and electricity. This proactive approach helps mitigate potential adverse effects on the company's financial performance.

The company's financial results are affected by volatile margins, which are dependent upon factors beyond their control, including the price of feedstocks and the market price at which they can sell their products. This highlights the inherent risk in the refining and marketing industry.

A reduction in the demand for Valero's 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. This poses a significant risk to Valero's future revenues and profitability.

Valero is subject to risks arising from sentiment towards climate-related matters, fossil fuels, GHG emissions, and other sustainability-related matters. This includes increasing pressure regarding their efforts and disclosures with respect to GHG emissions reductions/displacements and other sustainability-related matters.

The refining and marketing industry is highly competitive with respect to both feedstock supply and refined petroleum product markets. 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.

New entrants into the low-carbon fuels industry could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than Valero's technologies and products. This increases competition for feedstocks and customers.

Valero uses the services of third parties to transport feedstocks and products to market. Disruptions in transportation and logistics could have a material adverse effect on their business.

Operations depend on the reliable supply of natural gas and electricity, and natural gas and electricity prices have a measurable effect on the total cost of operations. Volatility of prices for both natural gas and electricity represent an ongoing challenge to operating results.

Valero sources petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, from suppliers throughout the world. Therefore, they are subject to the political, geographic, and economic risks attendant to doing business with suppliers located in different areas across the world.

The 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.

Valero is focused on developing our low-carbon fuel businesses, and they should continue to help drive the demand for our low-carbon fuels (such as renewable diesel, ethanol, and other low-carbon fuel products).

Valero is evaluating stand-alone projects to sequester carbon dioxide that results from the ethanol manufacturing process at those plants.

In 2024, Valero established a company-wide cross-functional team to preliminarily assess the risks and opportunities from conventional and generative AI and will continue these assessments in 2025.

As of December 31, 2024, Valero has invested $5.8 billion in low-carbon fuels businesses, indicating a strategic priority for capital allocation.

Valero returned $4.3 billion to stockholders in 2024 through purchases of common stock for treasury and dividend payments. This demonstrates a commitment to returning value to shareholders.

Valero reduced outstanding debt during 2024 through the repayment of the $167 million outstanding principal balance of the 1.200 percent Senior Notes that matured in March 2024.

Valero has well-developed management structures that are central to their decision making and risk management, including three programs that support their environmental management as follows: CTEMS, EERA, and FMS.

As of December 31, 2024, approximately 11 percent and 13 percent of our U.S. employees were veterans and reservists of the U.S. Armed Forces, and individuals with disabilities, respectively.

Valero measures annual total recordable incident rate (TRIR) and Tier 1 Process Safety Event Rate to assess safety performance. These metrics are also used by others in the industry, which allows for a more objective comparison of performance.

Our results for the year ended December 31, 2024 were supported by stable worldwide demand for petroleum-based transportation fuels.

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.

Crude oil differentials are expected to remain relatively stable. However, potential sanction adjustments related to Iran, Russia, and Venezuela, the Russia-Ukraine conflict, and potential U.S. tariffs on crude imports from Canada and Mexico could result in increased volatility in the crude oil market and potentially impact crude oil differentials.