Business Wire | Jan 28, 2021 06:25AM EST

Valero Energy Reports 2020 Fourth Quarter and Full Year Results and Declares Regular Cash Dividend on Common Stock

Jan. 28, 2021

SAN ANTONIO--(BUSINESS WIRE)--Jan. 28, 2021--Valero Energy Corporation (NYSE: VLO, "Valero") today reported a net loss attributable to Valero stockholders of $359 million, or $0.88 per share, for the fourth quarter of 2020, compared to net income of $1.1 billion, or $2.58 per share, for the fourth quarter of 2019. Excluding the adjustments shown in the accompanying earnings release tables, the adjusted net loss attributable to Valero stockholders was $429 million, or $1.06 per share, for the fourth quarter of 2020, compared to fourth quarter 2019 adjusted net income attributable to Valero stockholders of $873 million, or $2.13 per share. Fourth quarter 2020 adjusted results exclude the after-tax benefit from a LIFO liquidation adjustment of $70 million.

For the year ended December 31, 2020, the net loss attributable to Valero stockholders was $1.4 billion, or $3.50 per share, compared to net income of $2.4 billion, or $5.84 per share, in 2019. Excluding the adjustments shown in the accompanying earnings release tables, the adjusted net loss attributable to Valero stockholders was $1.3 billion, or $3.12 per share, for 2020, compared to adjusted net income attributable to Valero stockholders of $2.4 billion, or $5.70 per share, in 2019.

"We expect to see continued improvement in product demand with widespread vaccine distribution around the world," said Joe Gorder, Valero Chairman and Chief Executive Officer. "We also expect a faster recovery in refining margins with the continued shutdowns and conversions of uncompetitive refineries."

Refining

The refining segment reported a $377 million operating loss for the fourth quarter of 2020, compared to operating income of $1.4 billion for the fourth quarter of 2019. Excluding a LIFO liquidation adjustment and other operating expenses, the fourth quarter 2020 adjusted operating loss was $476 million. Refinery throughput volumes averaged 2.6 million barrels per day in the fourth quarter of 2020, which was 468 thousand barrels per day lower than the fourth quarter of 2019.

Operationally, the refining segment achieved record employee safety performance, process safety and environmental performance in 2020. "Despite the pandemic-induced financial challenges, our commitment to safety and environmental stewardship never wavered," said Gorder.

Renewable Diesel

The renewable diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $127 million of operating income for the fourth quarter of 2020, compared to $541 million for the fourth quarter of 2019. After adjusting for the retroactive blender's tax credit in 2019, adjusted renewable diesel operating income was $187 million for the fourth quarter of 2019. Renewable diesel sales volumes averaged 618 thousand gallons per day in the fourth quarter of 2020, a decrease of 226 thousand gallons per day versus the fourth quarter of 2019 due to the effect of planned maintenance in the fourth quarter of 2020. The renewable diesel segment set a record for annual sales volumes of 787 thousand gallons per day in 2020. As a result of continuous process improvement and optimization, the capacity of the existing St. Charles renewable diesel plant (DGD 1) has increased from 275 million gallons per year to 290 million gallons per year.

Ethanol

The ethanol segment reported $15 million of operating income for the fourth quarter of 2020, compared to $36 million for the fourth quarter of 2019. Fourth quarter 2020 adjusted operating income was $17 million. Ethanol production volumes averaged 4.1 million gallons per day in the fourth quarter of 2020, which was 197 thousand gallons per day lower than the fourth quarter of 2019. The decrease in operating income was attributed primarily to lower margins resulting from higher corn prices and lower ethanol prices.

Corporate and Other

General and administrative expenses were $224 million in the fourth quarter of 2020, compared to $243 million in the fourth quarter of 2019. For 2020, general and administrative expenses of $756 million were $112 million lower than 2019. The effective tax rate for 2020 was 45 percent, which was primarily the result of the carryback of our U.S. federal tax net operating loss to 2015 when the U.S. federal statutory tax rate was 35 percent.

Investing and Financing Activities

Capital investments totaled $622 million in the fourth quarter of 2020, of which $214 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to our partner's 50 percent share of DGD and those related to other variable interest entities, capital investments attributable to Valero were $458 million in the fourth quarter of 2020 and $2.0 billion for the full year.

Net cash provided by operating activities in 2020 was $948 million. Included in this amount was a $345 million unfavorable impact from working capital and $338 million associated with our joint venture partner's share of DGD's net cash provided by operating activities, excluding changes in DGD's working capital. Excluding these items, adjusted net cash provided by operating activities was $955 million.

Valero returned $400 million to stockholders through dividends in the fourth quarter of 2020. In 2020, Valero returned $1.8 billion to stockholders, or 184 percent of adjusted net cash provided by operating activities, consisting of $156 million of stock buybacks and $1.6 billion in dividends. The 2020 total payout ratio was higher than our long-term target due to the adverse economic impact of COVID-19.

Valero continues to target a long-term total payout ratio between 40 and 50 percent of adjusted net cash provided by operating activities. Valero defines total payout ratio as the sum of dividends and stock buybacks divided by net cash provided by operating activities adjusted for changes in working capital and DGD's net cash provided by operating activities, excluding changes in its working capital, attributable to our joint venture partner's ownership interest in DGD.

Declaration of Regular Cash Dividend

The Board of Directors has declared a regular quarterly common stock dividend of $0.98 per share payable on March 4, 2021 to holders of record at the close of business on February 11, 2021.

Liquidity and Financial Position

Valero ended 2020 with $14.7 billion of total debt and finance lease obligations and $3.3 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 37 percent as of December 31, 2020.

Strategic Update

In 2020, Valero completed several strategic projects on schedule and under budget and continued to make progress on other projects despite challenges related to the COVID-19 pandemic and several hurricanes. The Pasadena terminal project, which was completed in the first quarter, expands the company's product logistics portfolio, increases biofuel blending capacity and enhances export flexibility. The St. Charles Alkylation unit, which started up in the fourth quarter, is designed to convert low-value feedstocks into a premium alkylate product. The Pembroke Cogen project and the Diamond Pipeline expansion are on track to be completed in the third quarter and fourth quarter of 2021, respectively, and the Port Arthur Coker project is expected to be completed in 2023.

Valero continues to grow its position as the largest renewable fuels producer in North America with plans to quadruple its renewable diesel production by the end of 2023. The DGD plant expansion at St. Charles (DGD 2), which is expected to increase renewable diesel production by 400 million gallons per year, is expected to be completed in the fourth quarter of 2021. Valero and its joint venture partner have also approved a new 470 million gallons per year renewable diesel plant (DGD 3) at Valero's Port Arthur, Texas refinery. The new plant is expected to commence operations in the second half of 2023, increasing DGD's total annual production capacity to approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha.

"We expect low-carbon fuel policies to continue to expand globally and drive demand for renewable fuels," said Gorder, "and to that end, we are applying our liquid fuels expertise to continue to expand our long-term competitive advantage in low-carbon transportation fuels with the expansion of DGD."

Capital investments attributable to Valero are forecasted at $2.0 billion in 2021, of which approximately 60 percent is for sustaining the business and approximately 40 percent is for growth projects. Almost half of Valero's 2021 growth capital is allocated to expanding the renewable diesel business.

Conference Call

Valero's senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, "Valero"), is an international manufacturer and marketer of transportation fuels and petrochemical products. Valero is a Fortune 50 company based in San Antonio, Texas, and it operates 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 13 ethanol plants with a combined production capacity of approximately 1.68 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. Valero is also a joint venture partner in Diamond Green Diesel, which owns and operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America's largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. Approximately 7,000 outlets carry Valero's brand names. Please visit www.investorvalero.com for more information.

Valero Contacts

Investors:

Homer Bhullar, Vice President - Investor Relations, 210-345-1982 Eric Herbort, Senior Manager - Investor Relations, 210-345-3331 Gautam Srivastava, Senior Manager - Investor Relations, 210-345-3992

Media:

Lillian Riojas, Executive Director - Media Relations and Communications, 210-345-5002

Safe-Harbor Statement

Statements contained in this release that state the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "believe," "expect," "should," "estimates," "intend," "target," "will," "plans," "forecast," and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of the company's control, such as delays in construction timing and other factors, including but not limited to the impacts of COVID-19. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero's annual reports on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission and available on Valero's website at www.valero.com.

COVID-19 Disclosure

The global pandemic has significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use. As a result, there has also been a decline in the demand for, and thus also the market prices of, crude oil and certain of our products, particularly our refined petroleum products. Many uncertainties remain with respect to COVID-19, including its resulting economic effects and any future recovery, and we are unable to predict the ultimate economic impacts from COVID-19, how quickly national economies can recover once the pandemic subsides, the timing or effectiveness of the vaccine distribution, or whether any recovery will ultimately experience a reversal or other setbacks. However, the adverse impact of the economic effects on us has been and will likely continue to be significant. We believe we have proactively addressed many of the known impacts of COVID-19 to the extent possible and will strive to continue to do so, but there can be no guarantee that these measures will be fully effective. For more information, see our quarterly reports on Form 10-Q and other reports filed with the Securities and Exchange Commission.

Use of Non-GAAP Financial Information

This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include adjusted net income (loss) attributable to Valero stockholders, adjusted earnings (loss) per common share - assuming dilution, refining margin, renewable diesel margin, ethanol margin, adjusted refining operating income (loss), adjusted renewable diesel operating income, adjusted ethanol operating income (loss), adjusted net cash provided by operating activities, and capital investments attributable to Valero. These non-GAAP financial measures have been included to help facilitate the comparison of operating results between periods. See the accompanying earnings release tables for a reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measures. Note (g) to the earnings release tables provides reasons for the use of these non-GAAP financial measures.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Statement of income data

Revenues $ 16,604 $ 27,879 $ 64,912 $ 108,324

Cost of sales:

Cost of materials 15,101 24,080 58,933 96,476 and other (a) (b)

Lower of cost ormarket (LCM) - - (19 ) - inventory valuationadjustment (c)

Operating expenses(excludingdepreciation and 1,167 1,239 4,435 4,868

amortization expensereflected below)

Depreciation andamortization expense 566 557 2,303 2,202 (d)

Total cost of sales 16,834 25,876 65,652 103,546

Other operating 5 7 35 21 expenses

General andadministrativeexpenses (excluding 224 243 756 868 depreciation andamortization expensereflected below)

Depreciation and 11 14 48 53 amortization expense

Operating income (470 ) 1,739 (1,579 ) 3,836 (loss)

Other income, net 25 36 132 104 (e)

Interest and debtexpense, net of (153 ) (119 ) (563 ) (454 ) capitalized interest

Income (loss) beforeincome tax expense (598 ) 1,656 (2,010 ) 3,486 (benefit)

Income tax expense (289 ) 326 (903 ) 702 (benefit)

Net income (loss) (309 ) 1,330 (1,107 ) 2,784

Less: Net incomeattributable to 50 270 314 362 noncontrollinginterests (b)

Net income (loss)attributable toValero Energy $ (359 ) $ 1,060 $ (1,421 ) $ 2,422 Corporation

stockholders



Earnings (loss) per $ (0.88 ) $ 2.58 $ (3.50 ) $ 5.84 common share

Weighted-averagecommon shares 407 409 407 413 outstanding (inmillions)



Earnings (loss) percommon share - $ (0.88 ) $ 2.58 $ (3.50 ) $ 5.84 assuming dilution

Weighted-averagecommon sharesoutstanding - 407 410 407 414

assuming dilution(in millions) (f)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

RenewableDiesel

Ethanol

CorporateandEliminations

Total

Three months ended December 31, 2020

Revenues:

Revenues from external customers

$

15,513

$

205

$

886

$

-

$

16,604

Intersegment revenues

2

62

66

(130

)

-

Total revenues

15,515

267

952

(130

)

16,604

Cost of sales:

Cost of materials and other (a) (b)

14,324

107

800

(130

)

15,101

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,032

22

113

-

1,167

Depreciation and amortization expense

531

11

24

-

566

Total cost of sales

15,887

140

937

(130

)

16,834

Other operating expenses

5

-

-

-

5

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

-

-

-

224

224

Depreciation and amortization expense

-

-

-

11

11

Operating income (loss) by segment

$

(377

)

$

127

$

15

$

(235

)

$

(470

)

Three months ended December 31, 2019

Revenues:

Revenues from external customers

$

26,637

$

284

$

958

$

-

$

27,879

Intersegment revenues

6

73

69

(148

)

-

Total revenues

26,643

357

1,027

(148

)

27,879

Cost of sales:

Cost of materials and other (b)

23,602

(217

)

843

(148

)

24,080

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,092

21

126

-

1,239

Depreciation and amortization expense

523

12

22

-

557

Total cost of sales

25,217

(184

)

991

(148

)

25,876

Other operating expenses

7

-

-

-

7

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

-

-

-

243

243

Depreciation and amortization expense

-

-

-

14

14

Operating income by segment

$

1,419

$

541

$

36

$

(257

)

$

1,739

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Renewable Corporate Refining Diesel Ethanol and Total Eliminations

Three monthsended December 31, 2020

Revenues:

Revenues fromexternal $ 15,513 $ 205 $ 886 $ - $ 16,604 customers

Intersegment 2 62 66 (130 ) - revenues

Total revenues 15,515 267 952 (130 ) 16,604

Cost of sales:

Cost ofmaterials and 14,324 107 800 (130 ) 15,101 other (a) (b)

Operatingexpenses(excludingdepreciationand 1,032 22 113 - 1,167

amortizationexpensereflectedbelow)

Depreciationand 531 11 24 - 566 amortizationexpense

Total cost of 15,887 140 937 (130 ) 16,834 sales

Otheroperating 5 - - - 5 expenses

General andadministrativeexpenses(excluding

depreciation - - - 224 224 andamortizationexpensereflected

below)

Depreciationand - - - 11 11 amortizationexpense

Operatingincome (loss) $ (377 ) $ 127 $ 15 $ (235 ) $ (470 ) by segment



Three monthsended December 31, 2019

Revenues:

Revenues fromexternal $ 26,637 $ 284 $ 958 $ - $ 27,879 customers

Intersegment 6 73 69 (148 ) - revenues

Total revenues 26,643 357 1,027 (148 ) 27,879

Cost of sales:

Cost ofmaterials and 23,602 (217 ) 843 (148 ) 24,080 other (b)

Operatingexpenses(excludingdepreciationand 1,092 21 126 - 1,239

amortizationexpensereflectedbelow)

Depreciationand 523 12 22 - 557 amortizationexpense

Total cost of 25,217 (184 ) 991 (148 ) 25,876 sales

Otheroperating 7 - - - 7 expenses

General andadministrativeexpenses(excluding

depreciation - - - 243 243 andamortizationexpensereflected

below)

Depreciationand - - - 14 14 amortizationexpense

Operatingincome by $ 1,419 $ 541 $ 36 $ (257 ) $ 1,739 segment

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

RenewableDiesel

Ethanol

CorporateandEliminations

Total

Year ended December 31, 2020

Revenues:

Revenues from external customers

$

60,840

$

1,055

$

3,017

$

-

$

64,912

Intersegment revenues

8

212

226

(446

)

-

Total revenues

60,848

1,267

3,243

(446

)

64,912

Cost of sales:

Cost of materials and other (a) (b)

56,093

500

2,784

(444

)

58,933

LCM inventory valuation adjustment (c)

(19

)

-

-

-

(19

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

3,944

85

406

-

4,435

Depreciation and amortization expense (d)

2,138

44

121

-

2,303

Total cost of sales

62,156

629

3,311

(444

)

65,652

Other operating expenses

34

-

1

-

35

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

-

-

-

756

756

Depreciation and amortization expense

-

-

-

48

48

Operating income (loss) by segment

$

(1,342

)

$

638

$

(69

)

$

(806

)

$

(1,579

)

Year ended December 31, 2019

Revenues:

Revenues from external customers

$

103,746

$

970

$

3,606

$

2

$

108,324

Intersegment revenues

18

247

231

(496

)

-

Total revenues

103,764

1,217

3,837

(494

)

108,324

Cost of sales:

Cost of materials and other (b)

93,371

360

3,239

(494

)

96,476

Operating expenses (excluding depreciation and

amortization expense reflected below)

4,289

75

504

-

4,868

Depreciation and amortization expense

2,062

50

90

-

2,202

Total cost of sales

99,722

485

3,833

(494

)

103,546

Other operating expenses

20

-

1

-

21

General and administrative expenses (excluding

depreciation and amortization expense reflected

below)

-

-

-

868

868

Depreciation and amortization expense

-

-

-

53

53

Operating income by segment

$

4,022

$

732

$

3

$

(921

)

$

3,836

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Renewable Corporate Refining Diesel Ethanol and Total Eliminations

Year endedDecember 31, 2020

Revenues:

Revenues fromexternal $ 60,840 $ 1,055 $ 3,017 $ - $ 64,912 customers

Intersegment 8 212 226 (446 ) - revenues

Total revenues 60,848 1,267 3,243 (446 ) 64,912

Cost of sales:

Cost ofmaterials and 56,093 500 2,784 (444 ) 58,933 other (a) (b)

LCM inventoryvaluation (19 ) - - - (19 ) adjustment (c)

Operatingexpenses(excludingdepreciationand 3,944 85 406 - 4,435

amortizationexpensereflectedbelow)

Depreciationand 2,138 44 121 - 2,303 amortizationexpense (d)

Total cost of 62,156 629 3,311 (444 ) 65,652 sales

Otheroperating 34 - 1 - 35 expenses

General andadministrativeexpenses(excluding

depreciation - - - 756 756 andamortizationexpensereflected

below)

Depreciationand - - - 48 48 amortizationexpense

Operatingincome (loss) $ (1,342 ) $ 638 $ (69 ) $ (806 ) $ (1,579 ) by segment



Year endedDecember 31, 2019

Revenues:

Revenues fromexternal $ 103,746 $ 970 $ 3,606 $ 2 $ 108,324 customers

Intersegment 18 247 231 (496 ) - revenues

Total revenues 103,764 1,217 3,837 (494 ) 108,324

Cost of sales:

Cost ofmaterials and 93,371 360 3,239 (494 ) 96,476 other (b)

Operatingexpenses(excludingdepreciationand 4,289 75 504 - 4,868

amortizationexpensereflectedbelow)

Depreciationand 2,062 50 90 - 2,202 amortizationexpense

Total cost of 99,722 485 3,833 (494 ) 103,546 sales

Otheroperating 20 - 1 - 21 expenses

General andadministrativeexpenses(excluding

depreciation - - - 868 868 andamortizationexpensereflected

below)

Depreciationand - - - 53 53 amortizationexpense

Operatingincome by $ 4,022 $ 732 $ 3 $ (921 ) $ 3,836 segment

See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars, except per share amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of net income (loss) attributable to Valero

Energy Corporation stockholders to adjusted net income

(loss) attributable to Valero Energy Corporation

stockholders

Net income (loss) attributable to Valero Energy Corporation

stockholders

$

(359

)

$

1,060

$

(1,421

)

$

2,422

Adjustments:

Last-in, first-out (LIFO) liquidation adjustment (a)

(102

)

-

224

-

Income tax expense (benefit) related to the LIFO liquidation

adjustment

32

-

(76

)

-

LIFO liquidation adjustment, net of taxes

(70

)

-

148

-

Change in estimated useful life (d)

-

-

30

-

Income tax benefit related to the change in estimated

useful life

-

-

(6

)

-

Change in estimated useful life, net of taxes

-

-

24

-

LCM inventory valuation adjustment (c)

-

-

(19

)

-

Income tax expense related to the LCM inventory

valuation adjustment

-

-

3

-

LCM inventory valuation adjustment, net of taxes

-

-

(16

)

-

Blender's tax credit attributable to Valero Energy

Corporation stockholders (b)

-

(192

)

-

(80

)

Income tax expense related to blender's tax credit

-

5

-

2

Blender's tax credit attributable to Valero Energy

Corporation stockholders, net of taxes

-

(187

)

-

(78

)

Loss on early redemption of debt (e)

-

-

-

22

Income tax benefit related to loss on early

redemption of debt

-

-

-

(5

)

Loss on early redemption of debt, net of taxes

-

-

-

17

Total adjustments

(70

)

(187

)

156

(61

)

Adjusted net income (loss) attributable to

Valero Energy Corporation stockholders

$

(429

)

$

873

$

(1,265

)

$

2,361

Reconciliation of earnings (loss) per common share -

assuming dilution to adjusted earnings (loss) per common

share - assuming dilution

Earnings (loss) per common share - assuming dilution (f)

$

(0.88

)

$

2.58

$

(3.50

)

$

5.84

Adjustments:

LIFO liquidation adjustment (a)

(0.18

)

-

0.36

-

Change in estimated useful life (d)

-

-

0.06

-

LCM inventory valuation adjustment (c)

-

-

(0.04

)

-

Blender's tax credit attributable to Valero Energy

Corporation stockholders (b)

-

(0.45

)

-

(0.18

)

Loss on early redemption of debt (e)

-

-

-

0.04

Total adjustments

(0.18

)

(0.45

)

0.38

(0.14

)

Adjusted earnings (loss) per common share -

assuming dilution (f)

$

(1.06

)

$

2.13

$

(3.12

)

$

5.70

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars, except per share amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation of netincome (loss)attributable to Valero

Energy Corporationstockholders to adjustednet income

(loss) attributable toValero EnergyCorporation

stockholders

Net income (loss)attributable to ValeroEnergy Corporation $ (359 ) $ 1,060 $ (1,421 ) $ 2,422

stockholders

Adjustments:

Last-in, first-out(LIFO) liquidation (102 ) - 224 - adjustment (a)

Income tax expense(benefit) related to theLIFO liquidation 32 - (76 ) -

adjustment

LIFO liquidation (70 ) - 148 - adjustment, net of taxes

Change in estimated - - 30 - useful life (d)

Income tax benefitrelated to the change inestimated - - (6 ) -

useful life

Change in estimateduseful life, net of - - 24 - taxes

LCM inventory valuation - - (19 ) - adjustment (c)

Income tax expenserelated to the LCMinventory - - 3 -

valuation adjustment

LCM inventory valuation - - (16 ) - adjustment, net of taxes

Blender's tax creditattributable to ValeroEnergy - (192 ) - (80 )

Corporation stockholders(b)

Income tax expenserelated to blender's tax - 5 - 2 credit

Blender's tax creditattributable to ValeroEnergy - (187 ) - (78 ) Corporationstockholders, net oftaxes

Loss on early redemption - - - 22 of debt (e)

Income tax benefitrelated to loss on early - - - (5 )

redemption of debt

Loss on early redemption - - - 17 of debt, net of taxes

Total adjustments (70 ) (187 ) 156 (61 )

Adjusted net income(loss) attributable to $ (429 ) $ 873 $ (1,265 ) $ 2,361 Valero EnergyCorporation stockholders



Reconciliation ofearnings (loss) percommon share -

assuming dilution to adjusted earnings (loss)per common

share - assumingdilution

Earnings (loss) percommon share - assuming $ (0.88 ) $ 2.58 $ (3.50 ) $ 5.84 dilution (f)

Adjustments:

LIFO liquidation (0.18 ) - 0.36 - adjustment (a)

Change in estimated - - 0.06 - useful life (d)

LCM inventory valuation - - (0.04 ) - adjustment (c)

Blender's tax creditattributable to ValeroEnergy - (0.45 ) - (0.18 )

Corporation stockholders(b)

Loss on early redemption - - - 0.04 of debt (e)

Total adjustments (0.18 ) (0.45 ) 0.38 (0.14 )

Adjusted earnings (loss)per common share - $ (1.06 ) $ 2.13 $ (3.12 ) $ 5.70

assuming dilution (f)



See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of operating income (loss) by segment to

segment margin, and reconciliation of operating income

(loss) by segment to adjusted operating income (loss) by

segment

Refining segment

Refining operating income (loss)

$

(377

)

$

1,419

$

(1,342

)

$

4,022

Adjustments:

Blender's tax credit (b)

-

(15

)

-

(2

)

LIFO liquidation adjustment (a)

(104

)

-

222

-

LCM inventory valuation adjustment (c)

-

-

(19

)

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

1,032

1,092

3,944

4,289

Depreciation and amortization expense

531

523

2,138

2,062

Other operating expenses

5

7

34

20

Refining margin

$

1,087

$

3,026

$

4,977

$

10,391

Refining operating income (loss)

$

(377

)

$

1,419

$

(1,342

)

$

4,022

Adjustments:

Blender's tax credit (b)

-

(15

)

-

(2

)

LIFO liquidation adjustment (a)

(104

)

-

222

-

LCM inventory valuation adjustment (c)

-

-

(19

)

-

Other operating expenses

5

7

34

20

Adjusted refining operating income (loss)

$

(476

)

$

1,411

$

(1,105

)

$

4,040

Renewable diesel segment

Renewable diesel operating income

$

127

$

541

$

638

$

732

Adjustments:

Blender's tax credit (b)

-

(354

)

-

(156

)

Operating expenses (excluding depreciation and

amortization expense reflected below)

22

21

85

75

Depreciation and amortization expense

11

12

44

50

Renewable diesel margin

$

160

$

220

$

767

$

701

Renewable diesel operating income

$

127

$

541

$

638

$

732

Adjustment: Blender's tax credit (b)

-

(354

)

-

(156

)

Adjusted renewable diesel operating income

$

127

$

187

$

638

$

576

See Notes to Earnings Release.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of operating income (loss) by segment to

segment margin, and reconciliation of operating income

(loss) by segment to adjusted operating income (loss) by

segment (continued)

Ethanol segment

Ethanol operating income (loss)

$

15

$

36

$

(69

)

$

3

Adjustments:

LIFO liquidation adjustment (a)

2

-

2

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

113

126

406

504

Depreciation and amortization expense (d)

24

22

121

90

Other operating expenses

-

-

1

1

Ethanol margin

$

154

$

184

$

461

$

598

Ethanol operating income (loss)

$

15

$

36

$

(69

)

$

3

Adjustments:

LIFO liquidation adjustment (a)

2

-

2

-

Change in estimated useful life (d)

-

-

30

-

Other operating expenses

-

-

1

1

Adjusted ethanol operating income (loss)

$

17

$

36

$

(36

)

$

4

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation ofoperating income (loss)by segment to

segment margin, andreconciliation ofoperating income

(loss) by segment toadjusted operatingincome (loss) by

segment

Refining segment

Refining operating $ (377 ) $ 1,419 $ (1,342 ) $ 4,022 income (loss)

Adjustments:

Blender's tax credit - (15 ) - (2 ) (b)

LIFO liquidation (104 ) - 222 - adjustment (a)

LCM inventory valuation - - (19 ) - adjustment (c)

Operating expenses(excluding depreciationand 1,032 1,092 3,944 4,289

amortization expensereflected below)

Depreciation and 531 523 2,138 2,062 amortization expense

Other operating 5 7 34 20 expenses

Refining margin $ 1,087 $ 3,026 $ 4,977 $ 10,391



Refining operating $ (377 ) $ 1,419 $ (1,342 ) $ 4,022 income (loss)

Adjustments:

Blender's tax credit - (15 ) - (2 ) (b)

LIFO liquidation (104 ) - 222 - adjustment (a)

LCM inventory valuation - - (19 ) - adjustment (c)

Other operating 5 7 34 20 expenses

Adjusted refining $ (476 ) $ 1,411 $ (1,105 ) $ 4,040 operating income (loss)



Renewable diesel segment

Renewable diesel $ 127 $ 541 $ 638 $ 732 operating income

Adjustments:

Blender's tax credit - (354 ) - (156 ) (b)

Operating expenses(excluding depreciationand 22 21 85 75

amortization expensereflected below)

Depreciation and 11 12 44 50 amortization expense

Renewable diesel margin $ 160 $ 220 $ 767 $ 701



Renewable diesel $ 127 $ 541 $ 638 $ 732 operating income

Adjustment: Blender's - (354 ) - (156 ) tax credit (b)

Adjusted renewable $ 127 $ 187 $ 638 $ 576 diesel operating income



See Notes to Earnings Release.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)



Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation ofoperating income (loss)by segment to

segment margin, andreconciliation ofoperating income

(loss) by segment toadjusted operatingincome (loss) by

segment (continued)

Ethanol segment

Ethanol operating $ 15 $ 36 $ (69 ) $ 3 income (loss)

Adjustments:

LIFO liquidation 2 - 2 - adjustment (a)

Operating expenses(excluding depreciationand 113 126 406 504

amortization expensereflected below)

Depreciation andamortization expense 24 22 121 90 (d)

Other operating - - 1 1 expenses

Ethanol margin $ 154 $ 184 $ 461 $ 598



Ethanol operating $ 15 $ 36 $ (69 ) $ 3 income (loss)

Adjustments:

LIFO liquidation 2 - 2 - adjustment (a)

Change in estimated - - 30 - useful life (d)

Other operating - - 1 1 expenses

Adjusted ethanol $ 17 $ 36 $ (36 ) $ 4 operating income (loss)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of refining segment operating income (loss) to

refining margin (by region), and reconciliation of refining

segment operating income (loss) to adjusted refining

segment operating income (loss) (by region) (h)

U.S. Gulf Coast region

Refining operating income (loss)

$

(276

)

$

706

$

(979

)

$

1,485

Adjustments:

Blender's tax credit (b)

-

(11

)

-

(2

)

LIFO liquidation adjustment (a)

(68

)

-

132

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

571

610

2,220

2,436

Depreciation and amortization expense

327

325

1,317

1,279

Other operating expenses

-

5

20

13

Refining margin

$

554

$

1,635

$

2,710

$

5,211

Refining operating income (loss)

$

(276

)

$

706

$

(979

)

$

1,485

Adjustments:

Blender's tax credit (b)

-

(11

)

-

(2

)

LIFO liquidation adjustment (a)

(68

)

-

132

-

Other operating expenses

-

5

20

13

Adjusted refining operating income (loss)

$

(344

)

$

700

$

(827

)

$

1,496

U.S. Mid-Continent region

Refining operating income (loss)

$

(61

)

$

251

$

(128

)

$

1,242

Adjustments:

Blender's tax credit (b)

-

(3

)

-

-

LIFO liquidation adjustment (a)

(18

)

-

40

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

163

164

628

632

Depreciation and amortization expense

83

82

333

308

Other operating expenses

1

-

1

2

Refining margin

$

168

$

494

$

874

$

2,184

Refining operating income (loss)

$

(61

)

$

251

$

(128

)

$

1,242

Adjustments:

Blender's tax credit (b)

-

(3

)

-

-

LIFO liquidation adjustment (a)

(18

)

-

40

-

Other operating expenses

1

-

1

2

Adjusted refining operating income (loss)

$

(78

)

$

248

$

(87

)

$

1,244

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation of refiningsegment operating income(loss) to

refining margin (byregion), andreconciliation of refining

segment operating income(loss) to adjustedrefining

segment operating income(loss) (by region) (h)

U.S. Gulf Coast region

Refining operating income $ (276 ) $ 706 $ (979 ) $ 1,485 (loss)

Adjustments:

Blender's tax credit (b) - (11 ) - (2 )

LIFO liquidation (68 ) - 132 - adjustment (a)

Operating expenses(excluding depreciationand 571 610 2,220 2,436

amortization expensereflected below)

Depreciation and 327 325 1,317 1,279 amortization expense

Other operating expenses - 5 20 13

Refining margin $ 554 $ 1,635 $ 2,710 $ 5,211



Refining operating income $ (276 ) $ 706 $ (979 ) $ 1,485 (loss)

Adjustments:

Blender's tax credit (b) - (11 ) - (2 )

LIFO liquidation (68 ) - 132 - adjustment (a)

Other operating expenses - 5 20 13

Adjusted refining $ (344 ) $ 700 $ (827 ) $ 1,496 operating income (loss)



U.S. Mid-Continent region

Refining operating income $ (61 ) $ 251 $ (128 ) $ 1,242 (loss)

Adjustments:

Blender's tax credit (b) - (3 ) - -

LIFO liquidation (18 ) - 40 - adjustment (a)

Operating expenses(excluding depreciationand 163 164 628 632

amortization expensereflected below)

Depreciation and 83 82 333 308 amortization expense

Other operating expenses 1 - 1 2

Refining margin $ 168 $ 494 $ 874 $ 2,184



Refining operating income $ (61 ) $ 251 $ (128 ) $ 1,242 (loss)

Adjustments:

Blender's tax credit (b) - (3 ) - -

LIFO liquidation (18 ) - 40 - adjustment (a)

Other operating expenses 1 - 1 2

Adjusted refining $ (78 ) $ 248 $ (87 ) $ 1,244 operating income (loss)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of refining segment operating income (loss)

to refining margin (by region), and reconciliation of

refining segment operating income (loss) to adjusted

refining segment operating income (loss) (by region) (h)

(continued)

North Atlantic region

Refining operating income

$

31

$

314

$

115

$

1,041

Adjustments:

LIFO liquidation adjustment (a)

(8

)

-

25

-

LCM inventory valuation adjustment (c)

-

-

(19

)

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

153

154

536

593

Depreciation and amortization expense

53

53

211

213

Other operating expenses

-

2

8

4

Refining margin

$

229

$

523

$

876

$

1,851

Refining operating income

$

31

$

314

$

115

$

1,041

Adjustments:

LIFO liquidation adjustment (a)

(8

)

-

25

-

LCM inventory valuation adjustment (c)

-

-

(19

)

-

Other operating expenses

-

2

8

4

Adjusted refining operating income

$

23

$

316

$

129

$

1,045

U.S. West Coast region

Refining operating income (loss)

$

(71

)

$

148

$

(350

)

$

254

Adjustments:

Blender's tax credit (b)

-

(1

)

-

-

LIFO liquidation adjustment (a)

(10

)

-

25

-

Operating expenses (excluding depreciation and

amortization expense reflected below)

145

164

560

628

Depreciation and amortization expense

68

63

277

262

Other operating expenses

4

-

5

1

Refining margin

$

136

$

374

$

517

$

1,145

Refining operating income (loss)

$

(71

)

$

148

$

(350

)

$

254

Adjustments:

Blender's tax credit (b)

-

(1

)

-

-

LIFO liquidation adjustment (a)

(10

)

-

25

-

Other operating expenses

4

-

5

1

Adjusted refining operating income (loss)

$

(77

)

$

147

$

(320

)

$

255

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (g)

(millions of dollars)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation of refining segmentoperating income (loss)

to refining margin (by region), andreconciliation of

refining segment operating income (loss) to adjusted

refining segment operating income(loss) (by region) (h)

(continued)

North Atlantic region

Refining operating income $ 31 $ 314 $ 115 $ 1,041

Adjustments:

LIFO liquidation adjustment (a) (8 ) - 25 -

LCM inventory valuation adjustment (c) - - (19 ) -

Operating expenses (excludingdepreciation and 153 154 536 593

amortization expense reflected below)

Depreciation and amortization expense 53 53 211 213

Other operating expenses - 2 8 4

Refining margin $ 229 $ 523 $ 876 $ 1,851



Refining operating income $ 31 $ 314 $ 115 $ 1,041

Adjustments:

LIFO liquidation adjustment (a) (8 ) - 25 -

LCM inventory valuation adjustment (c) - - (19 ) -

Other operating expenses - 2 8 4

Adjusted refining operating income $ 23 $ 316 $ 129 $ 1,045



U.S. West Coast region

Refining operating income (loss) $ (71 ) $ 148 $ (350 ) $ 254

Adjustments:

Blender's tax credit (b) - (1 ) - -

LIFO liquidation adjustment (a) (10 ) - 25 -

Operating expenses (excludingdepreciation and 145 164 560 628

amortization expense reflected below)

Depreciation and amortization expense 68 63 277 262

Other operating expenses 4 - 5 1

Refining margin $ 136 $ 374 $ 517 $ 1,145



Refining operating income (loss) $ (71 ) $ 148 $ (350 ) $ 254

Adjustments:

Blender's tax credit (b) - (1 ) - -

LIFO liquidation adjustment (a) (10 ) - 25 -

Other operating expenses 4 - 5 1

Adjusted refining operating income $ (77 ) $ 147 $ (320 ) $ 255 (loss)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Throughput volumes (thousand barrels per day)

Feedstocks:

Heavy sour crude oil

368

329

356

394

Medium/light sour crude oil

317

242

347

272

Sweet crude oil

1,258

1,676

1,245

1,581

Residuals

184

236

202

215

Other feedstocks

82

157

81

153

Total feedstocks

2,209

2,640

2,231

2,615

Blendstocks and other

341

378

324

337

Total throughput volumes

2,550

3,018

2,555

2,952

Yields (thousand barrels per day)

Gasolines and blendstocks

1,338

1,511

1,248

1,423

Distillates

886

1,136

928

1,126

Other products (i)

351

405

397

433

Total yields

2,575

3,052

2,573

2,982

Operating statistics (g) (j)

Refining margin

$

1,087

$

3,026

$

4,977

$

10,391

Adjusted refining operating income (loss)

$

(476)

$

1,411

$

(1,105)

$

4,040

Throughput volumes (thousand barrels per day)

2,550

3,018

2,555

2,952

Refining margin per barrel of throughput

$

4.64

$

10.90

$

5.32

$

9.65

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.40

3.93

4.22

3.98

Depreciation and amortization expense per barrel of

throughput

2.27

1.89

2.28

1.92

Adjusted refining operating income (loss) per barrel of

throughput

$

(2.03)

$

5.08

$

(1.18)

$

3.75

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Throughput volumes (thousand barrels per day)

Feedstocks:

Heavy sour crude oil 368 329 356 394

Medium/light sour crude oil 317 242 347 272

Sweet crude oil 1,258 1,676 1,245 1,581

Residuals 184 236 202 215

Other feedstocks 82 157 81 153

Total feedstocks 2,209 2,640 2,231 2,615

Blendstocks and other 341 378 324 337

Total throughput volumes 2,550 3,018 2,555 2,952



Yields (thousand barrels per day)

Gasolines and blendstocks 1,338 1,511 1,248 1,423

Distillates 886 1,136 928 1,126

Other products (i) 351 405 397 433

Total yields 2,575 3,052 2,573 2,982



Operating statistics (g) (j)

Refining margin $ 1,087 $ 3,026 $ 4,977 $ 10,391

Adjusted refining operating $ (476) $ 1,411 $ (1,105) $ 4,040 income (loss)

Throughput volumes (thousand 2,550 3,018 2,555 2,952 barrels per day)



Refining margin per barrel of $ 4.64 $ 10.90 $ 5.32 $ 9.65 throughput

Less:

Operating expenses (excludingdepreciation and

amortization expense 4.40 3.93 4.22 3.98 reflected below) per barrelof

throughput

Depreciation and amortizationexpense per barrel of 2.27 1.89 2.28 1.92

throughput

Adjusted refining operatingincome (loss) per barrel of $ (2.03) $ 5.08 $ (1.18) $ 3.75

throughput

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Operating statistics (g) (j)

Renewable diesel margin

$

160

$

220

$

767

$

701

Adjusted renewable diesel operating income

$

127

$

187

$

638

$

576

Sales volumes (thousand gallons per day)

618

844

787

760

Renewable diesel margin per gallon of sales

$

2.82

$

2.84

$

2.66

$

2.53

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of sales

0.38

0.27

0.29

0.27

Depreciation and amortization expense per gallon of sales

0.20

0.15

0.15

0.18

Adjusted renewable diesel operating income per gallon

of sales

$

2.24

$

2.42

$

2.22

$

2.08

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Operating statistics (g) (j)

Renewable diesel margin $ 160 $ 220 $ 767 $ 701

Adjusted renewable diesel operating $ 127 $ 187 $ 638 $ 576 income

Sales volumes (thousand gallons per day) 618 844 787 760



Renewable diesel margin per gallon of $ 2.82 $ 2.84 $ 2.66 $ 2.53 sales

Less:

Operating expenses (excludingdepreciation and 0.38 0.27 0.29 0.27 amortization expense reflected below) pergallon of sales

Depreciation and amortization expense per 0.20 0.15 0.15 0.18 gallon of sales

Adjusted renewable diesel operatingincome per gallon $ 2.24 $ 2.42 $ 2.22 $ 2.08

of sales

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

ETHANOL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Operating statistics (g) (j)

Ethanol margin

$

154

$

184

$

461

$

598

Adjusted ethanol operating income (loss)

$

17

$

36

$

(36

)

$

4

Production volumes (thousand gallons per day)

4,124

4,321

3,588

4,269

Ethanol margin per gallon of production

$

0.41

$

0.46

$

0.35

$

0.38

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per gallon of production

0.30

0.32

0.31

0.32

Depreciation and amortization expense per gallon of production

0.06

0.06

0.07

0.06

Adjusted ethanol operating income (loss) per gallon of production

$

0.05

$

0.08

$

(0.03

)

$

-

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

ETHANOL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Operating statistics (g) (j)

Ethanol margin $ 154 $ 184 $ 461 $ 598

Adjusted ethanol operating income $ 17 $ 36 $ (36 ) $ 4 (loss)

Production volumes (thousand 4,124 4,321 3,588 4,269 gallons per day)



Ethanol margin per gallon of $ 0.41 $ 0.46 $ 0.35 $ 0.38 production

Less:

Operating expenses (excludingdepreciation and 0.30 0.32 0.31 0.32 amortization expense reflectedbelow) per gallon of production

Depreciation and amortization 0.06 0.06 0.07 0.06 expense per gallon of production

Adjusted ethanol operating income $ 0.05 $ 0.08 $ (0.03 ) $ - (loss) per gallon of production

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Operating statistics by region (h)

U.S. Gulf Coast region (g) (j)

Refining margin

$

554

$

1,635

$

2,710

$

5,211

Adjusted refining operating income (loss)

$

(344

)

$

700

$

(827

)

$

1,496

Throughput volumes (thousand barrels per day)

1,471

1,762

1,493

1,740

Refining margin per barrel of throughput

$

4.09

$

10.08

$

4.96

$

8.21

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.22

3.76

4.06

3.84

Depreciation and amortization expense per barrel of

throughput

2.40

2.01

2.41

2.01

Adjusted refining operating income (loss) per barrel of

throughput

$

(2.53

)

$

4.31

$

(1.51

)

$

2.36

U.S. Mid-Continent region (g) (j)

Refining margin

$

168

$

494

$

874

$

2,184

Adjusted refining operating income (loss)

$

(78

)

$

248

$

(87

)

$

1,244

Throughput volumes (thousand barrels per day)

404

463

404

454

Refining margin per barrel of throughput

$

4.52

$

11.60

$

5.91

$

13.17

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

4.38

3.84

4.25

3.81

Depreciation and amortization expense per barrel of

throughput

2.23

1.90

2.25

1.85

Adjusted refining operating income (loss) per barrel of

throughput

$

(2.09

)

$

5.86

$

(0.59

)

$

7.51

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Operating statistics by region (h)

U.S. Gulf Coast region (g) (j)

Refining margin $ 554 $ 1,635 $ 2,710 $ 5,211

Adjusted refining operating $ (344 ) $ 700 $ (827 ) $ 1,496 income (loss)

Throughput volumes (thousand 1,471 1,762 1,493 1,740 barrels per day)



Refining margin per barrel of $ 4.09 $ 10.08 $ 4.96 $ 8.21 throughput

Less:

Operating expenses (excludingdepreciation and

amortization expense 4.22 3.76 4.06 3.84 reflected below) per barrelof

throughput

Depreciation and amortizationexpense per barrel of 2.40 2.01 2.41 2.01

throughput

Adjusted refining operatingincome (loss) per barrel of $ (2.53 ) $ 4.31 $ (1.51 ) $ 2.36

throughput



U.S. Mid-Continent region (g) (j)

Refining margin $ 168 $ 494 $ 874 $ 2,184

Adjusted refining operating $ (78 ) $ 248 $ (87 ) $ 1,244 income (loss)

Throughput volumes (thousand 404 463 404 454 barrels per day)



Refining margin per barrel of $ 4.52 $ 11.60 $ 5.91 $ 13.17 throughput

Less:

Operating expenses (excludingdepreciation and

amortization expense 4.38 3.84 4.25 3.81 reflected below) per barrelof

throughput

Depreciation and amortizationexpense per barrel of 2.23 1.90 2.25 1.85

throughput

Adjusted refining operatingincome (loss) per barrel of $ (2.09 ) $ 5.86 $ (0.59 ) $ 7.51

throughput

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Operating statistics by region (h) (continued)

North Atlantic region (g) (j)

Refining margin

$

229

$

523

$

876

$

1,851

Adjusted refining operating income

$

23

$

316

$

129

$

1,045

Throughput volumes (thousand barrels per day)

418

510

413

492

Refining margin per barrel of throughput

$

5.94

$

11.14

$

5.79

$

10.31

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

3.99

3.29

3.54

3.30

Depreciation and amortization expense per barrel of

throughput

1.37

1.12

1.40

1.19

Adjusted refining operating income per barrel of

throughput

$

0.58

$

6.73

$

0.85

$

5.82

U.S. West Coast region (g) (j)

Refining margin

$

136

$

374

$

517

$

1,145

Adjusted refining operating income (loss)

$

(77

)

$

147

$

(320

)

$

255

Throughput volumes (thousand barrels per day)

257

283

245

266

Refining margin per barrel of throughput

$

5.78

$

14.37

$

5.77

$

11.80

Less:

Operating expenses (excluding depreciation and

amortization expense reflected below) per barrel of

throughput

6.15

6.30

6.25

6.47

Depreciation and amortization expense per barrel of

throughput

2.90

2.45

3.10

2.71

Adjusted refining operating income (loss) per barrel of

throughput

$

(3.27

)

$

5.62

$

(3.58

)

$

2.62

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Operating statistics by region (h) (continued)

North Atlantic region (g) (j)

Refining margin $ 229 $ 523 $ 876 $ 1,851

Adjusted refining operating $ 23 $ 316 $ 129 $ 1,045 income

Throughput volumes (thousand 418 510 413 492 barrels per day)



Refining margin per barrel of $ 5.94 $ 11.14 $ 5.79 $ 10.31 throughput

Less:

Operating expenses (excludingdepreciation and

amortization expense 3.99 3.29 3.54 3.30 reflected below) per barrelof

throughput

Depreciation and amortizationexpense per barrel of 1.37 1.12 1.40 1.19

throughput

Adjusted refining operatingincome per barrel of $ 0.58 $ 6.73 $ 0.85 $ 5.82

throughput



U.S. West Coast region (g) (j)

Refining margin $ 136 $ 374 $ 517 $ 1,145

Adjusted refining operating $ (77 ) $ 147 $ (320 ) $ 255 income (loss)

Throughput volumes (thousand 257 283 245 266 barrels per day)



Refining margin per barrel of $ 5.78 $ 14.37 $ 5.77 $ 11.80 throughput

Less:

Operating expenses (excludingdepreciation and

amortization expense 6.15 6.30 6.25 6.47 reflected below) per barrelof

throughput

Depreciation and amortizationexpense per barrel of 2.90 2.45 3.10 2.71

throughput

Adjusted refining operatingincome (loss) per barrel of $ (3.27 ) $ 5.62 $ (3.58 ) $ 2.62

throughput

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Refining

Feedstocks (dollars per barrel)

Brent crude oil

$

45.10

$

62.49

$

43.15

$

64.18

Brent less West Texas Intermediate (WTI) crude oil

2.54

5.51

3.84

7.15

Brent less Alaska North Slope (ANS) crude oil

0.27

(1.92

)

0.82

(0.86

)

Brent less Louisiana Light Sweet (LLS) crude oil

1.04

1.67

1.91

1.47

Brent less Argus Sour Crude Index (ASCI) crude oil

2.18

4.72

3.26

3.56

Brent less Maya crude oil

4.56

9.56

6.89

6.57

LLS crude oil

44.06

60.82

41.24

62.71

LLS less ASCI crude oil

1.14

3.05

1.35

2.09

LLS less Maya crude oil

3.52

7.89

4.98

5.10

WTI crude oil

42.56

56.98

39.31

57.03

Natural gas (dollars per million British Thermal Units)

2.55

2.26

2.00

2.47

Products (dollars per barrel)

U.S. Gulf Coast:

Conventional Blendstock of Oxygenate Blending (CBOB)

gasoline less Brent

4.05

3.79

2.97

4.37

Ultra-low-sulfur (ULS) diesel less Brent

7.09

15.92

7.11

14.90

Propylene less Brent

(2.05

)

(24.54

)

(12.12

)

(22.31

)

CBOB gasoline less LLS

5.09

5.46

4.88

5.84

ULS diesel less LLS

8.13

17.59

9.02

16.37

Propylene less LLS

(1.01

)

(22.87

)

(10.22

)

(20.84

)

U.S. Mid-Continent:

CBOB gasoline less WTI

5.77

10.73

6.96

13.62

ULS diesel less WTI

11.20

22.31

12.11

22.77

North Atlantic:

CBOB gasoline less Brent

6.61

7.33

5.50

7.20

ULS diesel less Brent

8.64

19.42

9.17

17.22

U.S. West Coast:

California Reformulated Gasoline Blendstock of

Oxygenate Blending (CARBOB) 87 gasoline less ANS

10.89

14.84

10.33

16.28

California Air Resources Board (CARB) diesel less ANS

12.76

21.50

12.42

19.30

CARBOB 87 gasoline less WTI

13.16

22.27

13.36

24.29

CARB diesel less WTI

15.03

28.93

15.44

27.31

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Refining

Feedstocks (dollars per barrel)

Brent crude oil $ 45.10 $ 62.49 $ 43.15 $ 64.18

Brent less West TexasIntermediate (WTI) crude 2.54 5.51 3.84 7.15 oil

Brent less Alaska North 0.27 (1.92 ) 0.82 (0.86 ) Slope (ANS) crude oil

Brent less LouisianaLight Sweet (LLS) crude 1.04 1.67 1.91 1.47 oil

Brent less Argus SourCrude Index (ASCI) crude 2.18 4.72 3.26 3.56 oil

Brent less Maya crude oil 4.56 9.56 6.89 6.57

LLS crude oil 44.06 60.82 41.24 62.71

LLS less ASCI crude oil 1.14 3.05 1.35 2.09

LLS less Maya crude oil 3.52 7.89 4.98 5.10

WTI crude oil 42.56 56.98 39.31 57.03



Natural gas (dollars permillion British Thermal 2.55 2.26 2.00 2.47 Units)



Products (dollars per barrel)

U.S. Gulf Coast:

Conventional Blendstockof Oxygenate Blending(CBOB) 4.05 3.79 2.97 4.37

gasoline less Brent

Ultra-low-sulfur (ULS) 7.09 15.92 7.11 14.90 diesel less Brent

Propylene less Brent (2.05 ) (24.54 ) (12.12 ) (22.31 )

CBOB gasoline less LLS 5.09 5.46 4.88 5.84

ULS diesel less LLS 8.13 17.59 9.02 16.37

Propylene less LLS (1.01 ) (22.87 ) (10.22 ) (20.84 )

U.S. Mid-Continent:

CBOB gasoline less WTI 5.77 10.73 6.96 13.62

ULS diesel less WTI 11.20 22.31 12.11 22.77

North Atlantic:

CBOB gasoline less Brent 6.61 7.33 5.50 7.20

ULS diesel less Brent 8.64 19.42 9.17 17.22

U.S. West Coast:

California ReformulatedGasoline Blendstock of 10.89 14.84 10.33 16.28 Oxygenate Blending(CARBOB) 87 gasoline lessANS

California Air ResourcesBoard (CARB) diesel less 12.76 21.50 12.42 19.30 ANS

CARBOB 87 gasoline less 13.16 22.27 13.36 24.29 WTI

CARB diesel less WTI 15.03 28.93 15.44 27.31

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Renewable diesel

New York Mercantile Exchange ULS diesel

(dollars per gallon)

$

1.28

$

1.95

$

1.25

$

1.94

Biodiesel Renewable Identification Number (RIN)

(dollars per RIN)

0.88

0.56

0.64

0.48

California Low-Carbon Fuel Standard (dollars per metric ton)

197.83

206.04

200.12

196.82

Chicago Board of Trade (CBOT) soybean oil (dollars per

pound)

0.37

0.31

0.32

0.29

Ethanol

CBOT corn (dollars per bushel)

4.17

3.81

3.64

3.84

New York Harbor ethanol (dollars per gallon)

1.49

1.62

1.36

1.53

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Renewable diesel

New York Mercantile Exchange ULSdiesel $ 1.28 $ 1.95 $ 1.25 $ 1.94

(dollars per gallon)

Biodiesel Renewable IdentificationNumber (RIN) 0.88 0.56 0.64 0.48

(dollars per RIN)

California Low-Carbon Fuel Standard 197.83 206.04 200.12 196.82 (dollars per metric ton)

Chicago Board of Trade (CBOT) soybeanoil (dollars per 0.37 0.31 0.32 0.29

pound)



Ethanol

CBOT corn (dollars per bushel) 4.17 3.81 3.64 3.84

New York Harbor ethanol (dollars per 1.49 1.62 1.36 1.53 gallon)

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

December 31,

2020

2019

Balance sheet data

Current assets

$

15,844

$

18,969

Cash and cash equivalents included in current assets

3,313

2,583

Inventories included in current assets

6,038

7,013

Current liabilities

9,283

13,160

Current portion of debt and finance lease obligations

included in current liabilities

723

494

Debt and finance lease obligations, less current portion

13,954

9,178

Total debt and finance lease obligations

14,677

9,672

Valero Energy Corporation stockholders' equity

18,801

21,803

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

December 31,

2020 2019

Balance sheet data

Current assets $ 15,844 $ 18,969

Cash and cash equivalents included in current assets 3,313 2,583

Inventories included in current assets 6,038 7,013

Current liabilities 9,283 13,160

Current portion of debt and finance lease obligations 723 494 included in current liabilities

Debt and finance lease obligations, less current 13,954 9,178 portion

Total debt and finance lease obligations 14,677 9,672

Valero Energy Corporation stockholders' equity 18,801 21,803

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of net cash provided by operating

activities to adjusted net cash provided by operating

activities (g)

Net cash provided by operating activities

$

96

$

1,708

$

948

$

5,531

Exclude:

Changes in current assets and current liabilities

(113

)

(434

)

(345

)

294

Diamond Green Diesel LLC's (DGD) adjusted net cash

provided by operating activities attributable to our joint

venture partner's ownership interest in DGD

69

277

338

390

Adjusted net cash provided by operating activities

$

140

$

1,865

$

955

$

4,847

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Dividends per common share

$

0.98

$

0.90

$

3.92

$

3.60

See Notes to Earnings Release Tables.

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation of net cashprovided by operating

activities to adjusted net cash provided by operating

activities (g)

Net cash provided by $ 96 $ 1,708 $ 948 $ 5,531 operating activities

Exclude:

Changes in current assets and (113 ) (434 ) (345 ) 294 current liabilities

Diamond Green Diesel LLC's(DGD) adjusted net cash

provided by operatingactivities attributable to 69 277 338 390 our joint

venture partner's ownershipinterest in DGD

Adjusted net cash provided by $ 140 $ 1,865 $ 955 $ 4,847 operating activities



Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Dividends per common share $ 0.98 $ 0.90 $ 3.92 $ 3.60

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Reconciliation of total capital investments to capital

investments attributable to Valero (g)

Capital expenditures (excluding variable interest entities

(VIEs))

$

239

$

448

$

1,014

$

1,627

Capital expenditures of VIEs:

DGD

212

51

523

142

Other VIEs

55

86

251

225

Deferred turnaround and catalyst cost expenditures

(excluding VIEs)

94

179

623

762

Deferred turnaround and catalyst cost expenditures

of DGD

7

2

25

18

Investments in unconsolidated joint ventures

15

42

54

164

Total capital investments

622

808

2,490

2,938

Adjustments:

DGD's capital investments attributable to our joint

venture partner

(109

)

(26

)

(274

)

(80

)

Capital expenditures of other VIEs

(55

)

(86

)

(251

)

(225

)

Capital investments attributable to Valero

$

458

$

696

$

1,965

$

2,633

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION NOTES TO EARNINGS RELEASE TABLES

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Reconciliation of totalcapital investments tocapital

investments attributable toValero (g)

Capital expenditures(excluding variable interestentities $ 239 $ 448 $ 1,014 $ 1,627

(VIEs))

Capital expenditures of VIEs:

DGD 212 51 523 142

Other VIEs 55 86 251 225

Deferred turnaround andcatalyst cost expenditures 94 179 623 762

(excluding VIEs)

Deferred turnaround andcatalyst cost expenditures 7 2 25 18

of DGD

Investments in unconsolidated 15 42 54 164 joint ventures

Total capital investments 622 808 2,490 2,938

Adjustments:

DGD's capital investmentsattributable to our joint (109 ) (26 ) (274 ) (80 )

venture partner

Capital expenditures of other (55 ) (86 ) (251 ) (225 ) VIEs

Capital investments $ 458 $ 696 $ 1,965 $ 2,633 attributable to Valero

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION NOTES TO EARNINGS RELEASE TABLES

Cost of materials and other for the year ended December 31, 2020 includes a charge of $224 million related to the liquidation of LIFO inventory layers attributable to our refining and ethanol segments. We recorded a charge of $326 million in September 2020 due to the expected liquidation of LIFO inventory layers because our LIFO inventory levels had decreased throughout the first nine months of 2020 due to lower production resulting from lower(a) demand for our products caused by the negative economic impacts of COVID-19 on our business, and we expected that our inventory levels at December 31, 2020 would remain below their December 31, 2019 levels. While our actual inventory levels at December 31, 2020 were below their December 31, 2019 levels, they did not decrease as much as expected. Therefore, cost of materials and other for the three months ended December 31, 2020 includes a benefit of $102 million to adjust the $326 million estimate to the $224 million actual charge for the year ended December 31, 2020.



Of the $102 million benefit recognized in the three months ended December 31, 2020, a benefit of $104 million is attributable to our refining segment and a charge of $2 million is attributable to our ethanol segment. Of the $224 million charge recognized for the year ended December 31, 2020, $222 million and $2 million is attributable to our refining and ethanol segments, respectively.



Cost of materials and other includes a benefit related to the blender's tax credit in each reporting period. The legislation authorizing the credit through December 31, 2022 was passed and signed into law in December 2019. As a result, for the three months and year ended December 31, 2020, we recognized a benefit of $60 million and $297 million, respectively, related(b) to the blender's tax credit attributable to renewable diesel volumes blended during those periods. The legislation also reinstated the credit retroactively to volumes blended during 2019 and 2018, and consequently, we recognized a benefit of $449 million in December 2019 for the blender's tax credit attributable to volumes blended during those two years. The entire amount was recognized by us in December 2019 because the law was enacted in that month.



The above-mentioned pre-tax benefits are attributable to our reportable segments and stockholders as follows:

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Blender's tax credit by reportable segment

Refining:

Amount related to reporting period

$

3

$

3

$

9

$

16

Amount related to prior periods but recognized in reporting period

-

15

-

2

Total

3

18

9

18

Renewable diesel:

Amount related to reporting period

57

77

288

275

Amount related to prior periods but recognized in reporting period

-

354

-

156

Total

57

431

288

431

Total recognized in reporting period

$

60

$

449

$

297

$

449



Three Months Year Ended Ended December 31, December 31,

2020 2019 2020 2019

Blender's tax credit by reportable segment

Refining:

Amount related to reporting period $ 3 $ 3 $ 9 $ 16

Amount related to prior periods butrecognized - 15 - 2 in reporting period

Total 3 18 9 18

Renewable diesel:

Amount related to reporting period 57 77 288 275

Amount related to prior periods butrecognized - 354 - 156 in reporting period

Total 57 431 288 431

Total recognized in reporting period $ 60 $ 449 $ 297 $ 449

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

Interests to which blender's tax credit is

attributable

Valero Energy Corporation stockholders:

Amount related to reporting period

$

32

$

42

$

153

$

154

Amount related to prior periods but recognized in reporting period

-

192

-

80

Total

32

234

153

234

Noncontrolling interest:

Amount related to reporting period

28

38

144

137

Amount related to prior periods but recognized in reporting period

-

177

-

78

Total

28

215

144

215

Total recognized in reporting period

$

60

$

449

$

297

$

449

Three Months Year Ended Ended December 31, December 31,

2020 2019 2020 2019

Interests to which blender's tax credit is attributable

Valero Energy Corporation stockholders:

Amount related to reporting period $ 32 $ 42 $ 153 $ 154

Amount related to prior periods butrecognized - 192 - 80 in reporting period

Total 32 234 153 234

Noncontrolling interest:

Amount related to reporting period 28 38 144 137

Amount related to prior periods butrecognized - 177 - 78 in reporting period

Total 28 215 144 215

Total recognized in reporting period $ 60 $ 449 $ 297 $ 449

(c)

The market value of our inventories accounted for under the LIFO method fell below their historical cost on an aggregate basis as of March 31, 2020. As a result, we recorded an LCM inventory valuation adjustment of $2.5 billion in March 2020. The market value of our LIFO inventories improved due to the subsequent recovery in market prices, which resulted in a full reversal of the reserve by September 30, 2020. The LCM inventory valuation adjustment for the year ended December 31, 2020 reflects a net benefit of $19 million due solely to the foreign currency translation effect of the portion of the LCM inventory valuation adjustments attributable to our international operations.

(d)

Depreciation and amortization expense for the year ended December 31, 2020 includes $30 million in accelerated depreciation related to a change in the estimated useful life of one of our ethanol plants.

(e)

"Other income, net" for the year ended December 31, 2019 includes a $22 million charge from the early redemption of $850 million of our 6.125 percent senior notes due February 1, 2020.

(f)

Common equivalent shares have been excluded from the computation of loss per common share - assuming dilution and adjusted loss per common share - assuming dilution for the three months and year ended December 31, 2020, as the effect of including such shares would be antidilutive.

(g)

We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under U.S. GAAP and are considered to be non-GAAP measures.

We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable U.S. GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable U.S. GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under U.S. GAAP. In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility.

Non-GAAP measures are as follows:

* Adjusted net income (loss) attributable to Valero Energy Corporation stockholders is defined as net income (loss) attributable to Valero Energy Corporation stockholders adjusted to reflect the items noted below, along with their related income tax effect. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below.

- LIFO liquidation adjustment - Generally, the LIFO inventory valuation method provides for the matching of current costs with current revenues. However, a LIFO liquidation results in a portion of our current-year cost of sales being impacted by historical costs, which obscures our current-year financial performance. Therefore, we have excluded the historical cost impact from adjusted net income (loss) attributable to Valero Energy Corporation stockholders. See note (a) for additional details.

- Change in estimated useful life - The accelerated depreciation recognized as a result of a change in the estimated useful life of one of our ethanol plants (see note (d)) is not indicative of our ongoing operations.

- LCM inventory valuation adjustment - The LCM inventory valuation adjustment, which is described in note (c), is the result of the market value of our inventories as of March 31, 2020 falling below their historical cost, with the decline in market value resulting from the decline in product market prices associated with the negative economic impacts from COVID-19. As market prices improved over the subsequent months, the writedown was fully reversed by September 30, 2020. The net benefit of $19 million associated with the LCM inventory valuation adjustments recorded during 2020 is due solely to the effects of foreign currency translation explained in note (c).

- Blender's tax credit attributable to Valero Energy Corporation stockholders - The blender's tax credit attributable to volumes blended during 2019 and 2018 was recognized by us in December 2019. The adjustment, therefore, reflects the portion of the blender's tax credit that was recorded in December 2019 but is associated with volumes blended during the nine months ended September 30, 2019 and the year ended December 31, 2018. See note (b) for additional details.

- Loss on early redemption of debt - The penalty and other expenses incurred in connection with the early redemption of our 6.125 percent senior notes due February 1, 2020 (see note (e)) are not associated with the ongoing costs of our borrowing and financing activities.

* Adjusted earnings (loss) per common share - assuming dilution is defined as adjusted net income (loss) attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution (see note (f)).

* Refining margin is defined as refining operating income (loss) excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation adjustment (see note (c)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe refining margin is an important measure of our refining segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Renewable diesel margin is defined as renewable diesel operating income excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), operating expenses (excluding depreciation and amortization expense), and depreciation and amortization expense. We believe renewable diesel margin is an important measure of our renewable diesel segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Ethanol margin is defined as ethanol operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe ethanol margin is an important measure of our ethanol segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Adjusted refining operating income (loss) is defined as refining segment operating income (loss) excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation adjustment (see note (c)), and other operating expenses. We believe adjusted refining operating income (loss) is an important measure of our refining segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted renewable diesel operating income is defined as renewable diesel segment operating income excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)). We believe this is an important measure of our renewable diesel segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted ethanol operating income (loss) is defined as ethanol segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), the change in estimated useful life (see note (d)), and other operating expenses. We believe this is an important measure of our ethanol segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding the items noted below. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities. The basis for our belief with respect to each excluded item is provided below.

- Changes in current assets and current liabilities - Current assets net of current liabilities represents our operating liquidity. We believe that the change in our operating liquidity from period to period does not represent cash generated by our operations that is available to fund our investing and financing activities.

- DGD's adjusted net cash provided by operating activities attributable to our joint venture partner's ownership interest in DGD - We are a 50/50 joint venture partner in DGD and consolidate DGD's financial statements; as a result, all of DGD's net cash provided by operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities.

- DGD's partners use DGD's operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD's operating cash flow is effectively attributable to each partner and only 50 percent of DGD's operating cash flow should be attributed to our net cash provided by operating activities. Therefore, we have adjusted our net cash provided by operating activities for the portion of DGD's operating cash flow attributable to our joint venture partner's ownership interest because we believe that it more accurately reflects the operating cash flow available to us to fund our investing and financing activities. The adjustment is calculated as follows (in millions):

The market value of our inventories accounted for under the LIFO method fell below their historical cost on an aggregate basis as of March 31, 2020. As a result, we recorded an LCM inventory valuation adjustment of $2.5 billion in March 2020. The market value of our LIFO inventories(c) improved due to the subsequent recovery in market prices, which resulted in a full reversal of the reserve by September 30, 2020. The LCM inventory valuation adjustment for the year ended December 31, 2020 reflects a net benefit of $19 million due solely to the foreign currency translation effect of the portion of the LCM inventory valuation adjustments attributable to our international operations.



Depreciation and amortization expense for the year ended December 31, 2020(d) includes $30 million in accelerated depreciation related to a change in the estimated useful life of one of our ethanol plants.



"Other income, net" for the year ended December 31, 2019 includes a $22(e) million charge from the early redemption of $850 million of our 6.125 percent senior notes due February 1, 2020.



Common equivalent shares have been excluded from the computation of loss(f) per common share - assuming dilution and adjusted loss per common share - assuming dilution for the three months and year ended December 31, 2020, as the effect of including such shares would be antidilutive.



We use certain financial measures (as noted below) in the earnings release(g) tables and accompanying earnings release that are not defined under U.S. GAAP and are considered to be non-GAAP measures.



We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable U.S. GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable U.S. GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under U.S. GAAP. In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility.

Non-GAAP measures are as follows:



* Adjusted net income (loss) attributable to Valero Energy Corporation stockholders is defined as net income (loss) attributable to Valero Energy Corporation stockholders adjusted to reflect the items noted below, along with their related income tax effect. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below.

- LIFO liquidation adjustment - Generally, the LIFO inventory valuation method provides for the matching of current costs with current revenues. However, a LIFO liquidation results in a portion of our current-year cost of sales being impacted by historical costs, which obscures our current-year financial performance. Therefore, we have excluded the historical cost impact from adjusted net income (loss) attributable to Valero Energy Corporation stockholders. See note (a) for additional details.



- Change in estimated useful life - The accelerated depreciation recognized as a result of a change in the estimated useful life of one of our ethanol plants (see note (d)) is not indicative of our ongoing operations.



- LCM inventory valuation adjustment - The LCM inventory valuation adjustment, which is described in note (c), is the result of the market value of our inventories as of March 31, 2020 falling below their historical cost, with the decline in market value resulting from the decline in product market prices associated with the negative economic impacts from COVID-19. As market prices improved over the subsequent months, the writedown was fully reversed by September 30, 2020. The net benefit of $19 million associated with the LCM inventory valuation adjustments recorded during 2020 is due solely to the effects of foreign currency translation explained in note (c).



- Blender's tax credit attributable to Valero Energy Corporation stockholders - The blender's tax credit attributable to volumes blended during 2019 and 2018 was recognized by us in December 2019. The adjustment, therefore, reflects the portion of the blender's tax credit that was recorded in December 2019 but is associated with volumes blended during the nine months ended September 30, 2019 and the year ended December 31, 2018. See note (b) for additional details.



- Loss on early redemption of debt - The penalty and other expenses incurred in connection with the early redemption of our 6.125 percent senior notes due February 1, 2020 (see note (e)) are not associated with the ongoing costs of our borrowing and financing activities.



* Adjusted earnings (loss) per common share - assuming dilution is defined as adjusted net income (loss) attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution (see note (f)).

* Refining margin is defined as refining operating income (loss) excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation adjustment (see note (c)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe refining margin is an important measure of our refining segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Renewable diesel margin is defined as renewable diesel operating income excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), operating expenses (excluding depreciation and amortization expense), and depreciation and amortization expense. We believe renewable diesel margin is an important measure of our renewable diesel segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Ethanol margin is defined as ethanol operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, and other operating expenses. We believe ethanol margin is an important measure of our ethanol segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance.

* Adjusted refining operating income (loss) is defined as refining segment operating income (loss) excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)), the LIFO liquidation adjustment (see note (a)), the LCM inventory valuation adjustment (see note (c)), and other operating expenses. We believe adjusted refining operating income (loss) is an important measure of our refining segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted renewable diesel operating income is defined as renewable diesel segment operating income excluding the blender's tax credit not attributable to volumes blended during the applicable period (see note (b)). We believe this is an important measure of our renewable diesel segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted ethanol operating income (loss) is defined as ethanol segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), the change in estimated useful life (see note (d)), and other operating expenses. We believe this is an important measure of our ethanol segment's operating and financial performance because it excludes items that are not indicative of that segment's core operating performance.

* Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding the items noted below. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities. The basis for our belief with respect to each excluded item is provided below.

- Changes in current assets and current liabilities - Current assets net of current liabilities represents our operating liquidity. We believe that the change in our operating liquidity from period to period does not represent cash generated by our operations that is available to fund our investing and financing activities.



- DGD's adjusted net cash provided by operating activities attributable to our joint venture partner's ownership interest in DGD - We are a 50/50 joint venture partner in DGD and consolidate DGD's financial statements; as a result, all of DGD's net cash provided by operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities.



- DGD's partners use DGD's operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD's operating cash flow is effectively attributable to each partner and only 50 percent of DGD's operating cash flow should be attributed to our net cash provided by operating activities. Therefore, we have adjusted our net cash provided by operating activities for the portion of DGD's operating cash flow attributable to our joint venture partner's ownership interest because we believe that it more accurately reflects the operating cash flow available to us to fund our investing and financing activities. The adjustment is calculated as follows (in millions):

Three Months EndedDecember 31,

Year EndedDecember 31,

2020

2019

2020

2019

DGD operating cash flow data

Net cash provided by operating activities

$

141

$

88

$

1,018

$

315

Exclude: changes in current assets and

current liabilities

4

(465

)

343

(465

)

Adjusted net cash provided by

operating activities

137

553

675

780

Our partner's ownership interest

50

%

50

%

50

%

50

%

DGD's adjusted net cash provided by

operating activities attributable to our joint

venture partner's ownership interest in

DGD

$

69

$

277

$

338

$

390

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

DGD operating cash flow data

Net cash provided by operating $ 141 $ 88 $ 1,018 $ 315 activities

Exclude: changes in current assetsand 4 (465 ) 343 (465 )

current liabilities

Adjusted net cash provided by 137 553 675 780 operating activities

Our partner's ownership interest 50 % 50 % 50 % 50 %

DGD's adjusted net cash provided by

operating activities attributableto our joint $ 69 $ 277 $ 338 $ 390 venture partner's ownershipinterest in

DGD

* Capital investments attributable to Valero is defined as all capital expenditures, deferred turnaround and catalyst cost expenditures, and investments in unconsolidated joint ventures presented in our consolidated statements of cash flows, excluding the portion of DGD's capital investments attributable to our joint venture partner and all of the capital expenditures of other VIEs. DGD's partners use DGD's operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD's operating cash flow is effectively attributable to each partner, only 50 percent of DGD's capital investments should be attributed to our net share of total capital investments. We also exclude the capital expenditures of our other consolidated VIEs because we do not operate those VIEs. We believe capital investments attributable to Valero is an important measure because it more accurately reflects our capital investments.

(h)

The refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid-Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries.

(i)

Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.

(j)

Valero uses certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

All per barrel of throughput, per gallon of sales, and per gallon of production amounts are calculated by dividing the associated dollar amount by the throughput volumes, sales volumes, and production volumes for the period, as applicable.

Throughput volumes, sales volumes, and production volumes are calculated by multiplying throughput volumes per day, sales volumes per day, and production volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. We use throughput volumes, sales volumes, and production volumes for the refining segment, renewable diesel segment, and ethanol segment, respectively, due to their general use by others who operate facilities similar to those included in our segments. We believe the use of such volumes results in per unit amounts that are most representative of the product margins generated and the operating costs incurred as a result of our operation of those facilities.

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CONTACT: Valero Contacts Investors: Homer Bhullar, Vice President - Investor Relations, 210-345-1982 Eric Herbort, Senior Manager - Investor Relations, 210-345-3331 Gautam Srivastava, Senior Manager - Investor Relations, 210-345-3992

CONTACT: Media: Lillian Riojas, Executive Director - Media Relations and Communications, 210-345-5002