Valero Energy Corp.

Q2 2026 was exceptionally strong (profitability + cash): Net income attributable to Valero stockholders was $3.7B ($12.62/sh) vs $714M ($2.28/sh) in Q2’25. Operating income rose sharply across segments: Refining $4.5B (vs $1.3B), Renewable Diesel $717M (vs -$79M), Ethanol $318M (vs $54M). Net cash from operations was $5.6B (includes favorable working capital and JV-related cash items); management characterized this as strong operational + commercial execution rather than a one-off.

Q3 2026 outlook: refining & renewable demand supported; specific operating assumptions given: - Refining throughput guidance (by region): Gulf Coast 1.78–1.83 M bpd, Mid-Continent 460–480 kbpd, West Coast 110–120 kbpd, North Atlantic 450–470 kbpd. - Refining cash opex: ~$4.75/bbl. - Renewable Diesel: expected sales ~3.5M gallons/day, operating expenses ~$0.49/gal. - Ethanol: production ~4.8M gallons/day, operating expenses ~$0.39/gal. - Macro cost items: net interest expense ~$140M, D&A ~$700M, G&A ~ $960M for 2026.

Capital allocation: dividend raised/continued + cash build for optionality; buybacks remain disciplined: Company announced a quarterly dividend of $1.20/share (July 16). Stockholder cash returns were $2.6B in Q2 with a 59% payout ratio. Management emphasized they are building cash above their long-term $4–$5B cash target (to protect optionality in commodity volatility), and still expect to maintain the minimum 50% payout commitment—implying buybacks/dividend are not “paused,” but scaled with volatility and cycle-through sustainability.