VALERO ENERGY COR: TX MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Type 10-Q)

CAUTION FOR THE PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES DISPUTES REFORM ACT, 1995

This Type 10-Q, together with with out limitation our disclosures under underneath the
heading "OVERVIEW AND OUTLOOK," contains forward-looking statements inside the
which means of Part 27A of the Securities Act of 1933 and Part 21E of the
Securities Change Act of 1934. You possibly can establish our forward-looking statements
by the phrases "anticipate," "consider," "anticipate," "plan," "intend," "scheduled,"
"estimate," "challenge," "projection," "predict," "funds," "forecast," "objective,"
"steering," "goal," "might," "would," "ought to," "will," "could," "try,"
"search," "potential," "alternative," "aimed," "contemplating," "proceed," and
related expressions.

These forward-looking statements embrace, amongst others, statements relating to:

•the impact, influence, potential length or timing, or different implications of the
COVID-19 pandemic, authorities restrictions in response thereto, variants of the
COVID-19 virus, vaccine distribution and administration ranges, financial
exercise, and world crude oil manufacturing ranges, and any expectations we could
have with respect thereto, together with with respect to our operations and the
manufacturing ranges of our property;
•our expectations with respect to the frequency of enormous extra prices and
bills arising out of storms and different climate occasions, reminiscent of Winter Storm
Uri;
•future refining section margins, together with gasoline and distillate margins, and
reductions;
•future renewable diesel section margins;
•future ethanol section margins;
•expectations relating to feedstock prices, together with crude oil differentials, and
working bills;
•anticipated ranges of crude oil and refined petroleum product inventories and
storage capability;
•expectations relating to the degrees of, and timing with respect to, the
manufacturing and operations at our refineries and vegetation;
•our anticipated stage of capital investments, together with deferred turnaround and
catalyst price expenditures, capital expenditures for environmental and different
functions, and three way partnership investments, the anticipated timing relevant to such
capital investments and any associated tasks, and the impact of these capital
investments on our outcomes of operations;
•our anticipated stage of money distributions or contributions, reminiscent of our
dividend cost price and contributions to our certified pension plans and different
postretirement profit plans;
•our capability to satisfy future money necessities, whether or not from funds generated from
our operations or our capability to entry monetary markets successfully, and our
capability to take care of adequate liquidity;
•our analysis of, and expectations relating to, any future exercise underneath our
share repurchase program;
•anticipated developments within the provide of and demand for crude oil and different
feedstocks and refined petroleum merchandise, renewable diesel, and ethanol and
corn associated co-products within the areas the place we function, in addition to globally;
•expectations relating to environmental, tax, and different regulatory initiatives;
•the impact of common financial and different circumstances on refining, renewable
diesel, and ethanol {industry} fundamentals;

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•expectations relating to adoptions of recent, or modifications to present, low-carbon
gasoline requirements or insurance policies, mixing credit, or effectivity requirements that
influence demand for renewable fuels; and
•expectations relating to a number of carbon transition tasks, that are in early
growth.

We primarily based our forward-looking statements on our present expectations, estimates,
and projections about ourselves, our {industry}, and the worldwide financial system and
monetary markets usually. We warning that these statements are usually not ensures
of future efficiency or outcomes and contain recognized and unknown dangers and
uncertainties, the final word outcomes of which we can not predict with certainty.
As well as, we primarily based many of those forward-looking statements on assumptions
about future occasions, the final word outcomes of which we can not predict with
certainty and which can show to be inaccurate. Accordingly, precise efficiency
or outcomes could differ materially from the longer term efficiency or outcomes that we
have expressed or forecast within the forward-looking statements. Variations
between precise efficiency or outcomes and any future efficiency or outcomes
steered in these forward-looking statements might end result from quite a lot of
components, together with the next:

•demand for, and provides of, refined petroleum merchandise (reminiscent of gasoline,
diesel, jet gasoline, and petrochemicals), renewable diesel, and ethanol and corn
associated co-products;
•demand for, and provides of, crude oil and different feedstocks;
•the results of public well being threats, pandemics, and epidemics, such because the
COVID-19 pandemic, governmental and societal responses thereto, vaccine
distribution and administration ranges, and the opposed impacts of the foregoing
on our enterprise, monetary situation, outcomes of operations, and liquidity,
together with, however not restricted to, our development, working prices, provide chain, labor
availability, logistical capabilities, buyer demand for our merchandise, and
{industry} demand usually, margins, manufacturing and throughput capability,
utilization, stock worth, money place, taxes, the value of our securities
and buying and selling markets with respect thereto, our capability to entry capital markets,
and the worldwide financial system and monetary markets usually;
•acts of terrorism geared toward both our refineries and vegetation or third-party
services that would impair our capability to supply or transport refined
petroleum merchandise, renewable diesel, ethanol, or corn associated co-products, or
to obtain feedstocks;
•political and financial circumstances in nations that produce crude oil or different
feedstocks or eat refined petroleum merchandise, renewable diesel, ethanol or
corn associated co-products;
•the power of the members of the Group of Petroleum Exporting Nations
(OPEC) to agree on and to take care of crude oil worth and manufacturing controls;
•the extent of shopper demand, consumption and total financial exercise,
together with seasonal fluctuations;
•refinery, renewable diesel plant, or ethanol plant overcapacity or
undercapacity;
•our capability to efficiently combine any acquired companies into our
operations;
•the chance that any divestitures could not present the anticipated advantages or could
lead to unexpected detriments;
•the actions taken by opponents, together with each pricing and changes to
refining capability or renewable fuels manufacturing in response to market
circumstances;
•the extent of opponents' imports into markets that we provide;
•accidents, unscheduled shutdowns, climate occasions, civil unrest, expropriation
of property, and different financial, diplomatic, or political occasions or developments,
terrorism, cyberattacks, or different catastrophes or disruptions affecting our
operations, manufacturing services, equipment, pipelines and different logistics
property, gear, or info programs, or any of the foregoing of our
suppliers, prospects, or third-party service suppliers;
•modifications in the associated fee or availability of transportation or storage capability for
feedstocks and our merchandise;

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•political strain and affect of environmental teams and different stakeholders
upon insurance policies and selections associated to the manufacturing, transportation, storage,
refining, processing, advertising, and gross sales of crude oil or different feedstocks,
refined petroleum merchandise, renewable diesel, ethanol, or corn associated
co-products;
•the value, availability, and acceptance of other fuels and
alternative-fuel automobiles, in addition to sentiment and perceptions with respect to
GHG emissions extra usually;
•the degrees of presidency subsidies for, and mandates or different insurance policies with
respect to, various fuels, alternative-fuel automobiles, and different low-carbon
applied sciences or initiatives;
•the volatility available in the market worth of biofuel credit (primarily RINs wanted to
adjust to the U.S. federal Renewable Gas Customary (RFS)) and GHG emission
credit wanted to adjust to the necessities of varied GHG emission packages;
•delay of, cancellation of, or failure to implement deliberate capital tasks and
understand the assorted assumptions and advantages projected for such tasks or price
overruns in setting up such deliberate capital tasks;
•earthquakes, hurricanes, tornadoes, and irregular climate, which might
unforeseeably have an effect on the value or availability of pure gasoline, crude oil,
rendered and recycled supplies, corn, and different feedstocks, refined petroleum
merchandise, renewable diesel, and ethanol;
•rulings, judgments, or settlements in litigation or different authorized or regulatory
issues, together with surprising environmental remediation prices, in extra of any
reserves or insurance coverage protection;
•legislative or regulatory motion, together with the introduction or enactment of
laws or rulemakings by governmental authorities, together with tariffs and
tax and environmental rules, reminiscent of modifications to the company tax price,
actions applied underneath the California cap-and-trade system and related
packages, modifications to quantity necessities or different obligations or exemptions
underneath the RFS, and actions arising from the U.S. Environmental Safety
Company's (EPA's) or different governmental regulation of GHGs, which can adversely
have an effect on our enterprise or operations;
•altering financial, regulatory, and political environments within the numerous
nations through which we function or in any other case do enterprise;
•modifications within the credit score rankings assigned to our debt securities and commerce credit score;
•modifications in forex trade charges, together with the worth of the Canadian greenback,
the pound sterling, the euro, the Mexican peso, and the Peruvian sol relative to
the U.S. greenback;
•the adequacy of capital sources and liquidity, together with availability,
timing, and quantities of money move or our capability to borrow;
•the prices, disruption, and diversion of administration's consideration related to
campaigns and unfavorable publicity commenced by buyers, stakeholders, or different
 events;
•total financial circumstances, together with the soundness and liquidity of economic
markets; and
•different components usually described within the "Threat Elements" part included in our
annual report on Type 10-Ok for the yr ended December 31, 2020.

Any one among these components, or a mixture of those components, might materially
have an effect on our future outcomes of operations and whether or not any forward-looking
statements in the end show to be correct. Our forward-looking statements are
not ensures of future efficiency, and precise outcomes and future efficiency
could differ materially from these steered in any forward-looking statements. We
don't intend to replace these statements except we're required by the
securities legal guidelines to take action.

All subsequent written and oral forward-looking statements attributable to us or
individuals appearing on our behalf are expressly certified of their entirety by the
foregoing. We undertake no obligation to publicly launch any revisions to any
such forward-looking statements which may be made to mirror occasions or
circumstances after the date of this report or to mirror the prevalence of
unanticipated occasions.


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NON-GAAP FINANCIAL MEASURES

The discussions in "OVERVIEW AND OUTLOOK," "RESULTS OF OPERATIONS," and
"LIQUIDITY AND CAPITAL RESOURCES" under embrace references to monetary measures
that aren't outlined underneath U.S. GAAP. These non-GAAP monetary measures embrace
adjusted working revenue (loss) (together with adjusted working revenue (loss) for
every of our reportable segments, as relevant); refining, renewable diesel, and
ethanol section margin; and capital investments attributable to Valero. We've got
included these non-GAAP monetary measures to assist facilitate the comparability of
working outcomes between intervals and to assist assess our money flows. See the
tables in word (c) starting on web page 41 for reconciliations of adjusted
working revenue (loss) (together with adjusted working revenue (loss) for every of
our reportable segments, as relevant) and refining, renewable diesel, and
ethanol section margin to their most instantly comparable U.S. GAAP monetary
measures. Additionally in word (c), we disclose the the reason why we consider our use of
such non-GAAP monetary measures supplies helpful info. See the desk on
web page 47 for a reconciliation of capital investments attributable to Valero to
its most instantly comparable U.S. GAAP monetary measure. Starting on web page 46,
we disclose the the reason why we consider our use of this non-GAAP monetary
measure supplies helpful info.

OVERVIEW AND OUTLOOK

Overview

Enterprise Operations Replace
The outbreak of COVID-19 and its growth right into a pandemic in March 2020
resulted in important financial disruption globally as governmental authorities
imposed restrictions, reminiscent of stay-at-home orders and different social distancing
measures, to sluggish the unfold of COVID-19. These actions considerably lowered
world financial exercise and negatively impacted many companies, together with our
enterprise. We skilled a decline within the demand for many of the transportation
fuels that we produce and promote, and thus additionally a decline available in the market costs of
these merchandise, attributable to a lower within the stage of particular person motion and journey
ensuing from the restrictions. There was additionally a decline within the world demand
for crude oil, the first feedstock for the merchandise of our refining section,
leading to a decline in crude oil costs and manufacturing ranges. On account of
these components, we generated a web loss attributable to Valero stockholders in
2020 and our operations generated considerably much less money in 2020 than in prior
years. We took a lot of actions since March 2020 to answer the impacts
from the pandemic on our enterprise, reminiscent of lowering transportation gasoline
manufacturing at our refineries and ethanol vegetation to align with demand, deferring
sure capital investments, deferring the cost of sure revenue and
oblique taxes as permitted by laws, and suspending purchases of our
frequent inventory underneath our inventory buy program. We additionally raised a complete of
$4.0 billion (earlier than deducting the underwriting reductions and debt issuance
prices) by two public debt choices at enticing charges. The web proceeds
from these choices, together with the money generated by our operations, allowed
us to make most of our deliberate capital investments, pay dividends in every of the
2020 quarterly intervals, and improve our money and money equivalents readily available as of
December 31, 2020 in comparison with the prior yr finish.

For the primary quarter of 2021, we reported a web loss attributable to Valero
stockholders of $704 million. The issue primarily impacting these outcomes was a
important improve in the price of electrical energy and pure gasoline at sure of
our refineries and ethanol vegetation arising out of Winter Storm Uri. We incurred
extra power prices estimated at $579 million, or $467 million after taxes,
through the first quarter of 2021. Our outcomes for the primary quarter are extra
absolutely mentioned in "First Quarter Outcomes" under and in "RESULTS OF OPERATIONS"
starting on web page 33.

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Whereas the numerous improve in power prices was an occasion remoted to the
first quarter of 2021, our enterprise confirmed indicators of restoration and enchancment in
the demand for and market costs of gasoline and diesel, with each components
reaching close to pre-pandemic ranges in March 2021. Jet gasoline demand has seen
improved market indicators, reminiscent of greater traveler throughput as reported by
the Transportation Safety Administration, though at a slower tempo than different
merchandise we produce relative to pre-pandemic ranges. These enhancements resulted
primarily from the lifting or easing of restrictions by many governmental
authorities, particularly these in our U.S. Gulf Coast and U.S. Mid-Continent
areas, in response to reducing COVID-19 an infection charges and growing
numbers of individuals receiving COVID-19 vaccines, which had been permitted by a quantity
of regulators all through the world in late 2020 and early 2021. Whereas many
governmental authorities in areas situated in our U.S. West Coast and North
Atlantic areas, reminiscent of California, Canada, and the U.Ok., proceed to impose
restrictions, a few of these restrictions have been or are quickly anticipated to be
reasonably lifted. The continued distribution of vaccines could end result within the
continued lifting of restrictions and could also be seen as a key think about serving to to
restore public confidence, and thus stimulate and improve financial exercise,
doubtlessly to pre-pandemic ranges; nonetheless, the chance stays that the vaccines
is probably not distributed broadly on a well timed foundation, they is probably not efficient
in opposition to new variants of the COVID-19 virus, the distribution of some or all of
the vaccines could also be paused or withdrawn attributable to considerations with potential aspect
results, and/or the extent of people' willingness to obtain a vaccine could
not be as sturdy or as well timed as wanted. Primarily based on these and different circumstances
that can't be predicted, the broader implications of the pandemic on our
outcomes of operations and monetary place stay unsure.

The bettering, however lingering, impacts of the pandemic on our operations and the
unfavorable results arising out of Winter Storm Uri on the power prices at sure
of our refineries and ethanol vegetation additionally impacted our liquidity through the
first quarter of 2021. Our operations for the quarter used $52 million of money
largely as a result of impact from estimated extra power prices beforehand famous,
nearly all of which had been paid by the top of the primary quarter. We additionally made
$582 million in capital investments and paid $400 million in dividends throughout
the quarter. In consequence, our money and money equivalents decreased by
$1.0 billion, from $3.3 billion as of December 31, 2020 to $2.3 billion as of
March 31, 2021. We didn't challenge any debt or make any borrowings underneath our
credit score services through the first quarter of 2021, and we had $8.0 billion in
liquidity1 as of March 31, 2021. A abstract of our money flows is introduced on
web page 45, and an outline of our money flows and different issues impacting our
liquidity and capital sources, together with measures now we have taken to deal with the
impacts of the COVID-19 pandemic on our liquidity, might be discovered underneath "LIQUIDITY
AND CAPITAL RESOURCES" on pages 44 by 49.

Whereas our enterprise has improved on account of the growing demand for and
market costs of many of the merchandise that we produce, many uncertainties stay
with respect to the pandemic, together with its ensuing financial results.
Subsequently, we're unable to foretell the final word financial impacts from the
pandemic on our enterprise and the way rapidly nationwide economies can recuperate as soon as the
pandemic subsides, the timing or effectiveness of vaccine distributions or
vaccination ranges, whether or not enhancements skilled by us to date could reverse,
or whether or not different setbacks could happen. In consequence, the opposed impacts of the
financial results of the pandemic on our firm could probably proceed to be
important. We consider now we have proactively responded to most of the recognized
impacts of the pandemic on our enterprise to the extent practicable and we attempt
to proceed to take action, however there might be no assurance that these or different measures
can be absolutely efficient.

1 See the elements of our liquidity in March 31, 2021 within the desk on web page 45 underneath “LIQUIDITY AND CAPITAL RESOURCES – Our liquidity”.

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First Quarter Outcomes
For the primary quarter of 2021, we reported a web loss attributable to Valero
stockholders of $704 million in comparison with a web loss attributable to Valero
stockholders of $1.9 billion for the primary quarter of 2020. The advance of
$1.1 billion was primarily attributable to a decrease working lack of $1.6 billion,
partially offset by a decrease revenue tax advantage of $468 million. The lower in
working loss between the intervals included the impact of a $2.5 billion LCM
stock valuation adjustment within the first quarter of 2020, which is described
in Word 3 of Condensed Notes to Consolidated Monetary Statements and in
word (b) on web page 41.

Whereas our working loss decreased by $1.6 billion within the first quarter of 2021
in comparison with the primary quarter of 2020, adjusted working revenue decreased by
$895 million. Adjusted working revenue excludes the changes mirrored in
the desk in word (c) on web page 44.

the $ 895 million the lower in adjusted working revenue is especially defined by:

•Refining section. Refining section adjusted working revenue decreased by
$883 million primarily attributable to estimated extra power prices arising out of
Winter Storm Uri, decrease distillate margins, decrease throughput volumes, and better
price of biofuel credit, partially offset by greater gasoline margins. That is
extra absolutely described on pages 37 and 38.

•Renewable diesel section. Renewable diesel section working revenue elevated
by $5 million primarily attributable to greater renewable diesel costs, partially offset
by greater feedstock prices and an unfavorable influence from commodity by-product
devices related to our worth threat administration actions. That is extra
absolutely described on web page 39.

•Ethanol section. Ethanol section adjusted working loss decreased by
$13 million primarily attributable to greater ethanol and corn associated co-product costs,
partially offset by greater corn costs, estimated extra power prices arising
out of Winter Storm Uri, and decrease manufacturing volumes. That is extra absolutely
described on pages 40 and 41.

Outlook

As beforehand mentioned, many uncertainties stay with respect to the COVID-19
pandemic, and whereas it's troublesome to foretell the final word financial impacts
that the pandemic could have on us and the way rapidly we will recuperate as soon as the
pandemic subsides, now we have famous a number of components under which have impacted or could
influence our outcomes of operations through the second quarter of 2021.

• Gasoline, jet gasoline and diesel costs are anticipated to proceed to enhance, with industry-wide stock ranges returning to historic ranges and continued restoration in product demand.

• The rebates on bitter crude oil are anticipated to proceed to enhance because the OPEC manufacturing will increase in response to any additional development in world demand for oil.

• Renewable diesel margins are anticipated to stay in step with present ranges.

• Ethanol margins are anticipated to enhance as home consumption will increase.

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RESULTS OF OPERATIONS

The next tables, together with reconciliations of non-GAAP monetary measures with their we The GAAP monetary measures in word (c) beginning on web page 41 spotlight our outcomes of operations, our working efficiency and benchmark market costs and margins which have a direct influence on our operations.

First Quarter Outcomes -
Monetary Highlights By Section and Complete Firm
(hundreds of thousands of {dollars})
                                                                      Three 

Ended months March 31, 2021

                                                                                                      Company
                                                               Renewable                                 and
                                            Refining            Diesel             Ethanol          Eliminations            Complete
Revenues:

Income from exterior prospects $ 19,469$ 352

     $    985          $          -          $ 20,806
Intersegment revenues                             3                  79                60                  (142)                -
Complete revenues                               19,472                 431             1,045                  (142)           20,806
Value of gross sales:
Value of supplies and different (a)              18,022                 187               924                  (141)           18,992

Working bills (excluding
depreciation and
amortization expense mirrored under) (a)     1,471                  29               156                     -             1,656
Depreciation and amortization expense           533                  12                21                     -               566
Complete price of gross sales                          20,026                 228             1,101                  (141)           21,214
Different working bills                         38                   -                 -                     -                38
Normal and administrative bills
(excluding
depreciation and amortization expense
mirrored
under)                                            -                   -                 -                   208               208
Depreciation and amortization expense             -                   -                 -                    12                12

Working revenue by section (592) $$ 203

      $    (56)$       (221)             (666)
Different revenue, web                                                                                                              45
Curiosity and debt expense, web of
capitalized
curiosity                                                                                                                     (149)
Loss earlier than revenue tax profit                                                                                               (770)
Revenue tax profit                                                                                                           (148)
Web loss                                                                                                                     (622)
Much less: Web revenue attributable to
noncontrolling
pursuits                                                                                                                      82
Web loss attributable to
Valero Power Company stockholders                                                                                   $   (704)

________________________

See footnote references on pages 41 to 44.

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First Quarter Outcomes -
Monetary Highlights By Section and Complete Firm (continued)
(hundreds of thousands of {dollars})
                                                                     Three 

Ended months March 31, 2020

                                                                                                    Company
                                                              Renewable                                and
                                           Refining            Diesel            Ethanol          Eliminations            Complete
Revenues:

Income from exterior prospects $ 20,985$ 306

    $   811          $          -          $ 22,102
Intersegment revenues                            2                  53               64                  (119)                -
Complete revenues                              20,987                 359              875                  (119)           22,102
Value of gross sales:
Value of supplies and different                 19,127                 130              813                  (118)           19,952
LCM stock valuation adjustment (b)       2,414                   -              128                     -             2,542
Working bills (excluding
depreciation and
amortization expense mirrored under)          995                  20              109                     -             1,124
Depreciation and amortization expense          536                  11               22                     -               569
Complete price of gross sales                         23,072                 161            1,072                  (118)           24,187
Different working bills                         2                   -                -                     -                 2
Normal and administrative bills
(excluding
depreciation and amortization expense
mirrored
under)                                           -                   -                -                   177               177
Depreciation and amortization expense            -                   -                -                    13                13

Working revenue by section ($ 2,087)$ 198

     $  (197)$       (191)           (2,277)
Different revenue, web                                                                                                            32
Curiosity and debt expense, web of
capitalized
curiosity                                                                                                                   (125)
Loss earlier than revenue tax profit                                                                                           (2,370)
Revenue tax profit                                                                                                         (616)
Web loss                                                                                                                 (1,754)
Much less: Web revenue attributable to
noncontrolling
pursuits                                                                                                                    97
Web loss attributable to
Valero Power Company stockholders                                                                                 $ (1,851)

________________________

See footnote references on pages 41 to 44.

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First Quarter Outcomes -
Common Market Reference Costs and Differentials
                                                                  Three Months Ended March 31,
                                                           2021                2020              Change
Refining
Feedstocks ({dollars} per barrel)
Brent crude oil                                        $    61.09$   50.90$   10.19
Brent much less West Texas Intermediate (WTI) crude oil           3.26               4.92              (1.66)
Brent much less Alaska North Slope (ANS) crude oil                0.33              (0.50)              0.83
Brent much less Louisiana Mild Candy (LLS) crude oil             1.11               2.76              (1.65)
Brent much less Argus Bitter Crude Index (ASCI) crude oil           2.99               5.01              (2.02)
Brent much less Maya crude oil                                    4.70               9.74              (5.04)
LLS crude oil                                               59.98              48.14              11.84
LLS much less ASCI crude oil                                      1.88               2.25              (0.37)
LLS much less Maya crude oil                                      3.59               6.98              (3.39)
WTI crude oil                                               57.84              45.98              11.86

Pure gasoline ({dollars} per million British Thermal
Models)                                                      19.66               1.82              17.84

Product margins ({dollars} per barrel)
U.S. Gulf Coast:
Typical Blendstock of Oxygenate Mixing
(CBOB) gasoline much less Brent                                  10.12               2.37               7.75
Extremely-low-sulfur (ULS) diesel much less Brent                    10.19              11.26              (1.07)
Propylene much less Brent                                        18.50             (21.04)             39.54
CBOB gasoline much less LLS                                      11.23               5.13               6.10
ULS diesel much less LLS                                         11.30              14.02              (2.72)
Propylene much less LLS                                          19.61             (18.28)             37.89
U.S. Mid-Continent:
CBOB gasoline much less WTI                                      14.82               7.69               7.13
ULS diesel much less WTI                                         17.21              17.31              (0.10)
North Atlantic:
CBOB gasoline much less Brent                                    11.56               4.28               7.28
ULS diesel much less Brent                                       11.89              14.29              (2.40)
U.S. West Coast:
California Reformulated Gasoline Blendstock of
Oxygenate Mixing (CARBOB) 87 gasoline much less ANS            14.56               7.82               6.74

California Air Sources Council (CARB) diesel much less YEARS 14.14

   17.22              (3.08)
CARBOB 87 gasoline much less WTI                                 17.49              13.24               4.25
CARB diesel much less WTI                                        17.07              22.64              (5.57)




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First Quarter Outcomes -
Common Market Reference Costs and Differentials, (continued)
                                                                 Three Months Ended March 31,
                                                         2021                2020               Change
Renewable diesel
New York Mercantile Change ULS diesel
({dollars} per gallon)                                 $     1.74$     1.55$     0.19
Biodiesel RIN ({dollars} per RIN)                            1.18                0.46                0.72
California Low-Carbon Gas Customary ({dollars} per
metric ton)                                              195.30              206.03              (10.73)

Chicago Chamber of Commerce (CBOT) soybean oil ({dollars} per pound)

                                                 0.48                0.30                0.18

Ethanol

CBOT corn ({dollars} per bushel)                             5.39                3.74                1.65
New York Harbor ethanol ({dollars} per gallon)               1.78                1.33                0.45



Complete Firm, Company, and Different
The next desk contains chosen monetary information for the whole firm,
company, and different for the primary quarter of 2021 and 2020. The chosen
monetary information is derived from the Monetary Highlights by Section and Complete
Firm tables on pages 33 and 34, except in any other case famous.
                                                                    Three 

Ended months March, thirty first,

                                                             2021                  2020              Change
Revenues                                               $    20,806$  22,102$  (1,296)
Value of gross sales (see notes (a) and (b) on web page 41)            21,214                24,187             (2,973)
Working bills (excluding depreciation and
amortization
expense) (see word (a) on web page 41)                           1,656                 1,124                532
Normal and administrative bills (excluding
depreciation
and amortization expense)                                      208                   177                 31
LCM stock valuation adjustment (see word (b) on
web page 41)                                                         -                 2,542             (2,542)

Working loss                                                (666)               (2,277)             1,611

Adjusted working revenue (see word (c) on web page 44)

                                                           (628)                  267               (895)

Curiosity and money owed, web of capitalized curiosity (149)

        (125)               (24)
Revenue tax profit                                            (148)                 (616)               468



Revenues decreased by $1.3 billion within the first quarter of 2021 in comparison with the
first quarter of 2020 primarily attributable to a lower within the quantity of refined
petroleum merchandise bought by our refining section. This lower in revenues,
together with a rise normally and administrative bills (excluding
depreciation and amortization expense) of $31 million, was greater than offset by a
lower in price of gross sales of $3.0 billion, which resulted in a $1.6 billion
lower in working loss, from $2.3 billion within the first quarter of 2020 to
$666 million within the first quarter of 2021. The lower in price of gross sales was
primarily as a result of impact of the $2.5 billion LCM stock valuation
adjustment within the first quarter of 2020 and decrease manufacturing volumes ensuing
in decrease crude oil and different feedstock prices within the first quarter of 2021,
partially offset by a $532 million improve in working bills (excluding
depreciation and amortization expense).

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Adjusted working revenue decreased by $895 million, from $267 million of
adjusted working revenue within the first quarter of 2020 to an adjusted working
lack of $628 million within the first quarter of 2021. The $895 million lower
features a $31 million improve normally and administrative bills
(excluding depreciation and amortization expense) related to our company
actions, and this improve is mentioned under. The remaining elements of
the lower in adjusted working revenue are mentioned by section within the
section analyses that comply with.

Normal and administrative bills (excluding depreciation and amortization
expense) elevated by $31 million within the first quarter of 2021 in comparison with the
first quarter of 2020 primarily attributable to a rise in sure worker
compensation bills of $23 million and better promoting bills of
$7 million.

“Curiosity and money owed, web of capitalized curiosity” elevated by
$ 24 million within the first quarter of 2021 in comparison with the primary quarter of 2020 primarily attributable to curiosity expense associated to public debt points in 2020.

Revenue tax profit decreased by $468 million within the first quarter of 2021
in comparison with the primary quarter of 2020 primarily on account of a decrease loss
earlier than revenue tax profit. Our efficient tax price was 19 p.c for the primary
quarter of 2021 in comparison with 26 p.c for the primary quarter of 2020. The
efficient tax price for the primary quarter of 2020 was impacted by the U.S.
federal tax NOL for 2020, which was carried again to 2015 when the U.S. federal
statutory price was 35 p.c, as described in Word 8 of Condensed Notes to
Consolidated Monetary Statements.

Refining Section Outcomes
The next desk contains chosen monetary and working information of our
refining section for the primary quarter of 2021 and 2020. The chosen monetary
information is derived from the Monetary Highlights by Section and Complete Firm
tables on pages 33 and 34, respectively, except in any other case famous.
                                                                    Three Months Ended March 31,
                                                             2021                  2020              Change
Working loss                                        $     (592)$  (2,087)$   1,495
Adjusted working revenue (loss) (see word (c) on
web page 43)                                                    (554)                    329               (883)

Refining margin (see word (c) on web page 42)             $    1,450$   1,860$    (410)
Working bills (excluding depreciation and
amortization
expense mirrored under) (see word (a) on web page 41)         1,471                     995                476

Depreciation and amortization expense                        533                     536                 (3)

Throughput volumes (thousand barrels per day) (see
word (d)
on web page 44)                                                2,410                   2,824               (414)



Refining section working loss decreased by $1.5 billion within the first quarter
of 2021; nonetheless, refining section adjusted working revenue, which excludes the
changes within the desk in word (c) on web page 43, decreased by $883 million in
the primary quarter of 2021 in comparison with the primary quarter of 2020. The

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elements of this lower, together with the explanations for the modifications in these
elements, are outlined under.

• The refining section’s margin decreased by $ 410 million within the first quarter of 2021 in comparison with the primary quarter of 2020.

The refining section’s margin is primarily affected by the costs of refined petroleum merchandise that we promote and the price of crude oil and different uncooked supplies that we course of. The desk on web page 35 displays the market benchmark costs and spreads that we consider had a major influence on the evolution of our refining section’s margin within the first quarter of 2021 in comparison with the primary quarter of 2020.

The decline within the refining section’s margin is especially as a result of following components:

•A lower in distillate (primarily diesel) margins had an unfavorable influence
of roughly $280 million.
•A lower in throughput volumes of 414,000 barrels per day had an unfavorable
influence of $249 million. As famous in "OVERVIEW AND OUTLOOK-Overview-Enterprise
Operations Replace" on pages 30 by 31, the COVID-19 pandemic resulted in
world financial disruption and a major decline within the demand for the
transportation fuels we produce, and because of this, we lowered manufacturing of
transportation gasoline merchandise starting late within the first quarter of 2020. We
have since elevated the manufacturing of most of our merchandise to align with
enhancements in demand, which reached close to pre-pandemic ranges in March 2021.

•A rise in the price of biofuel credit (primarily RINs within the U.S.) had an
unfavorable influence of $248 million. See Word 13 of Condensed Notes to
Consolidated Monetary Statements for added info on our authorities
and regulatory compliance program.

• The discount in reductions on feedstocks aside from crude oil had an opposed influence of roughly $ 167 million.

• The estimate of the extra power prices ensuing from the winter storm Uri had an unfavorable influence on $ 47 million (see word (a) on web page 41).

• A rise in gasoline margins had a good influence of roughly
$ 557 million.

• Working bills for the Refining section (excluding depreciation and amortization) elevated by $ 476 million primarily as a result of estimated extra power prices ensuing from the winter storm Uri of $ 478 million (see word (a) on web page 41).


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Renewable Diesel Section Outcomes
The next desk contains chosen monetary and working information of our
renewable diesel section for the primary quarter of 2021 and 2020. The chosen
monetary information is derived from the Monetary Highlights by Section and Complete
Firm tables on pages 33 and 34, respectively, except in any other case famous.
                                                                  Three 

Ended months March, thirty first,

                                                          2021                2020              Change
Working revenue                                      $      203          $ 

198 $ 5

Renewable diesel margin (see word (c) on web page 42) $ 244 $

     229          $       15
Working bills (excluding depreciation and
amortization
expense mirrored under)                                      29                 20                   9
Depreciation and amortization expense                         12                 11                   1

Gross sales volumes (thousand gallons per day) (see word
(d)
on web page 44)                                                  867                867                   -


The working revenue of the renewable diesel section elevated by $ 5 million within the first quarter of 2021. The rise is especially attributable to a better margin within the renewable diesel section.

Renewable diesel section margin elevated by $15 million within the first quarter of
2021 in comparison with the primary quarter of 2020. Renewable diesel section margin is
primarily affected by the value of the renewable diesel that we promote and the
price of the feedstocks that we course of. The desk on web page 36 displays market
reference costs that we consider had a fabric influence on the change in our
renewable diesel section margin within the first quarter of 2021 in comparison with the
first quarter of 2020.

The rise within the renewable diesel section’s margin is especially as a result of following:

• The rise in renewable diesel costs had a good influence of roughly
$ 121 million.

• A rise in the price of the uncooked supplies we course of had an unfavorable influence of roughly $ 59 million.

•Value threat administration actions had an unfavorable influence of $49 million. We
acknowledged a hedge lack of $23 million within the first quarter of 2021 in comparison with
a hedge acquire of $26 million within the first quarter of 2020.


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Ethanol Section Outcomes
The next desk contains chosen monetary and working information of our
ethanol section for the primary quarter of 2021 and 2020. The chosen monetary
information is derived from the Monetary Highlights by Section and Complete Firm
tables on pages 33 and 34, respectively, except in any other case famous.
                                                                  Three Months Ended March 31,
                                                          2021                2020              Change
Working loss                                        $      (56)$    (197)$      141
Adjusted working loss (see word (c) on web page 43)            (56)               (69)                 13

Ethanol margin (see word (c) on web page 43)              $      121$      62$       59
Working bills (excluding depreciation and
amortization
expense mirrored under) (see word (a) on web page 41)           156                109                  47
Depreciation and amortization expense                         21                 22                  (1)

Manufacturing volumes (thousand gallons per day) (see
word (d)
on web page 44)                                                3,562              4,103                (541)



Ethanol section working loss decreased by $141 million within the first quarter of
2021; nonetheless, ethanol section adjusted working loss, which excludes the
adjustment within the desk in word (c) on web page 43, decreased by $13 million within the
first quarter of 2021 in comparison with the primary quarter of 2020. The elements of
this lower, together with the explanations for the modifications in these elements, are
outlined under.

• The margin of the Ethanol section elevated by $ 59 million within the first quarter of 2021 in comparison with the primary quarter of 2020.

Ethanol section margin is primarily affected by costs of the ethanol and corn
associated co-products that we promote and the price of corn that we course of. The desk
on web page 36 displays market reference costs that we consider had a fabric
influence on the change in our ethanol section margin within the first quarter of 2021
in comparison with the primary quarter of 2020.

The rise within the margin of the ethanol section is especially as a result of following parts:

• The rise in ethanol costs had a good influence of roughly $ 178 million.

• The rise within the costs of the co-products we produce, primarily distillery cereals, had a good influence of roughly $ 94 million.

• The rise in maize costs had an unfavorable influence of about $ 188 million.

•A lower in manufacturing volumes of 541,000 gallons per day had an unfavorable
influence of roughly $24 million. As famous in "OVERVIEW AND
OUTLOOK-Overview-Enterprise Operations Replace" on pages 30 by 31, the
COVID-19 pandemic resulted in world financial disruption and a major
decline in demand for ethanol, and because of this, we lowered manufacturing starting
late within the first quarter of 2020. We've got since elevated the manufacturing of
ethanol at most of our vegetation to align with enhancements in demand.

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•Ethanol section working bills (excluding depreciation and amortization
expense) elevated by $47 million primarily attributable to estimated extra power prices
arising out of Winter Storm Uri of $54 million (see word (a) on web page 41),
partially offset by decrease chemical and catalyst prices of $6 million.
________________________
The next notes relate to references on pages 30 by 41.

(a)In mid-February 2021, lots of our refineries and vegetation had been impacted to
various extents by the extreme chilly, utility disruptions, and better power prices
arising out of Winter Storm Uri. The upper power prices resulted from an
improve within the costs of pure gasoline and electrical energy that considerably
exceeded charges that we contemplate regular, reminiscent of the common charges we incurred
the month previous the storm. In consequence, our working loss for the three
months ended March 31, 2021 contains estimated extra power prices of
$579 million.

The above-mentioned pre-tax estimated extra power cost is mirrored in our
assertion of revenue line objects and attributable to our reportable segments as
follows (in hundreds of thousands):
                                                                    Renewable
                                                     Refining        Diesel        Ethanol       Complete
       Value of supplies and different                  $      47      $       -      $      -      $  47
       Working bills (excluding depreciation
       and amortization expense)                          478              -            54        532
       Complete estimated extra power prices          $     525      $       -      $     54$ 579



(b)The market worth of our inventories accounted for underneath the LIFO technique fell
under their historic price on an mixture foundation as of March 31, 2020. As a
end result, we recorded an LCM stock valuation adjustment of $2.5 billion in
March 2020. Of the $2.5 billion adjustment, $2.4 billion and $128 million are
attributable to our refining and ethanol segments, respectively.

(c) We use sure monetary metrics (as famous under) that aren’t outlined
we GAAP and are thought of non-GAAP measures.

We've got outlined these non-GAAP measures and consider they're helpful to the
exterior customers of our monetary statements, together with {industry} analysts,
buyers, lenders, and score businesses. We consider our adjusted working
revenue measures (together with for our refining and ethanol segments) are helpful to
assess our ongoing monetary efficiency as a result of, when reconciled to their most
comparable U.S. GAAP measures, they supply improved comparability between
intervals by the exclusion of sure objects that we consider are usually not
indicative of our core working efficiency and that will obscure our underlying
enterprise outcomes and developments. We consider our refining margin, renewable diesel
margin, and ethanol margin, as relevant, are vital measures of the
related section's working and monetary efficiency as a result of, with respect to
such section, it's the most comparable measure to the {industry}'s market
reference product margins, that are utilized by {industry} analysts, buyers, and
others to judge our efficiency. These non-GAAP measures shouldn't be
thought of as alternate options to their most comparable U.S. GAAP measures nor
ought to they be thought of in isolation or as an alternative choice to an evaluation of our
outcomes of operations as reported underneath U.S. GAAP. As well as, these non-GAAP
measures is probably not corresponding to equally titled measures utilized by different
corporations as a result of we could outline them in another way, which diminishes their
utility.


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Non-GAAP measures are as follows:

•Refining margin is outlined as refining section working loss excluding the LCM
stock valuation adjustment, working bills (excluding depreciation and
amortization expense), depreciation and amortization expense, and different
working bills, as mirrored within the desk under.
                                                                 Three Months Ended
                                                                     March 31,
                                                                                2021          2020

Refining working loss reconciliation

on the refining margin

 Refining working loss                                                    

(592) $($ 2,087)

Changes:

 LCM stock valuation adjustment (see word (b))                          

– 2 414

Working bills (excluding depreciation and

 amortization expense) (see word (a))                                           1,471           995
 Depreciation and amortization expense                                            533           536
 Different working bills                                                          38             2
 Refining margin                                                              $ 1,450$  1,860



•Renewable diesel margin is outlined as renewable diesel section working revenue
excluding working bills (excluding depreciation and amortization expense)
and depreciation and amortization expense, as mirrored within the desk under.
                                                                   Three Months Ended
                                                                       March 31,
                                                                                   2021       2020
   Reconciliation of renewable diesel working revenue
   to renewable diesel margin
   Renewable diesel working revenue                                              $ 203$ 198
   Changes:

   Working bills (excluding depreciation and
   amortization expense)                                                             29         20
   Depreciation and amortization expense                                             12         11
   Renewable diesel margin                                                        $ 244$ 229



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•Ethanol margin is outlined as ethanol section working loss excluding the LCM
stock valuation adjustment, working bills (excluding depreciation and
amortization expense), and depreciation and amortization expense, as mirrored
within the desk under.
                                                                  Three Months Ended
                                                                      March 31,
                                                                                  2021        2020
  Reconciliation of ethanol working loss
  to ethanol margin
  Ethanol working loss                                                         $ (56)$ (197)
  Changes:
  LCM stock valuation adjustment (see word (b))                                  -         128
  Working bills (excluding depreciation and
  amortization expense) (see word (a))                                             156         109
  Depreciation and amortization expense                                             21          22

  Ethanol margin                                                                 $ 121$   62

• Adjusted refining working revenue is outlined because the working lack of the refining section excluding adjustment of the valuation of LCM inventories and different working bills, as indicated within the desk under.

                                                              Three Months Ended
                                                                   March 31,
                                                              2021             2020

Refining working loss reconciliation

adjusted working revenue from refining

     Refining working loss                             $    (592)

($ 2,087)

Changes:

     LCM stock valuation adjustment (see word (b))           -         

2,414

     Different working bills                                   38                 2
     Adjusted refining working revenue (loss)           $    (554)$    329



•Adjusted ethanol working loss is outlined as ethanol section working loss
excluding the LCM stock valuation adjustment, as mirrored within the desk
under.
                                                               Three Months Ended
                                                                   March 31,
                                                                2021             2020
   Reconciliation of ethanol working loss
   to adjusted ethanol working loss
   Ethanol working loss                                $     (56)$ (197)
   Changes:
   LCM stock valuation adjustment (see word (b))             -                128

   Adjusted ethanol working loss                       $     (56)$  (69)



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•Adjusted working revenue (loss) is outlined as whole firm working loss
excluding the LCM stock valuation adjustment and different working bills,
as mirrored within the desk under.
                                                              Three Months Ended
                                                                   March 31,
                                                              2021             2020

Reconciliation of the corporate’s whole working loss

to adjusted working revenue

     Complete firm working loss                        $    (666)$ (2,277)
     Changes:

     Different working bills                                   38                 2
     LCM stock valuation adjustment (see word (b))           -         

2,542

     Adjusted working revenue (loss)                    $    (628)$    267

(d) We use throughput volumes, gross sales volumes and manufacturing volumes for Refining Section, Renewable Diesel Section and Ethanol Section, respectively, attributable to their common use by others who function services just like these included in our segments.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Through the first quarter of 2021, our liquidity was negatively impacted by the
ongoing impacts of the COVID-19 pandemic and the unfavorable results arising out of
Winter Storm Uri on power prices at sure of our refineries and ethanol vegetation
throughout mid-February 2021, as described in "OVERVIEW AND
OUTLOOK-Overview-Enterprise Operations Replace." The actions that we took
all through 2020, and have continued to absorb 2021, to answer the impacts
from the pandemic on our enterprise improved our liquidity place. Among the many
actions taken had been the deferral of sure capital investments, the deferral of
sure revenue and oblique tax funds, and the suspension of share
repurchases. See dialogue of those deferrals and the suspension of share
repurchases and their influence on our liquidity in 2021 inside the dialogue of
issues impacting our liquidity and capital sources under.

In March 2021, DGD has entered into the DGD Revolver, as described in Word 4 of the condensed notes to the consolidated monetary statements, which can be used for common company functions. From March 31, 2021 and April 29, 2021, DGD had no excellent loans underneath this facility.

We consider that now we have adequate funds from operations and from borrowings
underneath our credit score services to fund our ongoing working necessities and different
commitments. We anticipate that, to the extent essential, we will elevate extra
money by fairness or debt financings in the private and non-private capital markets
or the association of extra credit score services. Nonetheless, there might be no
assurances relating to the supply of any future financings or extra
credit score services or whether or not such financings or extra credit score services can
be made out there on phrases which can be acceptable to us.

At April 19, 2021, we bought a 24.99% stake in MVP for
$ 270 million, as described in word 6 of the condensed notes to the consolidated monetary statements. We’ve got retained a 25.01% stake in MVP.

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Our Liquidity
Our liquidity consisted of the next as of March 31, 2021 (in hundreds of thousands):
      Obtainable borrowing capability from dedicated services(a):
      Valero Revolver                                                                     $ 3,882
      364-day Revolving Credit score Facility(b)                                                    875
      Canadian Revolver(c)                                                                    116
      Accounts receivable gross sales facility                                                    1,000
      Letter of credit score facility                                                                50
      Complete out there borrowing capability                                                    5,923
      Money and money equivalents(d)                                                          2,044
      Complete liquidity                                                                     $ 7,967

________________________

(a)Excludes the dedicated services of our VIEs.
(b)The 364-day Revolving Credit score Facility matured on April 12, 2021 and was not
renewed.
(c)The quantity for our Canadian Revolver is proven in U.S. {dollars}. As set forth
within the abstract of our credit score services in Word 4 of Condensed Notes to
Consolidated Monetary Statements, the supply underneath our Canadian Revolver
as of March 31, 2021 in Canadian {dollars} was C$145 million.
(d)Excludes $210 million of money and money equivalents associated to our VIEs that
is on the market to be used solely by our VIEs.

Info on our excellent borrowings, letters of credit score issued and availability underneath our credit score services are mirrored in Word 4 of the condensed notes to the consolidated monetary statements.

Money Flows
Elements of our money flows are set forth under (in hundreds of thousands):
                                                              Three Months Ended
                                                                  March 31,
                                                              2021           2020
       Money flows supplied by (utilized in):
       Working actions                               $      (52)     $

(49)

       Investing actions                                     (580)       

(757)

Fundraising actions:

       Borrowings                                                  8        

370

       Different financing actions                               (447)       

(565)

       Financing actions                                     (439)       

(195)

       Impact of overseas trade price modifications on money            12        

(67)

Web lower in money and money equivalents ($ 1,059)($ 1,068)



Money Flows for the Three Months Ended March 31, 2021
Within the first quarter of 2021, we used $1.1 billion of our money readily available to fund
our operations by $52 million, make $580 million of investments in our enterprise,
and fund $447 million of different financing actions.

Our operations usually generate optimistic web money flows; nonetheless, within the first
quarter of 2021, we used $52 million of money to fund our operations that was
largely pushed by a major improve in power prices at sure of our
refineries and ethanol vegetation attributable to results arising out of Winter Storm Uri, as
described

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in "OVERVIEW AND OUTLOOK-Overview-Enterprise Operations Replace," partially offset
by noncash expenses to revenue of $339 million, and a optimistic change in working
capital of $184 million. Noncash expenses included $578 million of depreciation
and amortization expense, partially offset by a $239 million deferred revenue tax
profit. Particulars relating to the elements of the change in working capital,
together with the explanations for the modifications in these elements, are described in
Word 11 of Condensed Notes to Consolidated Monetary Statements. As well as,
see "RESULTS OF OPERATIONS" for an evaluation of our web loss.

Our investing actions of $580 million consisted of $582 million in capital
investments, as outlined under, of which $154 million associated to self-funded
capital investments by DGD, and $26 million was associated to capital expenditures
of VIEs aside from DGD.

Different financing actions of $447 million consisted primarily of $400 million
in dividend funds, $31 million of funds of debt and finance lease
obligations, and $14 million for the acquisition of frequent inventory for treasury in
reference to stock-based compensation plans.

Money move for the three months ended March 31, 2020
Within the first quarter of 2020, we used $ 1.1 billion money and
$ 370 million loans to finance our operations in $ 49 million, Make
$ 757 million of investments in our firm and to finance $ 565 million different fundraising actions. The borrowings are described in word 4 of the condensed notes to the consolidated monetary statements.

Our operations usually generate optimistic web money flows; nonetheless, within the first
quarter of 2020, we used $49 million of money to fund our operations due
primarily to a unfavorable change in working capital of $1.1 billion. Whereas we
incurred a web lack of $1.8 billion within the first quarter of 2020, that web loss
was pushed by $3.0 billion of noncash expenses consisting of $582 million of
depreciation and amortization expense and the $2.5 billion LCM stock
valuation adjustment. The unfavorable change in working capital was largely the
results of quickly falling market costs for the merchandise that we promote. Money
generated by our product gross sales is often better than the money we use to pay
for crude oil and different feedstocks that we course of and different prices that we
incur. Nonetheless, as a result of each day product gross sales comply with the market costs on that
day, fast will increase or decreases in product market costs can considerably
influence our working capital positively or negatively, respectively. Market costs
declined quickly within the latter half of March 2020 and this fast decline
resulted in a major use of money to pay for our crude oil and different
feedstock purchases that had been bought earlier within the quarter earlier than market
costs for these feedstocks declined. Particulars relating to the elements of the
change in working capital, together with the explanations for the modifications in these
elements, are described in Word 11 of Condensed Notes to Consolidated
Monetary Statements. As well as, see "RESULTS OF OPERATIONS" for an evaluation
of our web loss.

Our investing actions of $757 million consisted of $767 million in capital
investments, as outlined under, of which $78 million associated to self-funded
capital investments by DGD, and $62 million was associated to capital expenditures
of VIEs aside from DGD.

Different fundraising actions of $ 565 million consisted primarily of $ 401 million
in dividend funds, $ 147 million for the acquisition of abnormal shares for money, and $ 15 million debt funds and finance lease obligations.

Capital Investments
Our capital investments embrace capital expenditures, deferred turnaround and
catalyst price expenditures, and investments in unconsolidated joint ventures.
Capital investments attributable to Valero, which is a

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non-GAAP monetary measure, displays our web share of capital investments and is
outlined as all capital expenditures, deferred turnaround and catalyst price
expenditures, and investments in unconsolidated joint ventures introduced in our
consolidated statements of money flows, excluding the portion of DGD's capital
investments attributable to our three way partnership companion and the entire capital
expenditures of different VIEs.

We're a 50/50 three way partnership companion in DGD and consolidate DGD's monetary
statements; because of this, all of DGD's web money supplied by working actions
(or working money move) is included in our consolidated web money supplied by
working actions. DGD's companions use DGD's working money move (excluding
modifications in its present property and present liabilities) to fund its capital
investments somewhat than distribute all of that money to themselves. As a result of DGD's
working money move is successfully attributable to every companion, solely 50 p.c
of DGD's capital investments ought to be attributed to our web share of capital
investments. We additionally exclude the capital expenditures of our different consolidated
VIEs as a result of we don't function these VIEs. We consider capital investments
attributable to Valero is a crucial measure as a result of it extra precisely
displays our capital investments.

Capital investments attributable to Valero shouldn't be thought of as an
various to capital investments, its most comparable U.S. GAAP measure, nor
ought to or not it's thought of in isolation or as an alternative choice to an evaluation of our
money flows as reported underneath U.S. GAAP. As well as, this non-GAAP measure could
not be corresponding to equally titled measures utilized by different corporations as a result of
we could outline it in another way, which can diminish its utility.
                                                               Three Months Ended
                                                                    March 31,
                                                                 2021             2020
   Reconciliation of capital investments
   to capital investments attributable to Valero
   Capital expenditures (excluding VIEs)                 $      160$ 299
   Capital expenditures of VIEs:
   DGD                                                          153                 74
   Different VIEs                                                    26                 62
   Deferred turnaround and catalyst price expenditures
   (excluding VIEs)                                             230                309
   Deferred turnaround and catalyst price expenditures
   of DGD                                                         1                  4
   Investments in unconsolidated joint ventures                  12                 19
   Capital investments                                          582                767
   Changes:
   DGD's capital investments attributable to our joint
   enterprise companion                                              (77)               (39)
   Capital expenditures of different VIEs                           (26)               (62)
   Capital investments attributable to Valero            $      479$ 666



As beforehand disclosed in our annual report on Type 10-Ok for the yr ended
December 31, 2020, we anticipate to incur $2.0 billion for capital investments
attributable to Valero throughout 2021. Roughly 60 p.c of the capital
investments attributable to Valero are for sustaining the enterprise and
40 p.c are for development methods, over half of which is allotted to
increasing the renewable diesel enterprise. Nonetheless, we repeatedly consider our
capital funds and make modifications as circumstances warrant. The

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capital funding estimate for 2021 contains $200 million of the roughly
$500 million of capital investments that had been deferred in 2020 and excludes
strategic acquisitions, if any.
Different Issues Impacting Liquidity and Capital Sources
Inventory Buy Program
As of March 31, 2021, we had $1.4 billion out there for buy underneath our inventory
buy program, which has no expiration date. We've got not bought any shares
of our frequent inventory underneath our inventory buy program since mid-March 2020, and
we'll consider the timing of repurchases when applicable. We've got no
obligation to make purchases underneath this program.

Pension Plan Funding
As beforehand disclosed in our annual report on Type 10-Ok for the yr ended
December 31, 2020, we plan to contribute roughly $128 million to our
pension plans and $22 million to our different postretirement profit plans throughout
2021.
Environmental Issues
Our operations are topic to in depth environmental rules by
governmental authorities regarding the discharge of supplies into the
surroundings, waste administration, air pollution prevention measures, GHG emissions, and
traits and composition of gasolines and distillates. As a result of
environmental legal guidelines and rules have gotten extra complicated and stringent and
new environmental legal guidelines and rules are repeatedly being enacted or
proposed, the extent of future expenditures required for environmental issues
might improve sooner or later. As well as, any main upgrades in any of our
refineries or vegetation might require materials extra expenditures to conform
with environmental legal guidelines and rules.

Tax Issues
Below deferrals supplied by just lately handed laws, such because the CARES Act
within the U.S. and by numerous taxing authorities underneath different present laws,
we deferred roughly $250 million of revenue and oblique (e.g., VAT and
motor gasoline taxes) tax funds that had been due in 2020. Of this quantity,
roughly 90 p.c can be paid in 2021 and 10 p.c in 2022. No
deferred funds had been made within the first quarter of 2021.

Money Held by Our Worldwide Subsidiaries
As of March 31, 2021, $1.3 billion of our money and money equivalents was held by
our worldwide subsidiaries. Money held by our worldwide subsidiaries can
be repatriated to us with none U.S. federal revenue tax penalties, however
sure different taxes could apply, together with, however not restricted to, withholding taxes
imposed by sure worldwide jurisdictions and U.S. state revenue taxes.
Subsequently, there's a price to repatriate money held by sure of our
worldwide subsidiaries to us, however we consider that such quantity shouldn't be
materials to our monetary place or liquidity.

Focus of Clients
Our operations have a focus of consumers within the refining {industry} and
prospects who're refined petroleum product wholesalers and retailers. These
concentrations of consumers could influence our total publicity to credit score threat,
both positively or negatively, in that these prospects could also be equally
affected by modifications in financial or different circumstances together with the uncertainties
regarding the COVID-19 pandemic and volatility within the world oil markets.
Nonetheless, we consider that our portfolio of accounts receivable is sufficiently
diversified to the extent essential to reduce potential credit score threat.
Traditionally, now we have not had any important issues amassing our accounts
receivable.


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Contractual Obligations
As of March 31, 2021, our contractual obligations included debt, finance lease
obligations, working lease obligations, buy obligations, and different
long-term liabilities. Within the abnormal course of enterprise, we had debt-related
actions through the three months ended March 31, 2021, as described in Word 4
of Condensed Notes to Consolidated Monetary Statements. There have been no materials
modifications outdoors the abnormal course of enterprise with respect to our contractual
obligations through the three months ended March 31, 2021.

CRITICAL ACCOUNTING ESTIMATES

The preparation of economic statements in conformity with U.S. GAAP requires us
to make estimates and assumptions that have an effect on the quantities reported in our
monetary statements and accompanying notes. Precise outcomes might differ from
these estimates. As of March 31, 2021, there have been no important modifications to our
crucial accounting estimates because the date our annual report on Type 10-Ok for
the yr ended December 31, 2020 was filed.

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