#1Valero Ⓡ DIAMOND GREEN DIESEL Investor Presentation November 2019 Valero#2Disclaimers This presentation contains forward-looking statements made by Valero Energy Corporation ("VLO" or "Valero") within the meaning of federal securities laws. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information. You can identify forward-looking statements by words such as "believe," "estimate," "expect," "forecast," "could," "may," "will," "targeting," "illustrative" or other similar expressions that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of Valero and are difficult to predict. These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of Valero. Although Valero believes that the assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, Valero can not give assurance that it will achieve or accomplish its expectations, beliefs or intentions. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in Valero's filings with the Securities and Exchange Commission, including Valero's annual reports on Form 10-K, quarterly reports on Form 10-Q, and other reports available on Valero's website at www.valero.com. These risks could cause the actual results of Valero to differ materially from those contained in any forward-looking statement. This presentation includes non-GAAP financial measures. Our reconciliations of GAAP financial measures to non- GAAP financial measures are located at the end of this presentation. These non-GAAP financial measures should not be considered as an alternative to GAAP financial measures. 2 Valero#3Who We Are (NYSE: VLO) • • • • Refining Premier assets and low cost operations 15 refineries, 3.1 million barrels per day (BPD) of high-complexity capacity Logistics assets, including approximately 3,100 miles of active pipelines, over 123 million barrels of storage and over 50 docks Fuels marketing and distribution through bulk and wholesale channels $40 billion market cap(1) (1) As of October 31, 2019, VLO at $96.98 per share. 3 . • Ethanol Premier plants and low cost operations 14 plants with 1.73 billion gallons per year ethanol production capacity Plants convert corn into ethanol and distillers grains Existing logistics assets well-positioned to support continued export growth Assets were acquired at a fraction of replacement cost • • • Renewable Diesel Advantaged feedstock and operating costs World's 2nd largest renewable diesel producer Operator and 50% owner of Diamond Green Diesel JV 275 million gallons per year production capacity Expanding to 675 million gallons annual production capacity Renewable diesel placed into premium low carbon markets in California, Canada and Europe Valero#4BENICIA Strong Presence in Advantaged U.S. Gulf Coast and Mid-Continent WILMINGTON ALBION HARTLEY AURORA WELCOME ALBERT CITY FORT DODGE JEAN GAULIN (QUEBEC CITY) CHARLES CITY JEFFERSON LAKOTA K RIGA BLUFFTON. CANADA PERU LIMA MONTREAL UNITED KINGDOM UNITED STATES IRELAND PEMBROKE LONDON WHOLESALE MARKETING PRESENCE BLOOMINGBURG BRANDED WHOLESALE PRESENCE LINDEN VALERO REFINERIES VALERO ETHANOL PLANTS MOUNT VERNON VALERO TERMINALS v MEMPHIS DIAMOND GREEN DIESEL PIPELINES MCKEE SAN ANTONIO, ARDMORE ST. CHARLES MERAUX THREE RIVERS See slide 33 for capacities. BILL GREEHEY (CORPUS CHRISTI EAST AND WEST) PORT ARTHUR HOUSTON TEXAS CITY 4 MEXICO CITY Majority of refineries designated as VPP Star Sites by OSHA, recognizing exemplary occupational safety and health programs. Valero#5Demonstrated Strategy for Value Creation Demonstrated commitment to stockholders: • Disciplined capital allocation with solid free cash flow and returns to stockholders Exceeded our target payout ratio of 40% to 50% every year under current management Visibility to earnings growth: • Texas City Refinery. Steady pipeline of high return projects focused on operating cost control, market expansion and margin improvement 25% after-tax IRR hurdle rate for projects Proven history of operations excellence: • Safe, reliable, environmentally responsible operations have driven higher profitability through multiple commodity cycles . • One of the lowest cash operating costs among peer group 5 Valero#63 1 2 Disciplined Capital Management is a Constant in Our Strategy Non-Discretionary Maintain Strong Balance Sheet Maintain investment grade credit rating Target 20% to 30% debt-to-cap ratio(1) Sustaining Capex Approximately $1.5 billion annually Key to safe and reliable operations Dividend Commitment to stockholders Targeting a sustainable and growing dividend, with a payout that is at the high end of our peer group(2) Discretionary Growth Capex 25% after-tax IRR hurdle rate for projects Focused on operating cost control, market expansion and margin improvement Acquisitions Evaluate versus alternative uses of cash (1) Targeted debt-to-cap ratio based on total debt reduced by $2 billion of cash. (2) Peer group includes PSX, MPC, HFC, and PBF. Cash Returns Targeting a payout ratio (3) between 40% and 50% of adjusted net cash provided by operating activities for 2019 Stock buyback program consists of ratable and opportunistic purchases (3) Payout ratio is the sum of dividends and stock buybacks divided by adjusted net cash provided by operating activities. Adjusted net cash provided by operating activities is calculated as net cash provided by operating activities excluding changes in working capital (i.e. current assets and current liabilities). 6 Valero#7Demonstrated Discipline in Capital Allocation Dividend Capital Allocation ($ billion) ■ Sustaining ■ Growth ■Buybacks Estimated Total Capex $2.5 Billion for both 2019 and 2020 $1.7 $2.8 $0.3 $1.3 $0.9 $1.4 $1.3 $0.8 $1.1 $1.9 $1.0 $0.6 $1.4 $1.6 $1.9 $1.4 $1.3 $1.5 Non-discretionary $1.6 $1.5 $1.2 $1.1 $1.2 $1.4 $0.8 $0.4 $0.5 $0.6 2012 2013 2014 2015 2016 2017 2018 Sustaining 60% Growth 40% Sustaining capex includes costs for turnarounds and catalysts and regulatory compliance. Growth capex includes joint-venture investments but excludes acquisitions. 7 Steady investments in maintaining asset base and enhancing margin capability of portfolio. Valero#88 $0.30 Delivering on our Commitment of Cash Returns to Stockholders Annual Dividend Per Share and Weighted Average Shares Outstanding as Percentage Relative to 2011 Dividend/share 3.7% 3.9% 570 million shares WASO 98% 96% 93% 88% 416 million shares 81% 78% 75% 73% $3.60 1.9% $3.20 $2.80 $2.40 $1.70 $1.05 $0.85 $0.65 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) S&P 500 Valero Energy Utilities Real Estate Annual Dividend Yield (2) 3.1% 3.1% 2.8% 2.2% 2.1% 1.9% (1) 2019 weighted average shares outstanding through September 30, 2019. Dividends per share annualized based on most recent quarterly dividend. Source: Bloomberg as of October 31, 2019. (2) Dividend yield for sectors reflects the Index Yield of the respective SPDR exchange-traded fund (ETF). Targeting continued buybacks and sustainable annual dividend growth. Cons. Staples Financials Materials Industrials Care Health Cons. 1.7% 1.5% 1.4% Disc. Tech Comm. Services Valero 1.0%#9Safety and Reliability are Imperative for Profitability 1.60 Personnel Safety Employees Contractors Industry Total Recordable Incident Rate (TRIR) 0.70 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 0.40 0.32 2018 Process Safety Event Rate 0.19 Tier 1 Process Safety (Three-year rolling averages) 0.07 2010 2011 2012 2013 2014 2015 2016 2017 2018 Improvement Versus Industry Benchmarks Leads to Greater Margin Capture, Lower Operating Expenses, and Better Efficiency Valero Personnel Index Valero Valero V 2018 Valero Valero 2008 Maintenance Index Non-Energy Cash Opex Energy Intensity Index Investments in reliability have contributed to operations excellence. See slide 22 for notes regarding this slide. 6 Valero#10Increased Refinery Availability Has Driven Valero to be One of the Lowest Cost Producers Improvement in Mechanical Availability Versus Industry Benchmarks 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 10 Valero Valero 2018 2008 $6.80 Refining Cash Operating Expenses Per Barrel of Throughput (Excludes Turnaround and D&A Expenses) Peer Range V Valero Valero Valero Valero Valero V Valero Valero k Valero Valero $3.00 Mechanical Availability 2010 2013 2016 Valero 2019(1) See slide 22 for notes regarding this slide. (1) 2019 refining cash operating expenses per barrel of throughput through September 30. Peer group includes PSX, MPC, HFC, and PBF. Valero#11Advantaged Crude Supply in U.S. Gulf Coast and Mid-Continent 2,310 1,030 1,945 CDU Capacity (1) U.S. Mid-Continent U.S. Gulf Coast 2012 2019 VLO Feedstock Ranges (2) 99% 1,280 461 1,484 1,279 515 34% 34% 87% 50% 23% 22% 764 510 17% 359 510 12% 10% 170 7% 8% 189 4% 2% 0% 1% HFC PBF Heavy sour Medium / light Sweet Residuals Other sour feedstocks MPC VLO PSX (1) CDU capacity as of January 1, 2019. See slide 22 for notes and slide 33 for capacity and Nelson complexity by refinery. (2) 2019 feedstock ranges through September 30. Feedstock ranges represent average quarterly minimums and maximums. Ranges for monthly averages are wider. Valero's refineries have flexibility to process 1.6 million BPD light sweet crude and access to deep pools of skilled labor in U.S. Gulf Coast. 11 Valero#12Rosarito 12 Our Portfolio Facilitates Global Optimization of Product Exports Helguvik Charleston Savannah Quebec City Point Tupper Montreal Portsmouth Boston New York Philadelphia Borco Tuxpan Port Everglades Veracruz Rio Haina Campeche Puerto Rico Salina Cruz Santa Tomas Cortes Amuay Port Moin PATSA Terminal Mamonal La Libertad Talara Paita Callao Mollendo Iquique Belem Suape Dublin Porvoo Mongstad Oslo Tallinn Copenhagen Amsterdam Antwerp La Havre Pembroke Bordeaux Koper Constanta Bilbao Gaeta Thessaloniki Cartagena Ceyhan Algiers Arrecife Las Palmas Dakar Lome Cotonou Rio de Janeiro Distillate Quintero Itaqui Gasoline Buenos Aires VLO's U.S. Product Exports (MBPD) ■ Gasoline e ■Distillate 462 516 491 2017 2018 283 274 93 Current Capacity Potential Capacity 2012 2013 2014 2015 2016 Calbuco See slide 22 for notes regarding this slide. Distillate volumes include diesel, jet fuel and ULSK. Product shortages in Latin America, Eastern Canada, Europe, and Africa expected to drive import demand growth. Valero#13Visibility to Growth with a Steady Pipeline of High Return Projects Expect to spend approximately $1 billion annually on growth investments Approximately $340 MM in incremental EBITDA for 2018 from completed projects Diamond and Sunrise Pipelines, Wilmington cogeneration unit and Diamond Green Diesel expansion Projects in execution phase (by expected completion date) - Pasadena terminal (2020), $410 MM cost(1) St. Charles alkylation unit (2020), $400 MM cost Pembroke cogeneration unit (2020), $170 MM cost Diamond pipeline expansion (2021), $100 MM cost (1) Diamond Green Diesel train II (2021), $550 MM cost(1) Port Arthur coker (2022), $975 MM cost Other projects in development phases Expanding product supply chain into Mexico and Latin America Increasing light products yield and octane enhancement in U.S. Gulf Coast Logistics for feedstock and product flexibility (1) Represents Valero's share of total project cost. 13 Illustrative Annual EBITDA Contribution from Projects ($1.2 - $1.5 billion) ■ Projects in Execution Projects in Development $300 $400 MM $900 $1,100 MM See slide 22 for notes regarding this slide. EBITDA estimates are illustrative. Excludes potential M&A. Valero#14Investing to Improve Margins and Light Product Yields Port Arthur's new coker will look like this one at Texas City. 14 Port Arthur Coker $975 MM anticipated cost for 55 MBPD delayed coker and sulfur recovery unit, with expected startup in 2022 Creates two independent CDU-VDU-coker trains, which should improve turnaround efficiency and reduce maintenance-related lost margin opportunity Design enables full utilization of existing CDU capacity, reduces VGO purchases, and increases heavy sour crude and resid processing capability and light products yield Estimated $420 MM annual EBITDA contribution at 2018 average prices ($325 MM at mid-cycle prices) Incremental Volumes (MBPD) Feeds Crude Resid VGO 102 21 (47) Products Naphtha 3 Gasoline 15 Diesel 43 LPG 4 Valero#15Investing to Increase Premium Renewable Fuels Production Diamond Green Diesel Train 1. Diamond Green Diesel Train II Valero's $550 MM portion of project cost expected to be funded from cash generated by DGD's operations Independent parallel renewable diesel plant and renewable naphtha finishing facility adjacent to existing plant expected to be completed in 2021 Expect increase in annual renewable diesel production capacity of 400 MM gallons per year and enables recovery of renewable naphtha Combined total production capacity expected to be 675 MM gallons per year after successful completion Margins expected to be supported by increasing renewable fuel mandates and carbon pricing Valero's 50% share of estimated annual EBITDA contribution is approximately $250 MM at $1.26/gallon historical average EBITDA(1) (1) Historical average EBITDA includes the Blenders Tax Credit. Projected pro forma EBITDA estimate of $1.26/gallon excludes the Blenders Tax Credit. 15 Valero#16Ethanol Ethanol plant in Aurora, South Dakota. U.S. Fuel Ethanol Exports (MBPD) Rest of Industry ■Valero 112 98 91 25 76 19 19 55 54 13 40 87 53 51 63 72 79 39 2013 2014 2015 2016 2017 2018 2019* Source: U.S. Energy Information Agency (EIA). *2019 through August 31. • - Operations 14 plants with 1.73 billion gallons annual production capacity Dry mill production process, where corn is ground into flour and mixed with water before fermentation Plants purchased for approximately 37% of replacement cost Efficient plants with scale, located in corn belt Operational best practices transferred from refining • Plant capacity at 130% of original design • Cost advantaged versus the industry • • Outlook Ethanol expected to remain in the U.S. gasoline pool and demand expected to grow with year-round E15 and CAFE standards 2019 exports impacted by trade barriers, higher domestic corn prices with the late corn crop, and lower gasoline prices which reduces blend economics Expect a rebound in export growth U.S. corn-based ethanol is the most economic choice for export into global markets - Global mandates to reduce GHG emissions and favorable blend economics Existing logistics assets well-positioned to support expected rebound in export growth 16 Valero#17. Valero is Well Positioned for IMO 2020 Expected Impacts to Crude and Products Global sulfur cap on marine fuels drops from 3.5 wt% to 0.5 wt% beginning January 1, 2020 Sour crude oil and resid discounts expected to widen as low complexity refineries switch to sweeter crude and feedstocks Consultants expect diesel demand to increase 1 to 2+ MMBPD between 2019 and 2020 in addition to base annual demand growth of 300 to 500 MBPD - Distillate cracks expected to strengthen while high sulfur fuel oil discounts widen Gasoline cracks expected to improve as low sulfur vacuum gasoil feedstocks compete with other blendstocks into bunker fuel and refiners maximize distillate production Peer-Leading Conversion Capacity (1) Expected to Maximize Distillate Upgrading Peer Range Median 30% 30% k Valero I 22% 14% (1) Source: EIA data as of January 1, 2019 and Valero analysis. Conversion capacity as a percentage of CDU capacity. Conversion capacity includes delayed coking, fluid coking, gasoil hydrocracking, and residual hydrocracking. Peer group includes PSX, MPC, HFC, and PBF. 17 Valero#18BETTER Delivered Solid Earnings and Free Cash Flow Even in a Low Margin Environment (2016) Average Free Cash Flow Refining EBITDA Per Barrel of Throughput Adjusted Earnings Per Share Free Cash Flow ($mm) (as a % of Avg. Market Cap) ($mm) (as a % of Avg. Market Cap) $4.62 $3.72 V $1,844 Valero Valero 7% Valero K Valero 2016 2016 results are not a representation of management's expectations for 2019. See slide 22 for notes regarding this slide. Peer group includes PSX, MPC, HFC, and PBF. See slides 37 - 41 for non-GAAP disclosures. Source: Bloomberg and company reports. 18 Peer Range $2,619 Valero 10% V Valero 2012 to 2018 Valero#19Demonstrated Lower Volatility in Earnings and Free Cash Flow Peer Range BETTER V Valero 44% Adjusted Earnings Per Share Volatility 2012-2019 400 !! Valero 32% EBITDA ˇ Valero 59% Free Cash Flow di % -50 Dec-12 Total Stockholder Return VLO S&P 500 Index +286% +145% Dow Jones Index +143% XLE -3% XLE Constituent Min -65% Peer Range VLO Valero has demonstrated lower volatility in earnings and free cash flow than refining and diversified peers, while delivering higher total stockholder return. See slide 22 for notes regarding this slide. Peer group includes PSX, MPC, HFC, and PBF. Source: Bloomberg and company reports. See slides 37-41 for non-GAAP disclosures. 19 Valero Oct-19 Valero#20We Believe Valero is a Compelling Investment VLO Percent Rank Versus S&P 500 Constituents 15% 3.7% 133% Valero K Valero Valero v Valero 1.5x 6.1x 31 Cumpan Companies Valero mastercant amazon NVIDIA Adobe Compelling Dividend Yield (≥3% Annualized dividend yield) Competitive EBITDA Growth (≥10% Consensus CAGR for 2019-2021) Valero Consensus Dividend EBITDA CAGR Yield TSR Since Net Debt to 2014(1) TTM Adjusted EV / 2020 EBITDA (3) 2019-2021 EBITDA (2) . Premier asset portfolio and operations • Managed risks - Proven operations excellence with one of the lowest cash operating costs among peer group(4) • Disciplined growth strategy - Invest in high return projects focused on operating cost control, market expansion and margin improvement Returns focused with a target payout ratio of 40% to 50% 431 Companies 343 Companies 75 15 Conces AT&T Google High Shareholder Return J.P.Morgan UnitedHeadthcare BROADCOM Microsoft globalpayments VISA DISNEY CAT Walmart Johon-Johnson COSTCO WHOLESALE ExxonMobil 3M IBM Chevron (≥125% TSR since 2014)(1) NETFLIX AMD CVS Honeywell Investment Grade (BBB-/Baa3) Bank of America P&G Large Cap M DELL GE ups (Market cap >$10 billion) CISCO BLACKROCK verizon MERCK (intel Pfizer 500 S&P 500 Companies Coca-Cola - Sustainable annual dividend growth - Target continued buybacks STANDARD & POOR'S 500 Source: Bloomberg as of October 31, 2019. (1) TSR from December 31, 2014 through October 31, 2019 includes stock price appreciation and dividends paid. (2) Net debt to adjusted EBITDA for 12 months ended September 30, 2019. (3) EV/EBITDA based on 2020 consensus estimates. See slides 37 - 41 for non-GAAP disclosures. (4) Peer group includes PSX, MPC, HFC, and PBF. 20 Valero#21Appendix Contents Topic Notes 21 Guidance Environmental, Social and Governance (ESG) Macro Environment Themes Logistics Investments to Improve Feedstock Flexibility, Cost & Crude Quality Valero Logistics Assets Investing to Grow Product Placement into Higher Netback Markets Project Price Set Assumptions Projects in Execution Phase or Recently Completed Refining Capacity and Nelson Complexity Natural Gas Cost Sensitivity Total Stockholder Return A Shift In Refining Valuation Non-GAAP Disclosures Investor Relations Contacts Pages 22 23 24 25 26 27 28 29 30-32 33 34 35 36 37-41 42 Valero#22Notes Slide 9 Contractor total recordable incident rate from U.S. Bureau of Labor Statistics. Tier 1 three-year rolling averages of process safety events per 20,000 work hours. Tier 1 defined within API Recommended Practice 754. Industry benchmarking and Valero's performance statistics from Solomon Associates and Valero. Slide 10 Industry benchmarking and Valero's performance statistics from Solomon Associates and Valero. Slide 11 Crude distillation capacities by geographic location from 10-K filings and company reports. U.S. Gulf Coast region is consistent with EIA's PADD 3; U.S. Mid-Continent region represents PADDS 2 and 4. Slide 12 Valero's actual U.S. gasoline and distillate export volumes and current and potential future gasoline and distillate export capacities are shown in the chart. Potential future gasoline and distillate export capacities are based upon expansion opportunities identified at the St. Charles (gasoline and distillate), Port Arthur (gasoline and distillate), Corpus Christi (gasoline), and Texas City (distillate) refineries. Potential capacity also includes Pasadena terminal currently under construction. Map shows destinations for products exported from Valero's refineries in the U.S., Canada and the U.K. Slide 13 Amounts shown represent targeted EBITDA growth. We are unable to provide a reconciliation of such forward-looking targets because certain information needed to make a reasonable forward-looking estimate is difficult to estimate and dependent on future events, which are uncertain or outside of our control, including with respect to unknown financing terms, project timing and costs, and other potential variables. Accordingly, a reconciliation is not available without unreasonable effort. Slide 18 Refining EBITDA per barrel of throughput is defined as refining margin less operating expenses (excluding depreciation and amortization expenses) divided by total throughput volumes. VLO defines refining margin as refining operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, lower cost or market inventory valuation adjustment, and asset impairment loss. Earnings per share adjusted to exclude special or nonrecurring items. Free cash flow is defined as net cash provided by operating activities less capital expenditures, deferred turnaround and catalyst cost expenditures, investments in joint ventures, and changes in current assets and liabilities. Average free cash flow for PBF reflects years 2013 to 2018 due to its December 2012 IPO. Slide 19 Volatility expressed as coefficient of variance, or the standard deviation divided by the mean, of the respective metric on a quarterly basis from the first quarter of 2012 through the third quarter of 2019. EBITDA is defined as net income plus income tax, net interest and depreciation and amortization. TSR from December 31, 2012 through October 31, 2019. TSR includes stock price appreciation and dividends paid. 22 Valero#23VLO Guidance 4Q19(1) Throughput (MBPD) U.S. Gulf Coast U.S. Mid-Continent 1,710 to 1,760 North Atlantic U.S. West Coast Refining cash operating expenses per barrel throughput Ethanol Production (millions of gallons per day) Operating expenses per gallon of production Cash opex 410 to 430 475 to 495 260 to 280 $3.95 4.3 $0.39 $0.33 Non-cash opex $0.06 Depreciation and amortization expense ($MM) $565 • Net interest expense ($MM) $113 2019(1) Renewable Diesel Sales volume (thousands of gallons per day) Operating expenses per gallon of production Cash opex Non-cash opex Payout ratio(2) of adjusted net cash provided by operating activities Effective tax rate • General and administrative expenses ($MM) • RINS expense ($MM) Capital expenditures ($MM) Sustaining Growth 750 $0.45 $0.29 $0.16 40 to 50% 22% $840 $300 to $400 $2,500 60% 40% (1) Unless otherwise stated, guidance as provided on the 3Q19 earnings call and is included here for informational purposes only. (2) Payout ratio is the sum of dividends and stock buybacks divided by adjusted net cash provided by operating activities. Adjusted net cash provided by operating activities is calculated as net cash provided by operating activities excluding changes in working capital (i.e. current assets and current liabilities). 23 Texas City Refinery. Valero#24Environmental, Social and Governance (ESG) V Valero Valero • Environmental World's 2nd largest renewable diesel (1) and corn ethanol producer ⚫ Significant investment in renewable fuels of $2.6 billion (2) • • An industry safety leader Record low environmental events driven by improvements in process safety and reliability with growing throughput capacity -21% reduction in refining GHG emissions since 2010 -99% flaring-free refinery operations - 44% reduction in criteria emissions(3) since 2007 14% reduction in refinery energy use since 2013 (1) In joint venture with Darling Ingredients, Inc. • Social With 10,000 employees, we foster a culture that supports diversity and inclusion Safe, healthy and rewarding work environment with opportunities for growth Recognized as one of America's best large employers Member of the Civic 50 list of America's most community-minded major companies by Points of Light $55.6 million charitable donations generated in 2018 150,000 volunteer hours companywide in 2018 (2) Total investment includes $1.7 billion in ethanol since 2009 and Valero's renewable diesel investment estimated at $900 million. Governance Independent and diverse Board of Directors 3 fully independent committees - 9 of 10 members are independent 3 of 10 members are women Robust governance, regulatory compliance and high ethical standards Alignment of executive pay to company performance Board Committee provides oversight of climate-related risks Committed to ESG engagement (3) As defined by the U.S. Environmental Protection Agency. Includes carbon monoxide, lead, nitrogen oxides, particulate matter, ground-level ozone and sulfur oxide. 24 Valero®#25Supportive Macro Environment Expected 25 FEEDSTOCK SUPPLY Abundant and growing supply of crude oil and natural gas Expanding North American logistics capacity continues to add efficiency to crude oil movements, particularly in the U.S. Gulf Coast PRODUCT DEMAND • Economic growth continues to generate rising product demand • Price environment remains favorable for healthy product demand ⚫ Bunker fuel specification change expected to increase distillate demand • Product shortages in Latin America, Eastern Canada, Europe and Africa REGULATORY AND GEOPOLITICAL Evolving U.S. legislative and regulatory landscape Emerging global developments Positive fundamentals continue to drive global transportation fuels growth. Macro environment themes represent industry consultant views. Valero®#26Centurion Logistics Investments to Improve Feedstock Flexibility, Cost and Crude Quality Competitive Supply in the Mid-Continent McKee Local Crude Gathering Cushing NuStar Centurion Pipeline Basin Red River Pipeline Childress Station NuStar Hewitt Pipeline Sunrise Pipeline Colorado City Midland Wasson Wichita Falls Taking Advantage of Increasing Permian Production with Investments in Corpus Christi Harvest Pipeline (Eagle Ford) ---> Memphis Diamond Pipeline EOG Pipeline (Eagle Ford)....> Collierville Crude System Ardmore ETCOP Capline To To Nederland St. James Crude Supply Flexibility for Quebec Cactus Pipeline (Permian)...> Grey Oak (Permian)---> Three Rivers Local Crude Gathering.....> NuStar NuStar Oakville Terminal Enbridge Line 9: 26 Jean-Gaulin (Quebec City) Montreal East Terminal Blue lines and terminals represent Valero ownership interest. U.S./Foreign Crude Imports NuStar Cactus....> Cactus II....> Grey Oak..> NuStar North Beach... EPIC.... Corpus Christi West and East Crude Export Dock Crude Export Tankage Valero#27Valero Logistics Assets Pipelines(1) Approximately 3,100 miles of active pipelines Racks, Terminals and Storage(1) Rail Marine(1) Over 123 million barrels of active shell capacity for crude oil and products Approximately 5,250 purchased railcars • Over 50 docks • Central Texas Pipeline started up in September 2019 Sunrise Pipeline expansion in Permian Over 200 truck rack bays started up in November 2018 (1) Includes assets that have other joint venture or minority interests. Does not include ethanol assets. 27 Expected to serve long-term needs of ethanol, asphalt, aromatics, and other products Two Panamax class vessels (joint venture) Valero#28Investing to Grow Product Placement into Higher Netback Markets Advantaged Refineries and Logistics MCKEE PORT ARTHUR TEXAS CITY EL PASO ST. CHARLES THREE RIVERS UNITED STATES MERAUX NUEVO LAREDO HOUSTON LAREDO BILL GREEHEY (CORPUS CHRISTI EAST AND WEST) HARLINGEN MEXICO MEXICO CITY PUEBLA VERACRUZ VALERO REFINERIES (1) TERMINALS PIPELINES O RAILCARS SHIPS PATSA PAITA PERU 99 60, ■ Other U.S. Product Exports 12 Month Moving Average (MBPD) ■ Europe ■Canada Other Latin America ■Mexico '11 '13 '17 19 '19 CALLAO (1) Includes terminals owned or leased by Valero. Total Gasoline (2) & Diesel Source: DOE Petroleum Supply Monthly data through August 2019. (2) Gasoline represents all finished gasoline plus all blendstocks (including ethanol, MTBE and other oxygenates). Expansion of supply chain to high demand growth markets provides ratable product outlet and improves margin capture. 28 Valero 76%#29Project Price Set Assumptions Port Arthur Coker Project Diamond Green Diesel Project 2018 Driver ($/bbl) Average(1) LCFS Credit Average Prices (2) ($/MT) $195 ICE Brent 71.56 200 ICE Brent - WCS Houston 9.41 HSVGO - ICE Brent 6.03 3.5%S Fuel Oil – ICE Brent - (10.39) 100 USGC CBOB - ICE Brent 4.85 USGC ULSD - ICE Brent 14.05 Naphtha ICE Brent LPG ICE Brent (1.38) (34.77) 0 2014 2015 2016 2017 2018 2019 Expect LCFS credit prices to continue to increase. (1) Source: 2018 average prices from ICE, Argus, Platts, and OPIS. (2) Source: Monthly average prices from California Air Resources Board as of October 2019. 29 Valero#30Investing to Improve Margins . • • Houston and St. Charles Alkylation Units Octane demand expected to grow due to Tier 3 sulfur regulations and CAFE standards Abundant, low cost North American NGL supply provides advantage for Gulf Coast capacity additions Both units upgrade low value isobutane and amylenes into high value alkylate High octane, low vapor pressure component enables the blending of incremental butane and low octane naphtha 13 MBPD capacity at Houston refinery ($300 MM cost) started up in June and is running well 17 MBPD capacity at St. Charles refinery ($400 MM cost) expected to start up in 2020 30 Houston alkylation unit. Valero#31Investing to Improve Access to North American Crude and Refinery Operating Cost Structure Diamond pipeline. Diamond and Sunrise Pipelines Diamond 200 MBPD capacity connecting Memphis to Cushing ($460 MM cost (¹)), and Sunrise 100 MBPD undivided interest connecting Midland to Wichita Falls ($135 MM cost(1)) 200 MBPD expansion and extension of Diamond ($100 MM cost (1)) expected to be completed in 2021 Provides additional Mid-Continent crude access to our McKee, Ardmore and Memphis refineries Improves crude oil supply flexibility, efficiency and blend quality (1) Project cost for Valero's 50% share of Diamond and 20% undivided interest in Sunrise. 31 Wilmington cogeneration plant, Cogeneration Plants Wilmington facility ($110 MM cost) started up in November 2017 Pembroke plant (£130 MM or $170 MM cost) scheduled to be completed in 2020 Expect to reduce costs and improve supply reliability for power and steam Valero#32Investing to Improve Margins, Product Export Capability and Biofuels Blending Texas HEARNE WILLIAMSON COUNTY Austin HOUSTON Pasadena terminal. • • Extending Product Supply Chain in Central Texas and the U.S. Gulf Coast Central Texas pipelines and terminals to supply high-growth refined products market Started up in September 2019 Approximately 205 miles of pipe (1), 960 thousand barrels of total storage capacity, and a truck rack Pasadena refined products terminal joint venture with Magellan Midstream Partners, L.P. (NYSE: MMP) - Initially includes 5 MM barrels of storage capacity with butane blending, two ship docks and a three-bay truck rack 1 MM barrels of storage capacity and one ship dock currently operational Anticipated Valero costs of $410 MM, with completion expected in 2020 Projects expected to improve product margins, reduce secondary costs, provide opportunity for third-party revenues, and increase capability for biofuels blending (1) Valero to own ~70 mile pipeline from Hearne to Williamson County and 40% undivided interest in 135 mile pipeline from Houston to Hearne. 32 Valero#33Our Refining Capacity and Nelson Complexity Capacities (MBPD)(1) Nelson Complexity Refinery Throughput Crude Index Corpus Christi(2) 370 290 14.4 Houston 250 205 7.3 Meraux 135 125 9.7 Port Arthur 395 335 12.7 St. Charles 340 215 16.1 Texas City 260 225 11.1 Three Rivers 100 89 13.2 U.S. Gulf Coast 1,850 1,484 12.7(3) Ardmore 90 86 12.1 McKee 200 195 8.3 Memphis 195 180 7.9 U.S. Mid-Continent 485 461 8.9(3) Pembroke 270 210 10.1 Quebec City 235 230 7.7 North Atlantic 505 440 8.8 (3) Benicia 170 145 16.1 Wilmington 135 85 15.8 U.S. West Coast 305 230 16.0(3) Total 3,145 2,615 11.4(3) (1) Capacities and Nelson complexity indices as of January 1, 2019. (2) Represents the combined capacities of two refineries-Corpus Christi East and Corpus Christi West. (3) Weighted average. 33 Valero#34U.S. Natural Gas Provides Opex and Feedstock Cost Advantages Our refining operations consume approximately 921,000 mm Btu/day of natural gas, of which 63% is operating expense and the balance is cost of goods sold Significant annual pre-tax cost savings compared to refiners in Europe Prices expected to remain low and disconnected from global oil and gas markets Natural Gas Cost Sensitivity for Valero's Refineries $2.54/mmBtu $0.79/bbl throughput $0.8 billion pre-tax annual cost advantage $4.81/mmBtu $1.50/bbl throughput U.S. 2019 average natural gas prices through October 31, 2019 for U.S. and Europe. Europe Estimated cost is derived using 921,000 mm Btu/day of natural gas consumption and a throughput of 3.0 MMBPD (12-month rolling average). 34 Valero#35-100 Dec-14 % Dec-15 VLO +133% Total Stockholder Return(2) Dow Jones Index +71% S&P 500 Index +63% XLE Range -VLO XLE -15% 185 XLE Constituents Min -65% Dec-16 Outperformed the Dow Jones Index, the S&P 500 Index and all Companies in the XLE(1) Index on TSR Since 2014 History of energy sector and broader market outperformance under current leadership team. (1) XLE includes refining peers PSX, MPC, HFC, and 26 other energy companies such as XOM, CVX, SLB, COP, EOG, OXY, and KMI. (2) TSR from December 31, 2014, through October 31, 2019. TSR includes stock price appreciation and dividends paid. 35 Valero Dec-17 Dec-18 Oct-19 Valero#36Now vs. Then – A Shift In Refining Valuation INDUSTRY/MACRO • • • • - In the Past Range bound industry wide EV/EBITDA multiple +/- 4.5x Peer group fragmented with smaller scale, less efficient refiners U.S. importing products to meet domestic product shortage Stock prices driven by seasonal refining trading cycles • Higher interest rates (10-yr Treasury ~5 percent) VALERO • • Marginal operations (+/- 85% utilization) Third quartile operating performance impacted by M&A integration Disadvantaged East Coast and Caribbean operations Less disciplined M&A and capital project execution Frequent acquisitions Focused on volume growth Approximately $3.5 billion annual capex Volatile cash flow profile and lower stockholder returns 1-2 percent dividend yield ($0.32/share annually) Approximately $5 billion of liquidity > 570 million shares outstanding Volatile stock price INDUSTRY/MACRO - New Paradigm EV/EBITDA multiple expansion and dispersion by company Peer group of larger scale, efficient and complex refiners Tight global product market expected to continue Economic growth and price environment remains favorable for healthy product demand Abundant supply of domestic crude oil and natural gas providing feedstock advantage Lower interest rates (10-yr Treasury ~2 percent) VALERO Premier operations (+/- 95% utilization) First quartile operating performance amid stable, upgraded portfolio (lowest cash operating costs) Advantaged operations and scale Disciplined capital investment and growth strategy Rigorous M&A targeting and screening process 25% after-tax IRR hurdle rate for projects focused on market expansion, margin enhancement and operating cost reduction Approximately $2.5 billion annual capex Distinctive free cash flow and higher stockholder returns Annualized dividend of $3.60/share Approximately $7.5 billion of liquidity as of September 30, 2019 Approximately 411 million shares outstanding as of October 29, 2019 Higher lows and less volatility in stock price with support from dividend and long-only investors 36 Valero#37Non-GAAP Disclosures Adjusted EBITDA and Net Debt-to-Adjusted EBITDA VLO defines EBITDA as net income before income tax expense, interest and debt expense, net of capitalized interest, and depreciation and amortization expense. VLO defines net debt-to-adjusted EBITDA as the ratio of total debt, net of cash, divided by adjusted EBITDA, which is defined as EBITDA further adjusted for deferred turnaround and catalyst cost expenditures, blender's tax credit, loss on early redemption of debt, Texas City fire expenses, and environmental reserve adjustment. VLO defines adjusted EBITDA for the trailing 12-month period (TTM) as the sum of adjusted EBITDA for the year ended December 31, 2018 and the nine months ended September 30, 2019, less that for the nine months ended September 30, 2018. VLO believes that the presentation of adjusted EBITDA provides useful information to investors to assess our ongoing financial performance because, when reconciled to net income, it provides improved comparability between periods through the exclusion of certain items that VLO believes are not indicative of our core operating performance and that may obscure our underlying business results and trends. VLO believes that the presentation of net debt-to-adjusted EBITDA provides useful information to investors to assess VLO's ability to incur and service debt. The GAAP measures most directly comparable to adjusted EBITDA are net income and net cash provided by operating activities. Adjusted EBITDA should not be considered an alternative to net income or net cash provided by operating activities presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income or net cash provided by operating activities. Adjusted EBITDA should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because adjusted EBITDA may be defined differently by other companies in our industry, VLO's definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. Refining EBITDA Per Barrel of Throughput VLO defines refining EBITDA per barrel of throughput as refining margin less operating expenses (excluding depreciation and amortization expenses) divided by total throughput volumes. VLO defines refining margin as refining operating income excluding operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, lower cost or market inventory valuation adjustment, and asset impairment loss. VLO believes refining EBITDA provides useful information to investors to assess our ongoing financial performance because, when reconciled to refining operating income, it provides improved comparability between periods through the exclusion of certain items that VLO believes are not indicative of our core operating performance and that may obscure our underlying business results and trends. The GAAP measure most directly comparable to refining EBITDA is refining operating income. Refining EBITDA should not be considered an alternative to refining operating income presented in accordance with GAAP. Refining EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect refining operating income. Refining EBITDA should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because refining EBITDA may be defined differently by other companies in our industry, VLO's definition of refining EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. 37 Valero#38Non-GAAP Disclosures (continued) Adjusted Earnings Per Common Share - assuming dilution VLO defines adjusted earnings per common share - assuming dilution as earnings per common share - assuming dilution excluding the lower of cost or market inventory valuation adjustment and its related income tax effect, asset impairment losses and the income tax benefit from the Aruba disposition. VLO believes this measure is useful to assess our ongoing financial performance because, when reconciled to earnings per common share - assuming dilution, it provides improved comparability between periods through the exclusion of certain items that VLO believes are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The GAAP measures most directly comparable to adjusted earnings per common share - assuming dilution are earnings per common share - assuming dilution. Adjusted earnings per common share assuming dilution should not be considered an alternative to earnings per common share assuming dilution presented in accordance with GAAP. Adjusted earnings per common share - assuming dilution has important limitations as an analytical tool because it excludes some, but not all, items that affect earnings per common share assuming dilution. Adjusted earnings per common share - assuming dilution should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because adjusted earnings per common share - assuming dilution may be defined differently by other companies in our industry, VLO's definition of adjusted earnings per common share - assuming dilution may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. - Free Cash Flow VLO defines free cash flow as net cash provided by operating activities less capital expenditures, deferred turnaround and catalyst cost expenditures, investments in joint ventures, and changes in current assets and liabilities. VLO believes that the presentation of free cash flow provides useful information to investors in assessing our ability to cover ongoing costs and our ability to generate cash returns to stockholders. The GAAP measures most directly comparable to free cash flow are net cash provided by operating activities and net cash used in investing activities. Free cash flow should not be considered an alternative to net cash provided by operating activities or net cash used in investing activities presented in accordance with GAAP. Free cash flow has important limitations as an analytical tool because it excludes some, but not all, items that affect net cash provided by operating activities or net cash used in investing activities. Free cash flow should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because free cash flow may be defined differently by other companies in our industry, VLO's definition of free cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. 38 Valero#39Non-GAAP Disclosures: Adjusted EBITDA and Net Debt-to-Adjusted EBITDA 39 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND NET DEBT-TO-ADJUSTED EBITDA (Unaudited, in Millions, Except Ratio Amount) Net income Nine Months Ended September 30, 2018 $ 2,331 Year Ended Nine Months Ended December 31, 2018 September 30, 2019 $ 3,353 $ 1,454 Less: Deferred turnaround and catalyst cost expenditures Less: Blender's tax credit 661 915 599 170 170 Plus: Loss on early redemption of debt 38 38 22 Plus: Texas City Refinery fire expenses 14 17 Plus: Environmental reserve adjustment 108 108 Plus: Depreciation and amortization expense 1,538 2,069 1,684 Plus: Interest and debt expense, net of capitalized interest 356 470 335 Plus: Income tax expense 674 879 376 Adjusted EBITDA 4,228 5,849 3,272 TTM adjusted EBITDA = $5,849 + $3,272 - $4,228 $ 4,893 September 30, 2019 Debt and finance lease obligations, less current portion Current portion of debt and finance lease obligations Cash and cash equivalents Total debt net of cash TTM net debt-to-adjusted EBITDA = $7,435 / $4,893: 9,170 402 (2,137) 7,435 1.5x Valero#40Non-GAAP Disclosures: Refining EBITDA Per Barrel of Throughput 40 RECONCILIATION OF REFINING EBITDA PER BARREL OF THROUGHPUT (Unaudited, in Millions, Except Per Barrel Amount) Refining operating income Plus: Operating expenses (excluding depreciation and amortization expense reflected below) Plus: Depreciation and amortization expense Plus: Lower of cost or market inventory valuation adjustment Plus: Asset impairment loss Refining margin Less: Operating expenses (excluding depreciation and amortization expense) Refining EBITDA Total throughput volumes (thousand barrels per day) Refining EBITDA per barrel of throughput Year Ended Dec 31, 2016 3,730 3,740 1,734 (697) 56 8,563 3,740 4,823 2,855 4.62 Valero#41Non-GAAP Disclosures: Adjusted Earnings Per Share and Free Cash Flow RECONCILIATION OF EARNINGS PER COMMON SHARE - ASSUMING DILUTION, TO ADJUSTED EARNINGS PER COMMON SHARE - ASSUMING DILUTION Earnings per common share - assuming dilution Exclude adjustments: Lower of cost or market inventory valuation adjustment, net of taxes Asset impairment loss Income tax benefit on Aruba Disposition Total adjustments Adjusted earnings per common share – assuming dilution (Unaudited) Year Ended December 31, 2016 $ 4.94 1.25 (0.12) 0.09 1.22 3.72 RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES UNDER GAAP TO FREE CASH FLOW (Unaudited, in Millions) Less: Capital expenditures Net cash provided by operating activities Less: Deferred turnaround and catalyst cost expenditures 2012 $ 5,270 2,931 2013 $ 5,564 2,121 Year Ended December 31, 2014 2015 $ 4,241 $ 5,611 2016 2017 2018 $ 479 634 2,153 649 1,618 4,820 1,278 $ 5,482 $ 4,371 1,353 1,628 673 718 523 915 Less: Investments in joint ventures 57 76 14 141 4 406 181 Less: Changes in current assets and current liabilities Free cash flow (302) 922 (1,810) (1,306) 976 1,289 (1,297) $ 2,105 $ 1,811 $ 3,235 $ 4,485 $ 1,844 $ 1,911 $ 2,944 Total free cash flow, 2012 - 2018 $18,335 Number of years Average free cash flow, 2012 - 2018 41 $ 2,619 Valero#42Investor Relations Contacts For more information, please contact: Homer Bhullar Gautam Srivastava Vice President, Investor Relations 210.345.1982 Manager, Investor Relations 210.345.3992 [email protected] 42 [email protected] Tom Mahrer Manager, Investor Relations 210.345.1953 [email protected] Valero