VALERO ENERGY CORP/TXVLO
VALERO ENERGY CORP/TX Leases Disclosure
5. LEASES
General
We have entered into long-term leasing arrangements for the right to use various classes of underlying assets as follows:
•Pipelines, Terminals, and Tanks includes facilities and equipment used in the storage, transportation, production, and sale of our feedstocks and products;
•Marine Transportation includes time charters for ocean-going tankers and coastal vessels;
•Rail Transportation includes railcars and related storage facilities; and
•Other includes machinery, equipment, and various facilities used in our operations; facilities and equipment related to industrial gases and power used in our operations; land and rights-of-way associated with our refineries, plants, and pipelines and other logistics assets, as well as office facilities; and equipment primarily used at our corporate offices, such as printers and copiers.
In addition to fixed lease payments, some arrangements contain provisions for variable lease payments. Certain leases for pipelines, terminals, and tanks provide for variable lease payments based on, among other things, throughput volumes in excess of a base amount. Certain marine transportation leases contain provisions for payments that are contingent on usage. Additionally, if the rental increases are not scheduled in the lease, such as an increase based on subsequent changes in the index or rate, those rents are considered variable lease payments. In all instances, variable lease payments are recognized in the period in which the obligation for those payments is incurred.
Lease Costs and Other Supplemental Information
Our total lease cost comprises costs that are included in our statements of income, as well as costs capitalized as part of an item of property, plant, and equipment or inventory. Total lease cost was as follows (in millions):
| Pipelines, Terminals, and Tanks | Transportation | Other | Total | ||||||||||||||||||||||||||
| Marine | Rail | ||||||||||||||||||||||||||||
| Year ended December 31, 2025 | |||||||||||||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||||||||
| Amortization of ROU assets | $ | 303 | $ | — | $ | 3 | $ | 31 | $ | 337 | |||||||||||||||||||
| Interest on lease liabilities | 103 | — | 1 | 8 | 112 | ||||||||||||||||||||||||
| Operating lease cost | 186 | 200 | 89 | 42 | 517 | ||||||||||||||||||||||||
| Variable lease cost | 102 | 29 | 1 | 9 | 141 | ||||||||||||||||||||||||
| Short-term lease cost | 16 | 291 | 3 | 121 | 431 | ||||||||||||||||||||||||
| Sublease income | — | (23) | — | (2) | (25) | ||||||||||||||||||||||||
| Total lease cost | $ | 710 | $ | 497 | $ | 97 | $ | 209 | $ | 1,513 | |||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||||||||
| Amortization of ROU assets | $ | 247 | $ | — | $ | 3 | $ | 33 | $ | 283 | |||||||||||||||||||
| Interest on lease liabilities | 107 | — | — | 9 | 116 | ||||||||||||||||||||||||
| Operating lease cost | 167 | 210 | 89 | 42 | 508 | ||||||||||||||||||||||||
| Variable lease cost | 114 | 36 | — | 10 | 160 | ||||||||||||||||||||||||
| Short-term lease cost | 27 | 196 | 3 | 134 | 360 | ||||||||||||||||||||||||
| Sublease income | — | (33) | — | (2) | (35) | ||||||||||||||||||||||||
| Total lease cost | $ | 662 | $ | 409 | $ | 95 | $ | 226 | $ | 1,392 | |||||||||||||||||||
| Year ended December 31, 2023 | |||||||||||||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||||||||
| Amortization of ROU assets | $ | 213 | $ | — | $ | 3 | $ | 30 | $ | 246 | |||||||||||||||||||
| Interest on lease liabilities | 101 | — | 1 | 5 | 107 | ||||||||||||||||||||||||
| Operating lease cost | 166 | 127 | 80 | 45 | 418 | ||||||||||||||||||||||||
| Variable lease cost | 114 | 61 | — | 8 | 183 | ||||||||||||||||||||||||
| Short-term lease cost | 18 | 125 | 2 | 112 | 257 | ||||||||||||||||||||||||
| Sublease income | — | (29) | — | (2) | (31) | ||||||||||||||||||||||||
| Total lease cost | $ | 612 | $ | 284 | $ | 86 | $ | 198 | $ | 1,180 | |||||||||||||||||||
The following table presents additional information related to our operating and finance leases (in millions, except for lease terms and discount rates):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Operating Leases | Finance Leases | Operating Leases | Finance Leases | ||||||||||||||||||||
| Supplemental balance sheet information | |||||||||||||||||||||||
ROU assets, net reflected in the following balance sheet line items: | |||||||||||||||||||||||
| $ | — | $ | 2,078 | $ | — | $ | 2,218 | ||||||||||||||||
| 1,072 | — | 1,098 | — | ||||||||||||||||||||
| Total ROU assets, net | $ | 1,072 | $ | 2,078 | $ | 1,098 | $ | 2,218 | |||||||||||||||
Current lease liabilities reflected in the following balance sheet line items: | |||||||||||||||||||||||
| $ | — | $ | 254 | $ | — | $ | 244 | ||||||||||||||||
| 419 | — | 378 | — | ||||||||||||||||||||
Noncurrent lease liabilities reflected in the following balance sheet line items: | |||||||||||||||||||||||
| — | 2,104 | — | 2,134 | ||||||||||||||||||||
| 665 | — | 699 | — | ||||||||||||||||||||
| Total lease liabilities | $ | 1,084 | $ | 2,358 | $ | 1,077 | $ | 2,378 | |||||||||||||||
| Other supplemental information | |||||||||||||||||||||||
| Weighted-average remaining lease term | 5.8 years | 13.2 years | 6.2 years | 13.2 years | |||||||||||||||||||
| Weighted-average discount rate | 5.8 | % | 5.1 | % | 5.9 | % | 4.9 | % | |||||||||||||||
Supplemental cash flow information related to our operating and finance leases is presented in Note 18.
Maturity Analyses
As of December 31, 2025, the remaining minimum lease payments due under our long-term leases were as follows (in millions):
| Operating Leases | Finance Leases | ||||||||||
| 2026 | $ | 457 | $ | 361 | |||||||
| 2027 | 260 | 312 | |||||||||
| 2028 | 166 | 310 | |||||||||
| 2029 | 100 | 280 | |||||||||
| 2030 | 53 | 257 | |||||||||
| Thereafter | 310 | 1,877 | |||||||||
| Total undiscounted lease payments | 1,346 | 3,397 | |||||||||
| Less: Amount associated with discounting | 262 | 1,039 | |||||||||
| Total lease liabilities | $ | 1,084 | $ | 2,358 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.