Delaware | 1-13175 | 74-1828067 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
One Valero Way San Antonio, Texas | 78249 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
VALERO ENERGY CORPORATION | ||
Date: April 26, 2011 | By: | /s/ Jay D. Browning |
Jay D. Browning | ||
Senior Vice President and Secretary | ||
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
STATEMENT OF INCOME DATA (a) (b) (c) : | ||||||||
Operating Revenues (1) | $ | 26,308 | $ | 18,493 | ||||
Costs and Expenses: | ||||||||
Cost of Sales (d) (e) | 24,568 | 17,056 | ||||||
Operating Expenses: | ||||||||
Refining | 744 | 764 | ||||||
Retail (d) | 162 | 152 | ||||||
Ethanol | 95 | 80 | ||||||
General and Administrative Expenses (f) | 130 | 97 | ||||||
Depreciation and Amortization Expense | 365 | 340 | ||||||
Total Costs and Expenses | 26,064 | 18,489 | ||||||
Operating Income (e) | 244 | 4 | ||||||
Other Income, Net | 17 | 11 | ||||||
Interest and Debt Expense: | ||||||||
Incurred | (144 | ) | (147 | ) | ||||
Capitalized | 27 | 20 | ||||||
Income (Loss) from Continuing Operations Before Income Tax Expense (Benefit) | 144 | (112 | ) | |||||
Income Tax Expense (Benefit) | 40 | (32 | ) | |||||
Income (Loss) from Continuing Operations | 104 | (80 | ) | |||||
Loss from Discontinued Operations, Net of Income Taxes | (6 | ) | (33 | ) | ||||
Net Income (Loss) | $ | 98 | $ | (113 | ) | |||
Earnings (Loss) per Common Share: | ||||||||
Continuing Operations | $ | 0.18 | $ | (0.14 | ) | |||
Discontinued Operations | (0.01 | ) | (0.06 | ) | ||||
Total | $ | 0.17 | $ | (0.20 | ) | |||
Weighted Average Common Shares Outstanding (in millions) | 566 | 562 | ||||||
Earnings (Loss) per Common Share – Assuming Dilution: | ||||||||
Continuing Operations | $ | 0.18 | $ | (0.14 | ) | |||
Discontinued Operations | (0.01 | ) | (0.06 | ) | ||||
Total | $ | 0.17 | $ | (0.20 | ) | |||
Weighted Average Common Shares Outstanding – Assuming Dilution (in millions) (g) | 573 | 562 | ||||||
Supplemental Information: | ||||||||
(1) Includes excise taxes on sales by our U.S. retail system | $ | 214 | $ | 208 | ||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
BALANCE SHEET DATA: | ||||||||
Cash and Temporary Cash Investments | $ | 4,133 | $ | 3,334 | ||||
Total Debt | 7,829 | 8,337 |
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Operating Income (Loss) by Business Segment: | ||||||||
Refining (e) | $ | 276 | $ | (15 | ) | |||
Retail | 66 | 71 | ||||||
Ethanol | 44 | 57 | ||||||
Total Before Corporate | 386 | 113 | ||||||
Corporate | (142 | ) | (109 | ) | ||||
Total | $ | 244 | $ | 4 | ||||
Depreciation and Amortization by Business Segment: | ||||||||
Refining | $ | 316 | $ | 294 | ||||
Retail | 28 | 26 | ||||||
Ethanol | 9 | 8 | ||||||
Total Before Corporate | 353 | 328 | ||||||
Corporate | 12 | 12 | ||||||
Total | $ | 365 | $ | 340 | ||||
Operating Highlights: | ||||||||
Refining (a) (b) (e): | ||||||||
Throughput Margin per Barrel | $ | 7.05 | $ | 5.98 | ||||
Operating Costs per Barrel: | ||||||||
Operating Expenses | 3.93 | 4.38 | ||||||
Depreciation and Amortization Expense | 1.66 | 1.68 | ||||||
Total Operating Costs per Barrel | 5.59 | 6.06 | ||||||
Operating Income (Loss) per Barrel | $ | 1.46 | $ | (0.08 | ) | |||
Throughput Volumes (Mbbls per Day): | ||||||||
Feedstocks: | ||||||||
Heavy Sour Crude | 372 | 440 | ||||||
Medium/Light Sour Crude | 372 | 385 | ||||||
Acidic Sweet Crude | 72 | 42 | ||||||
Sweet Crude | 666 | 588 | ||||||
Residuals | 249 | 137 | ||||||
Other Feedstocks | 137 | 118 | ||||||
Total Feedstocks | 1,868 | 1,710 | ||||||
Blendstocks and Other | 238 | 230 | ||||||
Total Throughput Volumes | 2,106 | 1,940 | ||||||
Yields (Mbbls per Day): | ||||||||
Gasolines and Blendstocks | 956 | 967 | ||||||
Distillates | 695 | 597 | ||||||
Other Products (h) | 465 | 398 | ||||||
Total Yields | 2,116 | 1,962 |
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Refining Operating Highlights by Region (e) (i): | ||||||||
Gulf Coast: | ||||||||
Operating Income (Loss) | $ | 111 | $ | (11 | ) | |||
Throughput Volumes (Mbbls per Day) | 1,299 | 1,137 | ||||||
Throughput Margin per Barrel | $ | 6.45 | $ | 6.08 | ||||
Operating Costs per Barrel: | ||||||||
Operating Expenses | 3.86 | 4.44 | ||||||
Depreciation and Amortization Expense | 1.64 | 1.74 | ||||||
Total Operating Costs per Barrel | 5.50 | 6.18 | ||||||
Operating Income (Loss) per Barrel | $ | 0.95 | $ | (0.10 | ) | |||
Mid-Continent: | ||||||||
Operating Income (Loss) | $ | 167 | $ | (11 | ) | |||
Throughput Volumes (Mbbls per Day) | 403 | 363 | ||||||
Throughput Margin per Barrel | $ | 9.68 | $ | 5.34 | ||||
Operating Costs per Barrel: | ||||||||
Operating Expenses | 3.65 | 4.07 | ||||||
Depreciation and Amortization Expense | 1.44 | 1.60 | ||||||
Total Operating Costs per Barrel | 5.09 | 5.67 | ||||||
Operating Income (Loss) per Barrel | $ | 4.59 | $ | (0.33 | ) | |||
Northeast: | ||||||||
Operating Income | $ | 56 | $ | 38 | ||||
Throughput Volumes (Mbbls per Day) | 209 | 178 | ||||||
Throughput Margin per Barrel | $ | 7.02 | $ | 7.77 | ||||
Operating Costs per Barrel: | ||||||||
Operating Expenses | 2.81 | 3.73 | ||||||
Depreciation and Amortization Expense | 1.20 | 1.66 | ||||||
Total Operating Costs per Barrel | 4.01 | 5.39 | ||||||
Operating Income (Loss) per Barrel | $ | 3.01 | $ | 2.38 | ||||
West Coast: | ||||||||
Operating Loss | $ | (58 | ) | $ | (31 | ) | ||
Throughput Volumes (Mbbls per Day) | 195 | 262 | ||||||
Throughput Margin per Barrel | $ | 5.62 | $ | 5.20 | ||||
Operating Costs per Barrel: | ||||||||
Operating Expenses | 6.15 | 4.97 | ||||||
Depreciation and Amortization Expense | 2.81 | 1.54 | ||||||
Total Operating Costs per Barrel | 8.96 | 6.51 | ||||||
Operating Loss per Barrel | $ | (3.34 | ) | $ | (1.31 | ) |
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Retail - U.S. (d): | ||||||||
Operating Income | $ | 19 | $ | 33 | ||||
Company-Operated Fuel Sites (Average) | 993 | 989 | ||||||
Fuel Volumes (Gallons per Day per Site) | 4,895 | 4,942 | ||||||
Fuel Margin per Gallon | $ | 0.076 | $ | 0.108 | ||||
Merchandise Sales | $ | 283 | $ | 272 | ||||
Merchandise Margin (Percentage of Sales) | 28.3 | % | 28.2 | % | ||||
Margin on Miscellaneous Sales | $ | 22 | $ | 22 | ||||
Operating Expenses | $ | 98 | $ | 94 | ||||
Depreciation and Amortization Expense | $ | 19 | $ | 18 | ||||
Retail - Canada (d): | ||||||||
Operating Income | $ | 47 | $ | 38 | ||||
Fuel Volumes (Thousand Gallons per Day) | 3,234 | 3,078 | ||||||
Fuel Margin per Gallon | $ | 0.317 | $ | 0.284 | ||||
Merchandise Sales | $ | 57 | $ | 52 | ||||
Merchandise Margin (Percentage of Sales) | 29.7 | % | 30.8 | % | ||||
Margin on Miscellaneous Sales | $ | 11 | $ | 10 | ||||
Operating Expenses | $ | 64 | $ | 58 | ||||
Depreciation and Amortization Expense | $ | 9 | $ | 8 | ||||
Ethanol (c): | ||||||||
Operating Income | $ | 44 | $ | 57 | ||||
Production (Thousand Gallons per Day) | 3,282 | 2,534 | ||||||
Gross Margin per Gallon of Production | $ | 0.50 | $ | 0.63 | ||||
Operating Costs per Gallon of Production: | ||||||||
Operating Expenses | 0.32 | 0.35 | ||||||
Depreciation and Amortization Expense | 0.03 | 0.03 | ||||||
Total Operating Costs per Gallon of Production | 0.35 | 0.38 | ||||||
Operating Income per Gallon of Production | $ | 0.15 | $ | 0.25 |
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Average Market Reference Prices and Differentials (j): | ||||||||
Feedstocks (Dollars per Barrel): | ||||||||
Louisiana Light Sweet (LLS) Crude Oil | $ | 105.02 | $ | 79.34 | ||||
LLS Less West Texas Intermediate (WTI) Crude Oil | 11.08 | 0.67 | ||||||
LLS Less Alaska North Slope (ANS) Crude Oil | 3.78 | 0.79 | ||||||
LLS Less Brent Crude Oil | (0.39 | ) | 3.06 | |||||
LLS Less Mars Crude Oil | 3.59 | 3.61 | ||||||
LLS Less Maya Crude Oil | 15.68 | 9.57 | ||||||
WTI Crude Oil | $ | 93.94 | $ | 78.67 | ||||
WTI Less Mars Crude Oil | (7.49 | ) | 2.94 | |||||
WTI Less Maya Crude Oil | 4.60 | 8.90 | ||||||
Products (Dollars per Barrel): | ||||||||
U.S. Gulf Coast: | ||||||||
Conventional 87 Gasoline Less LLS | $ | 3.82 | $ | 6.46 | ||||
Ultra-Low-Sulfur Diesel Less LLS | 13.59 | 6.83 | ||||||
Propylene Less LLS | 19.50 | 16.94 | ||||||
Conventional 87 Gasoline Less WTI | 14.90 | 7.13 | ||||||
Ultra-Low-Sulfur Diesel Less WTI | 24.67 | 7.49 | ||||||
Propylene Less WTI | 30.58 | 17.61 | ||||||
U.S. Mid-Continent: | ||||||||
Conventional 87 Gasoline Less WTI | $ | 15.89 | $ | 6.71 | ||||
Ultra-Low-Sulfur Diesel Less WTI | 25.10 | 6.70 | ||||||
U.S. Northeast: | ||||||||
Conventional 87 Gasoline Less Brent | $ | 3.94 | $ | 10.28 | ||||
Ultra-Low-Sulfur Diesel Less Brent | 15.04 | 11.35 | ||||||
Conventional 87 Gasoline Less WTI | 15.42 | 7.88 | ||||||
Ultra-Low-Sulfur Diesel Less WTI | 26.52 | 8.95 | ||||||
U.S. West Coast: | ||||||||
CARBOB 87 Gasoline Less ANS | $ | 15.36 | $ | 10.70 | ||||
CARB Diesel Less ANS | 20.70 | 8.55 | ||||||
CARBOB 87 Gasoline Less WTI | 22.66 | 10.58 | ||||||
CARB Diesel Less WTI | 28.00 | 8.43 | ||||||
New York Harbor Corn Crush (Dollars per Gallon) | $ | 0.08 | $ | 0.45 |
(a) | On December 17, 2010, Valero sold its refinery in Paulsboro, New Jersey, and associated inventory to PBF Holding Company LLC for $707 million in proceeds, of which $160 million consisted of a short-term note, resulting in a loss on the sale of $980 million ($610 million after taxes). The results of operations of the refinery for the three months ended March 31, 2010 are reflected in discontinued operations. In addition, the refining segment and Northeast Region operating highlights for the three months ended March 31, 2010 exclude the Paulsboro Refinery. |
(b) | During the fourth quarter of 2009, Valero permanently shut down its refinery in Delaware City, Delaware, and wrote down the book value of the refinery assets to net realizable value, resulting in a loss on the shutdown of $1.9 billion ($1.2 billion after taxes). On June 1, 2010, Valero sold the shutdown refinery assets and associated terminal and pipeline assets to PBF Energy Partners LP (an entity related to the buyer of the Paulsboro Refinery) for $220 million in cash proceeds, resulting in a gain on the sale of the refinery assets of $92 million ($58 million after taxes) and an insignificant gain on the sale of the terminal and pipeline assets. The results of operations of the shutdown refinery for the three months ended March 31, 2010 are reflected in discontinued operations. In addition, the refining segment and Northeast Region operating highlights for the three months ended March 31, 2010 exclude the Delaware City Refinery. The terminal and pipeline assets associated with the refinery were not shut down in 2009 and continued to be operated until the date of their sale, and the results of operations of those assets for the three months ended March 31, 2010 are reflected in continuing operations. |
(c) | Valero acquired three ethanol plants in the first quarter of 2010. The Statement of Income Data includes the results of operations of those plants commencing on their respective acquisition dates. Two plants were acquired from ASA Ethanol Holdings, LLC and the third plant was acquired from Renew Energy LLC. Ethanol production volumes reflected herein are based on total production during each period divided by actual calendar days per period. |
(d) | Credit card transaction processing fees incurred by Valero's Retail business segment of $21 million for the three months ended March 31, 2010 were reclassified from Retail operating expenses to cost of sales. In addition, the Retail-U.S. and Retail-Canada operating highlights for the three months ended March 31, 2010 have been restated to reflect this reclassification. |
(e) | Cost of sales for the three months ended March 31, 2011 includes a loss of $542 million ($352 million after tax) on derivative contracts related to the forward sales of refined product. These contracts were closed and realized during the first quarter of 2011. The $542 million loss is reflected in refining segment operating income, resulting in a $2.86 reduction in refining throughput margin per barrel for the three months ended March 31, 2011, and is allocated to refining operating income (loss) by region, excluding Northeast, based on relative throughput volumes for each region as follows: Gulf Coast- $372 million, or $3.18 per barrel; Mid-Continent- $122 million, or $3.36 per barrel; and West Coast- $48 million, or $2.71 per barrel. |
(f) | General and administrative expenses for the three months ended March 31, 2010 includes the recognition of a favorable settlement with one of Valero's third-party insurers for $40 million. The settlement relates to Valero's claim of insurance coverage in connection with losses incurred in prior periods. |
(g) | Common equivalent shares have been excluded from the computation of diluted loss per common share for the three months ended March 31, 2010 as the effect of including such shares would be antidilutive. |
(h) | Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, and asphalt. |
(i) | The regions reflected herein contain the following refineries: Gulf Coast- Corpus Christi East, Corpus Christi West, Texas City, Houston, Three Rivers, St. Charles, Aruba, and Port Arthur Refineries; Mid-Continent- McKee, Ardmore, and Memphis Refineries; Northeast- Quebec City; and West Coast- Benicia and Wilmington Refineries. |
(j) | Average market reference prices for Louisiana Light Sweet (LLS) crude oil, along with price differentials between the price of LLS crude oil and other types of crude oil, have been included in the table of Average Market Reference Prices and Differentials. The table also includes price differentials by region between the prices of certain products and the benchmark crude oil that provides the best indicator of product margins for each region. Prior to the first quarter of 2011, feedstock and product differentials presented herein were based on the price of West Texas Intermediate (WTI) crude oil. However, the price of WTI crude oil no longer provides a reasonable benchmark price of crude oil for all regions. Beginning in late 2010, WTI light-sweet crude oil began to price at a discount to waterborne light-sweet crude oils, such as LLS and Brent, because of increased WTI supplies resulting from greater domestic production and increased deliveries of crude oil from Canada into the Mid-Continent region. Therefore, the use of the price of WTI crude oil as a benchmark price for regions that do not process WTI crude oil is no longer reasonable. |