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Valero Energy Reports First Quarter 2011 Results

“We expect a strong second quarter for Valero,” Klesse continued. “With our refineries coming back online from maintenance and operating at higher rates, we expect to capture more of these outstanding margins and wide discounts. In addition, we successfully completed key projects that should enhance profitability, including replacement of the coke drums at our Port Arthur refinery, and we are nearly complete with the revamp of our cat-cracking unit at the St. Charles refinery.”

Klesse concluded, “We are very excited about Valero’s growth prospects. In addition to favorable industry conditions, we expect to add significant earnings power via the Pembroke acquisition later this year and our major growth projects that are on track for completion in 2012. Those projects, particularly the hydrocrackers and hydrogen plants, are ideal for this environment of high crude oil and low natural gas prices, as well as growing global demand for diesel and gasoline. Besides the successful execution of our growth plans, we remain focused on cost savings, and, of course, safe, reliable, and regulatory-compliant operations.”

Valero’s senior management will hold a conference call at 11:00 a.m. ET (10 a.m. CT) today to discuss this earnings release and provide an update on company operations. A live broadcast of the conference call will be available on the company’s web site at www.valero.com.

About Valero

Valero Energy Corporation is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Its assets include 14 petroleum refineries with a combined throughput capacity of approximately 2.6 million barrels per day, 10 ethanol plants with a combined production capacity of 1.1 billion gallons per year, and a 50-megawatt wind farm. Valero is also one of the largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under the Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon brands. Based in San Antonio, Valero is a Fortune 500 company with approximately 20,000 employees. Please visit www.valero.com for more information.

Safe Harbor Statement

Statements contained in this release that state the Company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission, and available on Valero’s website at www.valero.com.

 
 
VALERO ENERGY CORPORATION AND SUBSIDIARIES
EARNINGS RELEASE
(Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)
(Unaudited)
 
    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
 
 
VALERO ENERGY CORPORATION AND SUBSIDIARIES
EARNINGS RELEASE
(Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)
(Unaudited)
 
    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  
 
 
VALERO ENERGY CORPORATION AND SUBSIDIARIES
EARNINGS RELEASE
(Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)
(Unaudited)
 
    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 )
 
 
VALERO ENERGY CORPORATION AND SUBSIDIARIES
EARNINGS RELEASE
(Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)
(Unaudited)
 
    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  
 
 
VALERO ENERGY CORPORATION AND SUBSIDIARIES
EARNINGS RELEASE
(Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts)
(Unaudited)
 
    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
 
 

VALERO ENERGY CORPORATION AND SUBSIDIARIES EARNINGS RELEASE (Millions of Dollars, Except per Share, per Barrel, and per Gallon Amounts) (Unaudited)

(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.

Stock quotes in this article: VLO 

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