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Valero Energy Reports Second Quarter 2011 Results

Stocks in this article: VLO

Valero Energy Corporation (“Valero”) (NYSE: VLO) today reported net income attributable to Valero stockholders from continuing operations of $745 million, or $1.30 per share, for the second quarter of 2011, versus $520 million, or $0.92 per share, for the second quarter of 2010. For the six months ended June 30, 2011, net income attributable to Valero stockholders from continuing operations was $849 million, or $1.48 per share, versus $440 million, or $0.78 per share for the six months ended June 30, 2010.

Second quarter 2011 operating income was $1.3 billion versus second quarter 2010 operating income of $904 million. The increase in operating income was mainly due to an increase of $1.84 per barrel in refining throughput margin combined with an increase of 136,000 barrels per day in refining throughput volumes. The increase in throughput margin was primarily due to higher margins for gasoline, diesel, and jet fuel plus wider discounts for heavy-sour feedstocks on the Gulf Coast and light-sweet crude oil in the Mid-Continent. The increase in throughput volumes was mainly due to operating the Aruba refinery, which was not in operation during the second quarter of 2010.

“Our earnings momentum continues to build,” said Valero Chairman and CEO Bill Klesse. “In the second quarter, refining industry margins and feedstock discounts in our markets expanded from the strong first-quarter levels as global refined product demand continued to grow. To take advantage of this demand growth, we increased refining throughput volumes to our highest utilization rate in three years – despite the impact of an apparent lightning strike to a critical motor at our Port Arthur Refinery in early June. Our entire organization is proud of our employees’ efforts to quickly mobilize and mitigate the negative impact at Port Arthur to only two weeks.”

Klesse continued, “Our McKee, Ardmore, and Three Rivers refineries continued to benefit from processing WTI-type and Eagle Ford crude oils, which have been pricing at a significant discount to waterborne light-sweet crude oils such as Brent and LLS. We continued to increase our processing of discounted Eagle Ford crude oil at our Three Rivers refinery, and we plan to process additional volume there and at our Corpus Christi refinery in the third quarter.

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