Valero 2003 Annual Report Download - page 10

Download and view the complete annual report

Please find page 10 of the 2003 Valero annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 33

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33

top฀acquisition฀strategy
8
Joe Gorder, Senior Vice President of Corporate Development, and Mike Ciskowski,
Executive Vice President & Chief Financial Ofcer, (left to right) helped oversee the
successful acquisition and integration of the St. Charles and Aruba reneries. Valero has
been successful in targeting reneries that can be purchased for a small percentage of
replacement cost, then improving operations and upgrading them to improve protability.
Since฀Valero฀spun฀off฀its฀natural฀gas฀assets฀and฀focused฀on฀rening฀and฀marketing฀in฀1997,฀the฀
company฀has฀completed฀a฀string฀of฀very฀successful฀acquisitions฀transforming฀Valero฀into฀the฀
company฀that฀it฀is฀today.฀
Valero฀has฀developed฀a฀reputation฀for฀acquiring฀quality฀assets฀for฀a฀fraction฀of฀their฀replacement฀
value,฀ successfully฀ integrating฀ operations฀ in฀ record฀ time,฀ delivering฀ improved฀ prots,฀ and฀
working฀to฀ensure฀these฀acquisitions฀are฀accretive฀to฀earnings.฀Valero’s฀success฀is฀due฀to฀the฀
company’s฀steadfast฀pursuit฀of฀assets฀that฀meet฀its฀acquisition฀criteria,฀including฀reneries฀with฀
capacity฀in฀excess฀of฀100,000฀BPD,฀upgrade฀potential,฀good฀supply฀logistics฀and฀synergies฀with฀
its฀existing฀rening฀system.
Over฀the฀years,฀Valero฀has฀acquired฀a฀number฀of฀reneries฀at฀distressed฀prices฀that฀have฀proven฀
to฀be฀accretive฀to฀earnings.฀In฀its฀largest฀transaction฀to฀date,฀Valero฀more฀than฀doubled฀in฀size฀
by฀acquiring฀Ultramar฀Diamond฀Shamrock฀in฀record฀time฀without฀any฀layoffs.
In฀2003,฀Valero฀had฀its฀busiest฀year฀in฀terms฀of฀the฀number฀of฀transactions฀completed.฀The฀
company฀acquired฀its฀St.฀Charles฀renery฀for฀less฀than฀20฀cents-on-the-dollar฀replacement฀cost,฀
and฀purchased฀a฀natural฀gas฀liquids฀storage฀facility฀and฀an฀idled฀MTBE฀plant฀from฀Link฀Energy฀
–฀paying฀only฀$20฀million฀for฀$400฀million฀worth฀of฀assets.฀Additionally,฀the฀company฀entered฀
into฀a฀50/50฀joint฀venture฀with฀GulfTerra฀Energy฀Partners฀L.P.฀to฀develop฀a฀crude฀oil฀pipeline฀
from฀the฀Gulf฀of฀Mexico฀to฀the฀Gulf฀Coast,฀along฀with฀other฀smaller฀transactions.฀Then฀earlier฀
this฀year,฀Valero฀acquired฀its฀Aruba฀renery฀for฀15฀cents-on-the-dollar฀replacement฀cost.฀
Valero฀isn’t฀stopping฀there฀either!฀The฀company฀will฀continue฀to฀look฀for฀acquisition฀
opportunities฀that฀will฀t฀its฀criteria฀and฀be฀accretive฀to฀earnings.฀