Valero 2005 Annual Report Download

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NO
1
1 Historic Year Topping Off
25 Years of Achievement
Reļ¬ner in North America
V A L E R O
E N E R G Y C O R P O R A T I O N
2 0 0 5 Su m m a r y A n n u a l R e p o r t

Table of contents

  • Page 1
    N1 O Refiner in North America 1 Historic Year Topping Off 25 Years of Achievement VA L E R O ENERGY CORPORATION 2005 Summary Annual Report

  • Page 2
    ... UP FOR ANOTHER RECORD YEAR VALERO HAS GROWN HAND OVER FIST A HANDS-ON APPROACH TO OPERATIONS HANDS DOWN THE BEST STRATEGY VALERO'S BRAND ROLL-OUT GRABS NATIONAL ATTENTION SAFETY, RELIABILITY & PROFITABILITY GO HAND IN HAND EMPLOYEES SINGLE-HANDEDLY MADE VALERO AMERICA'S THIRD BEST EMPLOYER LENDING...

  • Page 3
    ... with more effective communications, Valero Energy Corporation has adopted a summary annual report format, which provides condensed financial disclosure. The company's full financial statements are contained in its Annual Report on Form 10-K for the year ended December 31, 2005, which is provided...

  • Page 4
    BILL GREEHEY chairman Of the bOard BILL KLESSE chief executiVe Officer & Vice chairman Of the bOard Pict ur e d a t t he Va le r o Me mphis Re f ine r y, one of t he a s s e t s pur c ha s e d a s pa r t of t he P r e mc or a c quis it io n, w hic h c a t a pult e d Va le r o t o be c ome t he N ...

  • Page 5
    ...oils that sell at a big discount to easier-to-refine, sweet crude oil. And, we were right on all counts! In 1997, we sold our natural gas liquids and pipelines business for a record $1.5 billion to PG&E, and spun off our single refinery in Corpus Christi, Texas, to our shareholders as the new Valero...

  • Page 6
    .... Certainly, we have had the right strategy. Valero's aggressive acquisition and capital investment strategy fueled the company's record growth as we added much-needed refining capacity to meet growing consumer demand. Valero not only acquired refineries for pennies-on-the-dollar of replacement...

  • Page 7
    ...less fortunate. As a result of our unique culture, we reached No. 3 - our highest ranking yet - on FORTUNE's 2006 list of the "100 Best Companies to Work For"; we earned the Spirit of America award, United Way's top national honor, twice; and we were ranked the third best-performing stock in 2005 by...

  • Page 8
    THUMBS UP f O r an O ther rec Ord year 6 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 9
    ..."Valero Energy was the top-performing stock on the blue-chip list of Standard & Poor's 500. Thanks to refinery acquisitions in 2005, Valero became the largest North American refining company and is quickly becoming a national household trade name..." -- Columnist David Hendricks, San Antonio Express...

  • Page 10
    VALERO HAS GROWN han d O Ver fiSt 8 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 11
    ... acquisition catapulted Valero to become the No. 1 refiner in North America. VaLerO'S riSe tO nO. 1 fr Om 170,000 b P d tO 3.3 m iLL iOn b Pd Premcor Inc. 3.3 Million BPD UDS 2001 2002 2003 2004 2005 Houston Paulsboro Krotz Springs Texas City Ardmore St. Charles Corpus Denver* Christi...

  • Page 12
    Similarly, the Aruba and St. Charles refineries, acquired in 2004 and 2003 respectively, have been among the best acquisitions in Valero history. The company implemented smooth transitions, invested in operational improvements, captured synergies with other Valero plants, benefited from higher ...

  • Page 13
    ... WILMINGTON ARDMORE ST. CHARLES THREE RIVERS PORT ARTHUR CORPUS CHRISTI HOUSTON (EAST & WEST) TEXAS CITY KROTZ SPRINGS SAN ANTONIO AR UBA Caribbean Sea ARUBA L E G E ND Retail & Braniei Wholesale Presence Wholesale Marketing Presence Valero Refineries Cameron Highway Oil Pipeline Project (JoInT...

  • Page 14
    A HANDS-ON APPROACH t O O Perati O nS 12 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 15
    ... refineries hemorrhaging money into well-run, highly profitable operations." -- CSP Magazine, January 2006 The nation's leader in conversion capacity, Valero is able to upgrade more low-quality feedstocks into higher-value fuels than its peers. And as a result of capital investments, the company...

  • Page 16
    HANDS DOWN the be S t S trateg y 14 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 17
    ... - Transportation Services [left], and Bob Beadle, Senior Vice President - Crude & Feedstock Supply & Trading [center], work together to secure and ship the most economical crude oils and feedstocks to Valero's 18 refineries. Processing deeply discounted feedstocks was a big advantage in 2005 as...

  • Page 18
    VALERO'S BRAND ROLL-OUT g rab S n atiO n aL atten ti On 16 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 19
    ... soda; introduced a full line of gift cards; and rolled out new products like DVDs and prepaid mobile phones. To better supply its locations with the right products at the right time, Valero has opened a 132,000-square-foot distribution center to serve 600 of its Texas stores. All of this innovation...

  • Page 20
    SAFETY, RELIABILITY & PROFITABILITY gO han d i n han d 18 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 21
    ... Sites. Earning this designation is so rigorous that only 20 of the nation's 149 refineries have achieved it, and Valero now owns half of them. "Valero has set a new standard for safety and health excellence in the refining industry." -- John Miles, OSHA Regional Administrator, Corpus Christi VPP...

  • Page 22
    EMPLOYEES SINGLE-HANDEDLY m ade Va L erO am eri ca' S thi rd be St emPLO yer 20 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 23
    ... Valero the No. 3 spot - its best ranking yet - on FORTUNE's "100 Best Companies to Work For" list. And one that brought two refineries back to life in record time - during a time of record refining margins, which is another example of how Valero shareholders benefit from the company's unique caring...

  • Page 24
    LENDING A HELPING HAND tO O u r cO m m u n i ti eS 22 VA L E R O E N E R G Y C O R P OR AT I O N

  • Page 25
    ... that Chief Executive Officer Bill Klesse led Valero's record $12 million United Way campaign in 2005. Agency tours, like this one to the Daughters of Charity Services of San Antonio, helped employees see how their contributions meet the needs of the community. build up the community by starting...

  • Page 26
    ...Department. Address and contact information can be found on the inside back cover of this report. Valero's 2005 Annual Report on Form 10-K and the Proxy Statement also may be accessed via the Company's web site at: www.valero.com. the bOard Of directOrS and StOckhOLderS Of VaLerO energy cOrPOratiOn...

  • Page 27
    ... SHEETS (millions of dollars) DECEMBER 31, ASSETS 2005 2004 Current Assets Property, Plant and Equipment, Net Goodwill Intangible Assets, Deferred Charges... $ 7,305 $ 4,534 5,156 3,901 Deferred Income Taxes Other Long-Term Liabilities Stockholders' Equity TOTAL LIABILITIES AND STOCKHOLDERS...

  • Page 28
    ... EXPENSE, NET MINORITY INTEREST IN NET INCOME OF VALERO L.P. DISTRIBUTIONS ON PREFERRED SECURITIES OF SUBSIDIARY TRUSTS INCOME BEFORE INCOME TAX EXPENSE INCOME TAX EXPENSE NET INCOME PREFERRED STOCK DIVIDENDS NET INCOME APPLICABLE TO COMMON STOCK EARNINGS PER COMMON SHARE (a) Weighted Average Common...

  • Page 29
    ... with Acquisitions Other, Net Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES: Debt and Capital Lease Borrowings (Repayments), Net Redemption of Preferred Securities of Subsidiary Trust Proceeds from Common Stock Offerings, Net Proceeds from Common Unit Issuance by Valero...

  • Page 30
    ... per barrel amounts) 2005(a) OPERATING RESULTS FOR YEAR ENDED DECEMBER 31: Operating Revenues Operating Income Net Income Earnings per Common Share (f ) Earnings per Common Share- Assuming Dilution (f ) FINANCIAL POSITION AS OF DECEMBER 31: Current Assets Property, Plant and Equipment, Net Goodwill...

  • Page 31
    ... and El Paso Corporation beginning June 1, 2001. The results of operations, operating statistics and cash ï¬,ow information exclude the operations of UDS, while the financial position, common stock data, capitalization ratios and employees include the effect of UDS, which was acquired by Valero on...

  • Page 32
    ...U.S. refineries have achieved it, and Valero owns half of them. • Ranked No. 3 on Investor's Business Daily's 2005 list of the "Big Cap 20" based on earnings growth. • Placed No. 4 on Forbes' list of America's Fastest-Growing Big Companies and one of America's Best-Managed Companies. • Ranked...

  • Page 33
    ... the Board of City Public Service, San Antonio's gas and electric utility company. BILL GREEHEY is Chairman of the Board of Valero Energy Corporation. He served as Chairman of the Board and Chief Executive Officer of Valero Energy Corporation and its predecessors from 1974 until he retired as Chief...

  • Page 34
    ... Services & Assistant Secretary Jay Browning, Vice President - Corporate Law & Secretary Mike Crownover, Vice President - Human Resources Clay Killinger, Vice President & Controller Norm Renfro, Vice President - Health, Safety & Environmental Hal Zesch, Vice President & Chief Information Officer...

  • Page 35
    [email protected] VALERO ENERGY CORPORATION COMMON STOCK Valero's common stock is listed for trading on the New York Stock Exchange under the ticker symbol "VLO." MEDIA INQUIRIES For media inquiries, please contact: Corporate Communications Department P.O. Box 696000 San Antonio, TX 78269...

  • Page 36
    EVERYONE IN THE VALERO FAMILY DESERVES A HAND FOR MAKING THE COMPANY NO. 1. VA L E R O E N E R G Y C O R P O R A T I O N P.O. Box 696000 San Antonio, Texas 78269-6000 www.valero.com