Valero 2006 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... Highlights A Letter to our Shareholders A Look at our Company from Coast to Coast Making Valero a Global Force in Refining Developing One of the World's Most Complex Refining Systems Turning Retail and Wholesale into World-Class Competitors Strong Safety, Reliability & Environmental Initiatives...

  • 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, 2006, which is provided...

  • Page 4
    ... - Marketing & Supply; Rich and CEO Portrait Marcogliese, Executive Vice President - Operations; Greg King, President; Bill Klesse, CEO & Chairman of the Board; Gene Edwards, Executive Vice President - Corporate Development & Strategic Planning; and Mike Ciskowski, Executive Vice President & Chief...

  • Page 5
    .... At Valero, we have worked hard to recruit employees, develop strategies and acquire assets that give us a competitive edge and make us a world-class competitor. Valero has grown from a regional energy company with a single refinery to become North America's largest refiner, with a system of 18...

  • Page 6
    ... have achieved Star Site status. As we are continuing these VPP efforts, we are new flue gas scrubbers, raising our total to 10 - more than any other refining company in North America. What's more, we are investing in the latest technology to improve energy efficiency at our refineries. In doing so...

  • Page 7
    ... Valero's United Way campaign and set a volunteer record with nearly 275,000 hours donated to worthy causes. Our employees also made it possible for the 2006 Valero Texas Open and Benefit for Children Golf Classic to raise a record $7 million for charity, the largest contribution in PGA TOUR history...

  • Page 8
    ...- volunteering in record numbers and giving record donations to charity. For all of these reasons, Valero has been recognized as a worldclass competitor in operational excellence, refining complexity, retail and wholesale marketing, safety performance, environmental stewardship and community service...

  • Page 9
    ... Lima Delaware City Paulsboro Quebec City Aruba CANADA SAN ANTONIO ARUBA Caribbean Sea Benicia Wilmington McKee San Antonio Three Rivers Corpus Christi (East & West) Texas City Houston Port Arthur Legend Retail & Branded Wholesale Presence Wholesale Marketing Presence Valero Re...

  • Page 10
    Valero got its start in refining with the Corpus Christi refinery (pictured), which remains one of the most technologically advanced plants in the world. Over the years, the company has assembled the best workforce, acquired great assets, upgraded and expanded those plants and developed best ...

  • Page 11
    ... ultra-low-sulfur diesel units are planned for the Benicia and Corpus Christi refineries. A successful strategy plus worldclass size, complexity, strength and geographic diversity - combined with Valero's dedicated and hard-working employees - give Valero the best refining system in the business...

  • Page 12
    ...7% Rest of World 3% South America 11% Africa 12% Middle East 17% North America 50% Oil tankers, like this one shown at the Port Arthur refinery's dock, deliver crude oil from around the world to the company's plants. Because of the complexity and flexibility of its system, Valero is able to choose...

  • Page 13
    ... when it entered the refining business by commissioning its Corpus Christi refinery. To keep its competitive advantage over other refiners, Valero has acquired facilities and upgraded them to meet this strategy. For example, the Port Arthur refinery - part of the Premcor acquisition in 2005 - became...

  • Page 14
    ... Growing Brand in U.S. U.S. Gasoline Sales Change by Brand, 2006 vs 2005 Valero Industry Average -7% -5% -3% -1% 0% 1% 3% 5% 7% 9% 11% 13% 15% Source: Lundberg Letter For being a superior retailer and innovator, Valero's retail network was named the 2006 Chain of the Year by Convenience Store...

  • Page 15
    ...the market with new stores, strong in-store programs and a popular credit card network. With its commitment to retail excellence, Valero was an easy choice for Chain of the Year." Record Growth for Branded Wholesale Business With the continued, aggressive growth of its branded wholesale locations as...

  • Page 16
    ...Basis are companies acquired by Valero. Valero has invested nearly $700 million to construct state-of-the-art scrubber units like this one shown at the Delaware City refinery, one of two scrubber units that went on line at the refinery in 2006. Valero has scrubber units, which reduce sulfur dioxide...

  • Page 17
    ... nation's best employers. This was not surprising because company officials have always believed that safety is the most fundamental way of caring for its employees, contract workers, and the communities where it operates. In 2006, Valero's international refining network achieved a record-best total...

  • Page 18
    ... Valero Texas Open sponsor. Valero employee Kayla Moore and her son, Isaac, benefited greatly from the services of Seton Home, a San Antonio charity that receives United Way contributions and Valero Texas Open proceeds. Today, Kayla is giving back to her community by contributing her time and money...

  • Page 19
    ... to community service than the Valero Texas Open. Before the company signed on as title sponsor, the most that the tournament had ever raised for charity was $500,000. In 2006, the tournament netted a record $7 million for charity, which was the largest contribution in the PGA TOUR's history. So...

  • Page 20
    ...writing or calling Valero's Investor Relations Department. Address and contact information can be found on the inside back cover of this report. Valero's 2006 Annual Report on Form 10-K and the Proxy Statement also may be accessed via the company's Web site at: www.valero.com. Report of Independent...

  • Page 21
    CONDENSED CONSOLIDATED BALANCE SHEETS (millions of dollars) DECEMBER 31, ASSETS 2006 2005 Current Assets Property, Plant and Equipment, Net Goodwill Intangible Assets, Deferred Charges and Other Assets, Net TOTAL ASSETS $ 10,760 21,098 4,211 $ 8,346 17,856 4,926 1,684 $ 37,753 1,670 $ 32,...

  • Page 22
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (millions of dollars, except per share amounts) YEAR ENDED DECEMBER 31, OPERATING REVENUES COSTS AND EXPENSES: Cost of Sales Refining Operating Expenses Retail Selling Expenses General and Administrative Expenses Depreciation and Amortization Expense ...

  • Page 23
    ...: Capital Expenditures and Deferred Turnaround and Catalyst Costs Proceeds from Sale of Valero GP Holdings, LLC Proceeds from Sales of Assets Major Acquisitions Contingent Payments in Connection with Acquisitions Buyout of Assets Under Structured Lease Arrangements Other, Net Net Cash Used in...

  • Page 24
    ...millions of dollars, except per share and per barrel amounts) 2006 OPERATING RESULTS FOR YEAR ENDED DECEMBER 31: Operating Revenues Operating Income Net Income Earnings per Common Share Earnings per Common Share- Assuming Dilution FINANCIAL POSITION AS OF DECEMBER 31: Current Assets Property, Plant...

  • Page 25
    ... (in millions) Number of Registered Shareholders, End of Year Market Price: High Low OTHER DATA: Capital Expenditures and Deferred Turnaround and Catalyst Costs Number of Employees, End of Year OPERATING STATISTICS: Throughput Volumes (mbbls per day) Throughput Margin per Barrel Operating Costs per...

  • Page 26
    ... University in San Antonio from 1979 until his retirement in 1999, at which time he was appointed President Emeritus of the University. Bill Bradford is the retired Chairman of the Board of Halliburton Company. Prior to the Halliburton-Dresser merger, he was Chairman of the Board and Chief Executive...

  • Page 27
    ..., April 26, 2007, at Valero's corporate headquarters located at One Valero Way (near the southwest corner of the intersection of I.H. 10 and Loop 1604 West) in San Antonio, Texas. Transfer Agent and Registrar Computershare Investor Services has been appointed transfer agent, registrar and dividend...

  • Page 28
    Valero Energy Corporation P.0. Box 696000 • San Antonio, Texas 78269-6000 • www.valero.com