Valero 2006 Annual Report Download - page 7

Higher
Highs
1998-2002 1999-2003 2000-2004 2001-2005 2002-2006
USGC 5-3-2 Product Margin
(US Gulf Coast margin calculated with
the ratio of 5 barrels of crude oil vs.
three barrels of gasoline and two
barrels of heating oil)
50/50 Arab Light/Medium
Sour Crude Oil Differentials
$1
$0
$2
$3
$4
$5
$6
Higher
Lows
VA L E R O E N E R G Y C O R P OR AT I O N 5
CEO & Chairman of the Board
$7
$8
refined products require subsidies to
be competitive with crude oil based
transportation fuels. We believe that
free markets should be allowed to
determine the fuels we use and the
prices we pay for them.
Another ongoing initiative is the
growth of the Valero brand. Valero
now has approximately 5,800 retail
and branded wholesale sites following
our expansion into the Great Lakes
and Pacific Northwest regions last
year. We continue to brand outlets
within our marketing area, and we
announced an agreement with Susser
Petroleum of Corpus Christi, Texas in
August 2006 to put the Valero brand
on over 300 of their locations in
Texas and Oklahoma. The deal made
Valero the No. 1 wholesale rack fuel
marketer in Texas, with 1,900 branded
wholesale and company-owned
locations and significant unbranded
sales volumes around the state.
Our retail operations, which represent
the company-operated stores, had
their best year ever in earnings per
store in 2006, and Valero was named
Chain of the Year by Convenience
Store Decisions magazine. Even with
these successes, we are continuing
to implement aggressive profit
improvement initiatives for our retail
organization.
Of course, none of these successes
would have been possible without
the dedication and hard work of our
employees, who were responsible for
Valero once again being named to
Fortune magazine’s list of the 100 Best
Companies to Work For. With this
year’s ranking at No. 22, Valero has
been in the top 25 for the last three
consecutive years, and we have been
named to the list in each of the past six
years that we have been eligible.
We have a very strong caring
and sharing commitment to the
communities in which we live and
work. With the company match, our
employees raised a record $13 million
for 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. We thank our
customers, contractors and suppliers
for their generosity and support of this
event.
2006 was a record year in every way
for Valero because everyone from
our board members and executives
to our employees made countless
contributions to our success. I thank
everyone for their support, hard work,
dedication and commitment to safety
and excellence. We also thank our
customers for their business and thank
our suppliers and contractors who
make tremendous efforts toward our
goal of improved operations.
We also thank Bill Greehey who
stepped down as Chairman of the
Board of Directors in January 2007
following his retirement as Chief
Executive Officer at the end of 2005.
All of us at Valero thank Bill for his
leadership and commitment to our
success over the years.
Thanks to the outstanding members
of our team, we are ready for the
future and are in a great position to
execute our strategies. I thank you,
our shareholders, for your investment
in our company and your confidence
in us. We are looking forward to
making our operations even better and
strengthening our position as a world-
class competitor in the years to come.