Valero 2007 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... FINANCIAL HIGHLIGHTS TO OUR STOCkHOLDERS INVESTING IN SHAREHOLDER VALUE INVESTING IN OUR ASSETS INVESTING IN SAFETY INVESTING IN OUR ENVIRONMENT INVESTING IN MARkETING INVESTING IN OUR EMPLOYEES INVESTING IN OUR COMMUNITIES CONDENSED FINANCIAL INFORMATION BOARD OF DIRECTORS STOCkHOLDER INFORMATION

  • Page 3
    ...and customers - by pursuing profitable, value-enhancing strategies with a focus on world-class operations. EMPLOYEES Our employees are our No. 1 asset. We are committed to providing a challenging, enjoyable and rewarding work environment, which fosters creative thinking, teamwork, open communication...

  • Page 4
    ... to all stockholders. This information is also available at www.valero.com. * Effective July 1, 2007, Valero Energy Corporation sold its Lima, Ohio refinery. Therefore, the assets and liabilities related to the sale are presented as "assets held for sale" and "liabilities related to assets held for...

  • Page 5
    PAGE LEFT BLANK INTENTIONALLY

  • Page 6
    ... $7.72 PER SHARE FROM CONTINUING OPERATIONS, MAkING THIS ONE OF THE BEST YEARS IN OUR HISTORY. WE WERE VOTED FORTUNE MAGAzINE'S No. 1 BEST BIG COMPANY TO WORk FOR IN AMERICA. IT WAS ALSO A GREAT YEAR FOR OUR STOCkHOLDERS. VALERO CONTINUED TO GROW SHAREHOLDER VALUE WITH A TOTAL SHAREHOLDER RETURN OF...

  • Page 7
    ...President - Investor and Corporate Communications; Joe Gorder, Executive Vice President - Marketing and Supply; Gene Edwards, Executive Vice President - Corporate Development and Strategic Planning; Bill Klesse, Chief Executive Officer, President and Chairman of the Board. VALERO 2007 ANNUAL REPORT...

  • Page 8
    ..., the Lima, Ohio refinery, which we sold in 2007, was a good fit for the acquirer, Husky Energy. Lima refinery employees and the community now have better opportunities. Today, we are looking at strategic alternatives for four other refineries: Aruba, Memphis, Krotz Springs and Ardmore. At the...

  • Page 9
    ..., enjoyable and rewarding work environment with opportunities for professional growth and development. Our goal is to continue to foster their growth so that, together, we can realize our vision and the earnings potential of our assets. VALERO IS POSITIONING ITSELF TO MEET THE CHALLENGES FACING...

  • Page 10
    ...-class competitor. Bill Klesse extremely reliable at supplying the market. Gasoline, diesel, heating oil, jet fuel, lubricants, chemicals - all of these products greatly enhance quality of life. In everything from plastics to clothing to medical supplies to computers, what we do adds real value. If...

  • Page 11
    ... low-quality feedstocks into high-quality fuels and benefit from the use of feedstocks that price below light sweet crude oil. In the past five years, the company increased its number of branded wholesale locations by 114 percent, from 1,800 to 3,850, which moved 126,000 barrels per day of products...

  • Page 12
    ... focused on increasing production of ultra-low-sulfur diesel (ULSD). Investing $1.2 billion, the company completed major installations of ULSD-producing units at its Houston, St. Charles, Benicia and Corpus Christi refineries. The investments were timely, as the 8 < VALERO 2007 ANNUAL REPORT

  • Page 13
    VALERO 2007 ANNUAL REPORT > 9

  • Page 14
    ... the two largest capital projects in the company's history - a $1.4 billion gas oil hydrocracker at its St. Charles refinery and a $2.4 billion hydrocracker/coker at Port Arthur. These major investments are expected to boost these refineries' production of ULSD by 49,000 barrels per day and 54...

  • Page 15
    ... Feedstocks 35% Sour and Acidic Crudes 29% PRICE BELOW LIGHT SWEET CRUDE OIL Figures shown are in millions of dollars. Flexibility in Valero's system enables the use of a wide variety of feedstocks. Almost 2/3 of Valero's feedstocks price below light sweet crude oil. VALERO 2007 ANNUAL REPORT...

  • Page 16
    ... The company's remaining refineries are on track to earn the certification in the coming years. Occupational safety, however, is not enough. In 2007, Valero invested in the development of a strong Process Safety Management (PSM) initiative, focused on identifying and 12 < VALERO 2007 ANNUAL REPORT

  • Page 17
    ...to investing financial and human resources to ensure safe and reliable operations throughout its system. The quebec City, Three Rivers and St. Charles refineries' superior performance earned the Chairman's Awards for Reliability, Environmental Excellence and Safety. VALERO 2007 ANNUAL REPORT > 13

  • Page 18
    ...-gas recovery systems, Valero endeavors to apply the best available technology to reduce emissions and protect our world. Its ULSD program significantly reduces sulfur emissions from on-road and off-road diesel vehicles. Similarly, the company's low-sulfur gasoline program works to reduce sulfur...

  • Page 19
    .... In Port Arthur, Texas, for example, Valero's refinery team has volunteered to work with local environmental groups to restore and preserve a local wetland habitat. In other regions, Valero worked closely with environmental organizations to support improvement projects, educate the community and...

  • Page 20
    ... supply of high-quality products, an attractive image package, competitive pricing and unparalleled service. In 2007, Valero added 574 new branded wholesale sites to its network, representing an increase of nearly 1 billion gallons in fuel sales per year. This continued growth brings Valero...

  • Page 21
    ... VALERO HEADqUARTERS ULTRAMAR - CANADIAN OPERATIONS CREDIT CARD CENTER qUEBEC CITY PAULSBORO DELAWARE CITY BENICIA MEMPHIS SAN ANTONIO WILMINGTON MCkEE ARDMORE THREE RIVERS ST. CHARLES kROTz SPRINGS PORT ARTHUR HOUSTON ARUBA CORPUS CHRISTI (EAST & WEST) TExAS CITY VALERO 2007 ANNUAL REPORT...

  • Page 22
    ... AND REWARDING WORk ENVIRONMENT. FOR ITS No. 1 ASSET, THE COMPANY STRIVES TO FOSTER CREATIVE THINkING, TEAMWORk, OPEN COMMUNICATION AND AN OPPORTUNITY FOR INDIVIDUAL PROFESSIONAL GROWTH AND DEVELOPMENT. Valero believes that an investment in its employees - from competitive pay and benefits to...

  • Page 23
    VALERO 2007 ANNUAL REPORT > 19

  • Page 24
    ... support, to employee involvement at all levels, Valero employees are contributing to the betterment of our world. From building homes to building relationships, in 2007 Valero Volunteers gave 190,000 service hours to improve communities where Valero operates. 20 < VALERO 2007 ANNUAL REPORT

  • Page 25
    ... hospitals located in communities where Valero has operations. • Helped raise nearly $2 million for the National Multiple Sclerosis Society through Velo Valero, the company's official cycling team. Velo Valero has been one of the largest fundraising teams The 2007 Valero Texas Open crowned justin...

  • Page 26
    ..., WITHOUT CHARGE, A FORM 10-k BY WRITING OR CALLING VALERO'S INVESTOR RELATIONS DEPARTMENT. ADDRESS AND CONTACT INFORMATION CAN BE FOUND ON PAGE 30 OF THIS REPORT. VALERO'S 2007 ANNUAL REPORT ON FORM 10-k AND THE PROxY STATEMENT ALSO MAY BE ACCESSED VIA THE COMPANY'S WEB SITE AT: www.VALERO.COM.

  • Page 27
    ...Public฀Accounting฀Firm To the Board of Directors and Stockholders of Valero Energy Corporation and Subsidiaries Our report on the consolidated financial statements refers to changes in the method of accounting for purchases and sales of inventory with the same counterparty and stock compensation...

  • Page 28
    ... INTEREST IN NET INCOME OF NUSTAR GP HOLDINGS, LLC INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAx ExPENSE INCOME TAx ExPENSE INCOME FROM CONTINUING OPERATIONS INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAx ExPENSE NET INCOME PREFERRED STOCk DIVIDENDS NET INCOME APPLICABLE TO COMMON...

  • Page 29
    ... (Benefit) Changes in Current Assets, Current Liabilities and Other, Net Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures and Deferred Turnaround and Catalyst Costs Proceeds from Sale of Lima Refinery Proceeds from Sale of NuStar GP Holdings, LLC...

  • Page 30
    ... PER BARREL AMOUNTS] 2007 (A) OPERATING RESULTS FOR YEAR ENDED DECEMBER 31: Operating Revenues Operating Income Income from Continuing Operations Earnings per Common Share from Continuing Operations-Assuming Dilution FINANCIAL POSITION AS OF DECEMBER 31: Current Assets Property, Plant and Equipment...

  • Page 31
    ... table. (b) Includes the operations related to the Premcor Acquisition beginning September 1, 2005. (c) Includes the operations related to the Aruba Acquisition beginning March 5, 2004. (d) Includes the operations of the St. Charles Refinery beginning July 1, 2003. VALERO 2007 ANNUAL REPORT > 27

  • Page 32
    ... Board in january 2007, and was named Chief Executive Officer and Vice Chairman of the Board at the end of 2005. Previously, Mr. klesse served as Valero's Executive Vice President and Chief Operating Officer, and held other leadership positions with Valero and Ultramar Diamond Shamrock Corporation...

  • Page 33
    ... relations. Dr. Purcell previously served as Vice President of the Council of the Americas, a non-profit business organization of Fortune 500 companies with investments in Latin America, and of the Americas Society, a non-profit educational institution, both in New York City. VALERO 2007 ANNUAL...

  • Page 34
    ... to stock accounts and dividends and all requests to transfer certificates should be addressed to: Computershare Investor Services 250 Royall Street Canton, MA 02021 (888) 470-2938 (312) 360-5261 www.computershare.com/contactus VALERO CORPORATE HEADQUARTERS One Valero Way San Antonio, Tx 78249...