Valero 2010 Annual Report Download - page 5

3TO OUR SHAREHOLDERS
LETTER TO SHAREHOLDERS
One year ago, we made a pledge to focus on
strategic items that would restore protability and
help us become a world-class rening industry
competitor. Valero has made great progress by
staying focused, working wisely and rising above
political and economic challenges.
During 2010, the world economy recovered faster
and stronger than expected, contributing to a surge
in global demand for rened products. At the same
time, the U.S. economy has been slowly recovering.
Rening margins and crude oil discounts, measured
against foreign sweet crude oil, improved
substantially over the past year. Our capital projects
and recent transactions have added value and a
competitive edge to our rening portfolio. On top
of all of this, the commitment of our people has
made a real dierence in countless ways – from
a return to protability through execution and
cost-control to improved lives in our communities
through our tireless volunteers.
In 2010, we focused on new workplace safety
programs, cut costs, and relentlessly looked for ways
to be more ecient, more competitive and more
protable. The results were excellent: improved
safety and reliability, divestiture of underperforming
assets, progress on major capital projects, signicant
cost reductions, the acquisition of three more
world-class ethanol plants and our best operational
performance in ve years. For 2010, Valero reported
income from continuing operations of $923 million,
or $1.62 per share.
As we look to an even better 2011, here are
additional highlights from 2010:
SAFETY  OUR HIGHEST PRIORITY
The safety of our people always comes rst and is
the most important eort we make every day. In
2010 we began tracking a new industry metric on
loss of containment, called API process safety events,
and have increased our eorts to eliminate losses
of containment across all of our facilities. We also
adopted “Life-Saving Rules,” a program that identies
the most common causes of serious injuries and
raises individual accountability to follow basic
accident-prevention rules. Our rening system’s
average total recordable-incident rate (TRIR) was
the second-lowest in company history, and our
contractors recorded their lowest-ever TRIR. Our
employees and contractors know that safety is
everyone’s priority, and that by working together,
our safety performance will continue to improve.
IMPROVED RELIABILITY WITH CONTINUED FOCUS
ON OPERATIONAL EXCELLENCE INITIATIVES
In 2010, we made signicant progress in key
reliability measures. Our Commitment to Excellence
Management System (CTEMS) is now in its third
year, delivering a standardized framework for
safety, operational excellence and reliability. We
also are improving reliability through aggressive
preventive maintenance programs, standardized
incident tracking tools, retrospective positive
material identication, and electrical and mechanical
inspections. Since 2007, the cost of high-impact
outages in our renery system has dropped more
than 70 percent.
IMPROVED OPTIMIZATION AND PRODUCT YIELDS
High-value rened products and liquid volume
yield are increasingly important. Through catalyst
optimization, attention to detail and better