R
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______________ to _______________
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Delaware
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74-1828067
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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One Valero Way
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78249
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San Antonio, Texas
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(Zip Code)
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(Address of principal executive offices)
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Registrant’s telephone number, including area code: (210) 345-2000
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Large accelerated filer
R
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Form 10-K Item No. and Caption
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Heading in 2013 Proxy Statement
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10.
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Directors, Executive Officers and
Corporate Governance
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Information Regarding the Board of Directors, Independent Directors, Audit Committee, Proposal No. 1 Election of Directors
,
Information Concerning Nominees and Other Directors,
Identification of Executive Officers,
Section 16(a) Beneficial Ownership Reporting Compliance,
and
Governance Documents and Codes of Ethics
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11.
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Executive Compensation
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Compensation Committee, Compensation Discussion and Analysis, Director Compensation, Executive Compensation,
and
Certain Relationships and Related Transactions
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12.
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Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters
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Beneficial Ownership of Valero Securities
and
Equity Compensation Plan Information
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13.
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Certain Relationships and Related
Transactions, and
Director Independence
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Certain Relationships and Related Transactions
and
Independent Directors
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14.
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Principal Accountant Fees and Services
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KPMG Fees for Fiscal Year 2012, KPMG Fees for Fiscal Year 2011,
and
Audit Committee Pre-Approval Policy
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PAGE
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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•
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Our refining segment includes refining operations, wholesale marketing, product supply and distribution, and transportation operations. The refining segment is segregated geographically into the U.S. Gulf Coast, U.S. Mid-Continent, North Atlantic, and U.S. West Coast regions.
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•
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Our ethanol segment includes sales of internally produced ethanol and distillers grains. Our ethanol operations are geographically located in the central plains region of the U.S.
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•
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Our retail segment includes company-operated convenience stores in the U.S. and Canada; and filling stations, cardlock facilities, and heating oil operations in Canada. The retail segment is segregated into two geographic regions. Our retail operations in the U.S. are referred to as Retail–U.S. and our retail operations in Canada are referred to as Retail–Canada.
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Refinery
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Location
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Throughput
Capacity
(a)
(BPD)
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U.S. Gulf Coast
:
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Corpus Christi
(b)
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Texas
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325,000
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Port Arthur
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Texas
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310,000
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St. Charles
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Louisiana
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270,000
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Texas City
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Texas
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245,000
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Aruba
(c)
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Aruba
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235,000
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Houston
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Texas
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160,000
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Meraux
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Louisiana
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135,000
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Three Rivers
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Texas
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100,000
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1,780,000
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U.S. Mid-Continent
:
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Memphis
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Tennessee
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195,000
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McKee
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Texas
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170,000
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Ardmore
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Oklahoma
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90,000
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455,000
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North Atlantic
:
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Pembroke
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Wales, U.K.
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270,000
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Quebec City
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Quebec, Canada
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235,000
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505,000
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U.S. West Coast
:
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Benicia
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California
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170,000
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Wilmington
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California
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135,000
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305,000
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Total
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3,045,000
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(a)
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“Throughput capacity” represents estimated capacity for processing crude oil, intermediates, and other feedstocks. Total estimated crude oil capacity is approximately 2.6 million BPD.
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(b)
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Represents the combined capacities of two refineries – the Corpus Christi East and Corpus Christi West Refineries.
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(c)
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The operations of the Aruba Refinery were suspended in March 2012. For further discussion of this matter, see
Note 4
in Notes to Consolidated Financial Statements.
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Combined Total Refining System Charges and Yields
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Charges:
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sour crude oil
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38
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%
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acidic sweet crude oil
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3
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%
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sweet crude oil
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35
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%
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residual fuel oil
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8
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%
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other feedstocks
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5
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%
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blendstocks
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11
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%
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Yields:
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gasolines and blendstocks
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47
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%
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distillates
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35
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%
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petrochemicals
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3
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%
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other products (includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, and asphalt)
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15
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%
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Combined U.S. Gulf Coast Region Charges and Yields
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Charges:
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sour crude oil
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53
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%
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acidic sweet crude oil
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2
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%
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sweet crude oil
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14
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%
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residual fuel oil
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13
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%
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other feedstocks
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5
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%
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blendstocks
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13
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%
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Yields:
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gasolines and blendstocks
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44
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%
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distillates
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34
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%
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petrochemicals
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4
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%
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other products (includes gas oil, No. 6 fuel oil, petroleum coke, and asphalt)
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18
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%
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Combined U.S. Mid-Continent Region Charges and Yields
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Charges:
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sour crude oil
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9
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%
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sweet crude oil
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81
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%
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other feedstocks
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1
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%
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blendstocks
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9
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%
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Yields:
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gasolines and blendstocks
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54
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%
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distillates
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36
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%
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petrochemicals
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4
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%
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other products (includes gas oil, No. 6 fuel oil, and asphalt)
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6
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%
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Combined North Atlantic Region Charges and Yields
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Charges:
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sour crude oil
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2
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%
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acidic sweet crude oil
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6
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%
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sweet crude oil
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81
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%
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residual fuel oil
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2
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%
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other feedstocks
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2
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%
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blendstocks
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7
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%
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Yields:
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gasolines and blendstocks
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43
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%
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distillates
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44
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%
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petrochemicals
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1
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%
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other products (includes gas oil, No. 6 fuel oil, and other products)
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12
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%
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Combined U.S. West Coast Region Charges and Yields
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Charges:
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sour crude oil
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62
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%
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acidic sweet crude oil
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11
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%
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sweet crude oil
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4
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%
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other feedstocks
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10
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%
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blendstocks
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13
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%
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Yields:
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gasolines and blendstocks
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62
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%
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distillates
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25
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%
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other products (includes gas oil, No. 6 fuel oil, petroleum coke, and asphalt)
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13
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%
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•
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We produce asphalt at five of our refineries. Our asphalt products are sold for use in road construction, road repair, and roofing applications through a network of refinery and terminal loading racks.
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•
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We produce naphthenic oils at one of our refineries suitable for a wide variety of lubricant and process applications.
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•
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NGLs produced at our refineries include butane, isobutane, and propane. These products can be used for gasoline blending, home heating, and petrochemical plant feedstocks.
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•
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We are a significant producer of petroleum coke, supplying primarily power generation customers and cement manufacturers. Petroleum coke is used largely as a substitute for coal.
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•
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We produce and market a number of commodity petrochemicals including aromatics (benzene, toluene, and xylene) and two grades of propylene. Aromatics and propylenes are sold to customers in the chemical industry for further processing into such products as paints, plastics, and adhesives.
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•
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We are a large producer of sulfur with sales primarily to customers in the agricultural sector. Sulfur is used in manufacturing fertilizer.
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State
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City
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Ethanol Nameplate Production
(in gallons per year)
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Production of DDG
(in tons per year)
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Corn Processed
(in bushels per year)
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Indiana
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Linden
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110 million
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350,000
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40 million
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Iowa
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Albert City
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110 million
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350,000
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40 million
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Charles City
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110 million
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350,000
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40 million
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Fort Dodge
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110 million
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350,000
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40 million
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Hartley
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110 million
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350,000
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40 million
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Minnesota
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Welcome
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110 million
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350,000
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40 million
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Nebraska
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Albion
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110 million
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350,000
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40 million
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Ohio
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Bloomingburg
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110 million
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350,000
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40 million
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South Dakota
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Aurora
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120 million
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390,000
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43 million
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Wisconsin
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Jefferson
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110 million
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350,000
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40 million
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Total
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1,110 million
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3,540,000
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403 million
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1
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Ethanol is commercially produced using either the wet mill or dry mill process. Wet milling involves separating the grain kernel into its component parts (germ, fiber, protein, and starch) prior to fermentation. In the dry mill process, the entire grain kernel is ground into flour. The starch in the flour is converted to ethanol during the fermentation process, creating carbon dioxide and distillers grains.
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2
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During fermentation, nearly all of the starch in the grain is converted into ethanol and carbon dioxide, while the remaining nutrients (proteins, fats, minerals, and vitamins) are concentrated to yield modified distillers grains, or, after further drying, dried distillers grains. Distillers grains generally are an economical partial replacement for corn, soybean, and dicalcium phosphate in feeds for livestock, swine, and poultry.
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•
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the sale of motor fuel at convenience stores, filling stations, and cardlocks;
|
•
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the sale of convenience merchandise items and services at our convenience stores; and
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•
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the sale of heating oil to residential customers and heating oil and motor fuel to small commercial customers.
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•
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the sale of motor fuel and convenience merchandise items through our company-operated convenience stores and cardlocks,
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•
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the sale of motor fuel through filling stations owned and operated by independent dealers or agents where we retain title to the motor fuel and sell it directly to our customers, and
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•
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the sale of heating oil to residential and small commercial customers.
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•
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Item 1 under the caption “Risk Factors – Compliance with and changes in environmental laws, including proposed climate change laws and regulations, could adversely affect our performance,”
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•
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Item 3, “Legal Proceedings” under the caption “Environmental Enforcement Matters,” and
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•
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Item 8, “Financial Statements and Supplementary Data” in
Note 10
of Notes to Consolidated Financial Statements under the caption “
Environmental Liabilities
” and
Note 12
of Notes to Consolidated Financial Statements under the caption “
Environmental Matters.
”
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Sales Prices of the
Common Stock
|
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Dividends
Per
Common
Share
|
||||||||
Quarter Ended
|
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High
|
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Low
|
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|||||||
2012:
|
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||||||
December 31
|
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$
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34.38
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$
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28.20
|
|
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$
|
0.175
|
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September 30
|
|
33.75
|
|
|
23.64
|
|
|
0.175
|
|
|||
June 30
|
|
26.33
|
|
|
20.37
|
|
|
0.150
|
|
|||
March 31
|
|
28.56
|
|
|
19.61
|
|
|
0.150
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|
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2011:
|
|
|
|
|
|
|
||||||
December 31
|
|
26.70
|
|
|
17.17
|
|
|
0.150
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|
|||
September 30
|
|
26.89
|
|
|
17.78
|
|
|
0.050
|
|
|||
June 30
|
|
30.50
|
|
|
23.18
|
|
|
0.050
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|
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March 31
|
|
30.73
|
|
|
23.19
|
|
|
0.050
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Period
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Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Not Purchased as Part of Publicly Announced Plans or Programs (a)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b)
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|||||
October 2012
|
50,163
|
|
$
|
29.01
|
|
50,163
|
|
—
|
|
$ 3.46 billion
|
November 2012
|
927,587
|
|
$
|
30.43
|
|
427,587
|
|
500,000
|
|
$ 3.44 billion
|
December 2012
|
3,214,969
|
|
$
|
32.10
|
|
14,637
|
|
3,200,332
|
|
$ 3.34 billion
|
Total
|
4,192,719
|
|
$
|
31.69
|
|
492,387
|
|
3,700,332
|
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$ 3.34 billion
|
(a)
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The shares reported in this column represent purchases settled in the fourth quarter of
2012
relating to (i) our purchases of shares in open-market transactions to meet our obligations under incentive compensation plans, and (ii) our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions in accordance with the terms of our incentive compensation plans.
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(b)
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On April 26, 2007, we publicly announced an increase in our common stock purchase program from $2 billion to $6 billion, as authorized by our board of directors on April 25, 2007. The $6 billion common stock purchase program has no expiration date. On February 28, 2008, we announced that our board of directors approved a $3 billion common stock purchase program, which is in addition to the $6 billion program. This $3 billion program has no expiration date.
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|
12/2007
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12/2008
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12/2009
|
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12/2010
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12/2011
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12/2012
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||||||||||||
Valero Common Stock
|
$
|
100.00
|
|
|
$
|
31.45
|
|
|
$
|
25.09
|
|
|
$
|
35.01
|
|
|
$
|
32.26
|
|
|
$
|
53.61
|
|
S&P 500
|
100.00
|
|
|
63.00
|
|
|
79.67
|
|
|
91.67
|
|
|
93.61
|
|
|
108.59
|
|
||||||
Old Peer Group
|
100.00
|
|
|
80.98
|
|
|
76.54
|
|
|
88.41
|
|
|
104.33
|
|
|
111.11
|
|
||||||
New Peer Group
|
100.00
|
|
|
66.27
|
|
|
86.87
|
|
|
72.84
|
|
|
74.70
|
|
|
76.89
|
|
1
|
Assumes that an investment in Valero common stock and each index was $100 on
December 31, 2007
. “Cumulative total return” is based on share price appreciation plus reinvestment of dividends from
December 31, 2007
through
December 31, 2012
.
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|
Year Ended December 31,
|
||||||||||||||||||
|
2012 (a)
|
|
|
2011 (b)
|
|
|
2010 (c)
|
|
|
2009 (c)
|
|
|
2008
|
||||||
Operating revenues
|
$
|
139,250
|
|
|
$
|
125,987
|
|
|
$
|
82,233
|
|
|
$
|
64,599
|
|
|
$
|
106,676
|
|
Income (loss) from
continuing operations
|
2,080
|
|
|
2,096
|
|
|
923
|
|
|
(273
|
)
|
|
(1,154
|
)
|
|||||
Earnings per common
share from continuing
operations – assuming dilution
|
3.75
|
|
|
3.69
|
|
|
1.62
|
|
|
(0.50
|
)
|
|
(2.20
|
)
|
|||||
Dividends per common share
|
0.65
|
|
|
0.30
|
|
|
0.20
|
|
|
0.60
|
|
|
0.57
|
|
|||||
Total assets
|
44,477
|
|
|
42,783
|
|
|
37,621
|
|
|
35,572
|
|
|
34,417
|
|
|||||
Debt and capital lease
obligations, less current portion
|
6,463
|
|
|
6,732
|
|
|
7,515
|
|
|
7,163
|
|
|
6,264
|
|
(a)
|
The operations of the Aruba Refinery were suspended in March 2012, as further described in
Note 4
in Notes to Consolidated Financial Statements.
|
(b)
|
We acquired the Meraux Refinery on October 1, 2011 and the Pembroke Refinery on August 1, 2011. The information presented for 2011 includes the results of operations from these acquisitions commencing on their respective acquisition dates.
|
(c)
|
We acquired three ethanol plants in the first quarter of 2010 and seven ethanol plants in the second quarter of 2009. The information presented for 2010 and 2009 includes the results of operations of these plants commencing on their respective acquisition dates.
|
•
|
future refining margins, including gasoline and distillate margins;
|
•
|
future retail margins, including gasoline, diesel, heating oil, and convenience store merchandise margins;
|
•
|
future ethanol margins;
|
•
|
expectations regarding feedstock costs, including crude oil differentials, and operating expenses;
|
•
|
anticipated levels of crude oil and refined product inventories;
|
•
|
our anticipated level of capital investments, including deferred refinery turnaround and catalyst costs and capital expenditures for environmental and other purposes, and the effect of these capital investments on our results of operations;
|
•
|
anticipated trends in the supply of and demand for crude oil and other feedstocks and refined products globally and in the regions where we operate;
|
•
|
expectations regarding environmental, tax, and other regulatory initiatives; and
|
•
|
the effect of general economic and other conditions on refining, retail, and ethanol industry fundamentals.
|
•
|
acts of terrorism aimed at either our facilities or other facilities that could impair our ability to produce or transport refined products or receive feedstocks;
|
•
|
political and economic conditions in nations that produce crude oil or consume refined products;
|
•
|
demand for, and supplies of, refined products such as gasoline, diesel fuel, jet fuel, heating oil, petrochemicals, and ethanol;
|
•
|
demand for, and supplies of, crude oil and other feedstocks;
|
•
|
the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) to agree on and to maintain crude oil price and production controls;
|
•
|
the level of consumer demand, including seasonal fluctuations;
|
•
|
refinery overcapacity or undercapacity;
|
•
|
our ability to successfully integrate any acquired businesses into our operations;
|
•
|
the actions taken by competitors, including both pricing and adjustments to refining capacity in response to market conditions;
|
•
|
the level of competitors’ imports into markets that we supply;
|
•
|
accidents, unscheduled shutdowns, or other catastrophes affecting our refineries, machinery, pipelines, equipment, and information systems, or those of our suppliers or customers;
|
•
|
changes in the cost or availability of transportation for feedstocks and refined products;
|
•
|
the price, availability, and acceptance of alternative fuels and alternative-fuel vehicles;
|
•
|
the levels of government subsidies for ethanol and other alternative fuels;
|
•
|
delay of, cancellation of, or failure to implement planned capital projects and realize the various assumptions and benefits projected for such projects or cost overruns in constructing such planned capital projects;
|
•
|
earthquakes, hurricanes, tornadoes, and irregular weather, which can unforeseeably affect the price or availability of natural gas, crude oil, grain and other feedstocks, and refined products and ethanol;
|
•
|
rulings, judgments, or settlements in litigation or other legal or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;
|
•
|
legislative or regulatory action, including the introduction or enactment of legislation or rulemakings by governmental authorities, including tax and environmental regulations, such as those to be implemented under the California Global Warming Solutions Act (also known as AB 32) and the EPA’s regulation of greenhouse gases, which may adversely affect our business or operations;
|
•
|
changes in the credit ratings assigned to our debt securities and trade credit;
|
•
|
changes in currency exchange rates, including the value of the Canadian dollar, the pound sterling, and the euro relative to the U.S. dollar;
|
•
|
overall economic conditions, including the stability and liquidity of financial markets; and
|
•
|
other factors generally described in the “Risk Factors” section included in Items 1, 1A, and 2, “Business, Risk Factors, and Properties” in this report.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
Change
|
||||||
Operating income (loss) by business segment:
|
|
|
|
|
|
|
||||||
Refining
|
|
$
|
4,450
|
|
|
$
|
3,516
|
|
|
$
|
934
|
|
Retail
|
|
348
|
|
|
381
|
|
|
(33
|
)
|
|||
Ethanol
|
|
(47
|
)
|
|
396
|
|
|
(443
|
)
|
|||
Corporate
|
|
(741
|
)
|
|
(613
|
)
|
|
(128
|
)
|
|||
Total
|
|
$
|
4,010
|
|
|
$
|
3,680
|
|
|
$
|
330
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Operating revenues
|
$
|
139,250
|
|
|
$
|
125,987
|
|
|
$
|
13,263
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of sales (c)
|
127,268
|
|
|
115,719
|
|
|
11,549
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Refining (d)
|
3,668
|
|
|
3,406
|
|
|
262
|
|
|||
Retail
|
686
|
|
|
678
|
|
|
8
|
|
|||
Ethanol
|
332
|
|
|
399
|
|
|
(67
|
)
|
|||
General and administrative expenses
|
698
|
|
|
571
|
|
|
127
|
|
|||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
Refining
|
1,370
|
|
|
1,338
|
|
|
32
|
|
|||
Retail
|
119
|
|
|
115
|
|
|
4
|
|
|||
Ethanol
|
42
|
|
|
39
|
|
|
3
|
|
|||
Corporate
|
43
|
|
|
42
|
|
|
1
|
|
|||
Asset impairment loss (e)
|
1,014
|
|
|
—
|
|
|
1,014
|
|
|||
Total costs and expenses
|
135,240
|
|
|
122,307
|
|
|
12,933
|
|
|||
Operating income
|
4,010
|
|
|
3,680
|
|
|
330
|
|
|||
Other income, net
|
9
|
|
|
43
|
|
|
(34
|
)
|
|||
Interest and debt expense, net of capitalized interest
|
(313
|
)
|
|
(401
|
)
|
|
88
|
|
|||
Income from continuing operations before
income tax expense
|
3,706
|
|
|
3,322
|
|
|
384
|
|
|||
Income tax expense
|
1,626
|
|
|
1,226
|
|
|
400
|
|
|||
Income from continuing operations
|
2,080
|
|
|
2,096
|
|
|
(16
|
)
|
|||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(7
|
)
|
|
7
|
|
|||
Net income
|
2,080
|
|
|
2,089
|
|
|
(9
|
)
|
|||
Less: Net loss attributable to noncontrolling interests
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Net income attributable to Valero stockholders
|
$
|
2,083
|
|
|
$
|
2,090
|
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
||||||
Net income attributable to Valero stockholders:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2,083
|
|
|
$
|
2,097
|
|
|
$
|
(14
|
)
|
Discontinued operations
|
—
|
|
|
(7
|
)
|
|
7
|
|
|||
Total
|
$
|
2,083
|
|
|
$
|
2,090
|
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
||||||
Earnings per common share – assuming dilution:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.75
|
|
|
$
|
3.69
|
|
|
$
|
0.06
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.01
|
|
|||
Total
|
$
|
3.75
|
|
|
$
|
3.68
|
|
|
$
|
0.07
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Refining (a) (b):
|
|
|
|
|
|
||||||
Operating income (c) (d) (e)
|
$
|
4,450
|
|
|
$
|
3,516
|
|
|
$
|
934
|
|
Throughput margin per barrel (f)
|
$
|
10.96
|
|
|
$
|
9.91
|
|
|
$
|
1.05
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses (d)
|
3.79
|
|
|
3.83
|
|
|
(0.04
|
)
|
|||
Depreciation and amortization expense
|
1.44
|
|
|
1.51
|
|
|
(0.07
|
)
|
|||
Total operating costs per barrel (e)
|
5.23
|
|
|
5.34
|
|
|
(0.11
|
)
|
|||
Operating income per barrel
|
$
|
5.73
|
|
|
$
|
4.57
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
||||||
Throughput volumes (thousand BPD):
|
|
|
|
|
|
||||||
Feedstocks:
|
|
|
|
|
|
||||||
Heavy sour crude
|
453
|
|
|
454
|
|
|
(1
|
)
|
|||
Medium/light sour crude
|
547
|
|
|
442
|
|
|
105
|
|
|||
Acidic sweet crude
|
81
|
|
|
116
|
|
|
(35
|
)
|
|||
Sweet crude
|
910
|
|
|
745
|
|
|
165
|
|
|||
Residuals
|
200
|
|
|
282
|
|
|
(82
|
)
|
|||
Other feedstocks
|
120
|
|
|
122
|
|
|
(2
|
)
|
|||
Total feedstocks
|
2,311
|
|
|
2,161
|
|
|
150
|
|
|||
Blendstocks and other
|
302
|
|
|
273
|
|
|
29
|
|
|||
Total throughput volumes
|
2,613
|
|
|
2,434
|
|
|
179
|
|
|||
|
|
|
|
|
|
||||||
Yields (thousand BPD):
|
|
|
|
|
|
||||||
Gasolines and blendstocks
|
1,251
|
|
|
1,120
|
|
|
131
|
|
|||
Distillates
|
918
|
|
|
834
|
|
|
84
|
|
|||
Other products (g)
|
467
|
|
|
494
|
|
|
(27
|
)
|
|||
Total yields
|
2,636
|
|
|
2,448
|
|
|
188
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
U.S. Gulf Coast (a):
|
|
|
|
|
|
||||||
Operating income (c) (d) (e)
|
$
|
2,541
|
|
|
$
|
2,205
|
|
|
$
|
336
|
|
Throughput volumes (thousand BPD)
|
1,488
|
|
|
1,450
|
|
|
38
|
|
|||
Throughput margin per barrel (c) (f)
|
$
|
9.65
|
|
|
$
|
9.33
|
|
|
$
|
0.32
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses (d)
|
3.55
|
|
|
3.66
|
|
|
(0.11
|
)
|
|||
Depreciation and amortization expense
|
1.44
|
|
|
1.50
|
|
|
(0.06
|
)
|
|||
Total operating costs per barrel (d) (e)
|
4.99
|
|
|
5.16
|
|
|
(0.17
|
)
|
|||
Operating income per barrel
|
$
|
4.66
|
|
|
$
|
4.17
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
||||||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
2,044
|
|
|
$
|
1,535
|
|
|
$
|
509
|
|
Throughput volumes (thousand BPD)
|
430
|
|
|
411
|
|
|
19
|
|
|||
Throughput margin per barrel (c) (f)
|
$
|
18.49
|
|
|
$
|
15.91
|
|
|
$
|
2.58
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
4.02
|
|
|
4.15
|
|
|
(0.13
|
)
|
|||
Depreciation and amortization expense
|
1.48
|
|
|
1.52
|
|
|
(0.04
|
)
|
|||
Total operating costs per barrel
|
5.50
|
|
|
5.67
|
|
|
(0.17
|
)
|
|||
Operating income per barrel
|
$
|
12.99
|
|
|
$
|
10.24
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
||||||
North Atlantic (b):
|
|
|
|
|
|
||||||
Operating income
|
$
|
752
|
|
|
$
|
171
|
|
|
$
|
581
|
|
Throughput volumes (thousand BPD)
|
428
|
|
|
317
|
|
|
111
|
|
|||
Throughput margin per barrel (f)
|
$
|
9.24
|
|
|
$
|
5.43
|
|
|
$
|
3.81
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
3.59
|
|
|
3.08
|
|
|
0.51
|
|
|||
Depreciation and amortization expense
|
0.85
|
|
|
0.87
|
|
|
(0.02
|
)
|
|||
Total operating costs per barrel
|
4.44
|
|
|
3.95
|
|
|
0.49
|
|
|||
Operating income per barrel
|
$
|
4.80
|
|
|
$
|
1.48
|
|
|
$
|
3.32
|
|
|
|
|
|
|
|
||||||
U.S. West Coast:
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
147
|
|
|
$
|
147
|
|
|
$
|
—
|
|
Throughput volumes (thousand BPD)
|
267
|
|
|
256
|
|
|
11
|
|
|||
Throughput margin per barrel (c) (f)
|
$
|
8.84
|
|
|
$
|
9.11
|
|
|
$
|
(0.27
|
)
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
5.09
|
|
|
5.25
|
|
|
(0.16
|
)
|
|||
Depreciation and amortization expense
|
2.25
|
|
|
2.29
|
|
|
(0.04
|
)
|
|||
Total operating costs per barrel
|
7.34
|
|
|
7.54
|
|
|
(0.20
|
)
|
|||
Operating income per barrel
|
$
|
1.50
|
|
|
$
|
1.57
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
||||||
Operating income for regions above
|
$
|
5,484
|
|
|
$
|
4,058
|
|
|
$
|
1,426
|
|
Loss on derivative contracts related to the forward sales of refined product (c)
|
—
|
|
|
(542
|
)
|
|
542
|
|
|||
Severance expense (d)
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||
Asset impairment loss applicable to refining (e)
|
(993
|
)
|
|
—
|
|
|
(993
|
)
|
|||
Total refining operating income
|
$
|
4,450
|
|
|
$
|
3,516
|
|
|
$
|
934
|
|
|
Year Ended December 31,
|
|||||||||
|
2012
|
|
2011
|
|
Change
|
|||||
Feedstocks:
|
|
|
|
|
|
|||||
Brent crude oil
|
$
|
111.70
|
|
|
$
|
110.93
|
|
|
0.77
|
|
Brent less WTI crude oil
|
17.55
|
|
|
15.88
|
|
|
1.67
|
|
||
Brent less Alaska North Slope (ANS) crude oil
|
1.08
|
|
|
1.39
|
|
|
(0.31
|
)
|
||
Brent less LLS crude oil
|
(0.91
|
)
|
|
(0.54
|
)
|
|
(0.37
|
)
|
||
Brent less Mars crude oil
|
3.97
|
|
|
3.46
|
|
|
0.51
|
|
||
Brent less Maya crude oil
|
12.06
|
|
|
12.18
|
|
|
(0.12
|
)
|
||
LLS crude oil
|
112.61
|
|
|
111.47
|
|
|
1.14
|
|
||
LLS less Mars crude oil
|
4.88
|
|
|
4.00
|
|
|
0.88
|
|
||
LLS less Maya crude oil
|
12.97
|
|
|
12.72
|
|
|
0.25
|
|
||
WTI crude oil
|
94.15
|
|
|
95.05
|
|
|
(0.90
|
)
|
||
|
|
|
|
|
|
|||||
Natural gas (dollars per million British thermal units)
|
2.71
|
|
|
3.96
|
|
|
(1.25
|
)
|
||
|
|
|
|
|
|
|||||
Products:
|
|
|
|
|
|
|||||
U.S. Gulf Coast:
|
|
|
|
|
|
|||||
Conventional 87 gasoline less Brent
|
6.49
|
|
|
5.58
|
|
|
0.91
|
|
||
Ultra-low-sulfur diesel less Brent
|
16.48
|
|
|
13.78
|
|
|
2.70
|
|
||
Propylene less Brent
|
(22.38
|
)
|
|
8.23
|
|
|
(30.61
|
)
|
||
Conventional 87 gasoline less LLS
|
5.58
|
|
|
5.04
|
|
|
0.54
|
|
||
Ultra-low-sulfur diesel less LLS
|
15.57
|
|
|
13.24
|
|
|
2.33
|
|
||
Propylene less LLS
|
(23.29
|
)
|
|
7.69
|
|
|
(30.98
|
)
|
||
U.S. Mid-Continent:
|
|
|
|
|
|
|||||
Conventional 87 gasoline less WTI
|
25.40
|
|
|
22.37
|
|
|
3.03
|
|
||
Ultra-low-sulfur diesel less WTI
|
34.96
|
|
|
31.06
|
|
|
3.90
|
|
||
North Atlantic:
|
|
|
|
|
|
|||||
Conventional 87 gasoline less Brent
|
11.46
|
|
|
6.24
|
|
|
5.22
|
|
||
Ultra-low-sulfur diesel less Brent
|
19.06
|
|
|
15.64
|
|
|
3.42
|
|
||
U.S. West Coast:
|
|
|
|
|
|
|||||
CARBOB 87 gasoline less ANS
|
15.39
|
|
|
11.48
|
|
|
3.91
|
|
||
CARB diesel less ANS
|
19.93
|
|
|
18.47
|
|
|
1.46
|
|
||
CARBOB 87 gasoline less WTI
|
31.86
|
|
|
25.97
|
|
|
5.89
|
|
||
CARB diesel less WTI
|
36.40
|
|
|
32.96
|
|
|
3.44
|
|
||
New York Harbor corn crush (dollars per gallon)
|
(0.15
|
)
|
|
0.25
|
|
|
(0.40
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Retail–U.S.:
|
|
|
|
|
|
||||||
Operating income (e)
|
$
|
240
|
|
|
$
|
213
|
|
|
$
|
27
|
|
Company-operated fuel sites (average)
|
1,013
|
|
|
994
|
|
|
19
|
|
|||
Fuel volumes (gallons per day per site)
|
5,083
|
|
|
5,060
|
|
|
23
|
|
|||
Fuel margin per gallon
|
$
|
0.162
|
|
|
$
|
0.144
|
|
|
$
|
0.018
|
|
Merchandise sales
|
$
|
1,239
|
|
|
$
|
1,223
|
|
|
$
|
16
|
|
Merchandise margin (percentage of sales)
|
29.7
|
%
|
|
28.7
|
%
|
|
1.0
|
%
|
|||
Margin on miscellaneous sales
|
$
|
89
|
|
|
$
|
88
|
|
|
$
|
1
|
|
Operating expenses
|
$
|
434
|
|
|
$
|
416
|
|
|
$
|
18
|
|
Depreciation and amortization expense
|
$
|
77
|
|
|
$
|
77
|
|
|
$
|
—
|
|
Asset impairment loss (e)
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
|
|
|
|
|
||||||
Retail–Canada:
|
|
|
|
|
|
||||||
Operating income (e)
|
$
|
108
|
|
|
$
|
168
|
|
|
$
|
(60
|
)
|
Fuel volumes (thousand gallons per day)
|
3,096
|
|
|
3,195
|
|
|
(99
|
)
|
|||
Fuel margin per gallon
|
$
|
0.258
|
|
|
$
|
0.299
|
|
|
$
|
(0.041
|
)
|
Merchandise sales
|
$
|
257
|
|
|
$
|
261
|
|
|
$
|
(4
|
)
|
Merchandise margin (percentage of sales)
|
29.0
|
%
|
|
29.4
|
%
|
|
(0.4
|
)%
|
|||
Margin on miscellaneous sales
|
$
|
44
|
|
|
$
|
43
|
|
|
$
|
1
|
|
Operating expenses
|
$
|
252
|
|
|
$
|
262
|
|
|
$
|
(10
|
)
|
Depreciation and amortization expense
|
$
|
42
|
|
|
$
|
38
|
|
|
$
|
4
|
|
Asset impairment loss (e)
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
|
|
|
|
|
||||||
Ethanol:
|
|
|
|
|
|
||||||
Operating income (loss)
|
$
|
(47
|
)
|
|
$
|
396
|
|
|
$
|
(443
|
)
|
Ethanol production (thousand gallons per day)
|
2,967
|
|
|
3,352
|
|
|
(385
|
)
|
|||
Gross margin per gallon of production (f)
|
$
|
0.30
|
|
|
$
|
0.68
|
|
|
$
|
(0.38
|
)
|
Operating costs per gallon of production:
|
|
|
|
|
|
||||||
Operating expenses
|
0.30
|
|
|
0.33
|
|
|
(0.03
|
)
|
|||
Depreciation and amortization expense
|
0.04
|
|
|
0.03
|
|
|
0.01
|
|
|||
Total operating costs per gallon of production
|
0.34
|
|
|
0.36
|
|
|
(0.02
|
)
|
|||
Operating income (loss) per gallon of production
|
$
|
(0.04
|
)
|
|
$
|
0.32
|
|
|
$
|
(0.36
|
)
|
(a)
|
The financial highlights and operating highlights for the refining segment and U.S. Gulf Coast region reflect the results of operations of our Meraux Refinery, including related logistics assets, from the date of its acquisition on October 1, 2011.
|
(b)
|
The financial highlights and operating highlights for the refining segment and North Atlantic region reflect the results of operations of our Pembroke Refinery, including the related market and logistics business, from the date of its acquisition on August 1, 2011.
|
(c)
|
Cost of sales for the year ended December 31, 2011 includes a loss of $542 million ($352 million after taxes) on commodity derivative contracts related to the forward sales of refined product. These contracts were closed and realized during the first quarter of 2011. This loss is reflected in refining segment operating income for the year ended December 31, 2011, but throughput margin per barrel for the refining segment has been restated from the amount previously presented to exclude this $542 million loss ($0.61 per barrel). In addition, operating income and throughput margin per barrel for the U.S. Gulf Coast, the U.S. Mid-Continent, and the U.S. West Coast regions for the year ended December 31, 2011 have been restated from the amounts previously presented to exclude the portion of this loss that had been allocated to them of $372 million ($0.70 per barrel), $122 million ($0.81 per barrel), and $48 million ($0.51 per barrel), respectively.
|
(d)
|
In September 2012, we decided to reorganize our Aruba Refinery into a crude oil and refined products terminal. These terminal operations require a considerably smaller workforce; therefore, the reorganization resulted in the termination of the majority of our employees in Aruba. We recognized severance expense of $41 million in September 2012. This expense is reflected in refining segment operating income for the year ended December 31, 2012, but it is excluded from operating costs per barrel for the refining segment and the U.S. Gulf Coast region. No income tax benefits were recognized related to this severance expense.
|
(e)
|
During the year ended December 31, 2012, we recognized the following asset impairment losses (in millions):
|
Refining segment:
|
|
|
||
Aruba Refinery
|
|
$
|
928
|
|
Cancelled capital projects
|
|
65
|
|
|
Asset impairment losses - refining segment
|
|
993
|
|
|
Retail segment:
|
|
|
||
U.S. stores
|
|
12
|
|
|
Canada stores
|
|
9
|
|
|
Asset impairment losses - retail segment
|
|
21
|
|
|
Total asset impairment losses
|
|
$
|
1,014
|
|
(f)
|
Throughput margin per barrel represents operating revenues less cost of sales of our refining segment divided by throughput volumes. Gross margin per gallon of production represents operating revenues less cost of sales of our ethanol segment divided by production volumes.
|
(g)
|
Other products primarily include petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, and asphalt.
|
(h)
|
The regions reflected herein contain the following refineries: the U.S. Gulf Coast region includes the Corpus Christi East, Corpus Christi West, Texas City, Houston, Three Rivers, St. Charles, Aruba, Port Arthur, and Meraux Refineries; the U.S. Mid-Continent region includes the McKee, Ardmore, and Memphis Refineries; the North Atlantic region includes the Pembroke and Quebec City Refineries; and the U.S. West Coast region includes the Benicia and Wilmington Refineries.
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
Change
|
||||||
Operating revenues
|
$
|
125,987
|
|
|
$
|
82,233
|
|
|
$
|
43,754
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of sales (c)
|
115,719
|
|
|
74,458
|
|
|
41,261
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Refining
|
3,406
|
|
|
2,944
|
|
|
462
|
|
|||
Retail
|
678
|
|
|
654
|
|
|
24
|
|
|||
Ethanol
|
399
|
|
|
363
|
|
|
36
|
|
|||
General and administrative expenses
|
571
|
|
|
531
|
|
|
40
|
|
|||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
Refining
|
1,338
|
|
|
1,210
|
|
|
128
|
|
|||
Retail
|
115
|
|
|
108
|
|
|
7
|
|
|||
Ethanol
|
39
|
|
|
36
|
|
|
3
|
|
|||
Corporate
|
42
|
|
|
51
|
|
|
(9
|
)
|
|||
Asset impairment loss
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||
Total costs and expenses
|
122,307
|
|
|
80,357
|
|
|
41,950
|
|
|||
Operating income
|
3,680
|
|
|
1,876
|
|
|
1,804
|
|
|||
Other income, net
|
43
|
|
|
106
|
|
|
(63
|
)
|
|||
Interest and debt expense, net of capitalized interest
|
(401
|
)
|
|
(484
|
)
|
|
83
|
|
|||
Income from continuing operations
before income tax expense
|
3,322
|
|
|
1,498
|
|
|
1,824
|
|
|||
Income tax expense
|
1,226
|
|
|
575
|
|
|
651
|
|
|||
Income from continuing operations
|
2,096
|
|
|
923
|
|
|
1,173
|
|
|||
Loss from discontinued operations, net of income taxes
|
(7
|
)
|
|
(599
|
)
|
|
592
|
|
|||
Net income
|
2,089
|
|
|
324
|
|
|
1,765
|
|
|||
Less: Net loss attributable to noncontrolling interest
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Net income attributable to Valero stockholders
|
$
|
2,090
|
|
|
$
|
324
|
|
|
$
|
1,766
|
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to Valero stockholders:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2,097
|
|
|
$
|
923
|
|
|
$
|
1,174
|
|
Discontinued operations
|
(7
|
)
|
|
(599
|
)
|
|
592
|
|
|||
Total
|
$
|
2,090
|
|
|
$
|
324
|
|
|
$
|
1,766
|
|
|
|
|
|
|
|
||||||
Earnings per common share – assuming dilution:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.69
|
|
|
$
|
1.62
|
|
|
$
|
2.07
|
|
Discontinued operations
|
(0.01
|
)
|
|
(1.05
|
)
|
|
1.04
|
|
|||
Total
|
$
|
3.68
|
|
|
$
|
0.57
|
|
|
$
|
3.11
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
Change
|
||||||
Refining (a) (b) (d):
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
3,516
|
|
|
$
|
1,903
|
|
|
$
|
1,613
|
|
Throughput margin per barrel (f)
|
$
|
9.91
|
|
|
$
|
7.80
|
|
|
$
|
2.11
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
3.83
|
|
|
3.79
|
|
|
0.04
|
|
|||
Depreciation and amortization expense
|
1.51
|
|
|
1.56
|
|
|
(0.05
|
)
|
|||
Total operating costs per barrel
|
5.34
|
|
|
5.35
|
|
|
(0.01
|
)
|
|||
Operating income per barrel
|
$
|
4.57
|
|
|
$
|
2.45
|
|
|
$
|
2.12
|
|
|
|
|
|
|
|
||||||
Throughput volumes (thousand BPD):
|
|
|
|
|
|
||||||
Feedstocks:
|
|
|
|
|
|
||||||
Heavy sour crude
|
454
|
|
|
458
|
|
|
(4
|
)
|
|||
Medium/light sour crude
|
442
|
|
|
386
|
|
|
56
|
|
|||
Acidic sweet crude
|
116
|
|
|
60
|
|
|
56
|
|
|||
Sweet crude
|
745
|
|
|
668
|
|
|
77
|
|
|||
Residuals
|
282
|
|
|
204
|
|
|
78
|
|
|||
Other feedstocks
|
122
|
|
|
110
|
|
|
12
|
|
|||
Total feedstocks
|
2,161
|
|
|
1,886
|
|
|
275
|
|
|||
Blendstocks and other
|
273
|
|
|
243
|
|
|
30
|
|
|||
Total throughput volumes
|
2,434
|
|
|
2,129
|
|
|
305
|
|
|||
|
|
|
|
|
|
||||||
Yields (thousand BPD):
|
|
|
|
|
|
||||||
Gasolines and blendstocks
|
1,120
|
|
|
1,048
|
|
|
72
|
|
|||
Distillates
|
834
|
|
|
712
|
|
|
122
|
|
|||
Other products (g)
|
494
|
|
|
395
|
|
|
99
|
|
|||
Total yields
|
2,448
|
|
|
2,155
|
|
|
293
|
|
|||
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
Change
|
||||||
U.S. Gulf Coast (a):
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
2,205
|
|
|
$
|
1,349
|
|
|
$
|
856
|
|
Throughput volumes (thousand BPD)
|
1,450
|
|
|
1,280
|
|
|
170
|
|
|||
Throughput margin per barrel (f)
|
$
|
9.33
|
|
|
$
|
8.20
|
|
|
$
|
1.13
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
3.66
|
|
|
3.71
|
|
|
(0.05
|
)
|
|||
Depreciation and amortization expense
|
1.50
|
|
|
1.60
|
|
|
(0.10
|
)
|
|||
Total operating costs per barrel
|
5.16
|
|
|
5.31
|
|
|
(0.15
|
)
|
|||
Operating income per barrel
|
$
|
4.17
|
|
|
$
|
2.89
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
||||||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
1,535
|
|
|
$
|
339
|
|
|
$
|
1,196
|
|
Throughput volumes (thousand BPD)
|
411
|
|
|
398
|
|
|
13
|
|
|||
Throughput margin per barrel (f)
|
$
|
15.91
|
|
|
$
|
7.33
|
|
|
$
|
8.58
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
4.15
|
|
|
3.60
|
|
|
0.55
|
|
|||
Depreciation and amortization expense
|
1.52
|
|
|
1.40
|
|
|
0.12
|
|
|||
Total operating costs per barrel
|
5.67
|
|
|
5.00
|
|
|
0.67
|
|
|||
Operating income per barrel
|
$
|
10.24
|
|
|
$
|
2.33
|
|
|
$
|
7.91
|
|
|
|
|
|
|
|
||||||
North Atlantic (b):
|
|
|
|
|
|
||||||
Operating income
|
$
|
171
|
|
|
$
|
129
|
|
|
$
|
42
|
|
Throughput volumes (thousand BPD)
|
317
|
|
|
195
|
|
|
122
|
|
|||
Throughput margin per barrel (f)
|
$
|
5.43
|
|
|
$
|
6.18
|
|
|
$
|
(0.75
|
)
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
3.08
|
|
|
2.99
|
|
|
0.09
|
|
|||
Depreciation and amortization expense
|
0.87
|
|
|
1.39
|
|
|
(0.52
|
)
|
|||
Total operating costs per barrel
|
3.95
|
|
|
4.38
|
|
|
(0.43
|
)
|
|||
Operating income per barrel
|
$
|
1.48
|
|
|
$
|
1.80
|
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
||||||
U.S. West Coast:
|
|
|
|
|
|
||||||
Operating income (c)
|
$
|
147
|
|
|
$
|
88
|
|
|
$
|
59
|
|
Throughput volumes (thousand BPD)
|
256
|
|
|
256
|
|
|
—
|
|
|||
Throughput margin per barrel (f)
|
$
|
9.11
|
|
|
$
|
7.73
|
|
|
$
|
1.38
|
|
Operating costs per barrel:
|
|
|
|
|
|
||||||
Operating expenses
|
5.25
|
|
|
5.09
|
|
|
0.16
|
|
|||
Depreciation and amortization expense
|
2.29
|
|
|
1.69
|
|
|
0.60
|
|
|||
Total operating costs per barrel
|
7.54
|
|
|
6.78
|
|
|
0.76
|
|
|||
Operating income per barrel
|
$
|
1.57
|
|
|
$
|
0.95
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
||||||
Operating income for regions above
|
$
|
4,058
|
|
|
$
|
1,905
|
|
|
$
|
2,153
|
|
Loss on derivative contracts related to the forward sales of refined product (c)
|
(542
|
)
|
|
—
|
|
|
(542
|
)
|
|||
Asset impairment loss applicable to refining
|
—
|
|
|
(2
|
)
|
|
2
|
|
|||
Total refining operating income
|
$
|
3,516
|
|
|
$
|
1,903
|
|
|
$
|
1,613
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
Change
|
||||||
Feedstocks:
|
|
|
|
|
|
||||||
Brent crude oil
|
$
|
110.93
|
|
|
$
|
79.54
|
|
|
$
|
31.39
|
|
Brent less WTI
|
15.88
|
|
|
0.13
|
|
|
15.75
|
|
|||
Brent less ANS crude oil
|
1.39
|
|
|
0.46
|
|
|
0.93
|
|
|||
Brent less LLS crude oil
|
(0.54
|
)
|
|
(2.09
|
)
|
|
1.55
|
|
|||
Brent less Mars crude oil
|
3.46
|
|
|
1.54
|
|
|
1.92
|
|
|||
Brent less Maya crude oil
|
12.18
|
|
|
9.26
|
|
|
2.92
|
|
|||
LLS
|
111.47
|
|
|
81.62
|
|
|
29.85
|
|
|||
LLS less Mars crude oil
|
4.00
|
|
|
3.62
|
|
|
0.38
|
|
|||
LLS less Maya crude oil
|
12.72
|
|
|
11.34
|
|
|
1.38
|
|
|||
WTI crude oil
|
95.05
|
|
|
79.41
|
|
|
15.64
|
|
|||
|
|
|
|
|
|
||||||
Natural gas (dollars per million British thermal units)
|
3.96
|
|
|
4.34
|
|
|
(0.38
|
)
|
|||
|
|
|
|
|
|
||||||
Products:
|
|
|
|
|
|
||||||
U.S. Gulf Coast:
|
|
|
|
|
|
||||||
Conventional 87 gasoline less Brent
|
5.58
|
|
|
7.39
|
|
|
(1.81
|
)
|
|||
Ultra-low-sulfur diesel less Brent
|
13.78
|
|
|
11.01
|
|
|
2.77
|
|
|||
Propylene less Brent
|
8.23
|
|
|
7.79
|
|
|
0.44
|
|
|||
Conventional 87 gasoline less LLS
|
5.04
|
|
|
5.30
|
|
|
(0.26
|
)
|
|||
Ultra-low-sulfur diesel less LLS
|
13.24
|
|
|
8.93
|
|
|
4.31
|
|
|||
Propylene less LLS
|
7.69
|
|
|
5.71
|
|
|
1.98
|
|
|||
U.S. Mid-Continent:
|
|
|
|
|
|
||||||
Conventional 87 gasoline less WTI
|
22.37
|
|
|
8.20
|
|
|
14.17
|
|
|||
Ultra-low-sulfur diesel less WTI
|
31.06
|
|
|
11.91
|
|
|
19.15
|
|
|||
North Atlantic:
|
|
|
|
|
|
||||||
Conventional 87 gasoline less Brent
|
6.24
|
|
|
8.38
|
|
|
(2.14
|
)
|
|||
Ultra-low-sulfur diesel less Brent
|
15.64
|
|
|
12.63
|
|
|
3.01
|
|
|||
U.S. West Coast:
|
|
|
|
|
|
||||||
CARBOB 87 gasoline less ANS
|
11.48
|
|
|
14.21
|
|
|
(2.73
|
)
|
|||
CARB diesel less ANS
|
18.47
|
|
|
13.79
|
|
|
4.68
|
|
|||
CARBOB 87 gasoline less WTI
|
25.97
|
|
|
13.88
|
|
|
12.09
|
|
|||
CARB diesel less WTI
|
32.96
|
|
|
13.45
|
|
|
19.51
|
|
|||
New York Harbor corn crush (dollars per gallon)
|
0.25
|
|
|
0.39
|
|
|
(0.14
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
Change
|
||||||
Retail–U.S.:
|
|
|
|
|
|
||||||
Operating income
|
$
|
213
|
|
|
$
|
200
|
|
|
$
|
13
|
|
Company-operated fuel sites (average)
|
994
|
|
|
990
|
|
|
4
|
|
|||
Fuel volumes (gallons per day per site)
|
5,060
|
|
|
5,086
|
|
|
(26
|
)
|
|||
Fuel margin per gallon
|
$
|
0.144
|
|
|
$
|
0.140
|
|
|
$
|
0.004
|
|
Merchandise sales
|
$
|
1,223
|
|
|
$
|
1,205
|
|
|
$
|
18
|
|
Merchandise margin (percentage of sales)
|
28.7
|
%
|
|
28.3
|
%
|
|
0.4
|
%
|
|||
Margin on miscellaneous sales
|
$
|
88
|
|
|
$
|
86
|
|
|
$
|
2
|
|
Operating expenses
|
$
|
416
|
|
|
$
|
412
|
|
|
$
|
4
|
|
Depreciation and amortization expense
|
$
|
77
|
|
|
$
|
73
|
|
|
$
|
4
|
|
|
|
|
|
|
|
||||||
Retail–Canada:
|
|
|
|
|
|
||||||
Operating income
|
$
|
168
|
|
|
$
|
146
|
|
|
$
|
22
|
|
Fuel volumes (thousand gallons per day)
|
3,195
|
|
|
3,168
|
|
|
27
|
|
|||
Fuel margin per gallon
|
$
|
0.299
|
|
|
$
|
0.271
|
|
|
$
|
0.028
|
|
Merchandise sales
|
$
|
261
|
|
|
$
|
240
|
|
|
$
|
21
|
|
Merchandise margin (percentage of sales)
|
29.4
|
%
|
|
30.1
|
%
|
|
(0.7
|
)%
|
|||
Margin on miscellaneous sales
|
$
|
43
|
|
|
$
|
38
|
|
|
$
|
5
|
|
Operating expenses
|
$
|
262
|
|
|
$
|
242
|
|
|
$
|
20
|
|
Depreciation and amortization expense
|
$
|
38
|
|
|
$
|
35
|
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
Ethanol (e):
|
|
|
|
|
|
||||||
Operating income
|
$
|
396
|
|
|
$
|
209
|
|
|
$
|
187
|
|
Ethanol production (thousand gallons per day)
|
3,352
|
|
|
3,021
|
|
|
331
|
|
|||
Gross margin per gallon of production (f)
|
$
|
0.68
|
|
|
$
|
0.55
|
|
|
$
|
0.13
|
|
Operating costs per gallon of production:
|
|
|
|
|
|
||||||
Operating expenses
|
0.33
|
|
|
0.33
|
|
|
—
|
|
|||
Depreciation and amortization expense
|
0.03
|
|
|
0.03
|
|
|
—
|
|
|||
Total operating costs per gallon of production
|
0.36
|
|
|
0.36
|
|
|
—
|
|
|||
Operating income per gallon of production
|
$
|
0.32
|
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
(a)
|
The financial highlights and operating highlights for the refining segment and U.S. Gulf Coast region reflect the results of operations of our Meraux Refinery, including related logistics assets, from the date of its acquisition on October 1, 2011 through December 31, 2011.
|
(b)
|
The financial highlights and operating highlights for the refining segment and North Atlantic region reflect the results of operations of our Pembroke Refinery, including the related market and logistics business, from the date of its acquisition on August 1, 2011 through December 31, 2011.
|
(c)
|
Cost of sales for the year ended December 31, 2011 includes a loss of $542 million ($352 million after taxes) on commodity derivative contracts related to the forward sales of refined product. These contracts were closed and realized during the first quarter of 2011. This loss is reflected in refining segment operating income for the year ended December 31, 2011, but throughput margin per barrel for the refining segment has been restated from the amount previously presented to exclude this $542 million loss ($0.61 per barrel). In addition, operating income and throughput margin per barrel for the U.S. Gulf Coast, the U.S. Mid-Continent, and the U.S. West Coast regions for the year ended December 31, 2011 have been restated from the amounts previously presented to exclude the portion of this loss that had been allocated to them of $372 million ($0.70 per barrel), $122 million ($0.81 per barrel), and $48 million ($0.51 per barrel), respectively.
|
(d)
|
In 2010, we sold our Paulsboro Refinery and our shutdown Delaware City refinery assets and associated terminal and pipeline assets. The results of operations of these refineries have been presented as discontinued operations for the year ended December 31, 2010. In addition, the operating highlights for the refining segment and North Atlantic region exclude these refineries for the year ended December 31, 2010.
|
(e)
|
We acquired three ethanol plants in the first quarter of 2010. The information presented reflects the results of operations of these plants commencing on their respective acquisition dates. Ethanol production volumes are based on total production during each year divided by actual calendar days per year.
|
(f)
|
Throughput margin per barrel represents operating revenues less cost of sales of our refining segment divided by throughput volumes. Gross margin per gallon of production represents operating revenues less cost of sales of our ethanol segment divided by production volumes.
|
(g)
|
Other products primarily include petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, and asphalt.
|
(h)
|
The regions reflected herein contain the following refineries: the U.S. Gulf Coast region includes the Corpus Christi East, Corpus Christi West, Texas City, Houston, Three Rivers, St. Charles, Aruba, Port Arthur, and Meraux Refineries; the U.S. Mid-Continent region includes the McKee, Ardmore, and Memphis Refineries; the North Atlantic region includes the Pembroke and Quebec City Refineries; and the U.S. West Coast region includes the Benicia and Wilmington Refineries.
|
(i)
|
Average market reference prices for LLS crude oil, along with price differentials between the price of LLS crude oil and other types of crude oil, have been included in the table of Average Market Reference Prices and Differentials. The table also includes price differentials by region between the prices of certain products and the benchmark crude oil that provides the best indicator of product margins for each region. Prior to the first quarter of 2011, feedstock and product differentials were based on the price of WTI crude oil. However, the price of WTI crude oil no longer provides a reasonable benchmark price of crude oil for all regions. Beginning in late 2010, WTI crude oil began to price at a discount to benchmark sweet crude oils, such as LLS and Brent, because of increased WTI supplies resulting from greater U.S. production and increased deliveries of crude oil from Canada into the U.S. Mid-Continent region. Therefore, the use of the price of WTI crude oil as a benchmark price for regions that do not process WTI crude oil is no longer reasonable.
|
•
|
fund
$3.4 billion
of capital expenditures and deferred turnaround and catalyst costs;
|
•
|
redeem our Series 1997 5.6%, Series 1998 5.6%, Series 1999 5.7%, Series 2001 6.65%, and Series 1997A 5.45% industrial revenue bonds for
$108 million
;
|
•
|
make scheduled long-term note repayments of $754 million;
|
•
|
repay borrowings under our revolving credit facility of
$1.1 billion
;
|
•
|
make repayments under our accounts receivable sales facility of
$1.7 billion
;
|
•
|
purchase common stock for treasury of
$281 million
;
|
•
|
pay common stock dividends of
$360 million
; and
|
•
|
increase available cash on hand by
$699 million
.
|
•
|
fund
$3.0 billion
of capital expenditures and deferred turnaround and catalyst costs;
|
•
|
purchase the Pembroke Refinery and the related marketing and logistics business for
$1.7 billion
;
|
•
|
purchase the Meraux Refinery for
$547 million
;
|
•
|
redeem our Series 1997B 5.4% and Series 1997C 5.4% industrial revenue bonds for
$56 million
;
|
•
|
make scheduled long-term note repayments of $418 million;
|
•
|
acquire the GO Zone Revenue Bonds Series 2010 for $300 million;
|
•
|
purchase our common stock for
$349 million
; and
|
•
|
pay common stock dividends of
$169 million
.
|
|
Payments Due by Period
|
|
|
||||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt and capital
lease obligations (including
interest on capital lease
obligations)
|
$
|
592
|
|
|
$
|
210
|
|
|
$
|
484
|
|
|
$
|
8
|
|
|
$
|
957
|
|
|
$
|
4,859
|
|
|
$
|
7,110
|
|
Operating lease obligations
|
337
|
|
|
250
|
|
|
179
|
|
|
133
|
|
|
86
|
|
|
350
|
|
|
1,335
|
|
|||||||
Purchase obligations
|
33,255
|
|
|
1,950
|
|
|
1,129
|
|
|
1,049
|
|
|
416
|
|
|
1,178
|
|
|
38,977
|
|
|||||||
Other long-term liabilities
|
—
|
|
|
134
|
|
|
128
|
|
|
127
|
|
|
126
|
|
|
1,615
|
|
|
2,130
|
|
|||||||
Total
|
$
|
34,184
|
|
|
$
|
2,544
|
|
|
$
|
1,920
|
|
|
$
|
1,317
|
|
|
$
|
1,585
|
|
|
$
|
8,002
|
|
|
$
|
49,552
|
|
•
|
in March 2012, we exercised the call provisions on our Series 1997 5.6%, Series 1998 5.6%, Series 1999 5.7%, Series 2001 6.65%, and Series 1997A 5.45% industrial revenue bonds, which were redeemed on May 3, 2012 for $108 million, or 100 percent of their outstanding stated values;
|
•
|
in April 2012, we made scheduled debt repayments of $4 million related to our Series 1997A 5.45% industrial revenue bonds and $750 million related to our 6.875% notes;
|
•
|
in May 2012, we borrowed $1.1 billion under our revolving credit facility;
|
•
|
in June 2012, we repaid $1.1 billion under our revolving credit facility; and
|
•
|
also in June 2012, we received proceeds of $300 million from the remarketing of the 4.0% GO Zone Bonds, which are due December 1, 2040, but are subject to mandatory tender on June 1, 2022.
|
Rating Agency
|
|
Rating
|
Standard & Poor’s Ratings Services
|
|
BBB (negative outlook)
|
Moody’s Investors Service
|
|
Baa2 (stable outlook)
|
Fitch Ratings
|
|
BBB (stable outlook)
|
|
|
Borrowing
Capacity
|
|
Expiration
|
|
Outstanding
Letters of Credit
|
||||
Letter of credit facilities
|
|
$
|
550
|
|
|
June 2013
|
|
$
|
418
|
|
U.S. revolving credit facility
|
|
$
|
3,000
|
|
|
December 2016
|
|
$
|
59
|
|
Canadian revolving credit facility
|
|
C$
|
50
|
|
|
November 2013
|
|
C$
|
10
|
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
Increase in projected benefit obligation resulting from:
|
|
|
|
||||
Discount rate decrease
|
$
|
109
|
|
|
$
|
12
|
|
Compensation rate increase
|
36
|
|
|
n/a
|
|
||
Health care cost trend rate increase
|
n/a
|
|
|
4
|
|
||
|
|
|
|
||||
Increase in expense resulting from:
|
|
|
|
||||
Discount rate decrease
|
17
|
|
|
—
|
|
||
Expected return on plan assets decrease
|
4
|
|
|
n/a
|
|
||
Compensation rate increase
|
9
|
|
|
n/a
|
|
||
Health care cost trend rate increase
|
n/a
|
|
|
—
|
|
•
|
inventories and firm commitments to purchase inventories generally for amounts by which our current year inventory levels (determined on a last-in, first-out (LIFO) basis) differ from our previous year-end LIFO inventory levels and
|
•
|
forecasted feedstock and refined product purchases, refined product sales, natural gas purchases, and corn purchases to lock in the price of these forecasted transactions at existing market prices that we deem favorable.
|
|
Derivative Instruments Held For
|
||||||
|
Non-Trading Purposes
|
|
Trading
Purposes
|
||||
December 31, 2012:
|
|
|
|
||||
Gain (loss) in fair value resulting from:
|
|
|
|
||||
10% increase in underlying commodity prices
|
$
|
(131
|
)
|
|
$
|
(9
|
)
|
10% decrease in underlying commodity prices
|
135
|
|
|
(1
|
)
|
||
|
|
|
|
||||
December 31, 2011:
|
|
|
|
||||
Gain (loss) in fair value resulting from:
|
|
|
|
||||
10% increase in underlying commodity prices
|
(156
|
)
|
|
1
|
|
||
10% decrease in underlying commodity prices
|
156
|
|
|
2
|
|
|
December 31, 2012
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate
|
$
|
480
|
|
|
$
|
200
|
|
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
950
|
|
|
$
|
4,824
|
|
|
$
|
6,929
|
|
|
$
|
8,521
|
|
Average interest rate
|
5.5
|
%
|
|
4.8
|
%
|
|
5.2
|
%
|
|
—
|
%
|
|
6.4
|
%
|
|
7.3
|
%
|
|
6.8
|
%
|
|
|
|||||||||
Floating rate
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100
|
|
|
$
|
100
|
|
Average interest rate
|
0.9
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.9
|
%
|
|
|
|
December 31, 2011
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate
|
$
|
754
|
|
|
$
|
484
|
|
|
$
|
200
|
|
|
$
|
475
|
|
|
$
|
—
|
|
|
$
|
5,578
|
|
|
$
|
7,491
|
|
|
$
|
9,048
|
|
Average interest rate
|
6.9
|
%
|
|
5.5
|
%
|
|
4.8
|
%
|
|
5.2
|
%
|
|
—
|
%
|
|
7.3
|
%
|
|
6.9
|
%
|
|
|
|||||||||
Floating rate
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
250
|
|
Average interest rate
|
0.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.6
|
%
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Operating revenues (a)
|
$
|
139,250
|
|
|
$
|
125,987
|
|
|
$
|
82,233
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
127,268
|
|
|
115,719
|
|
|
74,458
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Refining
|
3,668
|
|
|
3,406
|
|
|
2,944
|
|
|||
Retail
|
686
|
|
|
678
|
|
|
654
|
|
|||
Ethanol
|
332
|
|
|
399
|
|
|
363
|
|
|||
General and administrative expenses
|
698
|
|
|
571
|
|
|
531
|
|
|||
Depreciation and amortization expense
|
1,574
|
|
|
1,534
|
|
|
1,405
|
|
|||
Asset impairment losses
|
1,014
|
|
|
—
|
|
|
2
|
|
|||
Total costs and expenses
|
135,240
|
|
|
122,307
|
|
|
80,357
|
|
|||
Operating income
|
4,010
|
|
|
3,680
|
|
|
1,876
|
|
|||
Other income, net
|
9
|
|
|
43
|
|
|
106
|
|
|||
Interest and debt expense, net of capitalized interest
|
(313
|
)
|
|
(401
|
)
|
|
(484
|
)
|
|||
Income from continuing operations before income tax expense
|
3,706
|
|
|
3,322
|
|
|
1,498
|
|
|||
Income tax expense
|
1,626
|
|
|
1,226
|
|
|
575
|
|
|||
Income from continuing operations
|
2,080
|
|
|
2,096
|
|
|
923
|
|
|||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(7
|
)
|
|
(599
|
)
|
|||
Net income
|
2,080
|
|
|
2,089
|
|
|
324
|
|
|||
Less: Net loss attributable to noncontrolling interest
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net income attributable to Valero Energy Corporation stockholders
|
$
|
2,083
|
|
|
$
|
2,090
|
|
|
$
|
324
|
|
Net income attributable to Valero Energy Corporation stockholders:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2,083
|
|
|
$
|
2,097
|
|
|
$
|
923
|
|
Discontinued operations
|
—
|
|
|
(7
|
)
|
|
(599
|
)
|
|||
Total
|
$
|
2,083
|
|
|
$
|
2,090
|
|
|
$
|
324
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.77
|
|
|
$
|
3.70
|
|
|
$
|
1.63
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
(1.06
|
)
|
|||
Total
|
$
|
3.77
|
|
|
$
|
3.69
|
|
|
$
|
0.57
|
|
Weighted-average common shares outstanding (in millions)
|
550
|
|
|
563
|
|
|
563
|
|
|||
Earnings per common share – assuming dilution:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
3.75
|
|
|
$
|
3.69
|
|
|
$
|
1.62
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
(1.05
|
)
|
|||
Total
|
$
|
3.75
|
|
|
$
|
3.68
|
|
|
$
|
0.57
|
|
Weighted-average common shares outstanding – assuming dilution (in millions)
|
556
|
|
|
569
|
|
|
568
|
|
|||
Dividends per common share
|
$
|
0.65
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
_______________________________________________
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
||||||
(a) Includes excise taxes on sales by our U.S. retail system
|
$
|
964
|
|
|
$
|
892
|
|
|
$
|
891
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Net income
|
$
|
2,080
|
|
|
$
|
2,089
|
|
|
$
|
324
|
|
|
|
|
|
|
|
|
|||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
164
|
|
|
(122
|
)
|
|
158
|
|
|||
Net loss on pension
and other postretirement benefits
|
(211
|
)
|
|
(292
|
)
|
|
(16
|
)
|
|||
Net gain (loss) on derivative instruments designated and
qualifying as cash flow hedges
|
(28
|
)
|
|
29
|
|
|
(180
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive loss before
income tax benefit
|
(75
|
)
|
|
(385
|
)
|
|
(38
|
)
|
|||
Income tax benefit related to items of other
comprehensive loss
|
(87
|
)
|
|
(93
|
)
|
|
(61
|
)
|
|||
Other comprehensive income (loss)
|
12
|
|
|
(292
|
)
|
|
23
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
2,092
|
|
|
1,797
|
|
|
347
|
|
|||
Less: Comprehensive loss attributable to
noncontrolling interest
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Comprehensive income attributable to
Valero Energy Corporation stockholders
|
$
|
2,095
|
|
|
$
|
1,798
|
|
|
$
|
347
|
|
|
Valero Energy Corporation Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
|
Non-controlling
Interest
|
|
Total
Equity
|
||||||||||||||||
Balance as of December 31, 2009
|
$
|
7
|
|
|
$
|
7,896
|
|
|
$
|
(6,721
|
)
|
|
$
|
13,178
|
|
|
$
|
365
|
|
|
$
|
14,725
|
|
|
$
|
—
|
|
|
$
|
14,725
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|
324
|
|
|
—
|
|
|
324
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(114
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
54
|
|
||||||||
Tax deduction in excess of stock-
based compensation expense
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Transactions in connection with stock-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Stock issuances
|
—
|
|
|
(252
|
)
|
|
272
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||||
Stock repurchases
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||||
Balance as of December 31, 2010
|
7
|
|
|
7,704
|
|
|
(6,462
|
)
|
|
13,388
|
|
|
388
|
|
|
15,025
|
|
|
—
|
|
|
15,025
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,090
|
|
|
—
|
|
|
2,090
|
|
|
(1
|
)
|
|
2,089
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
(169
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||||||
Tax deduction in excess of stock-
based compensation expense
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||||
Transactions in connection with stock-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Stock issuances
|
—
|
|
|
(287
|
)
|
|
336
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
49
|
|
||||||||
Stock repurchases
|
—
|
|
|
(10
|
)
|
|
(349
|
)
|
|
—
|
|
|
—
|
|
|
(359
|
)
|
|
—
|
|
|
(359
|
)
|
||||||||
Contributions from noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
||||||||
Recognition of noncontrolling interests in MLP in connection with Pembroke Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||
Acquisition of noncontrolling interests in MLP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
(292
|
)
|
|
—
|
|
|
(292
|
)
|
||||||||
Balance as of December 31, 2011
|
7
|
|
|
7,486
|
|
|
(6,475
|
)
|
|
15,309
|
|
|
96
|
|
|
16,423
|
|
|
22
|
|
|
16,445
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,083
|
|
|
—
|
|
|
2,083
|
|
|
(3
|
)
|
|
2,080
|
|
||||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||||||
Tax deduction in excess of stock-
based compensation expense
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||||
Transactions in connection with stock-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Stock issuances
|
—
|
|
|
(260
|
)
|
|
319
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
||||||||
Stock repurchases
|
—
|
|
|
10
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
—
|
|
|
(153
|
)
|
||||||||
Stock repurchases under buyback program
|
—
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
(118
|
)
|
||||||||
Contributions from noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||||
Balance as of December 31, 2012
|
$
|
7
|
|
|
$
|
7,322
|
|
|
$
|
(6,437
|
)
|
|
$
|
17,032
|
|
|
$
|
108
|
|
|
$
|
18,032
|
|
|
$
|
63
|
|
|
$
|
18,095
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,080
|
|
|
$
|
2,089
|
|
|
$
|
324
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
1,574
|
|
|
1,534
|
|
|
1,473
|
|
|||
Asset impairment losses
|
1,014
|
|
|
—
|
|
|
2
|
|
|||
Loss on shutdown and sales of refinery assets, net
|
—
|
|
|
12
|
|
|
888
|
|
|||
Gain on sale of investment in Cameron Highway Oil Pipeline Company
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||
Stock-based compensation expense
|
58
|
|
|
58
|
|
|
54
|
|
|||
Deferred income tax expense
|
963
|
|
|
461
|
|
|
347
|
|
|||
Changes in current assets and current liabilities
|
(302
|
)
|
|
81
|
|
|
68
|
|
|||
Changes in deferred charges and credits and other operating activities, net
|
(117
|
)
|
|
(197
|
)
|
|
(56
|
)
|
|||
Net cash provided by operating activities
|
5,270
|
|
|
4,038
|
|
|
3,045
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(2,931
|
)
|
|
(2,355
|
)
|
|
(1,730
|
)
|
|||
Deferred turnaround and catalyst costs
|
(479
|
)
|
|
(629
|
)
|
|
(535
|
)
|
|||
Acquisition of Pembroke Refinery, net of cash acquired
|
—
|
|
|
(1,691
|
)
|
|
—
|
|
|||
Acquisition of Meraux Refinery
|
—
|
|
|
(547
|
)
|
|
—
|
|
|||
Acquisitions of ethanol plants
|
—
|
|
|
—
|
|
|
(260
|
)
|
|||
Minor acquisitions
|
(80
|
)
|
|
(37
|
)
|
|
—
|
|
|||
Proceeds from the sale of the Paulsboro Refinery
|
160
|
|
|
—
|
|
|
547
|
|
|||
Proceeds from the sale of the Delaware City Refinery assets and
associated terminal and pipeline assets
|
—
|
|
|
—
|
|
|
220
|
|
|||
Proceeds from the sale of investment in Cameron Highway
Oil Pipeline Company
|
—
|
|
|
—
|
|
|
330
|
|
|||
Other investing activities, net
|
(21
|
)
|
|
(39
|
)
|
|
23
|
|
|||
Net cash used in investing activities
|
(3,351
|
)
|
|
(5,298
|
)
|
|
(1,405
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Non-bank debt:
|
|
|
|
|
|
||||||
Borrowings
|
300
|
|
|
—
|
|
|
1,544
|
|
|||
Repayments
|
(862
|
)
|
|
(774
|
)
|
|
(517
|
)
|
|||
Bank credit agreements:
|
|
|
|
|
|
||||||
Borrowings
|
1,100
|
|
|
—
|
|
|
—
|
|
|||
Repayments
|
(1,100
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Accounts receivable sales program:
|
|
|
|
|
|
||||||
Proceeds from the sale of receivables
|
1,500
|
|
|
150
|
|
|
1,225
|
|
|||
Repayments
|
(1,650
|
)
|
|
—
|
|
|
(1,325
|
)
|
|||
Proceeds from the exercise of stock options
|
59
|
|
|
49
|
|
|
20
|
|
|||
Purchase of common stock for treasury
|
(281
|
)
|
|
(349
|
)
|
|
(13
|
)
|
|||
Common stock dividends
|
(360
|
)
|
|
(169
|
)
|
|
(114
|
)
|
|||
Contributions from noncontrolling interest
|
44
|
|
|
22
|
|
|
—
|
|
|||
Other financing activities, net
|
17
|
|
|
9
|
|
|
(4
|
)
|
|||
Net cash provided by (used in) financing activities
|
(1,233
|
)
|
|
(1,066
|
)
|
|
816
|
|
|||
Effect of foreign exchange rate changes on cash
|
13
|
|
|
16
|
|
|
53
|
|
|||
Net increase (decrease) in cash and temporary cash investments
|
699
|
|
|
(2,310
|
)
|
|
2,509
|
|
|||
Cash and temporary cash investments at beginning of year
|
1,024
|
|
|
3,334
|
|
|
825
|
|
|||
Cash and temporary cash investments at end of year
|
$
|
1,723
|
|
|
$
|
1,024
|
|
|
$
|
3,334
|
|
1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
company-specific factors, primarily refinery utilization rates and refinery maintenance turnarounds;
|
•
|
seasonal factors, such as the demand for refined products during the summer driving season and heating oil during the winter season; and
|
•
|
industry factors, such as movements in and the level of crude oil prices including the effect of quality differentials between grades of crude oil, the demand for and prices of refined products, industry supply capacity, and competitor refinery maintenance turnarounds.
|
•
|
turnaround costs, which are incurred in connection with planned major maintenance activities at our refineries and ethanol plants and which are deferred when incurred and amortized on a straight-line basis over the period of time estimated to lapse until the next turnaround occurs;
|
•
|
fixed-bed catalyst costs, representing the cost of catalyst that is changed out at periodic intervals when the quality of the catalyst has deteriorated beyond its prescribed function, which are deferred when incurred and amortized on a straight-line basis over the estimated useful life of the specific catalyst;
|
•
|
investments in entities that we do not control; and
|
•
|
other noncurrent assets such as convenience store dealer incentive programs, investments of certain benefit plans (related primarily to certain U.S. nonqualified defined benefit plans whose plan assets are not protected from our creditors and therefore cannot be reflected as a reduction from our obligations under those pension plans), debt issuance costs, and various other costs.
|
2.
|
ACQUISITIONS
|
Inventories
|
$
|
227
|
|
Property, plant and equipment
|
293
|
|
|
Deferred charges and other assets, net
|
28
|
|
|
Other long-term liabilities
|
(1
|
)
|
|
Purchase price
|
$
|
547
|
|
Current assets, net of cash acquired
|
$
|
2,215
|
|
Property, plant and equipment
|
947
|
|
|
Intangible assets
|
22
|
|
|
Deferred charges and other assets, net
|
37
|
|
|
Current liabilities, less current portion of debt
and capital lease obligations
|
(1,294
|
)
|
|
Debt and capital leases assumed, including current portion
|
(12
|
)
|
|
Deferred income taxes
|
(159
|
)
|
|
Other long-term liabilities
|
(60
|
)
|
|
Noncontrolling interest
|
(5
|
)
|
|
Purchase price, net of cash acquired
|
$
|
1,691
|
|
3.
|
SALES OF ASSETS
|
|
Year Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Operating revenues
|
$
|
—
|
|
|
$
|
4,692
|
|
Loss before income taxes
|
(9
|
)
|
|
(53
|
)
|
|
Year Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
Loss before income taxes
|
(3
|
)
|
|
(29
|
)
|
4.
|
IMPAIRMENTS
|
5.
|
RECEIVABLES
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Accounts receivable
|
$
|
8,061
|
|
|
$
|
8,366
|
|
Commodity derivative and foreign currency
contract receivables
|
136
|
|
|
174
|
|
||
Notes receivable and other
|
26
|
|
|
214
|
|
||
|
8,223
|
|
|
8,754
|
|
||
Allowance for doubtful accounts
|
(56
|
)
|
|
(48
|
)
|
||
Receivables, net
|
$
|
8,167
|
|
|
$
|
8,706
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance as of beginning of year
|
$
|
48
|
|
|
$
|
42
|
|
|
$
|
45
|
|
Increase in allowance charged to expense
|
21
|
|
|
21
|
|
|
14
|
|
|||
Accounts charged against the allowance,
net of recoveries
|
(13
|
)
|
|
(14
|
)
|
|
(17
|
)
|
|||
Foreign currency translation
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Balance as of end of year
|
$
|
56
|
|
|
$
|
48
|
|
|
$
|
42
|
|
6.
|
INVENTORIES
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Refinery feedstocks
|
$
|
2,458
|
|
|
$
|
2,474
|
|
Refined products and blendstocks
|
2,995
|
|
|
2,633
|
|
||
Ethanol feedstocks and products
|
191
|
|
|
195
|
|
||
Convenience store merchandise
|
112
|
|
|
103
|
|
||
Materials and supplies
|
217
|
|
|
218
|
|
||
Inventories
|
$
|
5,973
|
|
|
$
|
5,623
|
|
7.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
|
December 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Land
|
|
$
|
802
|
|
|
$
|
722
|
|
Crude oil processing facilities
|
|
24,865
|
|
|
23,322
|
|
||
Pipeline and terminal facilities
|
|
1,471
|
|
|
856
|
|
||
Grain processing equipment
|
|
694
|
|
|
673
|
|
||
Retail facilities
|
|
1,480
|
|
|
1,346
|
|
||
Administrative buildings
|
|
734
|
|
|
712
|
|
||
Other
|
|
1,457
|
|
|
1,290
|
|
||
Construction in progress
|
|
2,629
|
|
|
3,332
|
|
||
Property, plant and equipment, at cost
|
|
34,132
|
|
|
32,253
|
|
||
Accumulated depreciation
|
|
(7,832
|
)
|
|
(7,076
|
)
|
||
Property, plant and equipment, net
|
|
$
|
26,300
|
|
|
$
|
25,177
|
|
8.
|
INTANGIBLE ASSETS
|
|
Amortization
Expense
|
||
2013
|
$
|
21
|
|
2014
|
21
|
|
|
2015
|
21
|
|
|
2016
|
18
|
|
|
2017
|
7
|
|
9.
|
DEFERRED CHARGES AND OTHER ASSETS
|
10.
|
ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES
|
|
Accrued Expenses
|
|
Other Long-Term Liabilities
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Defined benefit plan liabilities (see Note 14)
|
$
|
32
|
|
|
$
|
37
|
|
|
$
|
982
|
|
|
$
|
795
|
|
Wage and other employee-related liabilities
|
282
|
|
|
259
|
|
|
91
|
|
|
79
|
|
||||
Uncertain income tax position liabilities (see Note 16)
|
—
|
|
|
—
|
|
|
391
|
|
|
337
|
|
||||
Environmental liabilities
|
27
|
|
|
39
|
|
|
242
|
|
|
235
|
|
||||
Accrued interest expense
|
96
|
|
|
108
|
|
|
—
|
|
|
—
|
|
||||
Derivative liabilities
|
14
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Asset retirement obligations
|
5
|
|
|
6
|
|
|
103
|
|
|
81
|
|
||||
Other accrued liabilities
|
134
|
|
|
121
|
|
|
321
|
|
|
354
|
|
||||
Accrued expenses and other long-term liabilities
|
$
|
590
|
|
|
$
|
595
|
|
|
$
|
2,130
|
|
|
$
|
1,881
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance as of beginning of year
|
$
|
274
|
|
|
$
|
268
|
|
|
$
|
279
|
|
Pembroke Acquisition
|
—
|
|
|
30
|
|
|
—
|
|
|||
Additions to liability
|
23
|
|
|
18
|
|
|
50
|
|
|||
Reductions to liability
|
(1
|
)
|
|
(5
|
)
|
|
(21
|
)
|
|||
Payments, net of third-party recoveries
|
(29
|
)
|
|
(35
|
)
|
|
(42
|
)
|
|||
Foreign currency translation
|
2
|
|
|
(2
|
)
|
|
2
|
|
|||
Balance as of end of year
|
$
|
269
|
|
|
$
|
274
|
|
|
$
|
268
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance as of beginning of year
|
$
|
87
|
|
|
$
|
101
|
|
|
$
|
179
|
|
Additions to accrual
|
28
|
|
|
4
|
|
|
3
|
|
|||
Reductions to accrual
|
(1
|
)
|
|
—
|
|
|
(34
|
)
|
|||
Accretion expense
|
5
|
|
|
4
|
|
|
7
|
|
|||
Settlements
|
(11
|
)
|
|
(22
|
)
|
|
(54
|
)
|
|||
Balance as of end of year
|
$
|
108
|
|
|
$
|
87
|
|
|
$
|
101
|
|
11.
|
DEBT AND CAPITAL LEASE OBLIGATIONS
|
|
Final
Maturity
|
|
December 31,
|
||||||
|
|
2012
|
|
2011
|
|||||
Bank credit facilities
|
Various
|
|
$
|
—
|
|
|
$
|
—
|
|
Industrial revenue bonds:
|
|
|
|
|
|
||||
Tax-exempt Revenue Refunding Bonds:
|
|
|
|
|
|
||||
Series 1997A, 5.45%
|
2027
|
|
—
|
|
|
18
|
|
||
Tax-exempt Waste Disposal Revenue Bonds:
|
|
|
|
|
|
||||
Series 1997, 5.6%
|
2031
|
|
—
|
|
|
25
|
|
||
Series 1998, 5.6%
|
2032
|
|
—
|
|
|
25
|
|
||
Series 1999, 5.7%
|
2032
|
|
—
|
|
|
25
|
|
||
Series 2001, 6.65%
|
2032
|
|
—
|
|
|
19
|
|
||
4.5% notes
|
2015
|
|
400
|
|
|
400
|
|
||
4.75% notes
|
2013
|
|
300
|
|
|
300
|
|
||
4.75% notes
|
2014
|
|
200
|
|
|
200
|
|
||
6.125% notes
|
2017
|
|
750
|
|
|
750
|
|
||
6.125% notes
|
2020
|
|
850
|
|
|
850
|
|
||
6.625% notes
|
2037
|
|
1,500
|
|
|
1,500
|
|
||
6.875% notes
|
2012
|
|
—
|
|
|
750
|
|
||
7.5% notes
|
2032
|
|
750
|
|
|
750
|
|
||
8.75% notes
|
2030
|
|
200
|
|
|
200
|
|
||
Debentures:
|
|
|
|
|
|
||||
7.65%
|
2026
|
|
100
|
|
|
100
|
|
||
8.75%
|
2015
|
|
75
|
|
|
75
|
|
||
Senior Notes:
|
|
|
|
|
|
||||
6.7%
|
2013
|
|
180
|
|
|
180
|
|
||
6.75%
|
2037
|
|
24
|
|
|
24
|
|
||
7.2%
|
2017
|
|
200
|
|
|
200
|
|
||
7.45%
|
2097
|
|
100
|
|
|
100
|
|
||
9.375%
|
2019
|
|
750
|
|
|
750
|
|
||
10.5%
|
2039
|
|
250
|
|
|
250
|
|
||
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0%
|
2040
|
|
300
|
|
|
—
|
|
||
Accounts receivable sales facility
|
2013
|
|
100
|
|
|
250
|
|
||
Net unamortized discount, including fair value adjustments
|
|
|
(29
|
)
|
|
(51
|
)
|
||
Total debt
|
|
|
7,000
|
|
|
7,690
|
|
||
Capital lease obligations, including unamortized fair value adjustments
|
|
49
|
|
|
51
|
|
|||
Total debt and capital lease obligations
|
|
|
7,049
|
|
|
7,741
|
|
||
Less current portion
|
|
|
(586
|
)
|
|
(1,009
|
)
|
||
Debt and capital lease obligations, less current portion
|
|
|
$
|
6,463
|
|
|
$
|
6,732
|
|
|
|
|
|
|
|
Amounts Outstanding
|
||||||||
|
|
Borrowing Capacity
|
|
Expiration
|
|
December 31,
2012
|
|
December 31,
2011
|
||||||
Letter of credit facilities
|
|
$
|
550
|
|
|
June 2013
|
|
$
|
418
|
|
|
$
|
300
|
|
Revolver
|
|
$
|
3,000
|
|
|
December 2016
|
|
$
|
59
|
|
|
$
|
119
|
|
Canadian revolving credit facility
|
|
C$
|
50
|
|
|
November 2013
|
|
C$
|
10
|
|
|
C$
|
20
|
|
•
|
in June 2012, we remarketed and received proceeds of
$300 million
related to the
4.0%
Gulf Opportunity Zone Revenue Bonds Series 2010 issued by the Parish of St. Charles, State of Louisiana (GO Zone Bonds), which are due
December 1, 2040
, but are subject to mandatory tender on
June 1, 2022
;
|
•
|
in April 2012, we made scheduled debt repayments of
$4 million
related to our Series 1997A
5.45%
industrial revenue bonds and
$750 million
related to our
6.875%
notes; and
|
•
|
in March 2012, we exercised the call provisions on our Series 1997
5.6%
, Series 1998
5.6%
, Series 1999
5.7%
, Series 2001
6.65%
, and Series 1997A
5.45%
industrial revenue bonds, which were redeemed on May 3, 2012 for
$108 million
, or
100%
of their outstanding stated values.
|
•
|
in December 2011, we redeemed our Series 1997B
5.4%
and Series 1997C
5.4%
industrial revenue bonds for
$56 million
, or
100%
of their stated values;
|
•
|
in May 2011, we made a scheduled debt repayment of
$200 million
related to our
6.125%
senior notes;
|
•
|
in April 2011, we made scheduled debt repayments of
$8 million
related to our Series 1997A
5.45%
, Series 1997B
5.4%
, and Series 1997C
5.4%
industrial revenue bonds;
|
•
|
in February 2011, we made a scheduled debt repayment of
$210 million
related to our
6.75%
senior notes; and
|
•
|
in February 2011, we paid
$300 million
to acquire the GO Zone Bonds, which were subject to mandatory tender. These bonds were remarketed in June 2012, as previously discussed.
|
•
|
in December 2010, the Parish of St. Charles, State of Louisiana (Issuer) issued GO Zone Bonds totaling
$300 million
, with a maturity date of
December 1, 2040
. The GO Zone Bonds initially bore interest at a weekly rate with interest payable monthly, commencing January 5, 2011. Pursuant to a financing agreement, the Issuer lent the proceeds of the sale of the GO Zone Bonds to us to finance a portion of the construction costs of a hydrocracker project at our St. Charles Refinery. We received proceeds of
$300 million
. Under the financing agreement, we were obligated to pay the Issuer amounts sufficient for the Issuer to pay principal and interest on the GO Zone Bonds;
|
•
|
in June 2010, we made a scheduled debt repayment of
$25 million
related to our
7.25%
debentures;
|
•
|
in May 2010, we redeemed our
6.75%
senior notes with a maturity date of
May 1, 2014
for
$190 million
, or
102.25%
of stated value;
|
•
|
in April 2010, we made scheduled debt repayments of
$8 million
related to our Series 1997A
5.45%
, Series 1997B
5.4%
, and Series 1997C
5.4%
industrial revenue bonds;
|
•
|
in March 2010, we redeemed our
7.5%
senior notes with a maturity date of
June 15, 2015
for
$294 million
, or
102.5%
of stated value; and
|
•
|
in February 2010, we issued
$400 million
of
4.5%
notes due
February 1, 2015
and
$850 million
of
6.125%
notes due in
February 1, 2020
for total net proceeds of
$1.2 billion
.
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance as of beginning of year
|
$
|
250
|
|
|
$
|
100
|
|
|
$
|
200
|
|
Proceeds from the sale of receivables
|
1,500
|
|
|
150
|
|
|
1,225
|
|
|||
Repayments
|
(1,650
|
)
|
|
—
|
|
|
(1,325
|
)
|
|||
Balance as of end of year
|
$
|
100
|
|
|
$
|
250
|
|
|
$
|
100
|
|
|
Debt
|
|
Capital
Lease
Obligations
|
||||
2013
|
$
|
580
|
|
|
$
|
12
|
|
2014
|
200
|
|
|
10
|
|
||
2015
|
475
|
|
|
9
|
|
||
2016
|
—
|
|
|
8
|
|
||
2017
|
950
|
|
|
7
|
|
||
Thereafter
|
4,824
|
|
|
35
|
|
||
Net unamortized discount
and fair value adjustments
|
(29
|
)
|
|
—
|
|
||
Less interest expense
|
—
|
|
|
(32
|
)
|
||
Total
|
$
|
7,000
|
|
|
$
|
49
|
|
12.
|
COMMITMENTS AND CONTINGENCIES
|
2013
|
$
|
337
|
|
2014
|
250
|
|
|
2015
|
179
|
|
|
2016
|
133
|
|
|
2017
|
86
|
|
|
Thereafter
|
350
|
|
|
Total minimum rental payments
|
$
|
1,335
|
|
Minimum rentals to be received
under subleases
|
$
|
30
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Minimum rental expense
|
$
|
508
|
|
|
$
|
523
|
|
|
$
|
485
|
|
Contingent rental expense
|
23
|
|
|
23
|
|
|
23
|
|
|||
Total rental expense
|
531
|
|
|
546
|
|
|
508
|
|
|||
Less sublease rental income
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
Net rental expense
|
$
|
529
|
|
|
$
|
544
|
|
|
$
|
505
|
|
•
|
The LCFS was scheduled to become effective in 2011, but rulings by the U.S. District Court have stayed enforcement of the LCFS until certain legal challenges to the LCFS have been resolved. Most notably, the court determined that the LCFS violates the Commerce Clause of the U.S. Constitution to the extent that the standard discriminates against out-of-state crude oils and corn ethanol. CARB appealed the lower court’s ruling to the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit Court), which lifted the stay on April 23, 2012. The Ninth Circuit Court heard arguments on the merits of the appeal in October 2012. We await the Ninth Circuit Court’s final ruling on the merits.
|
•
|
The California statewide cap-and-trade program became effective in 2012, with the auctioning of emission credits commencing in the fourth quarter of 2012. Initially, the program will apply only to stationary sources of greenhouse gases (
e.g.
, refinery and power plant greenhouse gas emissions). Greenhouse gas emissions from fuels that we sell in California will be covered by the program beginning in 2015. We anticipate that free allocations of credits will be available in the early years of the program, but we expect that compliance costs will increase significantly beginning in 2015, when transportation fuels are included in the program.
|
•
|
Complying with AB 32, including the LCFS and the cap-and-trade program, could result in material increased compliance costs for us, increased capital expenditures, increased operating costs, and additional operating restrictions for our business, resulting in an increase in the cost of, and decreases in the demand for, the products we produce. To the degree we are unable to recover these increased costs, these matters could have a material adverse effect on our financial position, results of operations, and liquidity.
|
13.
|
EQUITY
|
|
Common
Stock
|
|
Treasury
Stock
|
||
Balance as of December 31, 2009
|
673
|
|
|
(109
|
)
|
Transactions in connection with
stock-based compensation plans:
|
|
|
|
||
Stock issuances
|
—
|
|
|
5
|
|
Stock repurchases
|
—
|
|
|
(1
|
)
|
Balance as of December 31, 2010
|
673
|
|
|
(105
|
)
|
Transactions in connection with
stock-based compensation plans:
|
|
|
|
||
Stock issuances
|
—
|
|
|
5
|
|
Stock repurchases
|
—
|
|
|
(17
|
)
|
Balance as of December 31, 2011
|
673
|
|
|
(117
|
)
|
Transactions in connection with
stock-based compensation plans:
|
|
|
|
||
Stock issuances
|
—
|
|
|
6
|
|
Stock repurchases
|
—
|
|
|
(6
|
)
|
Stock repurchases under buyback program
|
—
|
|
|
(4
|
)
|
Balance as of December 31, 2012
|
673
|
|
|
(121
|
)
|
|
Before-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
||||||
Year Ended December 31, 2012:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
164
|
|
|
$
|
—
|
|
|
$
|
164
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Loss arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
(228
|
)
|
|
(79
|
)
|
|
(149
|
)
|
|||
Prior service cost
|
(9
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|||
(Gain) loss reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
34
|
|
|
12
|
|
|
22
|
|
|||
Prior service credit
|
(20
|
)
|
|
(7
|
)
|
|
(13
|
)
|
|||
Settlement
|
12
|
|
|
—
|
|
|
12
|
|
|||
Net loss on pension and other
postretirement benefits
|
(211
|
)
|
|
(77
|
)
|
|
(134
|
)
|
|||
Derivative instruments designated and
qualifying as cash flow hedges:
|
|
|
|
|
|
||||||
Net gain arising during the year
|
45
|
|
|
16
|
|
|
29
|
|
|||
Net gain reclassified into income
|
(73
|
)
|
|
(26
|
)
|
|
(47
|
)
|
|||
Net loss on cash flow hedges
|
(28
|
)
|
|
(10
|
)
|
|
(18
|
)
|
|||
Other comprehensive income (loss)
|
$
|
(75
|
)
|
|
$
|
(87
|
)
|
|
$
|
12
|
|
|
Before-Tax Amount
|
|
Tax Expense (Benefit)
|
|
Net Amount
|
||||||
Year Ended December 31, 2011:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
(122
|
)
|
|
$
|
—
|
|
|
$
|
(122
|
)
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||||
Loss arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
(285
|
)
|
|
(100
|
)
|
|
(185
|
)
|
|||
Prior service cost
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
(Gain) loss reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
14
|
|
|
4
|
|
|
10
|
|
|||
Prior service credit
|
(21
|
)
|
|
(7
|
)
|
|
(14
|
)
|
|||
Settlement
|
4
|
|
|
1
|
|
|
3
|
|
|||
Net loss on pension and other
postretirement benefits
|
(292
|
)
|
|
(103
|
)
|
|
(189
|
)
|
|||
Derivative instruments designated and
qualifying as cash flow hedges:
|
|
|
|
|
|
||||||
Net gain arising during the year
|
32
|
|
|
11
|
|
|
21
|
|
|||
Net gain reclassified into income
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Net gain on cash flow hedges
|
29
|
|
|
10
|
|
|
19
|
|
|||
Other comprehensive loss
|
$
|
(385
|
)
|
|
$
|
(93
|
)
|
|
$
|
(292
|
)
|
Year Ended December 31, 2010:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
158
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|||||
Gain (loss) arising during the year related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
(40
|
)
|
|
(6
|
)
|
|
(34
|
)
|
|||
Prior service credit
|
31
|
|
|
11
|
|
|
20
|
|
|||
(Gain) loss reclassified into income related to:
|
|
|
|
|
|
||||||
Net actuarial loss
|
6
|
|
|
2
|
|
|
4
|
|
|||
Prior service credit
|
(17
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|||
Settlement
|
4
|
|
|
1
|
|
|
3
|
|
|||
Net gain (loss) on pension and other postretirement benefits
|
(16
|
)
|
|
2
|
|
|
(18
|
)
|
|||
Derivative instruments designated and
qualifying as cash flow hedges:
|
|
|
|
|
|
|
|||||
Net loss arising during the year
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Net gain reclassified into income
|
(178
|
)
|
|
(62
|
)
|
|
(116
|
)
|
|||
Net loss on cash flow hedges
|
(180
|
)
|
|
(63
|
)
|
|
(117
|
)
|
|||
Other comprehensive income (loss)
|
$
|
(38
|
)
|
|
$
|
(61
|
)
|
|
$
|
23
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Pension/
OPEB
Liability
Adjustment
|
|
Net Gain (Loss) On Cash Flow Hedges
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
Balance as of December 31, 2009
|
$
|
465
|
|
|
$
|
(217
|
)
|
|
$
|
117
|
|
|
$
|
365
|
|
Other comprehensive income (loss)
|
158
|
|
|
(18
|
)
|
|
(117
|
)
|
|
23
|
|
||||
Balance as of December 31, 2010
|
623
|
|
|
(235
|
)
|
|
—
|
|
|
388
|
|
||||
Other comprehensive income (loss)
|
(122
|
)
|
|
(189
|
)
|
|
19
|
|
|
(292
|
)
|
||||
Balance as of December 31, 2011
|
501
|
|
|
(424
|
)
|
|
19
|
|
|
96
|
|
||||
Other comprehensive income (loss)
|
164
|
|
|
(134
|
)
|
|
(18
|
)
|
|
12
|
|
||||
Balance as of December 31, 2012
|
$
|
665
|
|
|
$
|
(558
|
)
|
|
$
|
1
|
|
|
$
|
108
|
|
14.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Changes in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
1,881
|
|
|
$
|
1,626
|
|
|
$
|
438
|
|
|
$
|
426
|
|
Service cost
|
140
|
|
|
104
|
|
|
12
|
|
|
11
|
|
||||
Interest cost
|
93
|
|
|
85
|
|
|
21
|
|
|
22
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
14
|
|
|
12
|
|
||||
Plan amendments
|
9
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Curtailment gain
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(90
|
)
|
|
(117
|
)
|
|
(35
|
)
|
|
(30
|
)
|
||||
Actuarial (gain) loss
|
289
|
|
|
179
|
|
|
(17
|
)
|
|
(9
|
)
|
||||
Other
|
1
|
|
|
—
|
|
|
3
|
|
|
6
|
|
||||
Benefit obligation at end of year
|
$
|
2,307
|
|
|
$
|
1,881
|
|
|
$
|
436
|
|
|
$
|
438
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in plan assets
(a)
:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
1,487
|
|
|
$
|
1,362
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
167
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Valero contributions
|
164
|
|
|
244
|
|
|
19
|
|
|
15
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
14
|
|
|
12
|
|
||||
Benefits paid
|
(90
|
)
|
|
(117
|
)
|
|
(35
|
)
|
|
(30
|
)
|
||||
Other
|
1
|
|
|
—
|
|
|
2
|
|
|
3
|
|
||||
Fair value of plan assets at end of year
|
$
|
1,729
|
|
|
$
|
1,487
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of funded status
(a)
:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at end of year
|
$
|
1,729
|
|
|
$
|
1,487
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less benefit obligation at end of year
|
2,307
|
|
|
1,881
|
|
|
436
|
|
|
438
|
|
||||
Funded status at end of year
|
$
|
(578
|
)
|
|
$
|
(394
|
)
|
|
$
|
(436
|
)
|
|
$
|
(438
|
)
|
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
1,857
|
|
|
$
|
1,550
|
|
|
n/a
|
|
|
n/a
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Projected benefit obligation
|
$
|
250
|
|
|
$
|
244
|
|
Accumulated benefit obligation
|
191
|
|
|
189
|
|
||
Fair value of plan assets
|
31
|
|
|
40
|
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||
2013
|
$
|
93
|
|
|
$
|
21
|
|
2014
|
116
|
|
|
22
|
|
||
2015
|
108
|
|
|
24
|
|
||
2016
|
117
|
|
|
25
|
|
||
2017
|
129
|
|
|
26
|
|
||
2018-2022
|
840
|
|
|
143
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
Components of net periodic
benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
140
|
|
|
$
|
104
|
|
|
$
|
88
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
10
|
|
Interest cost
|
93
|
|
|
85
|
|
|
83
|
|
|
21
|
|
|
22
|
|
|
26
|
|
||||||
Expected return on plan assets
|
(125
|
)
|
|
(112
|
)
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (credit)
|
3
|
|
|
2
|
|
|
3
|
|
|
(23
|
)
|
|
(23
|
)
|
|
(20
|
)
|
||||||
Net actuarial loss
|
33
|
|
|
12
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
4
|
|
||||||
Net periodic benefit cost before special charges
|
144
|
|
|
91
|
|
|
64
|
|
|
11
|
|
|
12
|
|
|
20
|
|
||||||
Special charges (credits)
|
(3
|
)
|
|
4
|
|
|
8
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
141
|
|
|
$
|
95
|
|
|
$
|
72
|
|
|
$
|
11
|
|
|
$
|
16
|
|
|
$
|
20
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
Net loss (gain) arising during
the year:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss (gain)
|
$
|
245
|
|
|
$
|
294
|
|
|
$
|
68
|
|
|
$
|
(17
|
)
|
|
$
|
(9
|
)
|
|
$
|
(28
|
)
|
Prior service cost (credit)
|
9
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net gain (loss) reclassified into income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss
|
(33
|
)
|
|
(12
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||||
Prior service (cost) credit
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
23
|
|
|
23
|
|
|
20
|
|
||||||
Curtailment and settlement
|
(12
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total changes in other
comprehensive (income) loss
|
$
|
206
|
|
|
$
|
280
|
|
|
$
|
59
|
|
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
(43
|
)
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Prior service cost (credit)
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
(81
|
)
|
|
$
|
(103
|
)
|
Net actuarial loss
|
882
|
|
|
681
|
|
|
34
|
|
|
50
|
|
||||
Total
|
$
|
903
|
|
|
$
|
697
|
|
|
$
|
(47
|
)
|
|
$
|
(53
|
)
|
|
Pension Plans
|
|
Other
Postretirement
Benefit Plans
|
||||
Amortization of prior service cost (credit)
|
$
|
3
|
|
|
$
|
(13
|
)
|
Amortization of net actuarial loss
|
57
|
|
|
—
|
|
||
Total
|
$
|
60
|
|
|
$
|
(13
|
)
|
|
Pension Plans
|
|
Other
Postretirement
Benefit Plans
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Discount rate
|
4.28
|
%
|
|
5.08
|
%
|
|
4.19
|
%
|
|
4.97
|
%
|
Rate of compensation increase
|
3.73
|
%
|
|
3.68
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
||||||
Discount rate
|
5.08
|
%
|
|
5.40
|
%
|
|
5.80
|
%
|
|
4.97
|
%
|
|
5.22
|
%
|
|
5.68
|
%
|
Expected long-term rate of return on plan assets
|
7.67
|
%
|
|
7.69
|
%
|
|
7.71
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Rate of compensation increase
|
3.68
|
%
|
|
3.56
|
%
|
|
4.18
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2012
|
|
2011
|
||
Health care cost trend rate assumed for the next year
|
7.32
|
%
|
|
7.43
|
%
|
Rate to which the cost trend rate was assumed to decline
(the ultimate trend rate)
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2020
|
|
|
2018
|
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service and interest cost components
|
$
|
1
|
|
|
$
|
(1
|
)
|
Effect on accumulated postretirement benefit obligation
|
20
|
|
|
(17
|
)
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total as of
December 31, 2012 |
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. companies
(a)
|
$
|
441
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
441
|
|
International companies
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
||||
Preferred stock
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
International growth
|
127
|
|
|
—
|
|
|
—
|
|
|
127
|
|
||||
Index funds
(b)
|
117
|
|
|
—
|
|
|
—
|
|
|
117
|
|
||||
Corporate debt instruments
|
—
|
|
|
290
|
|
|
—
|
|
|
290
|
|
||||
Government securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
107
|
|
|
—
|
|
|
—
|
|
|
107
|
|
||||
Other government securities
|
3
|
|
|
65
|
|
|
—
|
|
|
68
|
|
||||
Common collective trusts
|
—
|
|
|
294
|
|
|
—
|
|
|
294
|
|
||||
Insurance contracts
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Interest and dividends receivable
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Cash and cash equivalents
|
98
|
|
|
27
|
|
|
—
|
|
|
125
|
|
||||
Total
|
$
|
1,035
|
|
|
$
|
694
|
|
|
$
|
—
|
|
|
$
|
1,729
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total as of
December 31, 2011 |
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Valero Energy Corporation
common stock
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Other U.S. companies
(a)
|
375
|
|
|
—
|
|
|
—
|
|
|
375
|
|
||||
International companies
|
120
|
|
|
—
|
|
|
—
|
|
|
120
|
|
||||
Preferred stock
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Mutual funds:
|
|
|
|
|
|
|
|
||||||||
International growth
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||
Index funds
(b)
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
Corporate debt instruments
|
—
|
|
|
246
|
|
|
—
|
|
|
246
|
|
||||
Government securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Other government securities
|
—
|
|
|
84
|
|
|
—
|
|
|
84
|
|
||||
Common collective trusts
|
—
|
|
|
247
|
|
|
—
|
|
|
247
|
|
||||
Insurance contracts
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Interest and dividends receivable
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Cash and cash equivalents
|
153
|
|
|
1
|
|
|
—
|
|
|
154
|
|
||||
Total
|
$
|
892
|
|
|
$
|
595
|
|
|
$
|
—
|
|
|
$
|
1,487
|
|
(a)
|
Equity securities are held in a wide range of industrial sectors, including consumer goods, information technology, healthcare, industrials, and financial services.
|
(b)
|
This class includes primarily investments in approximately
60 percent
equities and
40 percent
bonds.
|
15.
|
STOCK-BASED COMPENSATION
|
•
|
The 2011 Omnibus Stock Incentive Plan (the OSIP) authorizes the grant of various stock and stock-based awards to our employees and our non-employee directors. Awards available under the OSIP include options to purchase shares of common stock, performance awards that vest upon the achievement of an objective performance goal, stock appreciation rights, and restricted stock that vests over a period determined by our compensation committee. The OSIP was approved by our stockholders on April 28, 2011. As of
December 31, 2012
,
17,178,084
shares of our common stock remained available to be awarded under the OSIP.
|
•
|
Prior to the approval of the OSIP by our stockholders, most of the equity awards granted to our employees and non-employee directors were made under our 2005 Omnibus Stock Incentive Plan. Prior awards granted under this plan included options to purchase shares of common stock, performance awards that vest upon the achievement of an objective performance goal, and restricted stock that vests over a period determined by our compensation committee.
No
additional grants may be awarded under this plan.
|
•
|
The Restricted Stock Plan for Non-Employee Directors authorized an annual grant of our common stock valued at
$160,000
to each non-employee director. Vesting generally occurred based on the number of grants received as follows: (i) initial grants to vest in
three
equal annual installments, (ii) second grants to vest
one-third
on the first anniversary of the grant date and the remaining
two-thirds
on the second anniversary of the grant date, and (iii) all grants thereafter to vest
100 percent
on the first anniversary of the grant date. During 2012, the final grants of available shares under this plan were awarded and
no
additional grants may be awarded under this plan. Prospective grants to our non-employee directors will be made under the OSIP, with vesting to occur in annual
one-third
increments over
three
years.
|
•
|
The 2003 Employee Stock Incentive Plan authorizes the grant of various stock and stock-related awards to employees and prospective employees. Awards include options to purchase shares of common stock, performance awards that vest upon the achievement of an objective performance goal, stock appreciation rights, and restricted stock that vests over a period determined by our compensation committee. As of
December 31, 2012
,
1,914,877
shares of our common stock remained available to be awarded under this plan.
|
•
|
In addition, we maintained other stock option and incentive plans under which previously granted equity awards remain outstanding.
No
additional grants may be awarded under these plans.
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Stock-based compensation expense
|
$
|
58
|
|
|
$
|
58
|
|
|
$
|
54
|
|
Tax benefit recognized on stock-based compensation expense
|
20
|
|
|
20
|
|
|
19
|
|
|||
Tax benefit realized for tax deductions resulting from exercises and vestings
|
45
|
|
|
35
|
|
|
23
|
|
|||
Effect of tax deductions in excess of recognized stock-based compensation expense reported as a financing cash flow
|
27
|
|
|
23
|
|
|
11
|
|
|
Year Ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Expected life in years
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
Expected volatility
|
49.11
|
%
|
|
49.30
|
%
|
|
48.21
|
%
|
Expected dividend yield
|
2.39
|
%
|
|
2.28
|
%
|
|
1.05
|
%
|
Risk-free interest rate
|
0.85
|
%
|
|
1.44
|
%
|
|
1.83
|
%
|
|
Number of
Stock
Options
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
(in years)
|
|
(in millions)
|
|||||
Outstanding as of January 1, 2012
|
19,906,586
|
|
|
$
|
27.11
|
|
|
|
|
|
||
Granted
|
262,170
|
|
|
29.23
|
|
|
|
|
|
|||
Exercised
|
(4,738,312
|
)
|
|
13.67
|
|
|
|
|
|
|||
Expired
|
(2,196,876
|
)
|
|
47.72
|
|
|
|
|
|
|||
Forfeited
|
(18,840
|
)
|
|
32.29
|
|
|
|
|
|
|||
Outstanding as of December 31, 2012
|
13,214,728
|
|
|
28.54
|
|
|
3.3
|
|
$
|
157
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable as of December 31, 2012
|
12,594,488
|
|
|
28.65
|
|
|
3.0
|
|
152
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
Per Share
|
|||
Nonvested shares as of January 1, 2012
|
3,249,090
|
|
|
$
|
22.28
|
|
Granted
|
1,459,317
|
|
|
28.90
|
|
|
Vested
|
(1,736,379
|
)
|
|
23.67
|
|
|
Forfeited
|
(51,740
|
)
|
|
22.07
|
|
|
Nonvested shares as of December 31, 2012
|
2,920,288
|
|
|
24.76
|
|
|
Nonvested
Awards
|
|
Vested
Awards
|
||
Awards outstanding as of January 1, 2012
|
691,191
|
|
|
24,635
|
|
Granted
|
547,140
|
|
|
—
|
|
Vested
|
(222,250
|
)
|
|
222,250
|
|
Forfeited
|
(26,667
|
)
|
|
(37,969
|
)
|
Awards outstanding as of December 31, 2012
|
989,414
|
|
|
208,916
|
|
|
Awards
Granted
|
|
Expected
Conversion
Rate
|
|
Fair Value
Per Share
|
|||
Third tranche of 2010 awards
|
208,917
|
|
|
100%
|
|
$
|
28.53
|
|
Second tranche of 2011 awards
|
233,350
|
|
|
50%
|
|
28.53
|
|
|
First tranche of 2012 awards
|
104,873
|
|
|
75%
|
|
28.53
|
|
|
Total
|
547,140
|
|
|
|
|
|
16.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
U.S. operations
|
$
|
4,015
|
|
|
$
|
3,190
|
|
|
$
|
1,436
|
|
International operations
|
(309
|
)
|
|
132
|
|
|
62
|
|
|||
Income from continuing operations before income tax expense
|
$
|
3,706
|
|
|
$
|
3,322
|
|
|
$
|
1,498
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Federal income tax expense
at the U.S. statutory rate
|
$
|
1,297
|
|
|
$
|
1,163
|
|
|
$
|
524
|
|
U.S. state income tax expense (benefit),
net of U.S. federal income tax effect
|
64
|
|
|
29
|
|
|
(21
|
)
|
|||
U.S. manufacturing deduction
|
(33
|
)
|
|
(28
|
)
|
|
5
|
|
|||
International operations
|
266
|
|
|
46
|
|
|
27
|
|
|||
Permanent differences
|
20
|
|
|
8
|
|
|
8
|
|
|||
Change in tax law
|
—
|
|
|
—
|
|
|
16
|
|
|||
Other, net
|
12
|
|
|
8
|
|
|
16
|
|
|||
Income tax expense
|
$
|
1,626
|
|
|
$
|
1,226
|
|
|
$
|
575
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
515
|
|
|
$
|
562
|
|
|
$
|
(75
|
)
|
U.S. state
|
22
|
|
|
13
|
|
|
(13
|
)
|
|||
International
|
126
|
|
|
186
|
|
|
22
|
|
|||
Total current
|
663
|
|
|
761
|
|
|
(66
|
)
|
|||
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
854
|
|
|
527
|
|
|
634
|
|
|||
U.S. state
|
77
|
|
|
32
|
|
|
(19
|
)
|
|||
International
|
32
|
|
|
(94
|
)
|
|
26
|
|
|||
Total deferred
|
963
|
|
|
465
|
|
|
641
|
|
|||
Income tax expense
|
$
|
1,626
|
|
|
$
|
1,226
|
|
|
$
|
575
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Deferred income tax assets:
|
|
|
|
||||
Tax credit carryforwards
|
$
|
61
|
|
|
$
|
158
|
|
Net operating losses (NOL)
|
247
|
|
|
300
|
|
||
Compensation and employee benefit liabilities
|
383
|
|
|
324
|
|
||
Environmental liabilities
|
83
|
|
|
78
|
|
||
Inventories
|
258
|
|
|
273
|
|
||
Property, plant and equipment
|
78
|
|
|
14
|
|
||
Other
|
157
|
|
|
160
|
|
||
Total deferred income tax assets
|
1,267
|
|
|
1,307
|
|
||
Less: Valuation allowance
|
(304
|
)
|
|
(295
|
)
|
||
Net deferred income tax assets
|
963
|
|
|
1,012
|
|
||
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Turnarounds
|
(300
|
)
|
|
(310
|
)
|
||
Property, plant and equipment
|
(6,143
|
)
|
|
(5,292
|
)
|
||
Inventories
|
(381
|
)
|
|
(274
|
)
|
||
Other
|
(103
|
)
|
|
(119
|
)
|
||
Total deferred income tax liabilities
|
(6,927
|
)
|
|
(5,995
|
)
|
||
Net deferred income tax liabilities
|
$
|
(5,964
|
)
|
|
$
|
(4,983
|
)
|
|
Amount
|
|
Expiration
|
||
U.S. state income tax credits
|
$
|
79
|
|
|
2013 through 2027
|
U.S. state income tax credits
|
12
|
|
|
Unlimited
|
|
U.S. state NOL (gross amount)
|
4,806
|
|
|
2013 through 2032
|
|
International NOL
|
518
|
|
|
Unlimited
|
Income tax benefit
|
$
|
297
|
|
Additional paid-in capital
|
7
|
|
|
Total
|
$
|
304
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Balance as of beginning of year
|
$
|
326
|
|
|
$
|
330
|
|
|
$
|
484
|
|
Additions based on tax positions related to the current year
|
11
|
|
|
14
|
|
|
4
|
|
|||
Additions for tax positions related to prior years
|
40
|
|
|
55
|
|
|
49
|
|
|||
Reductions for tax positions related to prior years
|
(36
|
)
|
|
(66
|
)
|
|
(203
|
)
|
|||
Reductions for tax positions related to the lapse of
applicable statute of limitations
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|||
Settlements
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
Balance as of end of year
|
$
|
341
|
|
|
$
|
326
|
|
|
$
|
330
|
|
17.
|
EARNINGS PER COMMON SHARE
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||||||||||||||
|
Restricted
Stock
|
|
Common
Stock
|
|
Restricted
Stock
|
|
Common
Stock
|
|
Restricted
Stock
|
|
Common
Stock
|
||||||||||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to Valero stockholders from continuing operations
|
|
|
$
|
2,083
|
|
|
|
|
$
|
2,097
|
|
|
|
|
$
|
923
|
|
||||||
Less dividends paid:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common stock
|
|
|
358
|
|
|
|
|
168
|
|
|
|
|
113
|
|
|||||||||
Nonvested restricted stock
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|||||||||
Undistributed earnings
|
|
|
$
|
1,723
|
|
|
|
|
$
|
1,928
|
|
|
|
|
$
|
809
|
|
||||||
Weighted-average common shares outstanding
|
3
|
|
|
550
|
|
|
3
|
|
|
563
|
|
|
3
|
|
|
563
|
|
||||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributed earnings
|
$
|
0.65
|
|
|
$
|
0.65
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Undistributed earnings
|
3.12
|
|
|
3.12
|
|
|
3.40
|
|
|
3.40
|
|
|
1.43
|
|
|
1.43
|
|
||||||
Total earnings per common share from continuing operations
|
$
|
3.77
|
|
|
$
|
3.77
|
|
|
$
|
3.70
|
|
|
$
|
3.70
|
|
|
$
|
1.63
|
|
|
$
|
1.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per common share from continuing operations – assuming dilution:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to Valero stockholders from continuing operations
|
|
|
$
|
2,083
|
|
|
|
|
$
|
2,097
|
|
|
|
|
$
|
923
|
|
||||||
Weighted-average common shares outstanding
|
|
|
550
|
|
|
|
|
563
|
|
|
|
|
563
|
|
|||||||||
Common equivalent shares:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock options
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
3
|
|
|||||||||
Performance awards and unvested restricted stock
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|||||||||
Weighted-average common shares outstanding – assuming dilution
|
|
|
556
|
|
|
|
|
569
|
|
|
|
|
568
|
|
|||||||||
Earnings per common share from continuing operations – assuming dilution
|
|
|
$
|
3.75
|
|
|
|
|
$
|
3.69
|
|
|
|
|
$
|
1.62
|
|
|
Year Ended December 31,
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Stock options
|
4
|
|
|
6
|
|
|
14
|
|
18.
|
SEGMENT INFORMATION
|
|
Refining
|
|
Retail
|
|
Ethanol
|
|
Corporate
|
|
Total
|
||||||||||
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues from external
customers
|
$
|
122,925
|
|
|
$
|
12,008
|
|
|
$
|
4,317
|
|
|
$
|
—
|
|
|
$
|
139,250
|
|
Intersegment revenues
|
8,946
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
9,061
|
|
|||||
Depreciation and amortization expense
|
1,370
|
|
|
119
|
|
|
42
|
|
|
43
|
|
|
1,574
|
|
|||||
Operating income (loss)
|
4,450
|
|
|
348
|
|
|
(47
|
)
|
|
(741
|
)
|
|
4,010
|
|
|||||
Total expenditures for long-lived assets
|
3,147
|
|
|
164
|
|
|
36
|
|
|
66
|
|
|
3,413
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues from external
customers
|
109,138
|
|
|
11,699
|
|
|
5,150
|
|
|
—
|
|
|
125,987
|
|
|||||
Intersegment revenues
|
8,665
|
|
|
—
|
|
|
145
|
|
|
—
|
|
|
8,810
|
|
|||||
Depreciation and amortization expense
|
1,338
|
|
|
115
|
|
|
39
|
|
|
42
|
|
|
1,534
|
|
|||||
Operating income (loss)
|
3,516
|
|
|
381
|
|
|
396
|
|
|
(613
|
)
|
|
3,680
|
|
|||||
Total expenditures for long-lived assets
|
2,708
|
|
|
134
|
|
|
32
|
|
|
113
|
|
|
2,987
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues from external
customers
|
69,854
|
|
|
9,339
|
|
|
3,040
|
|
|
—
|
|
|
82,233
|
|
|||||
Intersegment revenues
|
6,416
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
6,661
|
|
|||||
Depreciation and amortization expense
|
1,210
|
|
|
108
|
|
|
36
|
|
|
51
|
|
|
1,405
|
|
|||||
Operating income (loss)
|
1,903
|
|
|
346
|
|
|
209
|
|
|
(582
|
)
|
|
1,876
|
|
|||||
Total expenditures for long-lived assets
|
2,084
|
|
|
102
|
|
|
—
|
|
|
48
|
|
|
2,234
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Refining:
|
|
|
|
|
|
||||||
Gasolines and blendstocks
|
$
|
55,647
|
|
|
$
|
49,019
|
|
|
$
|
33,491
|
|
Distillates
|
51,504
|
|
|
43,713
|
|
|
26,402
|
|
|||
Petrochemicals
|
3,908
|
|
|
4,253
|
|
|
3,161
|
|
|||
Lubes and asphalts
|
2,033
|
|
|
1,948
|
|
|
1,315
|
|
|||
Other product revenues
|
9,833
|
|
|
10,205
|
|
|
5,485
|
|
|||
Total refining operating revenues
|
122,925
|
|
|
109,138
|
|
|
69,854
|
|
|||
Retail:
|
|
|
|
|
|
||||||
Fuel sales (gasoline and diesel)
|
10,045
|
|
|
9,730
|
|
|
7,498
|
|
|||
Merchandise sales and other
|
1,649
|
|
|
1,635
|
|
|
1,581
|
|
|||
Home heating oil
|
314
|
|
|
334
|
|
|
260
|
|
|||
Total retail operating revenues
|
12,008
|
|
|
11,699
|
|
|
9,339
|
|
|||
Ethanol:
|
|
|
|
|
|
||||||
Ethanol
|
3,545
|
|
|
4,436
|
|
|
2,647
|
|
|||
Distillers grains
|
772
|
|
|
714
|
|
|
393
|
|
|||
Total ethanol operating revenues
|
4,317
|
|
|
5,150
|
|
|
3,040
|
|
|||
Consolidated operating revenues
|
$
|
139,250
|
|
|
$
|
125,987
|
|
|
$
|
82,233
|
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
U.S.
|
$
|
100,733
|
|
|
$
|
98,806
|
|
|
$
|
67,392
|
|
Canada
|
10,376
|
|
|
10,110
|
|
|
6,945
|
|
|||
U.K.
|
10,779
|
|
|
4,297
|
|
|
149
|
|
|||
Other countries
|
17,362
|
|
|
12,774
|
|
|
7,747
|
|
|||
Consolidated operating revenues
|
$
|
139,250
|
|
|
$
|
125,987
|
|
|
$
|
82,233
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
U.S.
|
$
|
23,760
|
|
|
$
|
22,317
|
|
Canada
|
2,639
|
|
|
2,372
|
|
||
U.K.
|
1,110
|
|
|
848
|
|
||
Aruba
|
41
|
|
|
958
|
|
||
Ireland
|
37
|
|
|
—
|
|
||
Total long-lived assets
|
$
|
27,587
|
|
|
$
|
26,495
|
|
19.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Decrease (increase) in current assets:
|
|
|
|
|
|
||||||
Receivables, net
|
$
|
437
|
|
|
$
|
(3,110
|
)
|
|
$
|
(679
|
)
|
Inventories
|
(282
|
)
|
|
643
|
|
|
(407
|
)
|
|||
Income taxes receivable
|
51
|
|
|
128
|
|
|
545
|
|
|||
Prepaid expenses and other
|
(28
|
)
|
|
(2
|
)
|
|
107
|
|
|||
Increase (decrease) in current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
(113
|
)
|
|
2,004
|
|
|
670
|
|
|||
Accrued expenses
|
13
|
|
|
(18
|
)
|
|
(99
|
)
|
|||
Taxes other than income taxes
|
(260
|
)
|
|
312
|
|
|
(66
|
)
|
|||
Income taxes payable
|
(120
|
)
|
|
124
|
|
|
(3
|
)
|
|||
Changes in current assets and current liabilities
|
$
|
(302
|
)
|
|
$
|
81
|
|
|
$
|
68
|
|
•
|
the amounts shown above exclude changes in cash and temporary cash investments, deferred income taxes, and current portion of debt and capital lease obligations, as well as the effect of certain noncash investing and financing activities discussed below;
|
•
|
the amounts shown above exclude the current assets and current liabilities acquired in connection with the Meraux Acquisition in October 2011, the Pembroke Acquisition in August 2011, and the acquisitions of ethanol plants in 2010;
|
•
|
amounts accrued for capital expenditures and deferred turnaround and catalyst costs are reflected in investing activities when such amounts are paid;
|
•
|
amounts accrued for common stock purchases in the open market that are not settled as of the balance sheet date are reflected in financing activities when the purchases are settled and paid; and
|
•
|
certain differences between balance sheet changes and the changes reflected above result from translating foreign currency denominated balances at the applicable exchange rates as of each balance sheet date.
|
|
Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Interest paid in excess of amount capitalized
|
$
|
302
|
|
|
$
|
397
|
|
|
$
|
457
|
|
Income taxes paid (received), net
|
705
|
|
|
486
|
|
|
(690
|
)
|
20.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1
- Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3
- Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect our own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include occasional market quotes or sales of similar instruments or our own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant judgment.
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Netting
Adjustments
|
|
Total as of
December 31, 2012 |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
$
|
1,270
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
(1,195
|
)
|
|
$
|
135
|
|
Physical purchase contracts
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Investments of certain benefit plans
|
87
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
98
|
|
|||||
Foreign currency contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
1,138
|
|
|
70
|
|
|
—
|
|
|
(1,195
|
)
|
|
13
|
|
|||||
Biofuels blending obligation
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Foreign currency contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Netting
Adjustments
|
|
Total as of
December 31, 2011 |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
$
|
2,038
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
(1,940
|
)
|
|
$
|
176
|
|
Physical purchase contracts
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Investments of certain benefit plans
|
84
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
95
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
1,864
|
|
|
101
|
|
|
—
|
|
|
(1,940
|
)
|
|
25
|
|
|||||
Foreign currency contracts
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
•
|
Commodity derivative contracts consist primarily of exchange-traded futures and swaps, and as disclosed in
Note 21
, some of these contracts are designated as hedging instruments. These contracts are measured at fair value using the market approach. Exchange-traded futures are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. Swaps are priced using third-party broker quotes, industry pricing services, and exchange-traded curves, with appropriate consideration of counterparty credit risk, but because they have contractual terms that are not identical to exchange-traded futures instruments with a comparable market price, these financial instruments are categorized in Level 2 of the fair value hierarchy.
|
•
|
Physical purchase contracts to purchase inventories represent the fair value of firm commitments to purchase crude oil feedstocks and the fair value of fixed-price corn purchase contracts, and as disclosed in
Note 21
, some of these contracts are designated as hedging instruments. The fair values of these firm commitments and purchase contracts are measured using a market approach based on quoted prices from the commodity exchange, but because these commitments have contractual terms that are not identical to exchange-traded futures instruments with a comparable market price, they are categorized in Level 2 of the fair value hierarchy.
|
•
|
Investments of certain benefit plans consist of investment securities held by trusts for the purpose of satisfying a portion of our obligations under certain U.S. nonqualified benefit plans. The assets categorized in Level 1 of the fair value hierarchy are measured at fair value using a market approach based on quotations from national securities exchanges. The assets categorized in Level 3 of the fair value hierarchy represent insurance contracts, the fair value of which is provided by the insurer.
|
•
|
Other investments consist of (i) equity securities of private companies over which we do not exercise significant influence nor whose financial statements are consolidated into our financial statements and (ii) debt securities of a private company whose financial statements are not consolidated into our financial statements. We have elected to account for these investments at their fair values. These investments are categorized in Level 3 of the fair value hierarchy as the fair values of these investments are determined using the income approach based on internally developed analyses.
|
•
|
Our biofuels blending obligation represents a liability for the purchase of RINs and RTFCs, as defined and described in
Note 21
under
“Compliance Program Price Risk,”
to satisfy our obligation to blend biofuels into the products we produce. Our obligation is based on our deficiency in RINs and RTFCs and the price of these instruments as of the balance sheet date. Our obligation is categorized in Level 1 of the fair value hierarchy and is measured at fair value using the market approach based on quoted prices from an independent pricing service.
|
|
Investments of
Certain
Benefit Plans
|
|
Other Investments
|
||||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
Balance as of beginning of year
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchases
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
1
|
|
||||||
Total losses included in refining operating expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(1
|
)
|
||||||
Transfers in and/or out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of end of year
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The amount of total losses included in income attributable to the change in unrealized losses relating to assets still held at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
|
$
|
(1
|
)
|
|
Fair Value Measurements Using
|
|
|
|
Total Loss
Recognized
During the
Year Ended
December 31,
2012
|
||||||||||||||
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Fair Value
as of
December 31,
2012
|
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-lived assets of
the Aruba Refinery
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
903
|
|
Materials and supplies
inventories of
the Aruba Refinery
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Cancelled capital projects
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
65
|
|
|||||
Property, plant and equipment of
convenience stores
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
21
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and temporary cash investments
|
$
|
1,723
|
|
|
$
|
1,723
|
|
|
$
|
1,024
|
|
|
$
|
1,024
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Debt (excluding capital leases)
|
7,000
|
|
|
8,621
|
|
|
7,690
|
|
|
9,298
|
|
•
|
The fair value of cash and temporary cash investments approximates the carrying value due to the low level of credit risk of these assets combined with their short maturities and market interest rates (Level 1).
|
•
|
The fair value of debt is determined primarily using the market approach based on quoted prices provided by third-party brokers and vendor pricing services, but are not exchange-traded (Level 2).
|
21.
|
PRICE RISK MANAGEMENT ACTIVITIES
|
|
|
Notional
Contract
Volumes by
Year of
Maturity
|
|
Derivative Instrument
|
|
2013
|
|
Crude oil and refined products:
|
|
|
|
Futures – long
|
|
1,052
|
|
Futures – short
|
|
4,857
|
|
Physical contracts - long
|
|
3,805
|
|
|
|
Notional
Contract
Volumes by
Year of
Maturity
|
|
Derivative Instrument
|
|
2013
|
|
Crude oil and refined products:
|
|
|
|
Swaps – long
|
|
1,300
|
|
Swaps – short
|
|
1,300
|
|
Futures – long
|
|
11,894
|
|
Futures – short
|
|
2,981
|
|
Physical contracts – short
|
|
8,913
|
|
|
|
Notional Contract Volumes by
Year of Maturity
|
||||
Derivative Instrument
|
|
2013
|
|
2014
|
||
Crude oil and refined products:
|
|
|
|
|
||
Swaps – long
|
|
1,687
|
|
|
—
|
|
Swaps – short
|
|
895
|
|
|
—
|
|
Futures – long
|
|
48,109
|
|
|
—
|
|
Futures – short
|
|
63,769
|
|
|
—
|
|
Options – long
|
|
10
|
|
|
—
|
|
Natural gas:
|
|
|
|
|
||
Options – long
|
|
16,750
|
|
—
|
|
|
Corn:
|
|
|
|
|
||
Futures – long
|
|
13,995
|
|
|
5
|
|
Futures – short
|
|
28,680
|
|
|
25
|
|
Physical contracts – long
|
|
16,378
|
|
|
29
|
|
|
|
Notional Contract Volumes by
Year of Maturity
|
||||
Derivative Instrument
|
|
2013
|
|
2014
|
||
Crude oil and refined products:
|
|
|
|
|
||
Swaps – long
|
|
61,002
|
|
|
9,000
|
|
Swaps – short
|
|
60,819
|
|
|
9,000
|
|
Futures – long
|
|
69,939
|
|
|
2,236
|
|
Futures – short
|
|
69,923
|
|
|
2,236
|
|
Options – long
|
|
2,750
|
|
|
—
|
|
Options – short
|
|
3,400
|
|
|
—
|
|
Natural gas:
|
|
|
|
|
||
Futures – long
|
|
1,450
|
|
|
—
|
|
Futures – short
|
|
400
|
|
|
—
|
|
Corn:
|
|
|
|
|
||
Swaps - long
|
|
3,135
|
|
|
—
|
|
Swaps - short
|
|
5,045
|
|
|
—
|
|
Futures – long
|
|
4,830
|
|
|
—
|
|
Futures – short
|
|
4,830
|
|
|
—
|
|
|
Balance Sheet
Location
|
|
December 31, 2012
|
||||||
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|||||
Derivatives designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
77
|
|
|
$
|
64
|
|
Swaps
|
Receivables, net
|
|
15
|
|
|
13
|
|
||
Swaps
|
Prepaid expenses and other
|
|
2
|
|
|
2
|
|
||
Total
|
|
|
$
|
94
|
|
|
$
|
79
|
|
|
|
|
|
|
|
||||
Derivatives not designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
1,066
|
|
|
$
|
1,073
|
|
Swaps
|
Receivables, net
|
|
9
|
|
|
6
|
|
||
Swaps
|
Accrued expenses
|
|
32
|
|
|
46
|
|
||
Options
|
Receivables, net
|
|
1
|
|
|
4
|
|
||
Options
|
Accrued expenses
|
|
1
|
|
|
—
|
|
||
Physical purchase contracts
|
Inventories
|
|
11
|
|
|
—
|
|
||
Foreign currency contracts
|
Receivables, net
|
|
1
|
|
|
—
|
|
||
Foreign currency contracts
|
Accrued expenses
|
|
—
|
|
|
1
|
|
||
Total
|
|
|
$
|
1,121
|
|
|
$
|
1,130
|
|
Total derivatives
|
|
|
$
|
1,215
|
|
|
$
|
1,209
|
|
|
Balance Sheet
Location
|
|
December 31, 2011
|
||||||
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|||||
Derivatives designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
264
|
|
|
$
|
240
|
|
Swaps
|
Accrued expenses
|
|
36
|
|
|
46
|
|
||
Total
|
|
|
$
|
300
|
|
|
$
|
286
|
|
|
|
|
|
|
|
||||
Derivatives not designated as
hedging instruments
|
|
|
|
|
|
||||
Commodity contracts:
|
|
|
|
|
|
||||
Futures
|
Receivables, net
|
|
$
|
1,636
|
|
|
$
|
1,624
|
|
Swaps
|
Prepaid expenses and other
|
|
4
|
|
|
2
|
|
||
Swaps
|
Accrued expenses
|
|
38
|
|
|
51
|
|
||
Options
|
Receivables, net
|
|
2
|
|
|
—
|
|
||
Options
|
Accrued expenses
|
|
—
|
|
|
2
|
|
||
Physical purchase contracts
|
Inventories
|
|
—
|
|
|
2
|
|
||
Foreign currency contracts
|
Accrued expenses
|
|
—
|
|
|
3
|
|
||
Total
|
|
|
$
|
1,680
|
|
|
$
|
1,684
|
|
Total derivatives
|
|
|
$
|
1,980
|
|
|
$
|
1,970
|
|
Derivatives in Fair Value
Hedging Relationships
|
|
Location of Gain (Loss)
Recognized in Income
on Derivatives
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in
income on derivatives
|
|
Cost of sales
|
|
$
|
(250
|
)
|
|
$
|
(6
|
)
|
|
$
|
45
|
|
Gain (loss) recognized in
income on hedged item
|
|
Cost of sales
|
|
183
|
|
|
(23
|
)
|
|
(40
|
)
|
|||
Gain (loss) recognized in
income on derivatives
(ineffective portion)
|
|
Cost of sales
|
|
(67
|
)
|
|
(29
|
)
|
|
5
|
|
Derivatives in Cash Flow
Hedging Relationships
|
|
Location of Gain (Loss)
Recognized in Income
on Derivatives
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in
OCI on derivatives
(effective portion)
|
|
|
|
$
|
45
|
|
|
$
|
32
|
|
|
$
|
(2
|
)
|
Gain reclassified from
accumulated OCI into
income (effective portion)
|
|
Cost of sales
|
|
73
|
|
|
3
|
|
|
178
|
|
|||
Gain recognized in
income on derivatives
(ineffective portion)
|
|
Cost of sales
|
|
48
|
|
|
5
|
|
|
—
|
|
Derivatives Designated as
Economic Hedges and Other
Derivative Instruments
|
|
Location of Gain (Loss)
Recognized in Income
on Derivatives
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
1
|
|
|
$
|
(349
|
)
|
|
$
|
(210
|
)
|
Foreign currency contracts
|
|
Cost of sales
|
|
(38
|
)
|
|
18
|
|
|
(24
|
)
|
|||
Other contract
|
|
Cost of sales
|
|
—
|
|
|
29
|
|
|
—
|
|
|||
Total
|
|
|
|
$
|
(37
|
)
|
|
$
|
(302
|
)
|
|
$
|
(234
|
)
|
22.
|
QUARTERLY FINANCIAL DATA (Unaudited)
|
|
2012 Quarter Ended
|
||||||||||||||
|
March 31 (a)
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Operating revenues
|
$
|
35,167
|
|
|
$
|
34,662
|
|
|
$
|
34,726
|
|
|
$
|
34,695
|
|
Operating income (loss)
|
(244
|
)
|
|
1,361
|
|
|
1,309
|
|
|
1,584
|
|
||||
Income (loss) from continuing
operations
|
(432
|
)
|
|
830
|
|
|
673
|
|
|
1,009
|
|
||||
Net income (loss)
|
(432
|
)
|
|
830
|
|
|
673
|
|
|
1,009
|
|
||||
Net income (loss) attributable to
Valero Energy Corporation
stockholders
|
(432
|
)
|
|
831
|
|
|
674
|
|
|
1,010
|
|
||||
Earnings (loss) per common share
from continuing operations –
assuming dilution
|
(0.78
|
)
|
|
1.50
|
|
|
1.21
|
|
|
1.82
|
|
||||
Earnings (loss) per common share –
assuming dilution
|
(0.78
|
)
|
|
1.50
|
|
|
1.21
|
|
|
1.82
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2011 Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30 (b)
|
|
December 31 (c)
|
||||||||
Operating revenues
|
$
|
26,308
|
|
|
$
|
31,293
|
|
|
$
|
33,713
|
|
|
$
|
34,673
|
|
Operating income
|
244
|
|
|
1,290
|
|
|
1,979
|
|
|
167
|
|
||||
Income from continuing
operations
|
104
|
|
|
744
|
|
|
1,203
|
|
|
45
|
|
||||
Net income
|
98
|
|
|
743
|
|
|
1,203
|
|
|
45
|
|
||||
Net income attributable to
Valero Energy Corporation
stockholders
|
98
|
|
|
744
|
|
|
1,203
|
|
|
45
|
|
||||
Earnings per common share
from continuing operations –
assuming dilution
|
0.18
|
|
|
1.30
|
|
|
2.11
|
|
|
0.08
|
|
||||
Earnings per common share –
assuming dilution
|
0.17
|
|
|
1.30
|
|
|
2.11
|
|
|
0.08
|
|
(a)
|
The operations of the Aruba Refinery were suspended in March 2012.
|
(b)
|
Includes the operations related to the Pembroke Acquisition beginning August 1, 2011.
|
(c)
|
Includes the operations related to the Meraux Acquisition beginning October 1, 2011.
|
|
Page
|
|
|
|
|
3.01
|
|
--
|
Amended and Restated Certificate of Incorporation of Valero Energy Corporation, formerly known as Valero Refining and Marketing Company - incorporated by reference to Exhibit 3.1 to Valero’s Registration Statement on Form S-1 (SEC File No. 333-27013) filed May 13, 1997.
|
|
|
|
|
3.02
|
|
--
|
Certificate of Amendment (effective July 31, 1997) to Restated Certificate of Incorporation of Valero Energy Corporation - incorporated by reference to Exhibit 3.02 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175).
|
|
|
|
|
3.03
|
|
--
|
Certificate of Merger of Ultramar Diamond Shamrock Corporation with and into Valero Energy Corporation dated December 31, 2001 - incorporated by reference to Exhibit 3.03 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175).
|
|
|
|
|
3.04
|
|
--
|
Amendment (effective December 31, 2001) to Restated Certificate of Incorporation of Valero Energy Corporation - incorporated by reference to Exhibit 3.1 to Valero’s Current Report on Form 8-K dated December 31, 2001, and filed January 11, 2002 (SEC File No. 1-13175).
|
|
|
|
|
3.05
|
|
--
|
Second Certificate of Amendment (effective September 17, 2004) to Restated Certificate of Incorporation of Valero Energy Corporation - incorporated by reference to Exhibit 3.04 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (SEC File No. 1-13175).
|
|
|
|
|
3.06
|
|
--
|
Certificate of Merger of Premcor Inc. with and into Valero Energy Corporation effective September 1, 2005 - incorporated by reference to Exhibit 2.01 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (SEC File No. 1-13175).
|
|
|
|
|
3.07
|
|
--
|
Third Certificate of Amendment (effective December 2, 2005) to Restated Certificate of Incorporation of Valero Energy Corporation - incorporated by reference to Exhibit 3.07 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2005 (SEC File No. 1-13175).
|
|
|
|
|
3.08
|
|
--
|
Fourth Certificate of Amendment (effective May 24, 2011) to Restated Certificate of Incorporation of Valero Energy Corporation - incorporated by reference to Exhibit 4.8 to Valero’s Current Report on Form 8-K dated and filed May 24, 2011 (SEC File No. 1-13175).
|
|
|
|
|
*3.09
|
|
--
|
Amended and Restated Bylaws of Valero Energy Corporation.
|
|
|
|
|
4.01
|
|
--
|
Indenture dated as of December 12, 1997 between Valero Energy Corporation and The Bank of New York - incorporated by reference to Exhibit 3.4 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-56599) filed June 11, 1998.
|
|
|
|
|
4.02
|
|
--
|
First Supplemental Indenture dated as of June 28, 2000 between Valero Energy Corporation and The Bank of New York (including Form of 7 3/4% Senior Deferrable Note due 2005) - incorporated by reference to Exhibit 4.6 to Valero’s Current Report on Form 8-K dated June 28, 2000, and filed June 30, 2000 (SEC File No. 1-13175).
|
|
|
|
|
4.03
|
|
--
|
Indenture (Senior Indenture) dated as of June 18, 2004 between Valero Energy Corporation and Bank of New York - incorporated by reference to Exhibit 4.7 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004.
|
|
|
|
|
4.04
|
|
--
|
Form of Indenture related to subordinated debt securities - incorporated by reference to Exhibit 4.8 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004.
|
|
|
|
|
4.05
|
|
--
|
Specimen Certificate of Common Stock - incorporated by reference to Exhibit 4.1 to Valero’s Registration Statement on Form S-3 (SEC File No. 333-116668) filed June 21, 2004.
|
|
|
|
|
+10.01
|
|
--
|
Valero Energy Corporation Annual Bonus Plan, amended and restated as of July 29, 2009 - incorporated by reference to Exhibit 10.01 to Valero’s Current Report on Form 8-K dated July 29, 2009, and filed August 4, 2009 (SEC File No. 1-13175).
|
|
|
|
|
+10.02
|
|
--
|
Valero Energy Corporation Annual Incentive Plan for Named Executive Officers - incorporated by reference to Exhibit 10.01 to Valero’s Current Report on Form 8-K dated February 22, 2012, and filed February 27, 2012 (SEC File No. 1-13175).
|
|
|
|
|
+10.03
|
|
--
|
Valero Energy Corporation 2005 Omnibus Stock Incentive Plan, amended and restated as of October 1, 2005 - incorporated by reference to Exhibit 10.02 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2009 (SEC File No. 1-13175).
|
|
|
|
|
+10.04
|
|
--
|
Valero Energy Corporation 2011 Omnibus Stock Incentive Plan - incorporated by reference to Appendix A to Valero’s Definitive Proxy Statement on Schedule 14A for the 2011 annual meeting of stockholders, filed March 18, 2011 (SEC File No. 1-13175).
|
|
|
|
|
+10.05
|
|
--
|
Valero Energy Corporation Deferred Compensation Plan, amended and restated as of January 1, 2008 - incorporated by reference to Exhibit 10.04 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2008 (SEC File No. 1-13175).
|
|
|
|
|
+10.06
|
|
--
|
Form of Elective Deferral Agreement pursuant to the Valero Energy Corporation Deferred Compensation Plan - incorporated by reference to Exhibit 10.05 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175).
|
|
|
|
|
+10.07
|
|
--
|
Form of Investment Election Form pursuant to the Valero Energy Corporation Deferred Compensation Plan - incorporated by reference to Exhibit 10.06 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175).
|
|
|
|
|
+10.08
|
|
--
|
Form of Distribution Election Form pursuant to the Valero Energy Corporation Deferred Compensation Plan - incorporated by reference to Exhibit 10.07 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175).
|
|
|
|
|
+10.26
|
|
--
|
Form of Restricted Stock Agreement pursuant to the Valero Energy Corporation Restricted Stock Plan for Non-Employee Directors - incorporated by reference to Exhibit 10.03 to Valero’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (SEC File No. 1-13175).
|
|
|
|
|
10.27
|
|
--
|
$3,000,000,000 5-Year Amended and Restated Revolving Credit Agreement, dated as of December 5, 2011, among Valero Energy Corporation, as Borrower; JPMorgan Chase Bank, N.A., as Administrative Agent; and the lenders named therein - incorporated by reference to Exhibit 10.26 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175).
|
|
|
|
|
*12.01
|
|
--
|
Statements of Computations of Ratios of Earnings to Fixed Charges.
|
|
|
|
|
14.01
|
|
--
|
Code of Ethics for Senior Financial Officers - incorporated by reference to Exhibit 14.01 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 1-13175).
|
|
|
|
|
*21.01
|
|
--
|
Valero Energy Corporation subsidiaries.
|
|
|
|
|
*23.01
|
|
--
|
Consent of KPMG LLP dated February 28, 2013.
|
|
|
|
|
*24.01
|
|
--
|
Power of Attorney dated February 28, 2013 (on the signature page of this Form 10-K).
|
|
|
|
|
*31.01
|
|
--
|
Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal executive officer.
|
|
|
|
|
*31.02
|
|
--
|
Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal financial officer.
|
|
|
|
|
*32.01
|
|
--
|
Section 1350 Certifications (under Section 906 of the Sarbanes-Oxley Act of 2002).
|
|
|
|
|
99.01
|
|
--
|
Audit Committee Pre-Approval Policy - incorporated by reference to Exhibit 99.01 to Valero’s Annual Report on Form 10-K for the year ended December 31, 2011 (SEC File No. 1-13175).
|
|
|
|
|
**101
|
|
--
|
Interactive Data Files
|
*
|
Filed herewith.
|
+
|
Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.
|
**
|
Submitted electronically herewith.
|
|
VALERO ENERGY CORPORATION
(Registrant)
|
|
|
By:
|
/s/ William R. Klesse
|
|
|
(William R. Klesse)
|
|
|
Chief Executive Officer and
Chairman of the Board
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William R. Klesse
|
|
Chief Executive Officer and
Chairman of the Board
(Principal Executive Officer)
|
|
February 28, 2013
|
(William R. Klesse)
|
|
|
||
|
|
|
|
|
/s/ Michael S. Ciskowski
|
|
Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
February 28, 2013
|
(Michael S. Ciskowski)
|
|
|
||
|
|
|
|
|
/s/ Ronald K. Calgaard
|
|
Director
|
|
February 28, 2013
|
(Ronald K. Calgaard)
|
|
|
||
|
|
|
|
|
/s/ Jerry D. Choate
|
|
Director
|
|
February 28, 2013
|
(Jerry D. Choate)
|
|
|
||
|
|
|
|
|
/s/ Ruben M. Escobedo
|
|
Director
|
|
February 28, 2013
|
(Ruben M. Escobedo)
|
|
|
||
|
|
|
|
|
/s/ Deborah P. Majoras
|
|
Director
|
|
February 28, 2013
|
(Deborah P. Majoras)
|
|
|
||
|
|
|
|
|
/s/ Bob Marbut
|
|
Director
|
|
February 28, 2013
|
(Bob Marbut)
|
|
|
||
|
|
|
|
|
/s/ Donald L. Nickles
|
|
Director
|
|
February 28, 2013
|
(Donald L. Nickles)
|
|
|
||
|
|
|
|
|
/s/ Philip J. Pfeiffer
|
|
Director
|
|
February 28, 2013
|
(Philip J. Pfeiffer)
|
|
|
||
|
|
|
|
|
/s/ Robert A. Profusek
|
|
Director
|
|
February 28, 2013
|
(Robert A. Profusek)
|
|
|
||
|
|
|
|
|
/s/ Susan Kaufman Purcell
|
|
Director
|
|
February 28, 2013
|
(Susan Kaufman Purcell)
|
|
|
||
|
|
|
|
|
/s/ Stephen M. Waters
|
|
Director
|
|
February 28, 2013
|
(Stephen M. Waters)
|
|
|
||
|
|
|
|
|
/s/ Randall J. Weisenburger
|
|
Director
|
|
February 28, 2013
|
(Randall J. Weisenburger)
|
|
|
||
|
|
|
|
|
/s/ Rayford Wilkins, Jr.
|
|
Director
|
|
February 28, 2013
|
(Rayford Wilkins, Jr.)
|
|
|
___
|
a)
CASH METHOD
. I will furnish a check made payable to Valero Energy Corporation on the date of exercise
.
In addition to the Option price, federal income tax, social security tax, Medicare tax and state tax, as applicable, will be payable to Valero on the Exercise Date. I will be informed not later than the close of business on the day after the Exercise Date of the total settlement funds required. All option shares will be issued to me via the Computershare Direct Registration System; or
|
___
|
b)
STOCK SWAP METHOD
. I will submit a signed Representation of Ownership statement attesting as to shares of Valero Common Stock that I own. The number of shares of Valero Common Stock attested to on this signed statement must have a market value equal to or exceeding the sum of the Option price plus the amount of applicable tax withholding for the number of Option shares being exercised. The stock will be valued at the average of the high and low sales price per share of Valero Common Stock quoted on the New York Stock Exchange on the exercise date
.
In addition to the Option price, federal income tax, social security tax, Medicare tax and state tax, as applicable, will be deducted from the Option shares exercised, and a net number of shares will be issued to me via the Computershare Direct Registration System. Fractional shares will be settled in cash within one week of the exercise date; or
|
2)
|
Contact Merrill Lynch Representatives at 1-877-401-5856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
before income tax expense (benefit),
excluding income from equity investees
|
$
|
3,702
|
|
|
|
$
|
3,322
|
|
|
|
$
|
1,481
|
|
|
|
$
|
(334
|
)
|
|
|
$
|
268
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
711
|
|
|
|
735
|
|
|
|
743
|
|
|
|
701
|
|
|
|
626
|
|
|
|||||
Amortization of capitalized interest
|
25
|
|
|
|
23
|
|
|
|
20
|
|
|
|
18
|
|
|
|
17
|
|
|
|||||
Distributions from equity investees
|
1
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest capitalized
|
(221
|
)
|
|
|
(152
|
)
|
|
|
(90
|
)
|
|
|
(105
|
)
|
|
|
(92
|
)
|
|
|||||
Total earnings
|
$
|
4,218
|
|
|
|
$
|
3,928
|
|
|
|
$
|
2,164
|
|
|
|
$
|
280
|
|
|
|
$
|
819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
$
|
313
|
|
|
|
$
|
401
|
|
|
|
$
|
484
|
|
|
|
$
|
416
|
|
|
|
$
|
360
|
|
|
Interest capitalized
|
221
|
|
|
|
152
|
|
|
|
90
|
|
|
|
105
|
|
|
|
92
|
|
|
|||||
Rental expense interest factor (a)
|
177
|
|
|
|
182
|
|
|
|
169
|
|
|
|
180
|
|
|
|
174
|
|
|
|||||
Total fixed charges
|
$
|
711
|
|
|
|
$
|
735
|
|
|
|
$
|
743
|
|
|
|
$
|
701
|
|
|
|
$
|
626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
5.9
|
|
x
|
|
5.3
|
|
x
|
|
2.9
|
|
x
|
|
(b)
|
|
|
|
1.3
|
|
x
|
(a)
|
The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.
|
(b)
|
For the year ended December 31, 2009, earnings were insufficient to cover fixed charges by $421 million. The deficiency included the effect of a $222 million pre-tax impairment loss resulting from the permanent cancellation of certain capital projects classified as “construction in progress” as a result of the unfavorable impact of the economic slowdown on refining industry fundamentals during the year. The deficiency was also partially attributable to a $120 million loss contingency accrual related to our dispute of a turnover tax on export sales in Aruba.
|
Name of Entity
|
|
State of Incorporation/Organization
|
|
|
|
AUTOTRONIC SYSTEMS, INC.
|
|
Delaware
|
BIG DIAMOND, INC.
|
|
Texas
|
BIG DIAMOND NUMBER 1, INC.
|
|
Texas
|
CANADIAN ULTRAMAR COMPANY
|
|
Nova Scotia
|
COLONNADE VERMONT INSURANCE COMPANY
|
|
Vermont
|
CST BRANDS, INC.
|
|
Delaware
|
CST CANADA CO.
|
|
Nova Scotia
|
CST CANADA HOLDING INC.
|
|
Nova Scotia
|
CST MARKETING AND SUPPLY COMPANY
|
|
Delaware
|
CST SECURITY SERVICES, INC.
|
|
Delaware
|
DIAMOND ALTERNATIVE ENERGY, LLC
|
|
Delaware
|
DIAMOND ALTERNATIVE ENERGY OF CANADA INC.
|
|
Canada
|
DIAMOND GREEN DIESEL HOLDINGS LLC
|
|
Delaware
|
DIAMOND GREEN DIESEL LLC
|
|
Delaware
|
DIAMOND K RANCH LLC
|
|
Texas
|
DIAMOND OMEGA COMPANY, L.L.C.
|
|
Delaware
|
DIAMOND SHAMROCK ARIZONA, INC.
|
|
Delaware
|
DIAMOND SHAMROCK REFINING COMPANY, L.P.
|
|
Delaware
|
DIAMOND SHAMROCK STATIONS, INC.
|
|
Delaware
|
DIAMOND UNIT INVESTMENTS, L.L.C.
|
|
Delaware
|
DSRM NATIONAL BANK
|
|
U.S.A.
|
EASTVIEW FUEL OILS LIMITED
|
|
Ontario
|
EMERALD MARKETING, INC.
|
|
Texas
|
ENTERPRISE CLAIMS MANAGEMENT, INC.
|
|
Texas
|
GOLDEN EAGLE ASSURANCE LIMITED
|
|
British Columbia
|
HUNTWAY REFINING COMPANY
|
|
Delaware
|
KINROSS CELLULOSIC ETHANOL LLC
|
|
Delaware
|
MAINLINE PIPELINES LIMITED
|
|
England and Wales
|
MICHIGAN REDEVELOPMENT GP, LLC
|
|
Delaware
|
MICHIGAN REDEVELOPMENT, L.P.
|
|
Delaware
|
MRP PROPERTIES COMPANY, LLC
|
|
Michigan
|
NATIONAL CONVENIENCE STORES INCORPORATED
|
|
Delaware
|
NECHES RIVER HOLDING CORP.
|
|
Delaware
|
OCEANIC TANKERS AGENCY LIMITED
|
|
Quebec
|
PI DOCK FACILITIES LLC
|
|
Delaware
|
PORT ARTHUR COKER COMPANY L.P.
|
|
Delaware
|
PREMCOR USA INC.
|
|
Delaware
|
PROPERTY RESTORATION, L.P.
|
|
Delaware
|
ROBINSON OIL COMPANY (1987) LIMITED
|
|
Nova Scotia
|
Name of Entity
|
|
State of Incorporation/Organization
|
SABINE RIVER HOLDING CORP.
|
|
Delaware
|
SABINE RIVER LLC
|
|
Delaware
|
SIGMOR BEVERAGE, INC.
|
|
Texas
|
SIGMOR CORPORATION
|
|
Delaware
|
SIGMOR NUMBER 5, INC.
|
|
Texas
|
SIGMOR NUMBER 43, INC.
|
|
Texas
|
SIGMOR NUMBER 79, INC.
|
|
Texas
|
SIGMOR NUMBER 80, INC.
|
|
Texas
|
SIGMOR NUMBER 103, INC.
|
|
Texas
|
SIGMOR NUMBER 105, INC.
|
|
Texas
|
SIGMOR NUMBER 119, INC.
|
|
Texas
|
SIGMOR NUMBER 178, INC.
|
|
Texas
|
SIGMOR NUMBER 196, INC.
|
|
Texas
|
SIGMOR NUMBER 238, INC.
|
|
Texas
|
SIGMOR NUMBER 259, INC.
|
|
Texas
|
SIGMOR NUMBER 422, INC.
|
|
Texas
|
SKIPPER BEVERAGE COMPANY, INC.
|
|
Texas
|
SUNBELT REFINING COMPANY, L.P.
|
|
Delaware
|
SUNSHINE BEVERAGE CO.
|
|
Texas
|
TEXOIL LIMITED
|
|
Ireland
|
THE PREMCOR PIPELINE CO.
|
|
Delaware
|
THE PREMCOR REFINING GROUP INC.
|
|
Delaware
|
THE SHAMROCK PIPE LINE CORPORATION
|
|
Delaware
|
TOC-DS COMPANY
|
|
Delaware
|
ULTRAMAR ACCEPTANCE INC.
|
|
Canada
|
ULTRAMAR ENERGY INC.
|
|
Delaware
|
ULTRAMAR INC.
|
|
Nevada
|
ULTRAMAR LTD.
|
|
Canada
|
ULTRAMAR SERVICES INC.
|
|
Canada
|
VALERO ARKANSAS RETAIL LLC
|
|
Arkansas
|
VALERO ARUBA ACQUISITION COMPANY I, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA FINANCE INTERNATIONAL, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA HOLDING COMPANY N.V.
|
|
Aruba
|
VALERO ARUBA HOLDINGS INTERNATIONAL, LTD.
|
|
Virgin Islands (U.K.)
|
VALERO ARUBA MAINTENANCE/OPERATIONS
COMPANY N.V.
|
|
Aruba
|
VALERO BROWNSVILLE TERMINAL LLC
|
|
Texas
|
VALERO CALIFORNIA RETAIL COMPANY
|
|
Delaware
|
VALERO CANADA FINANCE, INC.
|
|
Delaware
|
VALERO CANADA L.P.
|
|
Newfoundland
|
VALERO CAPITAL CORPORATION
|
|
Delaware
|
VALERO CARIBBEAN SERVICES COMPANY
|
|
Delaware
|
VALERO COKER CORPORATION ARUBA N.V.
|
|
Aruba
|
VALERO CUSTOMS & TRADE SERVICES, INC.
|
|
Delaware
|
VALERO DIAMOND, L.P.
|
|
Texas
|
Name of Entity
|
|
State of Incorporation/Organization
|
VALERO DIAMOND METRO, INC.
|
|
Michigan
|
VALERO ENERGY ARUBA II COMPANY
|
|
Cayman Islands
|
VALERO ENERGY (IRELAND) LIMITED
|
|
Ireland
|
VALERO ENERGY LTD
|
|
England and Wales
|
VALERO EQUITY SERVICES LTD
|
|
England and Wales
|
VALERO ENTERPRISES, INC.
|
|
Delaware
|
VALERO FINANCE L.P. I
|
|
Newfoundland
|
VALERO FINANCE L.P. II
|
|
Newfoundland
|
VALERO FINANCE L.P. III
|
|
Newfoundland
|
VALERO GRAIN MARKETING, LLC
|
|
Texas
|
VALERO HOLDCO UK LTD
|
|
United Kingdom
|
VALERO HOLDINGS, INC.
|
|
Delaware
|
VALERO INTERNATIONAL HOLDINGS, INC.
|
|
Nevada
|
VALERO LIVE OAK LLC
|
|
Texas
|
VALERO MARKETING & SUPPLY-ARUBA N.V.
|
|
Aruba
|
VALERO MARKETING AND SUPPLY COMPANY
|
|
Delaware
|
VALERO MARKETING AND SUPPY INTERNATIONAL LTD.
|
|
Cayman Islands
|
VALERO MKS LOGISTICS, L.L.C.
|
|
Delaware
|
VALERO MOSELLE COMPANY S.à r.l.
|
|
Luxembourg
|
VALERO NEDERLAND COÖPERATIEF U.A.
|
|
The Netherlands
|
VALERO NEW AMSTERDAM B.V.
|
|
The Netherlands
|
VALERO NEW US LLC
|
|
Delaware
|
VALERO OMEGA COMPANY, L.L.C.
|
|
Delaware
|
VALERO OPERATIONS SUPPORT, LTD
|
|
England and Wales
|
VALERO PAYMENT SERVICES COMPANY
|
|
Virginia
|
VALERO PEMBROKESHIRE LLC
|
|
Delaware
|
VALERO PLAINS COMPANY LLC
|
|
Texas
|
VALERO POWER MARKETING LLC
|
|
Delaware
|
VALERO REFINING AND MARKETING COMPANY
|
|
Delaware
|
VALERO REFINING COMPANY-ARUBA N.V.
|
|
Aruba
|
VALERO REFINING COMPANY-CALIFORNIA
|
|
Delaware
|
VALERO REFINING COMPANY-OKLAHOMA
|
|
Michigan
|
VALERO REFINING COMPANY-TENNESSEE, L.L.C.
|
|
Delaware
|
VALERO REFINING-MERAUX LLC
|
|
Delaware
|
VALERO REFINING-NEW ORLEANS, L.L.C.
|
|
Delaware
|
VALERO REFINING-TEXAS, L.P.
|
|
Texas
|
VALERO RENEWABLE FUELS COMPANY, LLC
|
|
Texas
|
VALERO RETAIL HOLDINGS, INC.
|
|
Delaware
|
VALERO SECURITY SYSTEMS, INC.
|
|
Delaware
|
VALERO SERVICES, INC.
|
|
Delaware
|
VALERO TERMINALING AND DISTRIBUTION COMPANY
|
|
Delaware
|
VALERO TEXAS POWER MARKETING, INC.
|
|
Delaware
|
VALERO ULTRAMAR HOLDINGS INC.
|
|
Delaware
|
VALERO UNIT INVESTMENTS, L.L.C.
|
|
Delaware
|
VALERO WEST WALES LLC
|
|
Delaware
|
Name of Entity
|
|
State of Incorporation/Organization
|
VALLEY SHAMROCK, INC.
|
|
Texas
|
VEC TRUST I
|
|
Delaware
|
VEC TRUST III
|
|
Delaware
|
VEC TRUST IV
|
|
Delaware
|
VRG DIAMOND HOLDINGS, LLC
|
|
Texas
|
VRG PROPERTIES COMPANY
|
|
Delaware
|
VTD PROPERTIES COMPANY
|
|
Delaware
|
/s/ William R. Klesse
|
|
|
William R. Klesse
Chief Executive Officer
|
|
|
/s/ Michael S. Ciskowski
|
|
|
Michael S. Ciskowski
Executive Vice President and Chief Financial Officer
|
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ William R. Klesse
|
|
William R. Klesse
|
|
Chief Executive Officer and President
|
|
February 28, 2013
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael S. Ciskowski
|
|
Michael S. Ciskowski
|
|
Executive Vice President and Chief Financial Officer
|
|
February 28, 2013
|
|