10-KPeriod: FY2012

VALERO ENERGY CORP/TX Annual Report, Year Ended Dec 31, 2012

Filed February 28, 2013For Securities:VLO

Summary

Valero Energy Corporation (VLO) reported net income attributable to stockholders of $2.1 billion for the year ended December 31, 2012, which was comparable to the prior year. However, this included $983 million in non-cash asset impairment losses, primarily related to the Aruba Refinery. Excluding these and other significant items, the company's operating income showed a favorable increase. The company's refining segment was the primary driver of profitability, benefiting from improved margins in the U.S. Mid-Continent and North Atlantic regions. These improvements were largely due to favorable crude oil price differentials (WTI vs. Brent) and supply disruptions in the North Atlantic. Conversely, the ethanol segment experienced a significant decline in operating income due to higher corn prices and market oversupply. Valero also announced plans to separate its retail business into a new company, CST Brands, Inc., through an 80% pro rata distribution to stockholders, expected in the second quarter of 2013.

Financial Highlights

50 data points
Beta

Net Income

$2.08B

EPS (Diluted)

$3.75

Total Assets

$44.48B

Cash & Equivalents

$1.72B

Free Cash Flow

$2.34B

Financial Statements
Beta
Operating Expenses$133.35B
Operating Income$5.04B
Interest Expense$314.00M
Net Income$2.08B
EPS (Basic)$3.77
EPS (Diluted)$3.75
Shares Outstanding (Basic)550.00M
Shares Outstanding (Diluted)556.00M

Key Highlights

  • 1Net income attributable to stockholders from continuing operations was $2.1 billion for 2012, consistent with 2011.
  • 2The refining segment drove operating income growth, with U.S. Mid-Continent and North Atlantic regions showing significant margin improvements.
  • 3Ethanol segment operating income decreased by $443 million in 2012 due to higher corn prices and ethanol oversupply.
  • 4Valero plans to spin off its retail business into a new entity, CST Brands, Inc., distributing 80% of its shares to Valero stockholders.
  • 5The Aruba Refinery operations were suspended in March 2012 and the company recorded an asset impairment loss of $983 million related to this facility.
  • 6Valero actively repurchased shares, purchasing approximately $4.2 million worth of stock in Q4 2012, as part of ongoing stock purchase programs.
  • 7The company declared and paid dividends, with the quarterly dividend increasing from $0.15 to $0.175 in 2012 and a $0.20 dividend declared for Q1 2013.

Frequently Asked Questions

In 2012, Valero reported net income attributable to stockholders from continuing operations of $2.1 billion, or $3.75 per share. This was comparable to the previous year, but included a significant non-cash asset impairment loss of $983 million related to the Aruba Refinery. Excluding such items, the company saw a favorable increase in operating income, driven by its refining segment.

The refining segment was the main contributor to operating income growth, with improved margins in the U.S. Mid-Continent and North Atlantic regions benefiting from favorable crude oil price differentials and supply dynamics. The ethanol segment, however, experienced a substantial decline in operating income due to increased corn prices and an oversupply of ethanol in the market.

Valero suspended operations at its Aruba Refinery in March 2012 due to unfavorable economics. The company decided to reorganize the refinery into a crude oil and refined products terminal. A significant asset impairment loss of $983 million was recognized in 2012 related to this refinery.

Valero announced its intention to separate its retail business into a new, publicly traded company named CST Brands, Inc. This separation is planned as an 80% pro rata distribution of CST's common stock to Valero stockholders, expected in the second quarter of 2013.