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Valero Energy Corp. Reports Operating Results (10-Q)

August 08, 2012 | About:
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10qk

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Valero Energy Corp. (VLO) filed Quarterly Report for the period ended 2012-06-30.

Valero Energy Corporation has a market cap of $15.39 billion; its shares were traded at around $28.48 with a P/E ratio of 7.5 and P/S ratio of 0.1. The dividend yield of Valero Energy Corporation stocks is 2.2%. Valero Energy Corporation had an annual average earning growth of 6.5% over the past 10 years.

Highlight of Business Operations:

Operating revenues increased 11 percent (or $3.4 billion) for the second quarter of 2012 compared to the second quarter of 2011 primarily as a result of higher throughput volumes between the two periods related to our refining segment operations. The higher throughput volumes resulted primarily from the incremental throughput of 136,000 barrels per day from the Meraux Refinery, which was acquired on October 1, 2011, and incremental throughput of 250,000 barrels per day from the Pembroke Refinery, which was acquired on August 1, 2011. Operating income increased $71 million and income from continuing operations before income tax expense increased $89 million for the second quarter of 2012 compared to amounts reported for the second quarter of 2011 primarily due to a $111 million increase in refining segment operating income which was partially offset by a $59 million decrease in ethanol segment operating income discussed below.

Cost of sales for the six months ended June 30, 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. The loss is reflected in refining segment operating income for the six months ended June 30, 2011, but throughput margin per barrel for the refining segment has been restated for the amount previously presented to exclude this $542 million loss ($1.35 per barrel). In addition, operating income and throughput margin per barrel for the U.S. Gulf Coast, U.S. Mid-Continent, and U.S. West Coast regions for the six months ended June 30, 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 ($1.51 per barrel); $122 million ($1.68 per barrel), and $48 million ($1.11 per barrel), respectively.

Operating revenues increased 21 percent (or $12.2 billion) for the first six months of 2012 compared to the first six months of 2011 primarily as a result of higher refined product prices and higher throughput volumes between the two periods related to our refining segment operations. The higher throughput volumes resulted primarily from the incremental throughput of 130,000 barrels per day from the Meraux Refinery, which was acquired on October 1, 2011, and incremental throughput of 248,000 barrels per day from the Pembroke Refinery, which was acquired on August 1, 2011. Operating income decreased $417 million and income from continuing operations before income tax expense decreased $392 million for the first six months of 2012 compared to amounts reported for the first six months of 2011 primarily due to a $284 million decrease in refining segment operating income and a $94 million decrease in ethanol segment operating income discussed below.

The net cash provided by operating activities during the first six months of 2012 combined with $300 million of proceeds from the remarketing of the 4.0% Gulf Opportunity Zone Revenue Bonds Series 2010 (GO Zone Bonds), $1.1 billion in borrowings under our revolving credit facility, and $1.3 billion of proceeds from the sale of receivables under our accounts receivable sales facility were used mainly to:

As of June 30, 2012, we had an accounts receivable sales facility with a group of third-party entities and financial institutions to sell on a revolving basis up to $1.0 billion of eligible trade receivables. In July 2012, we amended our agreement to increase the facility to $1.5 billion and to extend the maturity date to July 2013. During the six months ended June 30, 2012, we sold $1.3 billion of interests in eligible receivables to the third-party entities and financial institutions under this facility, and we repaid $1.5 billion under this facility. As of June 30, 2012, the amount of interests in eligible receivables sold was $100 million.

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