Continuing a tradition it began in 1990, Convenience Store Decisions is proud to announce Valero Energy Corp. (NYSE: VLO) as its 2006 Convenience Store Chain of the Year.

Valero, which will be honored at an awards reception Oct. 9 in Las Vegas during the National Association of Convenience Stores (NACS) Trade Show and Exposition, was chosen for a number of reasons, said Convenience Store Decisions' Editor-in-Chief John Lofstock.

For starters, the San Antonio-based energy company is a true American success story. A virtual unknown in the downstream petroleum business in 2000, Valero has grown into the largest refiner in North America.

Today, Valero has approximately 5,500 retail and branded wholesale outlets in the U.S., Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Ultramar, Beacon and Shamrock. It markets fuel in 42 U.S. states, Canada, Latin America and the Caribbean.

Valero also operates 18 refineries with a refining throughput capacity of 3.3 million barrels per day and boasts assets of more than $33 billion. And based on its revenues of $80 billion, the company ranks No. 15 among the Fortune 500.

"Valero is a model of consistency with an outstanding retail offering and the refining capacity to deliver consumers a good value on fuel with no dropoff in quality," Lofstock said. "At a time when many oil companies are under fire for high fuel prices, Valero has managed to create some excitement in the market with new stores, strong in-store programs and a popular credit card network. With its commitment to retail excellence, Valero was an easy choice for Chain of the Year."

Giving credit for the award to the employees, Bill Klesse, Valero’s Chief Executive Officer, said “We are very proud to be named the Chain of the Year.  Thanks to the hard work and dedication of our retail and wholesale employees, Valero has achieved record-breaking growth and success and created a dynamic new brand offering.”

"The purpose of the Chain of the Year Award is to showcase the best of the best in convenience retailing, and Valero certainly meets that definition," said Shahla Hebets, Publisher of Convenience Store Decisions.

In the retail arena, Gary Arthur, Valero’s Senior Vice President of Retail and Specialty Products Marketing, also attributed Valero’s success to the employees. “We have worked hard to give our employees best-in-class compensation and benefits, and they’ve responded by significantly reducing turnover, improving customer service and increasing their community involvement. Year after year, our dedicated retail employees have increased the number of volunteer hours given and the funds raised for the Children’s Miracle Network, Muscular Dystrophy Association and United Way.

“Our employees have also helped bring about many improvements in our retail network over the past few years.  The new Valero image and store offerings have been well-received by our customers. We’ve introduced new merchandise like our private-label Fresh Choices sodas, bottled water, chips, sandwiches and salads, and developed enhanced coffee, fountain drink, food service and other programs,” Arthur said.

In terms of site count and geographic expansion, Valero’s most dramatic growth has occurred in its branded wholesale network.  “Our distinctive teal-and-yellow signs have gone up at stations stretching from California to the Carolinas,” said Ken Applegate, Valero’s Vice President of Wholesale Marketing.

“We have been aggressively expanding our branded wholesale network along the East Coast, adding new locations in the Mid-Continent and West Coast, and charting new territory in the Great Lakes region.  We believe the Valero brand has been so well received because of our tremendous supply capabilities, great brand image and competitive offering,” he said.

The Rise of a New Retailer

Valero's rise to the top began in earnest in 2000 when the company was the winning bidder for Exxon's Benicia refinery in California, along with a network of retail sites and supply contracts in the San Francisco Bay Area. Exxon was forced to sell the assets as terms of its acquisition of Mobil Oil Co.

But acquiring those assets wasn't nearly enough; it was a springboard for a much bigger refining/marketing strategy. Under the watchful eye of Chairman Bill Greehey, Valero pushed forward acquiring Ultramar Diamond Shamrock in 2001 and a half dozen more refineries over the next five years, including the acquisition of Premcor Inc. in 2005. Along the way, the company developed the Valero retail brand, acquired a proprietary credit card and fleet services network, instituted its own gift cards and created a line of private label products.

Also in 2005, Valero opened its 132,000-square-foot Retail Distribution Center (RDC) north of San Antonio that warehouses 2,500 different items to supply the chain’s 600 Texas-based stores.  This facility has improved the Valero retail network’s efficiency and operational flexibility in serving its Texas stores, as well as providing the capability to offer a variety of new products to consumers. Additionally, Valero has increased its profile nationally through an aggressive advertising, promotional and publicity campaign.

Throughout the years, Valero has received its share of awards. It is ranked No. 3 among the nation's best employers on Fortune magazine’s listing of the “100 Best Companies to Work For” -- up from its No. 23 ranking in 2005. It also ranked third on Forbes’ 2005 Platinum 400 list of America's Best Big Companies.

About the Chain of the Year Award

CSD's Chain of the Year award annually honors a convenience store or petroleum chain that has established itself as a superior retailer and innovator in its markets of operation.

CSD's first Chain of the Year award was given to Wawa inc. in 1990. Valero follows 2005 Chain of the Year winner 7-Eleven Inc. Other past winners include Sheetz Inc., Krause Gentle Corp., Amerada Hess, Exxon Mobil Corp., Petro-Canada and Kwik Trip Inc.

About Valero Energy Corp.

Valero Energy Corp. is a Fortune 500 company based in San Antonio, with approximately 22,000 employees and annual revenues of more than $80 billion. The company owns and operates 18 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.3 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation’s largest retail operators with approximately 5,500 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Ultramar, Beacon and Shamrock. Please visit www.valero.com for more information.