Skip Navigation LinksValero > News Room

In This Section
Skip navigation links
News & Features
Events & Presentations
Valero Energy Reports First Quarter 2012 Results 
San Antonio, Texas 

Valero Energy Corporation (“Valero,” NYSE: VLO) today reported a loss from continuing operations of $432 million, or $0.78 per share, for the first quarter of 2012, compared to income from continuing operations of $104 million, or $0.18 per share, for the first quarter of 2011.  Included in the first quarter 2012 results was a non-cash asset impairment loss of $605 million after taxes, or $1.09 per share, predominately related to the Aruba refinery.  Included in the first quarter 2011 results was an after-tax loss of $352 million, or $0.62 per share, on derivative contracts related to the forward sales of refined products.

The first quarter 2012 operating loss was $244 million versus $244 million of operating income in the first quarter of 2011.  Excluding the items noted above, first quarter 2012 operating income was $367 million, compared to $786 million of operating income in the first quarter of 2011.  The decrease in operating income was primarily due to lower discounts on crude oils and feedstocks plus lower margins for other products such as petrochemical feedstocks and petroleum coke.  Partially offsetting the decrease in operating income were higher margins for gasoline and diesel.

Refining throughput volumes in the first quarter of 2012 were 2,555,000 barrels per day, an increase of 449,000 barrels per day versus the first quarter of 2011.  The increase was mainly due to the acquisitions of the Pembroke and Meraux refineries.  During the first quarter of 2012, significant turnaround and maintenance activity occurred in three of Valero’s four refining regions, including plant-wide shutdowns at the Wilmington and St. Charles refineries.

“Given the high level of turnarounds and maintenance in the first quarter, we performed well and continued to execute our strategy,” said Valero Chairman and CEO Bill Klesse. “We improved our refining system by starting the two hydrogen plants at McKee and Memphis, and we continued to advance our large projects.  We also continued to work on our reliability with the extensive turnarounds that occurred in the first quarter, the recent replacement of the coker drums at St. Charles, and the McKee cat-cracker turnaround that is in progress. 

“2012 continues to look favorable for Valero.  Our major hydrocracker projects continue on-budget and on-schedule with start-up of the Port Arthur unit planned in the third quarter and completion of the St. Charles unit planned in the fourth quarter.  Also, the export market continues to be robust, and Valero has been exporting products on strong demand from international markets that have been paying a higher value than local markets.  These export volumes have helped to offset weak domestic demand and contributed to higher operating rates at our refineries.”

Valero’s ethanol segment reported $9 million of operating income for the first quarter of 2012 versus $44 million in the first quarter of 2011.  The decrease in ethanol operating income was mainly due to lower gross margins as ethanol prices were pressured by excess industry supplies, reflecting weak U.S. gasoline demand.  Ethanol production volumes in the first quarter of 2012 set a record-high quarterly average of 3.48 million gallons per day, narrowly beating the previous high of 3.46 million gallons per day set in the fourth quarter of 2011 and significantly higher than the 3.28 million gallons per day achieved in the first quarter of 2011.

Valero’s retail segment reported $40 million of operating income for the first quarter of 2012 versus $66 million of operating income for the first quarter of 2011.  The decrease in operating income was mainly due to lower fuel margins in both U.S. and Canadian operations.  U.S. retail fuel volumes achieved a first-quarter record at 5,046 gallons per day per site compared to 4,895 gallons per day per site in the first quarter of 2011, contrary to U.S. national demand numbers.

Regarding cash flows in the first quarter of 2012, capital spending was $884 million, of which $158 million was for turnaround and catalyst expenditures.  Valero returned cash to shareholders with payments of $83 million in dividends on its common stock and $106 million to purchase 4.5 million of Valero’s shares.  Valero ended the first quarter with $1.6 billion in cash and temporary cash investments.

For the full-year 2012, Valero’s estimate for total capital spending, including turnaround and catalyst expenditures, is unchanged from prior guidance of approximately $3.5 billion.  Valero expects total capital spending for 2013 to fall into a range of $2 billion to $2.5 billion, for a significant decrease of $1 billion to $1.5 billion versus the 2012 estimate.

“Our strategic priorities to grow long-term shareholder value remain intact,” Klesse concluded. “We have a constant focus on safety and improving the performance of our refineries.  We will continue to evaluate opportunities to optimize our portfolio with attractively priced assets that are exposed to favorable macro trends and have synergies with our portfolio.  We also plan to maintain our investment grade credit rating while returning more cash to shareholders through regular dividends and stock buybacks.  In fact, our goal is to have one of the highest cash yields among our peers.”

Valero’s senior management will hold a conference call at 11 a.m. ET (10 a.m. CT) today to discuss this earnings release and provide an update on company operations.  A live broadcast of the conference call will be available on the company’s web site at

About Valero
Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels, other petrochemical products and power. Valero subsidiaries employ approximately 22,000 people, and assets include 16 petroleum refineries with a combined throughput capacity of approximately 3 million barrels per day, 10 ethanol plants with a combined production capacity of 1.2 billion gallons per year, and a 50-megawatt wind farm. Approximately 6,800 retail and branded wholesale outlets carry the Valero, Diamond Shamrock, Shamrock and Beacon brands in the United States and the Caribbean; Ultramar in Canada; and Texaco in the United Kingdom and Ireland. Valero is a Fortune 500 company based in San Antonio. Please visit for more information.

Safe-Harbor Statement
Statements contained in this release that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and on Valero’s website at

 Click here to view Financial Tables.

Corporate Communications
Director-Media Relations and Communications
Send Email210-345-5002