�����������������������
� � � � � � � � � � � � � � � � � � � � � � � � �
� � � � � � � � � � � � � � � � � � � � � � � � � �
TA B L E O F C O N T E N T S
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . 1
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . 3
It Pays to be Different . . . . . . . . . . . . . . . . . . . . . 6
Acquisition Strategy Paying Big Dividends . . . . . . 8
Superior Operations, Spectacular Results . . . . . . 10
Sweet Returns on Sour Crude . . . . . . . . . . . . . . . 12
Pumping Up Retail/Wholesale Profits . . . . . . . . 14
Safety Pays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Unique Culture – The Big Pay Off . . . . . . . . . . . 18
Condensed Financial Statements . . . . . . . . . . . . 21
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 28
Shareholder Information . . . . . . . . . . . . . . . . . . . 29
AND BEING DIFFERENT HAS PAID OFF FOR OUR SHAREHOLDERS!
2 0 0 4 T O TA L S H A R E H O L D E R R E T U R N
S&P 11% VLO 98%
F I N A N C I A L H I G H L I G H T S
(Millions of Dollars, Except per Share Amounts)
‒
’
2004
2003
$ 54,619
$ 37,969
$ 2,979
$ 1,222
$ 1,804
$
622
$
6.53
$ 2.55
$ 19,392
$ 15,664
$ 7,798
$ 5,735
$ 1,596
$ 1,112
S u m m a r y A n n u a l R e p o r t
In an effort to provide shareholders with more effective communications, Valero Energy Corporation has adopted a summary
annual report format, which provides condensed financial disclosure. The company’s full financial statements are contained in
its Annual Report on Form 10-K for the year ended December 31, 2004, which is provided to all shareholders.
1
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
BILL GREEHEY
C H A I R M A N & C E O
LETTER TO THE SHAREHOLDERS
IT PAYS TO BE DIFFERENT.
AND, OUR DIFFERENCE IS PAYING OFF FOR OUR SHAREHOLDERS!
In 1997, when others were getting out of the refining
business, Valero decided to grow its refining business
in a big way!
That’s because we believed we were at the bottom of
the refining cycle and that we would be able to acquire
refining assets at deep discounts to replacement costs
and that the worldwide movement to cleaner fuels
would tighten refined product supplies – making
refineries and the products they produce significantly
more profitable. We also believed that the best profits
of all would belong to refiners that could process
plentiful, cheaper, heavier sour crude feedstocks
into premium products.
And we were right on all counts! Since 1997, we
have acquired 14 refineries – from Canada to the
Caribbean – for a fraction of their replacement
value. In fact, we estimate that our refineries have a
$43 billion replacement cost, while our refinery book
value is less than $9 billion.
Meanwhile, as the chart on this page dramatically
depicts, the profit margins on the key products these
refineries produce have gotten better and better, and
the discounts on the sour crude feedstocks we process
at these refineries, have gotten wider and wider.
Two of our most recent acquisitions epitomize the
success of our acquisition strategy. We acquired our
St. Charles refinery for $400 million in July of 2003 for
approximately 20 percent of replacement cost. In 2004
alone, it earned $335 million in operating income.
Then, in March of 2004, we acquired our Aruba
refinery for $365 million, which represents about
15 percent of replacement cost. In the 10 months we
owned this refinery in 2004, it earned $290 million in
operating income. Both refineries process heavy Maya
sour crude and we based our original economics to
purchase these refineries on a $6 to $7 per barrel
discount to West Texas Intermediate, a benchmark
sweet crude. In 2004, these discounts averaged over
$11 per barrel and the discount has averaged more
than $17 per barrel so far this year. Both refineries
are expected to make more operating income in
2005 than we paid for them!
As a result of many successful acquisitions such as
these, Valero is now the nation’s largest independent
refiner and has a throughput capacity of 2.5 million
barrels per day (BPD), which represents about 12
percent of total U.S. refining capacity. And, Valero
also has one of the most complex and geographically
diverse refining systems in North America today.
The complexity of our refineries is a key difference
for Valero – allowing us to benefit from historic
discounts on the feedstocks we run at our refineries,
while benefiting from historic product margins at
the same time!
That is why we’ve enjoyed record earnings, a record
stock price, record total shareholder return and why
we have been able to outperform our peer group
companies as well as the S&P 500 Index.
ROLLING 5-YEAR AVERAGE PRODUCT
MARGINS & SOUR CRUDE DISCOUNTS
*2005 PROJECTIONS AS OF MARCH 7, 2005
3
3
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
COMPARISON OF 5-YEAR
CUMULATIVE TOTAL RETURN
VALERO COMMON STOCK
PEER GROUP
S&P 500
Valero’s shareholders have benefited from total
shareholder return of 380 percent over the last
five years – compared to the 11 percent loss of the
S&P 500 Index over the same time period!
We are truly in the right business with the right
strategy and the right assets at the right time.
And just as importantly, Valero also has the right
culture. We have always believed our employees
are our No. 1 asset and that if we take care of our
employees, they will take care of the company, the
shareholders and the communities in which we live
and operate.
And they do! At Valero, our employees are the best in
the industry. They are talented, hard-working and
dedicated to Valero’s success in every way.
So, I guess it’s not surprising that 2004 was a record
year for Valero in every respect.
ANOTHER RECORD YEAR
We generated a record $55 billion in revenues, which
were up 44 percent over 2003. Based on the current
Fortune 500 ranking, our revenues would place Valero
among the top 20 largest publicly traded companies
in the United States today.
Better yet, Valero ranked No.1 on Forbes magazine’s
list of America’s Best Big Companies for our 2004
earnings growth and shareholder return!
Net income was a record $1.8 billion, or $6.53 per
share, which is nearly triple the net income of $622
million, or $2.55 per share, that we earned in 2003.
In 2004 alone, Valero’s total shareholder return was an
incredible 98 percent. And, because of the outstanding
performance of our stock last year, we had the first
stock split in Valero’s history!
We also increased our dividend by 38 percent and
ended the year with a very strong balance sheet with
our debt-to-capitalization ratio down to about 30
percent – despite our many acquisitions and strategic
investments these last few years!
2004 was also a year of record
recognition for Valero. In
addition to naming us The
Best Big Company in America,
Forbes magazine also listed
Valero as one of America’s
Best Managed Companies.
And, Fortune Magazine named
Valero as one of America’s Most
Admired Companies and ranked Valero third among
America’s largest companies in its annual listing of
“The 100 Best Companies to Work For.” Fortune
Magazine also selected Valero to receive the Employee
Pride Award – one of only five special awards given
to the top employers on its prestigious ranking.
Valero was also named “Oil Company of the Year” in
the Platts Global Energy Awards program in 2004,
and became only the second company in history to
receive the Spirit of America Award – United Way’s
highest honor – for a second time.
It is a tremendous tribute to Valero’s unique culture
and a strong testament to its success, to have been
honored as an industry leader, a top employer, a leader
in community service and a leader in shareholder
return in 2004. It clearly demonstrates that a company
can achieve great success while looking out for all of
its stakeholders. And, everyone at Valero takes great
pride in being a part of such a sharing and caring
culture. We firmly believe it is the cornerstone of
all our past and future success. And, as long as
we maintain our special culture, I believe we will
continue to have a very bright future.
4
4
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
GLOBAL DEMAND GROWTH
COMPARED TO CAPACITY GROWTH
MBPD
Source: Purvin & Gertz
THE BEST IS YET TO COME!
And, our future is bright! All of the fundamentals are
in place to make 2005 an even better year than 2004.
Worldwide demand for refined products – fueled
by a strong global economy – continues to outpace
refining capacity increases and supports strong
product margins going forward.
And, as oil demand continues to grow, the demand
increase is being met by medium and heavier sour
crude oil. Since there is limited refining capacity
capable of upgrading these types of crudes, they
become increasingly more surplus, which helps keep
the discounts on the sour feedstocks that make up
approximately 60 percent of Valero’s feedstock slate
at historic levels. In fact, we started out 2005 with
discounts that are twice as wide as those we enjoyed
during the same time period in 2004.
And, there is nothing on the horizon today to change
these bullish fundamentals.
In 2005, most experts are projecting that the crude
oil demand increase will be second only to 2004,
which was the largest demand increase in recent
history. Obviously, this means sour crude discounts
are expected to remain wide.
And, the movement to cleaner fuels continues to
support both the sour crude discount and refined
product margins. The maximum sulfur content in
gasoline drops from 90 parts per million (ppm) to
30 ppm in 2006. And, on-road diesel drops from
500 ppm to 15 ppm. These reductions should
further reduce supply and further limit imports –
strengthening product margins. And, since many
refiners depend upon sweet crude to meet these
lower sulfur specifications, they also support wide
sour crude discounts going forward.
We will also benefit from a full year of operations
at our Aruba refinery, which is expected to add
$85 million in incremental operating income in
2005. And, the strategic projects we completed in
our refineries are expected to add $175 million in
incremental operating income.
So 2005 is shaping up to be yet another record year.
As you can clearly see, our difference has paid big
dividends for Valero and its shareholders, and all the
fundamentals indicate that it should continue to pay
off in a big way for the foreseeable future!
That is why I always say, The Best is Yet to Come!
Chairman of the Board
and Chief Executive Officer
P.S. In a year of such tremendous success, we would be
remiss if we did not acknowledge the significant role
that John Hohnholt, Sr. Vice President of Technology,
Planning and Development, played in that success.
Although we lost John to heart failure in May of 2004,
everyone at Valero will always be grateful to him for
his vision, hard work, dedication, caring nature and
technical brilliance, which helped shape Valero’s
winning strategy as well as our caring culture. John
truly epitomized the Valero caring and sharing spirit
and “can do” attitude. We are thankful for his countless
contributions to Valero and to the community –
all of which helped make Valero the great company
that it is today.
4
4
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
5
5
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CORPUS CHRISTI
T E X A S
IT PAYS TO BE DIFFERENT
VALERO IS DIFFERENT FROM ITS PEERS, AND PROUD OF IT!
In 1997, Valero had a single 170,000-barrel-per-day
(BPD) refinery in Corpus Christi, Texas. Today,
Valero has one of the most geographically diverse
refining systems in North America with 15 refineries
stretching from Canada and the U.S. Gulf Coast and
West Coast to the Caribbean.
Valero has quickly emerged as the largest independent
refiner in North America, with a total throughput
capacity of 2.5 million BPD, which represents about
12 percent of total U.S. refining capacity. Valero is also
proud to be one of the best companies to work for in
America today as well as one of the top-performing
publicly traded U.S. companies.
The record $55 billion in revenues that Valero earned
in 2004 would place it among the top 20 largest
publicly traded companies in the U.S. based on
the current Fortune 500 rankings. But even more
importantly, Valero was ranked No. 1 on Forbes
magazine’s list of the 400 Best Big Companies in
America for its 2004 earnings growth and
shareholder return!
from its ability to process less costly, heavier sour crude
feedstocks, which has enabled it to turn record sour
crude discounts into record profits.
In addition to being a leading refiner, Valero is one
of the nation’s largest retailers with 4,700 retail and
wholesale branded sites. The company also has an
equity ownership interest in one of the fastest-growing
limited partnerships, Valero L.P., which owns crude
oil and refined product pipelines, as well as refined
product terminals and feedstock storage facilities.
Valero achieved this tremendous success through its
aggressive acquisition and capital investment strategy
– acquiring refineries for pennies-on-the-dollar of
replacement cost and then investing in them to make
them significantly more profitable.
But the most important difference about Valero is its
winning corporate culture. At Valero, employees know
they are the company’s No. 1 asset and it is their
caring and sharing spirit and “can do” attitude that
sets Valero apart from its peers!
And the really big pay off comes from Valero’s unique
sour crude processing advantage. With one of the
world’s most complex refining systems, Valero benefits
Valero’s unique strategy and unique culture are the
primary reasons why being different has paid off for
Valero and its shareholders!
7
7
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
ACQUISITION STRATEGY PAYING BIG DIVIDENDS
SINCE SELLING ITS NATURAL GAS OPERATIONS TO FOCUS ON REFINING AND MARKETING
IN 1997, VALERO HAS EXPERIENCED RECORD-BREAKING GROWTH AND SUCCESS
BECAUSE OF ITS AGGRESSIVE ACQUISITION STRATEGY.
In seven years, the company has grown from a single
refinery to a 15-refinery system to become the largest
independent refiner in the United States. Valero also has
added a network of more than 4,700 retail and wholesale
branded sites and an extensive pipelines and terminals
business, called Valero L.P. As a result, Valero’s assets
have increased more than 800 percent, from less than
Mike Ciskowski, Executive Vice President & Chief
Financial Officer, and Joe Gorder, Senior Vice President
of Corporate Development, (left to right) work together to
ensure Valero’s acquisition strategy pays off in a big way.
The St. Charles and Aruba refineries have proven to be
two of the most successful acquisitions in Valero’s history.
8
8
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
ACQUISITION STRATEGY PAYING BIG DIVIDENDS
$2 billion to approximately $19 billion today, and
revenues have increased by over 1,800 percent, from less
than $3 billion to nearly $55 billion.
The company has accomplished this tremendous growth
by acquiring assets at a fraction of their replacement cost,
integrating them smoothly and in record time, and
making only acquisitions that are significantly accretive
to earnings. These acquisitions have created profitable
synergies, strengthened Valero’s geographic diversity, and
increased its capacity to process less costly heavier sour
crude oil into clean fuels.
Two of the best examples of this strategy are the recent
acquisitions of the Aruba and St. Charles refineries, which
have proven to be among the best acquisitions in Valero’s
history. Both refineries have had smooth transitions, made
major operational improvements, and contributed
significantly to earnings. Valero acquired its St. Charles
refinery for $400 million in July of 2003. In 2004 alone,
it earned $335 million in operating income.
2.5 MILLION BPD
THROUGHPUT CAPACITY
*The Basis Petroleum acquisition included three refineries in Texas and Louisiana.
Then, in March of 2004, Valero acquired its Aruba
refinery for $365 million. In the 10 months Valero
owned this refinery in 2004, it earned $290 million in
operating income. Like the Texas City coker, both of
these refineries process heavy Maya sour crude and in
2005, both refineries are expected to make more
operating income than Valero paid for them!
These acquisitions are proof positive that Valero’s
acquisition strategy is paying big dividends for the
company’s shareholders.
8
8
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
9
9
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
SUPERIOR OPERATIONS, SPECTACULAR RESULTS
VALERO’S EXPERTISE IN EXPANDING AND UPGRADING ITS REFINERIES,
CAPTURING SYNERGIES AMONG PLANTS AND IMPROVING ITS OPERATIONS, HAS PAID OFF
IN MANY WAYS FOR VALERO AND ITS SHAREHOLDERS!
In 1997, Valero’s plan was to acquire refineries at
deep discounts to replacement costs and make
strategic investments in these distressed assets that
would improve yields, reduce operating costs and
make these refineries more profitable by optimizing
their ability to process less costly sour crude oils.
Bill Klesse, Executive Vice President & Chief Operating
Officer, and Rich Marcogliese, Senior Vice President
of Refinery Operations, (left to right) oversee Valero’s
extensive and complex refining operations. With the
company’s commitment to making strategic investments,
operational improvements and refinery upgrades, it’s no
surprise that Valero is one of the most profitable refiners
in North America.
1 0
1 0
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
SUPERIOR OPERATIONS, SPECTACULAR RESULTS
This strategy is the root of Valero’s success and this
successful strategy continues today. In fact, the strategic
projects Valero implemented in its refineries in 2004
and 2005 are expected to add $175 million in
incremental operating income in 2005 alone!
And, as a result of the capital investments made since
Valero decided to focus on growing its refinery system
in 1997, Valero has added approximately 381,000
barrels per day of refining capacity – the equivalent
of a world-scale refinery!
INTELLECTUAL ASSETS
ARE THE BEST INVESTMENTS
REFINERY COMPLEXITY
COMPARISON
AS OF JULY 2004
A LEADER IN UPGRADING CAPACITY
CONVERSION CAPACITY1
As an independent refiner, Valero has other unique
assets that contribute to its operational success – people who are experts in specific areas. For example, Valero
has an expert on cat crackers, an expert on reformers,
and an expert on cokers. So, when the company
acquires a refinery – especially one that may have
had operating problems in the past – Valero sends its
best people from its various refineries to work side-
by-side with the new employees. Valero’s seasoned
workers observe, mentor, share best practices and
train the new employees – always making safety
the top priority.
Valero’s successful strategy includes a synergistic refining
system that breeds efficiency, superior operational
flexibility, outstanding refinery leadership teams and
excellent refinery-upgrading capacity. These qualities
combined with the increasing global demand for
cleaner-burning fuels and other high-value products
makes the company’s strategy a long-term winner.
1 0
1 0
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
1 1
1 1
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
TEXAS CITY
C O K E R
SWEET RETURNS ON SOUR CRUDE
THERE ARE MANY POSITIVE ATTRIBUTES THAT SET VALERO APART FROM ITS PEERS.
AND CERTAINLY, VALERO’S SOUR CRUDE PROCESSING ADVANTAGE
IS ONE OF THE MOST PROFITABLE!
When Valero entered the refining business in
1984, by commissioning the last grassroots
refinery ever to be built in the U.S., its goal was to
take advantage of the environmental movement and
process cheaper, heavier sour feedstocks into premium,
cleaner-burning fuels.
It proved to be a winning strategy. And, this advantage
has grown as Valero has grown!
Today, Valero has one of the most complex and
profitable refining systems in North America.
Meanwhile, the heavier, sour crude feedstocks,
which make up about 60 percent of Valero’s
feedstock slate, have experienced record discounts.
These discounts are largely the result of strong
worldwide crude demand, spurred by a strong
global economy. And, the incremental barrel being
produced to meet this rising demand is typically
heavier, sour crude oil, which makes it more surplus.
At the same time, many refiners are relying on
sweeter crude oil to meet increasingly lower sulfur
specifications in fuel, which also helps widen the
sweet/sour crude differential.
And, Valero continues to capitalize on its success
by investing in projects that optimize its sour
crude strategy. For example, Valero’s $350 million
investment in a 45,000 barrel per day coker at its
Texas City refinery, increased the plant’s ability to
process heavy, sour Maya crude. The original
economics for the investment were based upon $6
to $7 Maya discounts to WTI, which are now more
than $17! As a result, the coker generated nearly
$200 million in operating income in 2004 alone!
RECORD SOUR CRUDE DISCOUNTS
$8.06
$3.74
* 50/50 ARAB LIGHT/MEDIUM **AS OF MARCH 22, 2005
Valero’s recently acquired refineries in St. Charles
and Aruba also process Maya crude, and the record
discounts helped these assets contribute $625 million
to operating income in 2004.
The complexity of its refineries is a key difference
for Valero – allowing it to turn historic sour crude
discounts into sweet returns for Valero’s shareholders!
Bob Beadle, Senior Vice President of Crude & Feedstock
Supply & Trading, works to ensure that Valero’s refineries
are running the most economical crude oils and feedstocks.
The company’s strategy of investing in its refineries to enable
them to process sour crude has really paid off in 2004 as
the company benefited from record sour crude discounts.
1 3
1 3
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
PUMPING UP RETAIL/WHOLESALE PROFITS
ORLANDO
F L O R I D A
PUMPING UP RETAIL/WHOLESALE PROFITS
SINCE GETTING INTO THE RETAIL BUSINESS IN A BIG WAY WITH THE
ULTRAMAR DIAMOND SHAMROCK ACQUISITION IN 2001, VALERO HAS IMPLEMENTED A
STRATEGY THAT HAS PUMPED UP ITS RETAIL AND WHOLESALE PROFITS IN AN EVEN BIGGER WAY.
In its retail marketing division, Valero’s strategy has
been to invest in its top-performing stores and close
or sell its marginal sites. As a result of its investments,
Valero has realized an 8 percent increase in gross profit
on merchandise sales per U.S. retail store over 2003.
While growth has not been the main focus of its retail
strategy, Valero did build nearly a dozen new-to-
industry sites in growing markets in 2004.
To expand and improve upon its branded wholesale
network, Valero launched an aggressive marketing
effort to sign up new distributor sites and re-image
existing locations. In 2004 alone, Valero added 520
branded wholesale sites to its network and re-imaged
860 existing locations. While the company’s network
has expanded from coast to coast, the most significant
growth has been along the East Coast where Valero
has forged new territory from Maine to Miami.
And, the company isn’t stopping there. It plans to
build on this success by growing the current network
of 2,700 wholesale sites to nearly 5,000 by 2007.
Not only does this strategy pay off because the
company makes a significant uplift by selling this
GASOLINE & DIESEL
DISTRIBUTION CHANNELS
product into wholesale channels, it also pays because
it takes this product out of the spot market enabling
the company to optimize margins.
Another area of
growth has been
Valero’s asphalt
marketing business.
The company sold
more than 56,000
barrels per day of
asphalt products in
2004, maintaining
its position as the
nation’s second largest producer and marketer of
asphalt and achieving record earnings.
Because of its winning strategy, Valero is not only
one of the nation’s largest retailers, it is now one of
the most profitable.
Gary Arthur, Senior Vice President of Retail & Specialty
Products Marketing, and Gene Edwards, Senior Vice
President of Product Supply & Trading and Wholesale
Marketing, (left to right) oversee Valero’s successful retail
and wholesale marketing programs. The retail division
invested in top-performing stores, which resulted in greater
per-store profits and a stronger network, and the wholesale
group continued to expand from coast to coast, adding
520 branded outlets and re-imaging 860 existing sites.
1 5
1 5
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
ARDMORE
OK L A HOM A
SAFETY PAYS
VALERO’S LEADERSHIP IN SAFETY AND ENVIRONMENTAL EXCELLENCE HAS PAID OFF AS IT HAS
MADE THE COMPANY A BETTER NEIGHBOR AND A BETTER BUSINESS.
In addition to being a safety leader, Valero is a leader
in environmental excellence. The company has
invested $1.2 billion in environmental projects over
the last few years and plans to invest an additional
$1.9 billion over the next three years.
These projects include everything from installing
new, state-of-the-art scrubbers designed to remove
sulfur dioxide and particulate emissions at nine of
its refineries, to building additional sulfur recovery
units at five plants to remove sulfur from refined
1.5
products so that it’s not emitted to the environment.
Also, by implementing the latest control technology
1
to improve combustion efficiency and improving
operational reliability, Valero is on target to reduce
0.5
greenhouse gases by approximately 1.8 million tons
per year by 2008.
1.5
.99
0
VALERO INDUSTRY
AVERAGE
2 0 0 4 TOTA L R E C O R D A B L E
I N C I D E N T R AT E
VALERO IS 50% BETTER THAN THE
VALERO IS 34% BETTER THAN THE
INDUSTRY AVERAGE
U.S. INDUSTRY AVERAGE
THE MOST RECENT INDUSTRY AVERAGE IS 1.5 AS RECORDED
THE MOST RECENT INDUSTRY AVERAGE
BY THE NATIONAL BUREAU OF LABOR STATISTICS
IS 1.5 AS RECORDED BY THE
NATIONAL BUREAU OF LABOR STATISTICS
1.5
1
0.5
0
.99
1.5
VALERO INDUSTRY
AVERAGE
2 0 0 4 TOTA L R E C O R D A B L E
I N C I D E N T R AT E
VALERO IS 50% BETTER THAN THE
INDUSTRY AVERAGE
THE MOST RECENT INDUSTRY AVERAGE IS 1.5 AS RECORDED
BY THE NATIONAL BUREAU OF LABOR STATISTICS
In 2004, Valero improved its safety performance
in every area of its business and outperformed the
industry as well. In fact, its U.S. refining system’s
total recordable incident rate of just 0.99 is
34 percent better than the industry average.
Driving this outstanding safety performance is Valero’s
strong commitment to OSHA’s Voluntary Protection
Program (VPP). In 2004, Valero’s
Wilmington and Ardmore refineries
joined the prestigious list of VPP Star
Sites, bringing the company’s total to
seven VPP Star Sites. Only 18 of the
149 U.S. refineries have achieved
this designation.
As a result of the company’s outstanding
safety performance, the National
Petrochemical & Refiners Association
(NPRA) awarded 20 safety awards to
eight of Valero’s refineries, and gave its
highest honor – the 2004 Distinguished
Safety Award – to the company’s
Wilmington refinery.
1 6
1 6
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
1 7
1 7
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
UNIQUE CULTURE—THE BIG PAY OFF
AT VALERO, EMPLOYEES ARE THE NO. 1 ASSET.
Valero’s corporate culture can be summed up in
one word: pride. The company’s employees
have pride in the company, their jobs, their fellow
employees and their communities.
Employee pride is such an important part of the
Valero culture that the company was honored with
President Greg King and Mary Rose Brown, Senior Vice
President of Corporate Communications, share the belief
that if you take care of the employees, they will take care
of the shareholders. So it is no surprise that Valero ranked
No. 1 for earnings growth and shareholder return by
Forbes, as well as a top employer by Fortune Magazine.
1 8
1 8
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
UNIQUE CULTURE—THE BIG PAY OFF
the 2004 “Pride Award” from the Great Place to
Work Institute. This national award is given to
the company on Fortune Magazine’s list of the
“100 Best Companies to Work For” with the
most employee pride.
On the heels of receiving this recognition, Valero
was once again the only energy company ranked
as one of Fortune’s “100 Best Companies to
Work For” in 2005. In fact, the company was
ranked No. 3 among the largest employers on
the list and No. 23 on the overall list.
In addition to being honored as a top employer,
Valero was recognized as one of the top performers
in its industry and in corporate America.
Valero was ranked No. 1 on Forbes’ list of the
“Platinum 400–Best Big Companies” for 2004
earnings growth and shareholder return; was listed
as one of the “Best-Managed Companies in
America” in Forbes’ Jan. 10, 2005 edition; and
was selected as the “2004 Oil Company of the
Year” from companies around the world as part
of the Platts Global Energy Awards program.
All of this success is the result of Valero’s special
caring and sharing spirit. Employees are the No. 1
asset at Valero so they do more for their company
and their communities – proof that if you take care
of the employees, they’ll take care of the
shareholders.
And without a doubt, Valero’s five-year, total
shareholder return of 380 percent versus the S&P’s
11 percent loss is the biggest testament to the success
of Valero’s unique culture.
Executive Vice President & Chief Administrative Officer,
Keith Booke, accepts the United Way’s Spirit of America
award. Valero is only the second company to receive this
prestigious award twice.
1 8
1 8
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
1 9
1 9
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
UNIQUE CULTURE—THE BIG PAY OFF
VALERO’S COMMITMENT TO COMMUNITY SERVICE HAS TOUCHED TENS OF THOUSANDS OF
LIVES, HELPED HUNDREDS OF NONPROFIT GROUPS, AND POSITIVELY IMPACTED COUNTLESS
COMMUNITIES FROM CANADA TO CALIFORNIA TO THE CARIBBEAN.
In addition to these charitable contributions,
Valero employees donated 200,000 volunteer
hours to worthy projects in their communities.
The company’s volunteers did everything from
hosting Christmas dinners for disadvantaged
children and mentoring at-risk youth to
delivering meals to the elderly.
And, these are just a few examples of Valero’s
commitment to community service. Not only
has this commitment provided great returns for
the company’s communities and employees, it
has paid off for the shareholders as it has made
Valero the success that it is today.
In 2004, 95 percent of Valero’s employees
contributed to the United Way, donating
a record-breaking $9 million when combined
with the company match. As a result of its
longstanding commitment to charity, Valero
became only the second company to receive
the United Way’s highest national honor, the
“Spirit of America” award, twice.
What’s more, Valero led the way in raising an
unprecedented $4 million for charity through the
2004 Valero Texas Open – making it one of the
top five tournaments on the PGA TOUR in terms
of charitable contributions. Valero’s retail stores also
raised a record-breaking $1.2 million for the
Muscular Dystrophy Association and $857,000
for Children’s Miracle Network.
2 0
2 0
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The financial information presented on pages 23-27 of this summary annual report should be read in conjunction with
Valero Energy Corporation’s complete Consolidated Financial Statements (including the notes) and Management’s
Discussion and Analysis of Financial Condition and Results of Operations. This and other information about the
Company is contained in Valero’s Proxy Statement for the 2005 Annual Meeting of Stockholders and Valero’s Form 10-K
for the year ended December 31, 2004. These documents are provided to all shareholders of record as of March 1, 2005.
In addition, anyone may request, without charge, a Form 10-K by writing or calling Valero’s Investor Relations Department.
Address and contact information can be found on the inside back cover of this report. Valero’s 2004 Annual Report on
Form 10-K and the Proxy Statement also may be accessed via the Company’s web site at: www.valero.com.
2 0
2 0
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
2 1
2 1
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
The Board of Directors and Stockholders of Valero Energy Corporation and Subsidiaries:
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated balance sheet of Valero Energy Corporation and subsidiaries (the Company) as of December 31, 2004,
and the related consolidated statements of income, stockholders’
equity, cash flows and comprehensive income for the year then
ended appearing in the Company’s 2004 Annual Report on
Form 10-K (not presented herein); and in our report dated
March 11, 2005, also appearing in that Annual Report, we
expressed an unqualified opinion on those consolidated
financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2004,
and the related condensed consolidated statements of income
and cash flows for the year then ended are fairly stated, in all
material respects, in relation to the consolidated financial
statements from which it has been derived.
KPMG LLP
San Antonio, Texas
March 11, 2005
To the Board of Directors and Stockholders
of Valero Energy Corporation
We have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the
consolidated balance sheet of Valero Energy Corporation and
subsidiaries (the Company) as of December 31, 2003, and the
related consolidated statements of income, stockholders’ equity,
cash flows and comprehensive income for each of the two years
in the period then ended, appearing in the Company’s 2004
Annual Report on Form 10-K (not presented herein). In our
report dated March 11, 2004, also appearing in that Annual
Report, we expressed an unqualified opinion on those
consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2003,
and the related condensed consolidated statements of income and
cash flows for each of the two years in the period then ended are
fairly stated, in all material respects, in relation to the consolidated
financial statements from which it has been derived.
Ernst & Young LLP
San Antonio, Texas
March 11, 2004
2 2
2 2
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
2004
2003
(millions of dollars)
ASSETS
Current Assets
$
5,264
$
3,817
Property, Plant and Equipment, Net
10,317
Goodwill
Intangible Assets, Deferred Charges
and Other Assets, Net
2,401
1,410
8,195
2,402
1,250
TOTAL ASSETS
$ 19,392
$
15,664
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
$
4,534
$
3,064
Long-Term Debt and Capital Lease Obligations,
Less Current Portions
Deferred Income Taxes
Other Long-Term Liabilities
Stockholders’ Equity
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
3,901
2,011
1,148
7,798
4,245
1,605
1,015
5,735
$ 19,392
$
15,664
2 2
2 2
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
2 3
2 3
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31,
2004
2003
2002
OPERATING REVENUES
$ 54,619
$
37,969
$
29,048
(millions of dollars, except per share amounts)
COSTS AND EXPENSES:
Cost of Sales
Refining Operating Expenses
Retail Selling Expenses
General and Administrative Expenses
Depreciation and Amortization Expense
TOTAL COSTS AND EXPENSES
OPERATING INCOME
EQUITY IN EARNINGS OF VALERO L.P.
OTHER INCOME (EXPENSE), NET
INTEREST AND DEBT EXPENSE, NET
MINORITY INTEREST IN NET INCOME OF
VALERO L.P.
DISTRIBUTIONS ON PREFERRED SECURITIES
OF SUBSIDIARY TRUSTS
INCOME BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
NET INCOME
PREFERRED STOCK DIVIDENDS
NET INCOME APPLICABLE TO
COMMON STOCK
EARNINGS PER COMMON SHARE (a)
Weighted Average Common Shares Outstanding
(in millions) (a)
EARNINGS PER COMMON SHARE —
ASSUMING DILUTION (a)
Weighted Average Common Equivalent Shares
Outstanding (in millions) (a)
47,797
2,141
705
379
618
51,640
2,979
39
( 48 )
( 260 )
—
—
2,710
906
1,804
13
33,587
1,656
694
299
511
36,747
1,222
30
15
( 261 )
( 2 )
( 17 )
987
365
622
5
25,863
1,332
675
258
449
28,577
471
—
9
(286 )
(14 )
(30 )
150
58
92
—
$
$
1,791
7.02
$
$
617
2.69
$
$
92
0.43
255.1
229.7
211.6
$
6.53
$
2.55
$
0.42
DIVIDENDS PER COMMON SHARE (a)
$
0.29
$
276.1
244.0
0.21
220.2
$
0.20
(a)
Share and per share amounts for 2003 and 2002 have been adjusted to reflect the effect of a two-for-one stock split,
which was effected in the form of a stock dividend distributed on October 7, 2004.
2 4
2 4
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
2004
2003
2002
(millions of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
Depreciation and Amortization Expense
Deferred Income Tax Expense
Changes in Current Assets,
Current Liabilities & Other, Net
Net Cash Provided by Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures and Deferred Turnaround
and Catalyst Costs
Buyout of Assets Under Structured Lease Arrangements
Proceeds from Sale of Assets to Valero L.P.
Proceeds from Sale of Tesoro Notes
Proceeds from Disposition of Assets Held for Sale
Payments Related to the Golden Eagle Business
Acquisitions and Investments
Contingent Payments in Connection with Acquisitions
Other, Net
Net Cash Provided by (Used in) Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash Payment to UDS Shareholders
Debt and Capital Lease Borrowings (Repayments), Net
Redemption of Preferred Securities of Subsidiary Trust
Proceeds from Common Stock Offerings, Net
Proceeds from Common Unit Issuance by Valero L.P., Net
Cash Distributions to Minority Interest in Valero L.P.
Preferred and Common Stock Dividends
Issuance (Repurchase) of Stock, Net
Net Cash Provided by (Used in) Financing Activities
VALERO L.P.’S CASH BALANCE AS OF THE
DATE THAT VALERO CEASED CONSOLIDATION
EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH
NET INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS
CASH AND TEMPORARY CASH INVESTMENTS
AT BEGINNING OF YEAR
CASH AND TEMPORARY CASH INVESTMENTS
AT END OF YEAR
$
1,804
$
622
$
92
618
345
190
2,957
(1,596 )
( 567 )
—
—
—
—
(577 )
( 53 )
108
(2,685 )
—
63
—
406
—
—
(79 )
(183 )
207
—
15
494
369
511
287
333
1,753
(1,112 )
( 275 )
380
90
—
—
(451 )
( 51 )
88
(1,331 )
—
(357 )
(200 )
250
200
(4 )
(51 )
26
(136 )
( 336 )
40
(10 )
379
449
2
( 271 )
272
( 780 )
—
—
—
1,226
(183 )
—
(24 )
10
249
(2,055 )
1,642
—
—
—
(14 )
(42 )
57
(412 )
—
1
110
269
$
863
$
369
$
379
2 4
2 4
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
2 5
2 5
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CONDENSED CONSOLIDATED 5-YR FINANCIAL & STATISTICAL REVIEW
OPERATING RESULTS FOR YEAR
ENDED DECEMBER 31:
Operating Revenues
Operating Income
Net Income
Earnings per Common Share (f )
Earnings per Common Share—
Assuming Dilution (f )
(millions of dollars, except per share and per barrel amounts)
2004(a)
2003(b)
2002(c)
2001(d)
2000(e)
$ 54,619
$ 37,969
$ 29,048
$ 14,988
$ 14,671
$ 2,979
$ 1,222
$ 1,804
$
7.02
$
$
622
2.69
$
$
$
471
92
0.43
$
$
$
1,001
564
4.64
$
$
$
611
339
2.90
$
6.53
$
2.55
$
0.42
$
4.42
$
2.80
FINANCIAL POSITION AS OF DECEMBER 31:
Current Assets
$ 5,264
$ 3,817
$
3,536
$
4,136
$ 1,285
Property, Plant and Equipment, Net
Goodwill
Intangible Assets, Deferred Charges
and Other Assets, Net
Total Assets
Current Liabilities
Long-Term Debt and Capital Lease Obligations,
Less Current Portions
Deferred Income Taxes
Other Long-Term Liabilities
Company-Obligated Preferred
Securities of Subsidiary Trusts
Minority Interest in Valero L.P.
10,317
2,401
8,195
2,402
7,412
2,580
7,217
2,211
2,677
—
1,410
1,250
937
836
346
$ 19,392
$ 15,664
$ 14,465
$ 14,400
$ 4,308
$ 4,534
$ 3,064
$
3,006
$
4,753
$ 1,039
3,901
2,011
1,148
—
—
4,245
1,605
1,015
—
—
4,494
1,241
927
373
116
2,805
1,388
763
373
115
1,042
407
120
173
—
Stockholders’ Equity
7,798
5,735
4,308
4,203
1,527
Total Liabilities and Stockholders’ Equity
$ 19,392
$ 15,664
$ 14,465
$ 14,400
$ 4,308
2 6
2 6
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
CONDENSED CONSOLIDATED 5-YR FINANCIAL & STATISTICAL REVIEW
YEAR ENDED DECEMBER 31,
2004(a)
2003(b)
2002(c)
2001(d)
2000(e)
COMMON STOCK DATA:
Dividends per Common Share (f )
Number of Shares Outstanding,
End of Year (in millions) (f )
Number of Registered Shareholders,
End of Year
Market Price (f ):
High
Low
CAPITALIZATION RATIOS (NET OF CASH): (g)
Long-Term Debt and Capital Lease Obligations,
including Current Portions, and Short-Term Debt
Stockholders’ Equity and Other
OTHER DATA:
Capital Expenditures and Deferred Turnaround
and Catalyst Costs
$
0.29
$
0.21
$
0.20
$
0.17
$
0.16
255.5
240.5
214.3
208.4
121.7
6,554
6,564
7,174
7,265
5,207
$ 47.82
$ 22.85
$ 23.54
$ 16.10
$
$
24.99
11.58
$
$
26.30
15.75
$ 19.32
9.25
$
31 %
69 %
40 %
60 %
50 %
50 %
53 %
47 %
40 %
60 %
$ 1,596
$ 1,112
$
780
$
536
$
302
Number of Employees, End of Year
19,879
19,741
19,878
22,355
3,129
OPERATING STATISTICS:
Throughput Volumes (mbbls per day)
Throughput Margin per Barrel
Operating Costs per Barrel:
Refining Operating Expenses
Depreciation and Amortization
Total Operating Costs per Barrel
2,162
7.44
2.70
0.66
3.36
$
$
$
1,835
5.13
2.47
0.63
3.10
$
$
$
1,595
4.02
2.29
0.66
2.95
$
$
$
1,001
6.12
2.31
0.63
2.94
$
$
$
857
5.08
2.18
0.53
2.71
$
$
$
(a)
Includes the operations related to the Aruba Acquisition beginning March 5, 2004.
(b)
Includes the operations of the St. Charles Refinery beginning July 1, 2003.
(c)
Includes the operations of UDS beginning January 1, 2002.
(d)
(e)
(f )
(g)
Includes the operations related to the acquisitions from Huntway Refining Company and El Paso Corporation beginning
June 1, 2001. The results of operations, operating statistics and cash flow information exclude the operations of UDS, while
the financial position, common stock data, capitalization ratios and employees include the effect of UDS, which was acquired
by Valero on December 31, 2001.
Includes the operations related to the Benicia Refinery and the related distribution assets beginning May 16, 2000 and the
operations of the related California service stations beginning June 16, 2000.
Share and per share amounts for 2003, 2002, 2001 and 2000 have been adjusted to reflect the effect of a two-for-one stock split,
which was effected in the form of a stock dividend distributed on October 7, 2004.
In determining the 2002, 2001 and 2000 ratios, 20% of the outstanding balance of Valero’s company-obligated preferred
securities of subsidiary trust (PEPS Units) issued in 2000 was deemed to be debt. In addition, for the 2002 and 2001 ratios,
50% of the $200 million company-obligated preferred securities of subsidiary trust assumed in the UDS Acquisition was deemed
to be debt, and in 2001 the payable to UDS shareholders was included as debt.
2 6
2 6
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
2 7
2 7
Va l e r o E n e r g y C o r p o r a t i o n
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
s u m m a r y a n n u a l r e p o r t
BOARD OF DIRECTORS
Bob Marbut is Chairman of the Board and
Chief Executive Officer of SecTecGLOBAL,
Inc. and Argyle Communications, Inc. He also
serves as a director of Tupperware Corporation
and Hearst-Argyle Television, Inc., and is
Executive Chairman of Electronics Line 3000
Ltd. Previously, Mr. Marbut served as Chief
Executive Officer of Hearst-Argyle Television,
Inc., Argyle Television, Inc., Argyle Television
Holding, Inc. and Harte-Hanks
Communications, Inc.
Ruben Escobedo has had his own certified
public accounting firm, Ruben Escobedo &
Company, CPAs, in San Antonio since its
formation in 1977. He also serves as a
director of Cullen/Frost Bankers, Inc.
Senator Don Nickles served in the
Oklahoma State Senate for two years, and
then went on to serve in the U.S. Senate for
24 years. As a U.S. Senator, he held many
leadership positions and served on several key
committees, including the Budget and the
Energy and Natural Resources Committees.
Upon his retirement, he formed The Nickles
Group, a Washington-based consulting and
business venture firm. Senator Nickles also
serves on the Board of Chesapeake
Energy Corporation.
Bill Bradford is the retired Chairman of the
Board of Halliburton Company. Prior to the
Halliburton-Dresser merger, he was Chairman
of the Board and Chief Executive Officer of
Dresser Industries, Inc., and he held various
positions in production and management during
his tenure there. Mr. Bradford currently serves
as a director of Kerr-McGee Corporation.
Pictured Left to Right from Bottom
Dr. Susan Kaufman Purcell is the Director of the Center
for Hemispheric Policy at the University of Miami. Additionally,
she serves as a director of The Brazil Fund, Inc., Scudder Global
High Income Fund, Inc., Scudder New Asia Fund, Inc. and
Scudder Global Commodities Stock Fund, Inc. Previously, she
served as Vice President of the Americas Society and as Vice
President of the Council of the Americas.
Bill Greehey is Chairman of the Board and Chief Executive
Officer of Valero Energy Corporation. He also serves as Chairman
of the Board of the managing partner of Valero L.P., a publicly
traded limited partnership in which Valero Energy Corporation
has an equity ownership interest.
Dr. Ron Calgaard serves as Chairman
of the Board and Chief Executive Officer of
Austin, Calvert & Flavin, Inc. in San Antonio
and as a director of The Trust Company. Previously, he held
the position of President of Trinity University in San Antonio
from 1979 until his retirement in 1999, at which time he was
appointed President Emeritus of the University.
Jerry Choate is retired from the Allstate Corporation, where
he served as Chairman of the Board and Chief Executive Officer
from 1995 through the end of 1998. Currently, Mr. Choate serves
as a director of Amgen, Inc. and Van Kampen Mutual Funds.
Glenn Biggs is President of Biggs & Co., which is engaged in
developmental projects and financial planning, and he serves as
Chairman of the Board of Hester Asset Management Corp. and
Southwestern Bancorp. Previously, he served as Chairman of the
Board of City Public Service, San Antonio’s gas and electricity
utility company.
2 8
Va l e r o E n e r g y C o r p o r a t i o n
s u m m a r y a n n u a l r e p o r t
S H A R E H O L D E R I N F O R M A T I O N
Valero Corporate Headquarters
One Valero Way
San Antonio, TX 78249-1616
(210) 345-2000
Web Site
www.valero.com
Investor Inquiries
For investor inquiries, please contact:
Investor Relations Department
P.O. Box 696000
San Antonio, TX 78269-6000
(800) 531-7911 or (210) 345-2198
(210) 345-2103 (fax)
investorrelations@valero.com
Media Inquiries
For media inquiries, please contact:
Corporate Communications Department
P.O. Box 696000
San Antonio, TX 78269-6000
(800) 531-7911 or (210) 345-2314
(210) 345-2327 (fax)
corporatecommunications@valero.com
Annual Meeting
Valero’s annual meeting of stockholders will be held at 10:00 a.m.,
Thursday, April 28, 2005, at Valero’s corporate headquarters located
at One Valero Way (near the southwest corner of the intersection of
I.H. 10 and Loop 1604 West) in San Antonio, Texas.
Valero Energy Corporation Common Stock
Valero’s common stock is listed for trading on the New York Stock
Exchange under the ticker symbol “VLO.”
Transfer Agent and Registrar
Computershare Investor Services has been appointed transfer agent,
registrar and dividend disbursing agent for Valero’s common stock.
Inquiries with respect to stock accounts and dividends and all
requests to transfer shares should be addressed to:
Computershare Investor Services
P.O. Box A3504
Chicago, IL 60690-3504
(888) 470-2938
Dividend Withholding
Under federal income tax law, you are subject to certain penalties,
as well as withholding with respect to your dividend payments,
if you have not provided Valero with your correct social security
number or other taxpayer identification number. For this reason,
any security holder who has not provided a taxpayer identification
number should obtain a Form W-9 (Payer’s Request for Taxpayer
Identification Number). To request a Form W-9, please contact
Valero’s transfer agent and registrar at the address shown above.
F O R WA R D - L O O K I N G S T A T E M E N T S
Much of the information provided in this report includes or is based upon estimates, predictions, projections and other
“forward-looking statements” (as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) that involve various risks and uncertainties. While these forward-looking statements, and any
assumptions upon which they are based, are made in good faith and reflect Valero’s current judgment regarding the
direction of its business, actual results will almost always vary, sometimes materially, from any estimates, predictions,
projections, assumptions, or other future performance suggested herein. Certain risks and uncertainties that may affect
Valero are detailed from time to time in its SEC reports, including Valero’s most recent Annual Report on Form 10-K.
The financial and other information provided in this summary annual report should be read in conjunction with Valero
Energy Corporation’s complete Consolidated Financial Statements (including the notes) and Management’s Discussion
and Analysis of Financial Condition and Results of Operations. This and other information about Valero is contained
in Valero’s Notice of the 2005 Annual Meeting of Stockholders Proxy Statement and Form 10-K for the year ended
December 31, 2004. This document is provided to all stockholders of record as of March 1, 2005. In addition, persons
may request, without charge, a Form 10-K by writing or calling Valero’s Investor Relations Department. Valero’s 2004
Annual Report on Form 10-K and the Proxy Statement also may be accessed via our web site at: www.valero.com.
Printed in the U.S.A.
V A L E R O E N E R G Y C O R P O R A T I O N
P. O . B o x 6 9 6 0 0 0
S a n A n t o n i o , Te x a s 7 8 2 6 9 - 6 0 0 0
w w w. v a l e r o . c o m