Valero Energy Corporation · NYSE:VLO
Valero Energy — Shareholder Meeting (April 2007)
16 slides from Valero Energy's shareholder meeting presentation, Apr 26, 2007
Slide 1: Valero Energy Corporation 2007 Annual Meeting of Stockholders
Je WLERO ENERGY CORPORATION | 2007 ANNUAL MEETING OF STOCKHOLDERS
Slide 2: 2006 - Best Year in Valero's History
2006 - Best Year in Valero's History Terrific Financial Results $5.5 billion net income, $92 billion in revenues #16 on Fortune 500 list Record $8.64 EPS Largest Capital Investment Program $3.75 billion invested in our company Purchased 35 million shares of stock (5% of outstanding shares) Increased
Slide 3: Valero's Community Commitment Continues
Valero's Community Commitment Continues Record United Way - $13 million Record Valero Texas Open - $7 million No. 1 on PGA Tour Employees - 272,000 volunteer hours Recently topped the Fortune 500 List as... A BIG Thank YOU to all our Employees! 5 "No. 1 Best Big Company to Work For"
Slide 4: It Is Always Safety First
It Is Always Safety First Valero is committed to safe operations and has improved occupational safety statistics nearly every year Refining Employee Injury Rate 7
Slide 5: Committed to Process Safety Management
Pre-certification Re-certified Committed to Process Safety Management New Process Safety Management (PSM) initiative underway Focused on best-in-class PSM in all our facilities Created VP position in operations Continued commitment to OSHA's VPP program VPP is a recognized OSHA program for excellenc
Slide 6: Strong Environmental Commitment
Strong Environmental Commitment Refining Industry has spent billions to comply with environmental regulations This decade Tier II gasoline $8 billion Ultra-low sulfur diesel $9 billion nearly $20 billion MTBE Phase-out $2 billion In 1990's over $25 billion spent on federal RFG program and other init
Slide 7: Climate Change Initiatives
Climate Change Initiatives Valero Goals Improve efficiency, lower CO2 emissions on existing equipment Improve our energy intensity index to 1st quartile in our industry New Vice President of Alternative Fuels and Energy Low-carbon fuels, energy efficiency and power Internal Greenhouse Gas Committee;
Slide 8: Strategic Focus Shifting
Strategic Focus Shifting Growth through acquisition strategy was clearly the right call at the right time Throughput Capacity '3-2-1 Maya Diff 1997 0.53 3.321046328 5.603151767 1998 0.735 2.472635628 5.628834473 1999 0.785 1.806875275 4.791944615 2000 1 4.339628166 7.492355576 2001 1.9 4.33108198 8.
Slide 9: Valero's Strategy has Shifted
Valero's Strategy has Shifted Market has changed, asset values have risen relative to our valuation Now time to shift focus to: Bottom line growth (EPS, Cash Flow) Focus on improving operations, energy efficiency Execute high-return strategic projects Reduce number of shares outstanding Maintain str
Slide 10: Initiatives to Improve Returns
Initiatives to Improve Returns Evaluating all capital projects in light of higher costs and changing markets $1 billion in operating improvements targeted over next 5 years ($1 per share) Restructuring retail business More accountability and higher performance expectations Portfolio optimization Som
Slide 11: 2007 Major Projects Coming On-Stream
2007 Major Projects Coming On-Stream Refinery Project Start Up Total Cost1 ($mm) Annual EBITDA ($mm) IRR1 St. Charles Mild Hydrocracker 2Q $424 $125 31% Port Arthur Crude Expansion 1Q 157 90 40% Bill Greehey Iso-Octene unit 2Q 77 30 26% Benicia ULSD Hydrotreater 2Q 105 45 28% Wilmington Alky Expansi
Slide 12: Significant Organic Growth
Significant Organic Growth 2002 2003 2004 2005 2006 2007 Stay in Business 480 855 1220 2044 2836 2320 Strategic 299 257 376 530 920 1180 Capital Expenditures
Slide 13: 2007 - Off to a Great Start
2007 - Off to a Great Start 5-Yr Avg 2007 2006 High Low 1/1/2007 5.15 4.69 6.33 7.12 2.87 2/1/2007 4.82 8.7 3.11 8.42 1.98 3/1/2007 8.88 17.21 14.55 14.55 5.64 4/1/2007 11.9 26.73 23.6 23.6 5.77 5/1/2007 10.26 16.97 16.97 4.1 6/1/2007 9.56 19.4 19.4 4.09 7/1/2007 10.63 22.14 22.14 4.83 8/1/2007 9.25
Slide 14: Long Term - Refining is Bright
Long Term - Refining is Bright World demand growth continues 2007 estimates 1.7 million BPD increase (2% growth) Global business - Transportation equalizes regions Refinery capacity growth has been slower than analysts expected Material costs higher and lead times longer Construction/turnaround labo
Slide 15: Valero and its Employees - World-Class Competitors
Valero and its Employees - World-Class Competitors in a Rapidly Changing World We will achieve: Meaningful bottom-line growth Improved operating and financial performance Valero is the best value in refining We will continue to look for acquisitions - but selectively We know you, our shareholders, o
Slide 16: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation 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 193