Valero Energy Corporation · NYSE:VLO
Valero Energy — 2005 Simmons & Company Energy Conference
16 slides from Valero Energy's conference presentation, Mar 3, 2005
Slide 1: 2005 Simmons & Company Energy Conference
———— is ‘orbes platts ; VPP: ‘Top Compeaiy on 2004 2004 Se i ee in erica: Comy \ited Way Spirit Star Site IS tu 2004 othelea! — Gfamen ad = Reinet, Cotman Wek ioe
Slide 2: 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 1934
Slide 3: 2004 — Record Year of Achievements for Valero
2004 — Record Year of Achievements for Valero = Record recognition © #1 on Forbes’ 400 Best Big Companies ¢ Platt’s 2004 Oil Company of the Year 7 OSHA VPP Star Sites #23 on Fortune’s 100 Best Companies to Work For ° ¢ ® United Way’s Spirit of America Award = Record margins, record sour crude discou
Slide 4: Tightening Supply/Demand Fundamentals
Tightening Supply/Demand Fundamentals Global Demand Growth Compared To Refinery Capacity Expansion Mero 4,000 Demand 3,000 Exceeds Capacity 700 4,000 o coun | i Exceeds 2,000 Demand 3,000 "91 to "94. "95 to "99 "00 to 04. "05 to ‘09 Snot: uh & GHEE, PRA, ESA, Cempany toma = 2000 to 2004, demand grow
Slide 5: Regulatory Changes Impacting Supply
Regulatory Changes Impacting Supply Maximum Gasoline Maximum Diesel Sulfur Content (PPM) Sulfur Content (PPM) ae 500500 500 10 459 20 so al so 1515 pp Pao 03 "04°05 "06 oon 03 “04 “05 "08 exons 03 "04°05 "06 on 03 “04 “05 "08 exons us. Europe us. Europe = Major changes in sulfur specs © 2005 in Euro
Slide 6: Continuation of Outstanding Sour Crude Discounts
Continuation of Outstanding Sour Crude Discounts Sour Crude Discounts to WTI 18.00 vn orward Curve 16.00 — [ \ Sea 14.00 C1 12.00 — et 10.00 8.00 4 6.00 —____ \e+ Mars 4.00 4 *. = 2.00 0.00 1003 2003 3603 4003 1604 2004 3604 4Q04 1005 2005 3005 4605 Ta Fava ea ot Febery 21, 2S = Big move occurred in
Slide 7: Sour Crude Fundamentals Never Looked Better
Sour Crude Fundamentals Never Looked Better Estimated Quality of Reserves (2005) High Acid Lightedtum Sour 8% Estimated World Crude Demand by Quality Type (2005) High Acid (Sweet) 3% LightMedium Sour 53% ‘SoreeTON ar own Company maT, = Fundamental issue ... disconnect between global crude reserves a
Slide 8: Valero ... Outstanding Sour Conversion Capacity
Valero ... Outstanding Sour Conversion Capacity 41,900 Conversion Capacity! cat cracking Hydrocracking 1,400 Dicoking XOM VLO COP RDS BP CVX PCO MRO SUN TSO Not: Lotneludks aruba and Gude Seuss: Gar Joumal, Company baer ‘:converdon Capt = sum of Cohn, Hyerorachng and Cat achng Cspasity = Valero is a
Slide 9: Higher Highs, Higher Lows - Products & Feedstocks
Higher Highs, Higher Lows - Products & Feedstocks $ per Barrel Rolling 5 - Year Average $6.00 Product Margins & Sour Crude Discounts $5.00 $4.00 $3.00 $2.00 + "98-'02 *99-'03 "00-'04. *01-"05 O usec 5-3-2 ProductMargin i 50/50 Arab LightMedium Sour Crude Discount Fe VeRO ENERGY CORPORATION °
Slide 10: Track Record of Successful Investments
Track Record of Successful Investments = Texas City Coker ® $350 million investment © $200 million income contribution in 2004 © 2 year pay-back on investment = St. Charles ® Acquired in July 2003 for $400 million ® $335 million income contribution in 2004 © Capital investments & operational improve
Slide 11: Valero Continues to Invest for the Future
Valero Continues to Invest for the Future {Dollars in Millions) Projected Capital Expenditure $2,000 $2,000 $2,000 $1,600 $1,500 Im Strategic Ba Tierll $1,000) 95 Bll Turnarounds $500 Bil Sustaining/other| 4 Hl Regulatory $0 2004 2005 2007 = Focused on Tier Il capital expenditures in 2005 & 2006 = C
Slide 12: Higher Earnings Despite Lower Product Margins
Higher Earnings Despite Lower Product Margins = 4Q04 — Great Example (Dollars in Millions) $700 $(350) $(49) 3508 $809 | 1 Product Margins 3Q04 4Q04 Sour Crude Other” Discounts Operating Operating Income Income = Similar expectation for 2005 earnings ® Higher distillate margins and wider sour crude
Slide 13: Valero ... Continuing Our Successful Strategy
Valero ... Continuing Our Successful Strategy = Proven results in utilizing cash flow © Highly successful acquisition & CAPEX strategy © Experienced management with a sustainable growth plan = Will continue to: ® Invest in our assets ® Look for selective, accretive acquisitions ® Reduce debt Increas
Slide 14: APPENDIX
APPENDIX Fe MuRo ENERGY Coronation ‘+
Slide 15: Key Strategic Capital Projects — 2004 & 2005
Key Strategic Capital Projects — 2004 & 2005 (ollars in Millions) Est Thruput | Est. Total | Annualized Incremental 2005 Strategic CAPEX Projects 2004 & 2005 | Start-up | (tana) _| Cost Op. tne Contrib, | OP. Inc. Contrib. 2004 Strategic CAPEX = Benicia alky expansion Comp. 4 $23 4 $2 ‘St. Charles c
Slide 16: Searchable text section of graphics shown above
Searchable text section of graphics shown above [GRAPHIC] [ LOG O] 2005 Simmons & Company Energy Conference [LOGO] [LOGO] [LOGO] [LOGO] [LOGO] Top Company in America 2004 2004 Oil Company of the Year 2004 United Way Spirit of America Award Seven VPP Star Site Refineries Number 23 on 2005 Fortune 100
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