Valero Energy Reports First Quarter 2012 Results SAN ANTONIO, May 1, 2012 - 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.