Valero Energy (VLO) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	VALERO ENERGY CORP/TX
Entity Central Index Key	0001035002
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			9.5
Entity Common Stock, Shares Outstanding (actual number)		565,475,748

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and temporary cash investments	$1,887	$825
Restricted cash	129	122
Receivables, net	3,947	3,773
Inventories	4,724	4,863
Income taxes receivable	58	888
Deferred income taxes	175	180
Prepaid expenses and other	181	261
Assets held for sale and assets related to discontinued operations	219	224
Total current assets	11,320	11,136
Property, plant and equipment, at cost	29,186	28,463
Accumulated depreciation	(5,851)	(5,592)
Property, plant and equipment, net	23,335	22,871
Intangible assets, net	226	227
Deferred charges and other assets, net	1,584	1,395
Total assets	36,465	35,629
Current liabilities:
Current portion of debt and capital lease obligations	635	237
Accounts payable	5,986	5,760
Accrued expenses	502	514
Taxes other than income taxes	604	725
Income taxes payable	22	95
Deferred income taxes	186	253
Liabilities related to discontinued operations	160	225
Total current liabilities	8,095	7,809
Debt and capital lease obligations, less current portion	7,718	7,163
Deferred income taxes	4,131	4,063
Other long-term liabilities	1,855	1,869
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value; 1,200,000,000 shares authorized; 673,501,593 and 673,501,593 shares issued	7	7
Additional paid-in capital	7,879	7,896
Treasury stock, at cost; 108,318,528 and 108,798,847 common shares	(6,688)	(6,721)
Retained earnings	13,036	13,178
Accumulated other comprehensive income	432	365
Total stockholders' equity	14,666	14,725
Total liabilities and stockholders' equity	$36,465	$35,629

1_Consolidated Balance Sheets

Consolidated Balance Sheets (Parenthetical)
	Mar. 31, 2010	Dec. 31, 2009
Stockholders' equity:
Common stock, par value	0.01	0.01
Common stock, shares authorized	1,200,000,000	1,200,000,000
Common stock, shares issued	673,501,593	673,501,593
Treasury stock, common shares	108,318,528	108,798,847

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Consolidated Statements of Income [Abstract]
Operating revenues (1)	$19,643	$13,328
Costs and expenses:
Cost of sales	18,136	11,204
Operating expenses	912	845
Retail selling expenses	173	169
General and administrative expenses	97	145
Depreciation and amortization expense	357	350
Asset impairment loss		22
Total costs and expenses	19,675	12,735
Operating income (loss)	(32)	593
Other income (expense), net	11	(1)
Interest and debt expense:
Incurred	(147)	(119)
Capitalized	20	39
Income (loss) from continuing operations before income tax expense (benefit)	(148)	512
Income tax expense (benefit)	(47)	148
Income (loss) from continuing operations	(101)	364
Loss from discontinued operations, net of income taxes	(12)	(55)
Net income (loss)	(113)	309
Earnings (loss) per common share:
Continuing operations	-0.18	0.7
Discontinued operations	-0.02	-0.1
Total	-0.2	0.6
Weighted-average common shares outstanding (in millions)	562	514
Earnings (loss) per common share - assuming dilution:
Continuing operations	-0.18	0.7
Discontinued operations	-0.02	-0.11
Total	-0.2	0.59
Weighted-average common shares outstanding - assuming dilution (in millions)	562	519
Dividends per common share	0.05	0.15
Supplemental information:
(1) Includes excise taxes on sales by our U.S. retail system	$208	$204

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net income (loss)	($113)	$309
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	357	378
Asset impairment loss		37
Noncash interest expense and other income, net	(1)	1
Stock-based compensation expense	12	12
Deferred income tax expense	17	169
Changes in current assets and current liabilities	753	(96)
Changes in deferred charges and credits and other operating activities, net	(43)	(29)
Net cash provided by operating activities	982	781
Cash flows from investing activities:
Capital expenditures	(382)	(735)
Deferred turnaround and catalyst costs	(229)	(167)
Advance payments related to purchase of ethanol facilities		(13)
Purchase of ethanol facilities	(260)
Other investing activities, net	15	6
Net cash used in investing activities	(856)	(909)
Non-bank debt:
Borrowings	1,244	998
Repayments	(294)
Accounts receivable sales program:
Proceeds from sale of receivables	1,225	100
Repayments	(1,225)	(100)
Purchase of common stock for treasury	(1)
Issuance of common stock in connection with employee benefit plans	4	1
Benefit from tax deduction in excess of recognized stock-based compensation cost	2	1
Common stock dividends	(28)	(77)
Debt issuance costs	(10)	(7)
Other financing activities	(1)	(2)
Net cash provided by financing activities	916	914
Effect of foreign exchange rate changes on cash	20	(11)
Net increase in cash and temporary cash investments	1,062	775
Cash and temporary cash investments at beginning of period	825	940
Cash and temporary cash investments at end of period	$1,887	$1,715

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Consolidated Statements of Comprehensive Income [Abstract]
Net income (loss)	($113)	$309
Other comprehensive income (loss):
Foreign currency translation adjustment	101	(81)
Pension and other postretirement benefits:
Net gain reclassified into income, net of income tax expense of $- and $-	(1)
Net gain (loss) on derivative instruments designated and qualifying as cash flow hedges:
Net gain (loss) arising during the period, net of income tax (expense) benefit of $1 and $(32)	(1)	60
Net gain reclassified into income, net of income tax expense of $17 and $21	(32)	(40)
Net gain (loss) on cash flow hedges	(33)	20
Other comprehensive income (loss)	67	(61)
Comprehensive income (loss)	($46)	$248

2_Consolidated Statements of Co

Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Pension and other postretirement benefits:
Net gain reclassified into income, income tax expense
Net gain (loss) on derivative instruments designated and qualifying as cash flow hedges:
Net gain (loss) arising during the period, income tax (expense) benefit	1	(32)
Net gain reclassified into income, income tax expense	$17	$21

Basis of Presentation, Principl

Basis of Presentation, Principles of Consolidation, and Significant Accounting Policies
	3 Months Ended Mar. 31, 2010
Basis of Presentation, Principles of Consolidation, and Significant Accounting Policies [Abstract]
BASIS OF PRESENTATION, PRINCIPLES OF CONSOLIDATION, AND SIGNIFICANT ACCOUNTING POLICIES	1. BASIS OF PRESENTATION, PRINCIPLES OF CONSOLIDATION, AND SIGNIFICANT ACCOUNTING POLICIES As used in this report, the terms Valero, we, us, or our may refer to Valero Energy Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole. These unaudited consolidated financial statements include the accounts of Valero and subsidiaries in which Valero has a controlling interest. Intercompany balances and transactions have been eliminated in consolidation. Investments in significant non-controlled entities are accounted for using the equity method. These unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP)for interim financial information and with the instructions to Form 10-Q and Article10 of RegulationS-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Financial information for the three months ended March31, 2010 and 2009 included in these Condensed Notes to Consolidated Financial Statements is derived from our unaudited consolidated financial statements. Operating results for the three months ended March31, 2010 are not necessarily indicative of the results that may be expected for the year ending December31, 2010. The consolidated balance sheet as of December31, 2009 has been derived from the audited financial statements as of that date. For further information, refer to the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2009. We have evaluated subsequent events that occurred after March31, 2010 through the filing of this Form 10-Q. Any material subsequent events that occurred during this time have been properly recognized or disclosed in our financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Reclassifications Certain amounts previously reported have been reclassified to conform to the 2010 presentation. As discussed in Note 4, we permanently shut down our Delaware City Refinery in the fourth quarter of 2009, and our board of directors approved a plan of sale for our terminal, pipeline, and shutdown refinery assets at Delaware City in the first quarter of 2010. As a result, these assets have been presented in the consolidated balance sheet as assets held for sale and assets of discontinued operations as of March31, 2010 and December31, 2009. In addition, the results of operations of t

Accounting Pronouncements

Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Accounting Pronouncements [Abstract]
ACCOUNTING PRONOUNCEMENTS	2. ACCOUNTING PRONOUNCEMENTS Transfers of Financial Assets In June2009, Topic 860 of the Accounting Standards Codification (the Codification, or ASC), Transfers and Servicing, was modified to clarify the requirements for derecognizing transferred financial assets, remove the concept of a qualifying special-purpose entity and related exceptions, and require additional disclosures related to transfers of financial assets. This guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after November15, 2009, and earlier application was prohibited. The adoption of these provisions of ASC Topic 860 effective January1, 2010 did not affect our financial position or results of operations. Variable Interest Entities In June2009, ASC Topic 810, Consolidation, was amended to modify provisions related to variable interest entities to include entities previously considered qualifying special-purpose entities, as the concept of these entities was eliminated. This modification also clarifies consolidation requirements and expands disclosure requirements related to variable interest entities. These provisions of ASC Topic 810 were effective for fiscal years, and interim periods within those fiscal years, beginning after November15, 2009, and earlier application was prohibited. The adoption of these provisions of ASC Topic 810 effective January1, 2010 did not affect our financial position or results of operations.

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
Acquisitions [Abstract]
ACQUISITIONS	3. ACQUISITIONS The acquired ethanol businesses discussed below involve the production and marketing of ethanol and its co-products, including distillers grains. The operations of our ethanol business complement our existing clean motor fuels business. Acquisitions of ASA and Renew Assets In December2009, we signed an agreement with ASA Ethanol Holdings, LLC (ASA)to buy two ethanol plants located in Linden, Indiana and Bloomingburg, Ohio and made a $20million advance payment towards the purchase of these facilities. On January13, 2010, we completed the acquisition of the facilities, including certain inventories, for a total purchase price of $202million. Also in December2009, we received approval from a bankruptcy court to acquire an ethanol facility located near Jefferson, Wisconsin from Renew Energy LLC (Renew) and made a $1million advance payment towards the purchase of this facility. We completed the acquisition of this facility, including certain receivables and inventories, on February4, 2010 for a total purchase price of $79million. The assets acquired from ASA and Renew have been recognized at estimated acquisition-date fair values as determined by preliminary independent appraisals and other evaluations as follows (in millions): Current assets, primarily inventory $ 11 Property, plant and equipment 270 Total consideration $ 281 Neither goodwill nor a gain from a bargain purchase is expected to be recognized in conjunction with the ASA and Renew acquisitions, and no contingent assets or liabilities were acquired or assumed. In addition, pro forma results of operations for the three months ended March31, 2010 have not been presented for these acquisitions as the acquisitions were not material to our financial position or results of operations. The consolidated statement of income for the three months ended March31, 2010 includes the results of the ASA and Renew acquisitions as of their respective acquisition dates in the first quarter of 2010. Acquisition of VeraSun Assets In the second quarter of 2009, we acquired seven ethanol plants and a site under development from VeraSun Energy Corporation (VeraSun). The acquisition of these ethanol plants (referred to as the VeraSun Acquisition) was completed under three separate closing transactions. The purchase price for the VeraSun Acquisition was $477million plus $79million primarily for inventory and certain other working capital. An independent appraisal of the assets acquired in the VeraSun Acquisition was completed, and the assets acquired and the liabilities assumed have been recognized at their acquisition-date fair values as determined by the appraisal and other evaluations as follows (in millions): Current assets, primarily inventory $ 77 Property, plant and equipment 491 Identifiable intangible assets 1 Current liabilities (10 ) Other long-term liabilities (3 ) Total consideration $ 556 Neither goodwill nor a gain from a bargain purchase was recognized in conjunction with the VeraSun Acquisition, and no si

Assets Held for Sale and Assets

Assets Held for Sale and Assets and Liabilities of Discontinued Operations
	3 Months Ended Mar. 31, 2010
Assets Held for Sale and Assets and Liabilities of Discontinued Operations [Abstract]
ASSETS HELD FOR SALE AND ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS	4. ASSETS HELD FOR SALE AND ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS On November20, 2009, we announced the permanent shutdown of our Delaware City Refinery due to financial losses caused by poor economic conditions, significant capital spending requirements, and high operating costs. In the fourth quarter of 2009, we recorded a pre-tax loss of $1.9billion, of which $1.4billion represented the write-down of the book value of the refinery assets to net realizable value. The results of operations of the Delaware City Refinery have been presented as discontinued operations in the consolidated statements of income for both periods presented because of the permanent shutdown of the refinery. Certain terminal and pipeline assets previously associated with the refinery were not shut down and have continued to be operated, with the results of their operations reflected in continuing operations in the consolidated statements of income for both periods presented. In the first quarter of 2010, our board of directors approved a plan of sale for our terminal, pipeline, and shutdown refinery assets at Delaware City. On April7, 2010, we entered into an agreement to sell those assets to wholly owned subsidiaries of PBF Energy Partners LP (PBF)for $220million in proceeds. The transaction is expected to close during the second quarter of 2010, subject to regulatory approvals, as well as finalization of certain agreements with the state of Delaware. As a result, the shutdown Delaware City Refinery assets and the associated terminal and pipeline assets have been presented in the consolidated balance sheets within assets held for sale and assets related to discontinued operations as of March31, 2010 and December31, 2009. All other related assets, consisting primarily of accounts receivable and certain inventories, and liabilities of the shutdown Delaware City Refinery that will not be sold are also presented as assets and liabilities related to discontinued operations as of March31, 2010 and December31, 2009. The nature and significance of our post-closing participation in the terminalling agreement described below represents a continuation of activities with the terminal operations of the Delaware City Refinery for accounting purposes, and as such the results of operations related to these terminal operations have not been presented as discontinued operations in the consolidated statements of income for any of the periods presented. In connection with this sale, we will enter into a terminalling and offtake agreement with PBF under which PBF will provide certain terminalling services including receipt, storage, handling, and redelivery of refined products for us. If PBF resumes refinery operations, the terminalling agreement will terminate and we will purchase certain off-take products as prescribed in the agreement. The initial term of this agreement is for one year and shall automatically renew for 180-day periods until terminated by either party. Financial information related to the assets held for sale and the assets and liabilities related to the discontinued operations is summarized as follows (in millions):

Impairments

Impairments
	3 Months Ended Mar. 31, 2010
Impairments [Abstract]
IMPAIRMENTS	5. IMPAIRMENTS Due to the economic slowdown that persisted throughout 2009 and its negative impact on the refining industry, we evaluated our refining operating assets for potential impairment in 2009. Such evaluations were based on expected future cash flows for each of our refineries using significant estimates and assumptions about the future operations of those refineries, including overall throughput volumes, types of crude oil processed, types of products produced, and prices for crude oil and refined products. Prices for crude oil and refined products fluctuate significantly based on market factors, including geopolitical matters. Prices, in turn, impact refinery throughput assumptions. In addition, we considered matters specific to our Aruba Refinery and Paulsboro Refinery to develop expected future cash flows for those refineries. We determined that there was no indication of potential impairment of our refining operating assets as of December31, 2009. While the economy and refining industry fundamentals improved during the first quarter of 2010, refining industry fundamentals continued to be negatively impacted by the economic slowdown. As a result, we updated our evaluation of potential impairments of our refining operating assets as of March31, 2010, and we determined that there was no indication of impairment. Our cash flow estimates are based on our continued expectation of improved refined product prices resulting from an expected improvement in the worldwide economy, and we updated our assumptions related to matters specific to our Aruba and Paulsboro Refineries that impact expected future cash flows for those refineries. We believe that our estimates used to develop expected cash flows are reasonable; however, future cash flows will differ from our estimates and such differences may be material. The sensitivity of our estimates is most significant with respect to our Aruba and Paulsboro Refineries. Therefore, should prices fail to improve as expected or other factors occur that impact our expectations regarding these refineries, we may determine that either or both refineries are impaired, and the resulting impairment loss could be material to our results of operations. For further information regarding impairments, see Note 3 of Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2009.

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories [Abstract]
INVENTORIES	6. INVENTORIES Inventories consisted of the following (in millions): March 31, December 31, 2010 2009 Refinery feedstocks $ 2,549 $ 2,124 Refined products and blendstocks 1,710 2,317 Ethanol feedstocks and products 183 141 Convenience store merchandise 93 96 Materials and supplies 189 185 Inventories $ 4,724 $ 4,863 As of March31, 2010 and December31, 2009, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by approximately $4.9billion and $4.5billion, respectively.

Debt

Debt
	3 Months Ended Mar. 31, 2010
Debt [Abstract]
DEBT	7. DEBT Non-Bank Debt In March2009, we issued $750million of 9.375% notes due March15, 2019 and $250million of 10.5% notes due March15, 2039. Proceeds from the issuance of these notes totaled approximately $998 million, before deducting underwriting discounts and other issuance costs of $8million. In February2010, we issued $400million of 4.50% notes due in February2015 and $850million of 6.125% notes due in February2020. Proceeds from the issuance of these notes totaled approximately $1.24billion, before deducting underwriting discounts of $8million. On March15, 2010, we redeemed our 7.50% senior notes with a maturity date of June15, 2015 for $294million, or 102.5% of stated value. These notes had a carrying amount of $296million as of the redemption date, resulting in a $2million gain that was included in other income (expense), net in the consolidated statement of income. In March2010, we called for redemption our 6.75% senior notes with a maturity date of May1, 2014 for $190million, or 102.25% of stated value. The redemption date was May3, 2010. These notes had a carrying amount of $187million as of the redemption date, resulting in a loss on the redemption of approximately $3million. Bank Credit Facilities We have a revolving credit facility (the Revolver) that has a maturity date of November 2012. As of March 31, 2010, the Revolver had a borrowing capacity of $2.4 billion. The Revolver has certain restrictive covenants, including a maximum debt-to-capitalization ratio of 60%. As of March 31, 2010 and December 31, 2009, our debt-to-capitalization ratios, calculated in accordance with the terms of the Revolver, were 30.6% and 30.9%, respectively. We believe that we will remain in compliance with this covenant. During the three months ended March31, 2010, we had no borrowings or repayments under our Revolver or other revolving bank credit facilities. As of March31, 2010 and December 31, 2009, we had no borrowings outstanding under these committed revolving credit facilities. As of March31, 2010 and December 31, 2009, we had $242million and $259million, respectively, of letters of credit outstanding under our uncommitted short-term bank credit facilities and $329million and $299million, respectively, of letters of credit outstanding under our U.S. committed revolving credit facilities. Under our Canadian committed revolving credit facility, we had Cdn. $22million of letters of credit outstanding as of both March31, 2010 and December 31, 2009. Accounts Receivable Sales Facility We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell on a revolving basis up to $1billion of eligible trade receivables. We amended our agreement in June2009 to extend the maturity date to June2010. As of December31, 2009, the amount of eligible receivables sold to the third-party entities and financial institutions was $200million. During the quarter ended March31, 2010, we sold and repaid $1.2billion of eligible receivables to the third-party entities and financial institutions. As of March31, 2010, the amount of eligible receivables sold to the third-party entities and

Stockholders' Equity

Stockholders' Equity
	3 Months Ended Mar. 31, 2010
Stockholders' Equity [Abstract]
STOCKHOLDERS' EQUITY	8. STOCKHOLDERS EQUITY Treasury Stock No significant purchases of our common stock were made during the three months ended March31, 2010 and 2009. During the three months ended March31, 2010 and 2009, we issued 0.5million and 0.2 million shares from treasury, respectively, for our employee benefit plans. Common Stock Dividends On April29, 2010, our board of directors declared a regular quarterly cash dividend of $0.05 per common share payable on June16, 2010 to holders of record at the close of business on May19, 2010.

Earnings

Earnings (Loss) Per Common Share
	3 Months Ended Mar. 31, 2010
Earnings (Loss) Per Common Share [Abstract]
EARNINGS (LOSS) PER COMMON SHARE	9. EARNINGS (LOSS)PER COMMON SHARE Earnings (loss)per common share amounts were computed as follows (dollars and shares in millions, except per share amounts): Three Months Ended March 31, 2010 2009 Restricted Common Restricted Common Stock Stock Stock Stock Earnings (loss)per common share from continuing operations: Income (loss)from continuing operations $ (101 ) $ 364 Less dividends paid: Common stock 28 77 Nonvested restricted stock Undistributed earnings (loss) $ (129 ) $ 287 Weighted-average common shares outstanding 3 562 2 514 Earnings (loss)per common share from continuing operations: Distributed earnings $ 0.05 $ 0.05 $ 0.15 $ 0.15 Undistributed earnings (loss) (0.23 ) 0.55 0.55 Total earnings (loss)per common share from continuing operations $ 0.05 $ (0.18 ) $ 0.70 $ 0.70 Earnings (loss)per common share from continuing operations assuming dilution: Income (loss)from continuing operations $ (101 ) $ 364 Weighted-average common shares outstanding 562 514 Common equivalent shares (1): Stock options 4 Performance awards and other benefit plans 1 Weighted-average common shares outstanding assuming dilution 562 519 Earnings (loss)per common share from continuing operations assuming dilution $ (0.18 ) $ 0.70 (1) Common equivalent shares were excluded from the computation of diluted loss per share for the three months ended March31, 2010 because the effect of including such shares would be antidilutive. The following table reflects potentially dilutive securities that were excluded from the calculation of earnings (loss)per common share from continuing operations assuming dilution as the effect of including such securities would have been antidilutive (in millions). For the three months ended March31, 2010, common equivalent shares, which represent primarily stock options, were excluded as a result of the net loss reported for the first quarter of 2010. In addition, for both periods, certain stock option amounts presented below were excluded, representing outstanding stock options for which the exercise prices were greater than the average market price of the common shares during each respective reporting period. Three Months Ended March 31, 2010 2009

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended Mar. 31, 2010
Supplemental Cash Flow Information [Abstract]
SUPPLEMENTAL CASH FLOW INFORMATION	10. SUPPLEMENTAL CASH FLOW INFORMATION In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in millions): Three Months Ended March 31, 2010 2009 Decrease (increase)in current assets: Restricted cash $ (7 ) $ (8 ) Receivables, net (189 ) (245 ) Inventories 168 (50 ) Income taxes receivable 830 117 Prepaid expenses and other 39 (90 ) Increase (decrease)in current liabilities: Accounts payable 155 231 Accrued expenses (47 ) 35 Taxes other than income taxes (126 ) (86 ) Income taxes payable (70 ) Changes in current assets and current liabilities $ 753 $ (96 ) The above changes in current assets and current liabilities differ from changes between amounts reflected in the applicable consolidated balance sheets for the respective periods for the following reasons: the amounts shown above exclude changes in cash and temporary cash investments, deferred income taxes, and current portion of debt and capital lease obligations, as well as the effect of certain noncash investing and financing activities discussed below; amounts accrued for capital expenditures and deferred turnaround and catalyst costs are reflected in investing activities in the consolidated statements of cash flows when such amounts are paid; amounts accrued for common stock purchases in the open market that are not settled as of the balance sheet date are reflected in financing activities in the consolidated statements of cash flows when the purchases are settled and paid; changes in assets and liabilities related to the discontinued operations of the Delaware City Refinery prior to its shutdown are reflected in the line items to which the changes relate in the table above; and certain differences between consolidated balance sheet changes and consolidated statement of cash flow changes reflected above result from translating foreign currency denominated amounts at different exchange rates. There were no significant noncash investing or financing activities for the three months ended March31, 2010 and 2009. Cash flows related to the discontinued operations of the Delaware City Refinery have been combined with the cash flows from continuing operations within each category in the consolidated statements of cash flows for both periods presented and are summarized as follows (in millions): Three Month Ended March 31, 2010 2009 Cash used in operating activities $ (12 ) $ (42 ) Cash used in investing activities (34 ) Cash flows related to interest and income taxes were as follows (in millions): Three Months Ended March 31, 2010 2009 Interest paid in excess of (less than) amount capitalized $ 56 $ (19 ) Income taxes paid (n

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
FAIR VALUE MEASUREMENTS	11. FAIR VALUE MEASUREMENTS A fair value hierarchy (Level 1, Level 2, or Level 3) is used to categorize fair value amounts based on the quality of inputs used to measure fair value. Accordingly, fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs are based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. We use appropriate valuation techniques based on the available inputs to measure the fair values of our applicable assets and liabilities. When available, we measure fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. The tables below present information (dollars in millions) about our financial assets and liabilities measured and recorded at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized by us to determine the fair values as of March31, 2010 and December31, 2009. Fair Value Measurements Using Quoted Significant Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs Total as of (Level 1) (Level 2) (Level 3) March 31, 2010 Assets: Commodity derivative contracts $ 30 $ 235 $ $ 265 Nonqualified benefit plans 102 10 112 Liabilities: Commodity derivative contracts 84 10 94 Certain nonqualified benefit plans 33 33 Fair Value Measurements Using Quoted Significant Prices Other Significant in Active Observable Unobservable Total as of Markets Inputs Inputs December 31, (Level 1) (Level 2) (Level 3) 2009 Assets: Commodity derivative contracts $ 10 $ 349 $ $ 359 Nonqualified benefit plans 99 10 109 Liabilities: Commodity derivative contracts 100 9 109 Certain nonqualified benefit plans 34 34 The valuation methods used to measure our financial instruments at fair value are as follows: Commodity derivative contracts, consisting primarily of exchange-traded futures and swaps, are measured at fair value using the market approach. Exchange-traded futures are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. Swaps are priced using third-party broker quotes, industry pricing services, and exchange-traded curves, with appropriate consideration of counterparty credit risk, but since they have contractual terms that are not identical to exchange-traded futures instruments wi

Price Risk Management Activitie

Price Risk Management Activities
	3 Months Ended Mar. 31, 2010
Price Risk Management Activities [Abstract]
PRICE RISK MANAGEMENT ACTIVITIES	12. PRICE RISK MANAGEMENT ACTIVITIES We are exposed to market risks related to the volatility in the price of commodities, interest rates and foreign currency exchange rates, and we enter into derivative instruments to manage those risks. We also enter into derivative instruments to manage the price risk on other contractual derivatives into which we have entered. The only types of derivative instruments we enter into are those related to the various commodities we purchase or produce, interest rate swaps, and foreign currency exchange and purchase contracts, as described below. All derivative instruments are recorded on our balance sheet as either assets or liabilities measured at their fair values. When we enter into a derivative instrument, it is designated as a fair value hedge, a cash flow hedge, an economic hedge, or a trading activity. The gain or loss on a derivative instrument designated and qualifying as a fair value hedge, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized currently in income in the same period. The effective portion of the gain or loss on a derivative instrument designated and qualifying as a cash flow hedge is initially reported as a component of other comprehensive income and is then recorded in income in the period or periods during which the hedged forecasted transaction affects income. The ineffective portion of the gain or loss on the cash flow derivative instrument, if any, is recognized in income as incurred. For our economic hedging relationships (hedges not designated as fair value or cash flow hedges) and for derivative instruments entered into by us for trading purposes, the derivative instrument is recorded at fair value and changes in the fair value of the derivative instrument are recognized currently in income. The cash flow effects of all of our derivative contracts are reflected in operating activities in the consolidated statements of cash flows for both periods presented. Commodity Price Risk We are exposed to market risks related to the price of crude oil, refined products (primarily gasoline and distillate), grain (primarily corn), and natural gas used in our refining operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, including swaps, futures, and options. We use the futures markets for the available liquidity, which provides greater flexibility in transacting our hedging and trading operations. We use swaps primarily to convert our floating price exposure to a fixed price. Our positions in commodity derivative instruments are monitored and managed on a daily basis by a risk control group to ensure compliance with our stated risk management policy that has been approved by our board of directors. For risk management purposes, we use fair value hedges, cash flow hedges, and economic hedges. In addition to the use of derivative instruments to manage commodity price risk, we also enter into certain commodity derivative instruments for trading purposes. Our objective for entering into each type of hedge or trading activity is described

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Segment Information [Abstract]
SEGMENT INFORMATION	13. SEGMENT INFORMATION Prior to the second quarter of 2009, we had two reportable segments, which were refining and retail. As a result of the VeraSun Acquisition during the second quarter of 2009 (as discussed in Note 3), ethanol is presented as a third reportable segment. The following table reflects activity related to continuing operations (in millions): Refining Retail Ethanol Corporate Total Three months ended March31, 2010: Operating revenues from external customers $ 16,897 $ 2,176 $ 570 $ $ 19,643 Intersegment revenues 1,508 55 1,563 Operating income (loss) (51 ) 71 57 (109 ) (32 ) Three months ended March31, 2009: Operating revenues from external customers 11,696 1,632 13,328 Intersegment revenues 1,007 1,007 Operating income (loss) 693 56 (156 ) 593 Total assets by reportable segment were as follows (in millions): March 31, December 31, 2010 2009 Refining $ 31,114 $ 30,901 Retail 1,881 1,875 Ethanol 950 654 Corporate 2,520 2,199 Total consolidated assets $ 36,465 $ 35,629 Corporate assets primarily include cash, corporate office buildings, and income tax receivables that may exist from time to time.

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Employee Benefit Plans [Abstract]
EMPLOYEE BENEFIT PLANS	14. EMPLOYEE BENEFIT PLANS The components of net periodic benefit cost related to our defined benefit plans were as follows for the three months ended March31, 2010 and 2009 (in millions): Other Postretirement Pension Plans Benefit Plans 2010 2009 2010 2009 Components of net periodic benefit cost: Service cost $ 22 $ 26 $ 3 $ 3 Interest cost 20 20 6 6 Expected return on plan assets (28 ) (27 ) Amortization of: Prior service cost (credit) 1 (5 ) (4 ) Net loss 3 1 2 Net periodic benefit cost $ 15 $ 22 $ 5 $ 7 Our anticipated contributions to our qualified pension plans during 2010 have not changed from amounts previously disclosed in our consolidated financial statements for the year ended December31, 2009. During both of the three month periods ended March31, 2010 and 2009, we contributed $50million to our qualified pension plans. In March2010, a comprehensive health care reform package composed of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (Health Care Reform) was enacted into law. As a result of the Health Care Reform, the income tax benefit presented in our consolidated statement of income for the three months ended March31, 2010 includes a charge of $16million related to the non-deductibility of certain retiree prescription health care costs, to the extent of federal subsidies received. Although the tax change provisions of the Health Care Reform are not effective until 2013, the effect of changes in tax laws or rates on deferred tax assets and liabilities are recognized in the period that includes the enactment date, even though the changes may not be effective until future periods. Other provisions of the Health Care Reform are also expected to affect the future costs of our retiree health care plans. An estimate of the additional impacts of the Health Care Reform is not yet practicable due to the number and complexity of the provisions; however, we are currently evaluating the potential impact of the Health Care Reform on our financial position and results of operations.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	15. COMMITMENTS AND CONTINGENCIES Tax Matters We are subject to extensive tax liabilities, including federal, state, and foreign income taxes and transactional taxes such as excise, sales/use, payroll, franchise, withholding, and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future. Many of these liabilities are subject to periodic audits by the respective taxing authority. Subsequent changes to our tax liabilities as a result of these audits may subject us to interest and penalties. Effective January1, 2007, the Government of Aruba (GOA)enacted a turnover tax on revenues from the sale of goods produced and services rendered in Aruba. The turnover tax, which initially was 3% for on-island sales and services (but has subsequently been reduced to 1.5%) and 1% on export sales, is being assessed by the GOA on sales by our Aruba Refinery. We disputed the GOAs assessment of the turnover tax in arbitration proceedings with the Netherlands Arbitration Institute (NAI)pursuant to which we sought to enforce our rights under a tax holiday agreement related to the refinery and other agreements. The arbitration hearing was held on February 3-4, 2009. We also filed protests of these assessments through proceedings in Aruba. In April2008, we entered into an escrow agreement with the GOA and Caribbean Mercantile Bank NV (CMB), pursuant to which we agreed to deposit an amount equal to the disputed turnover tax on exports into an escrow account with CMB, pending resolution of the tax protest proceedings in Aruba. Under this escrow agreement, we are required to continue to deposit an amount equal to the disputed tax on a monthly basis until the tax dispute is resolved through the Aruba proceedings. On April20, 2009, we were notified that the Aruban tax court overruled our protests with respect to the turnover tax assessed in January and February2007, totaling $8million. Under the escrow agreement, we expensed and paid $8million, plus $1million of interest, to the GOA in the second quarter of 2009. Amounts deposited under the escrow agreement, which totaled $115million as of March31, 2010 and December31, 2009 are reflected as restricted cash in our consolidated balance sheets. In addition to the turnover tax described above, the GOA has asserted other tax amounts including approximately $35million related to various dividends. We also challenged approximately $35million in foreign exchange payments made to the Central Bank of Aruba as payments exempted under our tax holiday, as well as other reasons. Both the dividend tax and the foreign exchange payment matters were also addressed in the arbitration proceedings discussed above. On November3, 2009, we received an interim First Partial Award from the NAI arbitral panel. The panels ruling validated our tax holiday agreement, but the panel also ruled in favor of the GOA on our dispute of the $35million in foreign exchange payments previously made to the Central Bank of Aruba. The panels decision did not, however, fully resolve the remaini

Condensed Consolidating Financi

Condensed Consolidating Financial Information
	3 Months Ended Mar. 31, 2010
Condensed Consolidating Financial Information [Abstract]
CONDENSED CONSOLIDATING FINANCIAL INFORMATION	16. CONDENSED CONSOLIDATING FINANCIAL INFORMATION In conjunction with the acquisition of Premcor Inc. on September1, 2005, Valero Energy Corporation fully and unconditionally guaranteed the following debt of The Premcor Refining Group Inc. (PRG), a wholly owned subsidiary of Valero Energy Corporation, that was outstanding as of March31, 2010: 6.75% senior notes due February2011, 6.125% senior notes due May2011, and 6.75% senior notes due May2014. In addition, PRG has fully and unconditionally guaranteed all of the outstanding debt issued by Valero Energy Corporation. The following condensed consolidating financial information is provided for Valero and PRG as an alternative to providing separate financial statements for PRG. The accounts for all companies reflected herein are presented using the equity method of accounting for investments in subsidiaries. Condensed Consolidating Balance Sheet as of March31, 2010 (unaudited, in millions) Valero Other Non- Energy Guarantor Corporation PRG Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and temporary cash investments $ 882 $ $ 1,005 $ $ 1,887 Restricted cash 1 128 129 Receivables, net 34 3,913 3,947 Inventories 86 4,638 4,724 Income taxes receivable 11 58 (11 ) 58 Deferred income taxes 175 175 Prepaid expenses and other 5 176 181 Assets held for sale and assets related to discontinued operations 211 8 219 Total current assets 893 337 10,101 (11 ) 11,320 Property, plant and equipment, at cost 4,124 25,062 29,186 Accumulated depreciation (416 ) (5,435 ) (5,851 ) Property, plant and equipment, net 3,708 19,627 23,335 Intangible assets, net 226 226 Investment in Valero Energy affiliates 6,107 4,093 (5 ) (10,195 ) Long-term notes receivable from affiliates 15,838 (15,838 ) Deferred income tax receivable 712 (712 ) Deferred charges and other assets, net 143 161 1,280 1,584 Total assets $ 23,693 $ 8,299 $ 31,229 $ (26,756 ) $ 36,465 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Current portion of debt and capital lease obligations $ 33 $ 398 $ 204 $ $ 635 Accounts payable 41 117 5,828 5,986 Accrued expe