Valero Energy (VLO) 10-Q 2010 Q3 Quarterly report

Exhibit 12.01

VALERO ENERGY CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED CHARGES
AND RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

(Millions of Dollars)

	Nine Months
	Ended			Year Ended December 31,
	September 30,
	2010			2009			2008			2007			2006			2005
Ratio of Earnings to Fixed Charges:
Earnings:
Income (loss) from continuing operations before income tax expense (benefit), minority interest in net income of consolidated subsidiaries, and income from equity investees	$	1,114		$	(467	)	$	511		$	6,453		$	7,480		$	4,948
Add:
Fixed charges		557			705			630			644			546			470
Amortization of capitalized interest		16			19			18			14			9			8
Distributions from equity investees		10			–			–			–			47			50
Less:
Interest capitalized		(68	)		(112	)		(104	)		(105	)		(148	)		(62	)
Total earnings	$	1,629		$	145		$	1,055		$	7,006		$	7,934		$	5,414
Fixed charges:
Interest expense, net		$ 362			$ 408			$ 347			$ 361			$ 229			$ 272
Interest capitalized		68			112			104			105			148			62
Rental expense interest factor (a)		127			185			179			178			169			136
Total fixed charges		$ 557			$ 705			$ 630			$ 644			$ 546			$ 470
Ratio of earnings to fixed charges		2.9	x		(b)			1.7	x		10.9	x		14.5	x		11.5	x
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends:
Total earnings	$	1,629		$	145		$	1,055		$	7,006		$	7,934		$	5,414
Total fixed charges		$ 557			$ 705			$ 630			$ 644			$ 546			$ 470
Preferred stock dividends		–			–			–			–			3			20
Total fixed charges and preferred stock dividends		$ 557			$ 705			$ 630			$ 644			$ 549			$ 490
Ratio of earnings to fixed charges and preferred stock dividends		2.9	x		(b)			1.7	x		10.9	x		14.5	x		11.0	x

(a)

The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.

(b)

For the year ended December 31, 2009, earnings were insufficient to cover fixed charges by $560 million. The deficiency included the effect of a $230 million pre-tax impairment loss resulting from the permanent cancellation of certain capital projects classified as “construction in progress” as a result of the unfavorable impact of the economic slowdown on refining industry fundamentals during the year. The deficiency was also partially attributable to a $120 million loss contingency accrual related to our dispute of a turnover tax on export sales in Aruba.