Exhibit 12.01
VALERO L.P.
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars, Except Ratio)
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| Nine Months Ended September 30, |
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| Year Ended December 31, |
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| 2006 |
| 2005 |
| 2004 |
| 2003 |
| 2002 |
| 2001 |
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Earnings: |
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Income from continuing operations before provision for income taxes and income from equity investees |
| $ | 110,033 |
| $ | 110,069 |
| $ | 77,074 |
| $ | 67,177 |
| $ | 52,350 |
| $ | 42,694 |
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Add: |
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Fixed charges |
| 55,844 |
| 46,211 |
| 21,625 |
| 16,443 |
| 5,492 |
| 4,203 |
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Amortization of capitalized interest |
| 86 |
| 80 |
| 60 |
| 55 |
| 48 |
| 39 |
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Distributions from joint ventures |
| 4,524 |
| 4,657 |
| 1,373 |
| 2,803 |
| 3,590 |
| 2,874 |
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Less: Interest capitalized |
| (1,100 | ) | (1,008 | ) | (192 | ) | (123 | ) | (255 | ) | (298 | ) | ||||||
Total earnings |
| $ | 169,387 |
| $ | 160,009 |
| $ | 99,940 |
| $ | 86,355 |
| $ | 61,225 |
| $ | 49,512 |
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Fixed charges: |
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Interest expense (1) |
| $ | 50,425 |
| $ | 41,616 |
| $ | 20,630 |
| $ | 15,291 |
| $ | 4,968 |
| $ | 3,721 |
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Amortization of debt issuance costs |
| 542 |
| 622 |
| 407 |
| 740 |
| 160 |
| 90 |
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Interest capitalized |
| 1,100 |
| 1,008 |
| 192 |
| 123 |
| 255 |
| 298 |
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Rental expense interest factor (2) |
| 3,777 |
| 2,965 |
| 396 |
| 289 |
| 109 |
| 94 |
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Total fixed charges |
| $ | 55,844 |
| $ | 46,211 |
| $ | 21,625 |
| $ | 16,443 |
| $ | 5,492 |
| $ | 4,203 |
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Ratio of earnings to fixed charges |
| 3.0 | x | 3.5 | x | 4.6 | x | 5.3 | x | 11.1 | x | 11.8 | x |
(1) The “interest and other expense, net” reported in Valero L.P.’s consolidated statements of income for the nine months ended September 30, 2006 and the year ended December 31, 2005 includes investment income of $2,061,000 and $850,000, respectively and includes other income (expense) of $1,276,000 and ($2,237,000), respectively.
(2) The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.