SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 31, 1994
VALERO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-4718 74-1244795
(Commission File Number) (IRS Employer Identification No.)
530 McCullough Avenue, San Antonio, Texas 78215
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(210/246-2000)
<PAGE>
This Form 8-K/A amends Item 7(b) of the Valero Energy
Corporation (the "Company") Current Report on Form 8-K
dated May 31, 1994 (filed June 2, 1994).
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information. The following pro
forma information of Valero Energy Corporation and its
consolidated subsidiaries is included herein as a part of this
Current Report:
<TABLE>
Page
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet -- March 31, 1994 . . . . . . . .
Pro Forma Consolidated Statement of Income -- For the Three Months Ended
March 31, 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro Forma Consolidated Statement of Income -- For the Year Ended
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Pro Forma Condensed Consolidated Financial Statements . . . . . . . . .
</TABLE>
<PAGE>
Item 7(b). Pro Forma Financial Information
<TABLE>
VALERO ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1994
(Thousands of dollars)
(Unaudited)
<CAPTION>
VALERO
VALERO VNGP, ENERGY
ENERGY L.P. Pro Forma
ASSETS Historical Historical ADJUSTMENTS Consolidated
<S> <C> <C> <C> <C>
CURRENT ASSETS. . . . . . . . . . . . $ 346,536 $ 203,941 $(121,264) <F1> $ 390,080
(39,133) <F2>
PROPERTY, PLANT AND
EQUIPMENT, NET . . . . . . . . . . . 1,294,376 735,291 47 <F2> 2,058,425
31,911 <F3>
(3,964) <F4>
764 <F6>
INVESTMENT IN AND LEASES
RECEIVABLE FROM VALERO
NATURAL GAS PARTNERS, L.P. . . . . . 123,055 - 121,264 <F1> -
(121,264) <F4>
(17,469) <F5>
(105,586) <F6>
INVESTMENT IN AND ADVANCES TO
JOINT VENTURES . . . . . . . . . . . 29,674 - - 29,674
DEFERRED CHARGES AND OTHER
ASSETS . . . . . . . . . . . . . . . 74,548 79,297 (21,973) <F3> 129,566
(300) <F4>
(2,006) <F7>
$1,868,189 $1,018,529 $(278,973) $2,607,745
LIABILITIES AND STOCKHOLDERS'
EQUITY/PARTNERS' CAPITAL
CURRENT LIABILITIES . . . . . . . . . $ 141,275 $ 293,713 $ (39,086) <F2> $ 394,821
(1,081) <F6>
LONG-TERM DEBT,
less current maturities. . . . . . . 424,844 476,072 - 900,916
CAPITAL LEASE OBLIGATIONS,
less current maturities. . . . . . . - 103,741 (103,741) <F6> -
DEFERRED INCOME TAXES . . . . . . . . 235,640 - - 235,640
DEFERRED CREDITS AND
OTHER LIABILITIES. . . . . . . . . . 40,021 2,006 9,938 <F3> 49,959
(2,006) <F7>
REDEEMABLE PREFERRED STOCK,
SERIES A . . . . . . . . . . . . . . 13,800 - - 13,800
STOCKHOLDERS' EQUITY. . . . . . . . . 1,012,609 - - 1,012,609
PARTNERS' CAPITAL . . . . . . . . . . - 142,997 (125,528) <F4> -
(17,469) <F5>
$1,868,189 $1,018,529 $(278,973) $2,607,745
</TABLE>
<PAGE>
<TABLE>
VALERO ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Three Months Ended March 31, 1994
(Thousands of Dollars, Except per Share Amounts)
(Unaudited)
<CAPTION>
VALERO
VALERO VNGP, ENERGY
ENERGY L.P. Pro Forma
Historical Historical ADJUSTMENTS Consolidated
<S> <C> <C> <C> <C>
OPERATING REVENUES. . . . . . . . . . $281,277 $379,664 $(54,808) <F8> $607,173
1,040 <F9>
COSTS AND EXPENSES:
Cost of sales. . . . . . . . . . . . 210,107 335,331 (34,106) <F8> 511,268
(64) <F9>
Operating expenses . . . . . . . . . 30,024 33,347 (20,702) <F8> 42,349
(320) <F9>
Depreciation expense . . . . . . . . 15,568 9,234 415 <F10> 24,732
(485) <F11>
255,699 377,912 (55,262) 578,349
OPERATING INCOME. . . . . . . . . . . 25,578 1,752 1,494 28,824
EQUITY IN EARNINGS (LOSSES) OF AND
INCOME FROM VALERO NATURAL
GAS PARTNERS, L.P. . . . . . . . . . (2,908) - 2,908 <F12> -
OTHER INCOME (EXPENSE), NET . . . . . (918) 501 226 <F13> (191)
INTEREST AND DEBT EXPENSE:
Incurred . . . . . . . . . . . . . . (12,048) (16,836) 58 <F9> (24,243)
3,193 <F14>
1,390 <F15>
Capitalized. . . . . . . . . . . . . 279 136 - 415
INCOME (LOSS) BEFORE INCOME
TAXES. . . . . . . . . . . . . . . . 9,983 (14,447) 9,269 4,805
INCOME TAX EXPENSE. . . . . . . . . . 3,700 - (1,800) <F16> 1,900
NET INCOME (LOSS) . . . . . . . . . . 6,283 (14,447) 11,069 2,905
Less: preferred stock
dividend requirements. . . . . . . 532 - 2,456 <F17> 2,988
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCK . . . . . . . . . . . . $ 5,751 $(14,447) $ 8,613 $ (83)
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK . . . . . . . . . . . . $ .13 $ (.00)
</TABLE>
<PAGE>
<TABLE>
VALERO ENERGY CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1993
(Thousands of Dollars, Except per Share Amounts)
(Unaudited)
<CAPTION>
VALERO
VALERO VNGP, ENERGY
ENERGY L.P. Pro Forma
Historical Historical ADJUSTMENTS Consolidated
<S> <C> <C> <C> <C>
OPERATING REVENUES. . . . . . . . . . $1,222,239 $1,326,458 $(277,920) <F8> $2,275,359
4,582 <F9>
COSTS AND EXPENSES:
Cost of sales. . . . . . . . . . . . 970,435 1,090,363 (197,193) <F8> 1,863,333
(272) <F9>
Operating expenses . . . . . . . . . 119,567 120,171 (80,727) <F8> 157,484
(1,527) <F9>
Depreciation expense . . . . . . . . 56,733 36,446 1,658 <F10> 92,897
(1,940) <F11>
1,146,735 1,246,980 (280,001) 2,113,714
OPERATING INCOME. . . . . . . . . . . 75,504 79,478 6,663 161,645
EQUITY IN EARNINGS OF AND INCOME
FROM VALERO NATURAL
GAS PARTNERS, L.P. . . . . . . . . . 23,693 - (23,693) <F12> -
GAIN ON DISPOSITION OF ASSETS
AND OTHER INCOME, NET. . . . . . . . 6,209 1,263 246 <F13> 7,718
INTEREST AND DEBT EXPENSE:
Incurred . . . . . . . . . . . . . . (49,517) (68,007) 233 <F9> (103,087)
12,822 <F14>
1,382 <F15>
Capitalized. . . . . . . . . . . . . 12,335 1,713 - 14,048
INCOME BEFORE INCOME TAXES. . . . . . 68,224 14,447 (2,347) 80,324
INCOME TAX EXPENSE. . . . . . . . . . 31,800 - 4,200 <F16> 36,000
NET INCOME. . . . . . . . . . . . . . 36,424 14,447 (6,547) 44,324
Less: preferred stock
dividend requirements. . . . . . . 1,262 - 10,781 <F17> 12,043
NET INCOME APPLICABLE TO
COMMON STOCK . . . . . . . . . . . . $ 35,162 $ 14,447 $ (17,328) $ 32,281
EARNINGS PER SHARE OF COMMON
STOCK. . . . . . . . . . . . . . . . $ .82 $ .75
</TABLE>
<PAGE>
VALERO ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying pro forma condensed consolidated
financial statements of the Company give effect to the
acquisition by the Company of the Common Units held by the Public
Unitholders. The $117.5 million cost of such Common Units is
funded by the net proceeds from the sale of $172.5 million of
$3.125 Convertible Preferred Stock that was completed in March
1994. Such net proceeds were used to reduce outstanding
indebtedness under bank credit lines and for temporary cash
investments as of March 31, 1994. The acquisition is accounted
for as a purchase. As a result of the acquisition, the Company
would own 100% of the outstanding Common Units of VNGP, L.P., and
VNGP, L.P. would be fully consolidated in the financial
statements of the Company. Unless otherwise required by the
context, the term "VNGP, L.P." as used herein refers to VNGP,
L.P. and its consolidated subsidiaries, both individually and
collectively. The pro forma condensed consolidated financial
statements are based on the historical consolidated financial
statements of the Company and VNGP, L.P. after certain
adjustments as described below. The pro forma condensed
consolidated balance sheet assumes that the acquisition by the
Company of the Common Units held by the Public Unitholders
occurred on March 31, 1994. The pro forma consolidated
statements of income assume that the above described transactions
occurred on January 1, 1993. Such pro forma condensed
consolidated financial statements are not necessarily indicative
of the results of future operations.
[FN]
<F1>
Reflects the utilization of cash proceeds from the
sale of $3.125 Convertible Preferred Stock to fund the
$117,514,000 acquisition cost of the Common Units held by the
Public Unitholders and the remaining estimated direct costs of
the acquisition of $3,750,000. Direct acquisition costs of
$3,000,000 were accrued in the Company's historical balance sheet
as of March 31, 1994, resulting in total estimated direct
acquisition costs of $6,750,000. These costs were included in
the total acquisition cost of the Common Units held by the Public
Unitholders allocated to the portion of VNGP, L.P.'s assets
acquired and liabilities assumed.
<F2>
Reflects the elimination of current receivables and
payables between the Company and VNGP, L.P. for product sales and
purchases, management fees billed by the Company to VNGP, L.P.
for direct and indirect costs, and accrued interest on capital
leases. The difference between the Company's accrued interest
receivable and VNGP, L.P.'s accrued interest payable on capital
leases is reflected as an adjustment to net property, plant and
equipment.
<F3>
Reflects the adjustment to assumed fair value of the
portion of VNGP, L.P.'s assets acquired and liabilities assumed
previously held by the Public Unitholders. See adjustments <F9>
and <F13>.
<F4>
Reflects the elimination of the Company's acquisition
cost of the Common Units not previously held by the Company
against the corresponding VNGP, L.P. Public Unitholders'
capital, with the difference reflected as an adjustment to the
fair value of net property, plant and equipment acquired.
A summary of the allocation of the acquisition cost of
the Common Units of VNGP, L.P. previously held by the
Public Unitholders is as follows (thousands of dollars):
<TABLE>
<S> <C>
VNGP, L.P. Common Units purchased
(9,711,919 Common Units @ $12.10 per Unit) . . . . . . . . $117,514
Direct acquisition costs . . . . . . . . . . . . . . . . . . 6,750
Total acquisition cost . . . . . . . . . . . . . . . . . 124,264
Less direct acquisition costs accrued in the Company's
historical balance sheet as of March 31, 1994. . . . . . . (3,000)
121,264
Less: VNGP, L.P.'s historical cost basis in
Common Units not previously held by the Company. . . . . . 125,228
Difference - assumed to be an adjustment to the fair value
of net property, plant and equipment acquired. . . . . . . $ (3,964)
</TABLE>
<PAGE>
<F5>
Reflects the elimination of the Company's
previously existing general and limited partner interests
in VNGP, L.P. against the corresponding VNGP, L.P. partners'
capital.
<F6>
Reflects the elimination of the Company's leases
receivable from VNGP, L.P. against the current and long-term
portions of VNGP, L.P.'s capital lease obligations to the
Company, with the difference reflected as an adjustment to net
property, plant and equipment.
<F7>
Reflects the elimination of the noncurrent receivable
and payable between the Company and VNGP, L.P. for postretirement
benefits other than pensions.
<F8>
Reflects the elimination of transactions between the
Company and VNGP, L.P. for product sales and purchases, and
management fees billed by the Company to VNGP, L.P. for direct
and indirect costs.
<F9>
Reflects an increase in operating revenues and
decrease in cost of sales, operating expenses and interest
expense resulting from the amortization to income of the portion
of certain deferred credits and the elimination of amortization
expense on the portion of certain deferred charges of VNGP, L.P.
that were adjusted to fair value upon the acquisition by the
Company of the Public Unitholders' Common Units. See adjustment
<F3>. The deferred credits recorded in adjustment <F3> and
subsequently amortized to income relate primarily to the
assumption of VNGP, L.P.'s obligation to provide discounted
natural gas transportation services to approximately 12 customers.
Such obligations arose in connection with the settlement of
certain take-or-pay and other claims. The fair value adjustment
represents the discounted present value of the difference between
settlement contract rates and current market rates and is
amortized to revenues over the term of the contracts (which
expire primarily in the years 1993 through 1997) based on the
volumes agreed to be transported under such settlement contracts.
<F10>
Reflects an increase to depreciation expense resulting
from the assumed increase in fair value of the portion of VNGP,
L.P.'s net property, plant and equipment acquired from the Public
Unitholders depreciated over an estimated average remaining life
of 17.5 years.
<F11>
Reflects a decrease in depreciation expense resulting
from the difference in depreciable lives of assets held under
capital leases of 20 to 40 years versus their lease terms of 15
to 25 years.
<F12>
Reflects the elimination of the Company's equity in
(losses) of and interest income from VNGP, L.P.
<F13>
Reflects an increase in net interest income resulting
from the accretion of interest which was imputed in connection
with the adjustment to fair value of the portion of VNGP, L.P.'s
deferred charges acquired and deferred credits assumed previously
held by the Public Unitholders. See adjustment <F3>.
<F14>
Reflects the elimination of interest expense incurred
by VNGP, L.P. in connection with its capital lease obligations to
the Company.
<F15>
Reflects a decrease in interest expense due to the
assumed repayment of indebtedness under bank credit lines as of
January 1, 1993 funded primarily by the $43.6 million excess
proceeds from the sale of $3.125 Convertible Preferred Stock.
<F16>
Reflects the tax effects of the consolidation of VNGP,
L.P. into the Company, primarily the tax effects of VNGP, L.P.'s
net income (loss) after its merger into the Company.
<F17>
Reflects an increase in preferred stock dividends due
to the sale of $172.5 million of $3.125 Convertible Preferred
Stock as of January 1, 1993. The preferred stock is convertible
into VEC common stock ("Common Stock") at a premium of 25% above
an assumed Common Stock market price of $21 5/8 per share.
Conversion of the Convertible Preferred Stock into Common Stock
is antidilutive to earnings per share of common stock for the
three months ended March 31, 1994 and the year ended December 31,
1993.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned hereunto duly authorized.
VALERO ENERGY CORPORATION
By: /s/ Don M. Heep
Don M. Heep
Senior Vice President and
Chief Financial Officer
Date: February 9, 1995
