Valero Energy uses $223 million in second quarter to repay debt

By Jennifer Lanning Drey

Portland, Ore., July 27 - Valero Energy Corp. spent $223 million to pay down debt in the second quarter, ending the period with $8 billion of debt at June 30, Michael Ciskowski, its chief financial officer, said Tuesday during the company's quarterly earnings conference call.

Valero had a cash balance of $2 billion and had $4.4 billion of additional available liquidity at the end of the second quarter, he said.

Going forward, the company will remain focused on maintaining its financial strength and investment-grade credit ratings. Valero will also continue to work to reduce costs and improve its portfolio of assets, he said.

In June, Valero closed on the sale of its Delaware City, Del., assets and started turnaround maintenance at its Aruba refinery. The company said it continues to evaluate strategic alternatives for its Paulsboro refinery in New Jersey.

Valero reported second-quarter operating income of $921 million, versus an operating loss of $192 million in the second quarter of 2009. The company said the increase in operating income was mainly due to higher margins for diesel and many of its secondary products.

Second-quarter operating revenues increased to $21.78 billion, compared with $17.34 billion in the same period of 2009.

"We had a really good second quarter that demonstrated the earnings power of our assets following the strategic actions and cost-reduction efforts we've taken over the last 12 months," Ciskowski said.

Valero is a San Antonio-based refinery owner and operator.

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