Filed pursuant to Rule 424(b)(3)
Registration No. 333-106949
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 16, 2003)
(VALERO ENERGY CORPORATION LOGO)
2% MANDATORY CONVERTIBLE PREFERRED STOCK
(LIQUIDATION PREFERENCE $25 PER SHARE)
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This document supplements our prospectus dated October 16, 2003, as
supplemented by our prospectus supplement dated October 28, 2003, relating to
the offering for resale of Valero Energy Corporation's 2% Mandatory Convertible
Preferred Stock (liquidation preference $25 per share) and the shares of our
common stock issuable upon conversion of the convertible preferred stock. As
used in this prospectus supplement, the terms "Valero," "we," "us" and "our"
will each refer to Valero Energy Corporation and its subsidiaries and "Orion"
refers to Orion Refining Corporation. The convertible preferred stock was issued
to Orion, a debtor in possession, in connection with Valero's purchase of
Orion's refinery located in Louisiana. On October 28, 2003, Orion resold
8,460,000 shares of our convertible preferred stock in an underwritten public
offering. After the offering, Orion retained 1,540,000 shares of our convertible
preferred stock. On July 1, 2004, the United States bankruptcy court for the
District of Delaware entered an order confirming Orion's amended plan of
liquidation which provides for the transfer of Orion's remaining shares of our
convertible preferred stock to ORC Distribution Trust for distribution to
various creditors in satisfaction of Orion's obligations to such creditors. The
information in this prospectus supplement replaces and supercedes the
information set forth in the fourth paragraph under the caption "Selling
Securityholder" in the prospectus dated October 16, 2003 and in all prior
prospectus supplements to that prospectus.
Our common stock currently trades on the New York Stock Exchange under the
symbol "VLO." The closing price of the common stock on the New York Stock
Exchange was $75.77 per share on July 6, 2004.
INVESTING IN OUR PREFERRED OR COMMON STOCK INVOLVES RISKS. SEE "RISK
FACTORS' BEGINNING ON PAGE 5 OF THE ACCOMPANYING PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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July 7, 2004
SELLING SECURITYHOLDER
The following table sets forth the names of the selling securityholders,
the amount of preferred stock and shares of our common stock beneficially owned
by each such selling securityholder prior to the offering, the amount being
offered for each of the selling securityholder's account and the amount to be
owned by each such securityholder after completion of the offering.
NUMBER OF NUMBER OF
SHARES OF NUMBER OF SHARES OF NUMBER OF
PREFERRED SHARES OF COMMON SHARES OF
STOCK NUMBER OF PREFERRED STOCK NUMBER OF COMMON
BENEFICIALLY SHARES OF STOCK TO BE BENEFICIALLY SHARES OF STOCK TO BE
OWNED PREFERRED OWNED AFTER OWNED COMMON OWNED AFTER
PRIOR TO STOCK BEING COMPLETION PRIOR TO STOCK BEING COMPLETION
THE OFFERED OF THE THE OFFERED OF THE
NAME OFFERING HEREBY OFFERING(1) OFFERING(2) HEREBY OFFERING(3)
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ORC Distribution
Trust(4)............... 1,339,567 1,339,567 0 663,755 663,755 0
TCW Shared Opportunity
Fund II, L.P. ......... 7,899 7,899 0 3,913 3,913 0
Shared Opportunity Fund
IIB, LLC............... 7,011 7,011 0 3,473 3,473 0
TCW Shared Opportunity
Fund III, L.P. ........ 37,508 37,508 0 18,585 18,585 0
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(1) Based on the assumption that the selling securityholders sell all their
shares of convertible preferred stock.
(2) This number is based on a conversion ratio of .4955, the ratio at which a
share of convertible preferred stock is convertible into a share of our
common stock at any time prior to July 1, 2006, an amount that is subject to
change on the mandatory conversion date as described in "Description of the
Convertible Preferred Stock -- Mandatory Conversion."
(3) Based on the assumption that the selling securityholders sell all their
shares of convertible preferred stock or our common stock underlying the
convertible preferred stock.
(4) Subject to certain conditions, (i) TCW Leveraged Income Trust, L.P., TCW
Leveraged Income Trust II, L.P., TCW Shared Opportunity Fund II, L.P.,
Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III, L.P. and
TCW Leveraged Income Trust IV, L.P. (collectively, the "TCW Funds"), have
investment power with respect to 735,251 shares of our convertible preferred
stock and (ii) OCM Opportunities Fund II, L.P. and Columbia/HCA Master
Retirement Trust (Separate Account II) (collectively, the "Oaktree Funds"),
have investment power with respect to 604,316 shares of our convertible
preferred stock. Accordingly, the TCW Funds and Oaktree Funds may be deemed
to beneficially own 735,251 and 604,316 shares of our convertible preferred
stock, respectively.