VLO » Topics » 8. GOODWILL

This excerpt taken from the VLO 10-K filed Feb 26, 2007.


The changes in the carrying amount of goodwill were as follows (in millions):


     Year Ended December 31,  
     2006     2005  

Balance as of beginning of year

   $ 4,926     $ 2,401  

Final (2006) and preliminary (2005) Premcor Acquisition purchase price allocation and adjustments

     (646 )     2,528  

Acquisition earn-out payments not previously accrued (see Note 23)

     26       35  

Settlements and adjustments related to acquisition tax contingencies, stock option exercises, and other

     (95 )     (38 )

Balance as of end of year

   $ 4,211     $ 4,926  

Settlements and adjustments related to acquisition tax contingencies, stock option exercises, and other reflected in the table above relate primarily to settlements of various income tax contingencies assumed in the UDS and Premcor Acquisitions and exercises of stock options assumed in those acquisitions, the effects of which were recorded as purchase price adjustments, and adjustments to the amount of goodwill attributable to our investment in Valero L.P. (see Note 9).

All of our goodwill has been allocated among four reporting units that comprise the refining segment. These reporting units are the Gulf Coast, Mid-Continent, Northeast, and West Coast refining regions. We completed our annual test for impairment of goodwill as of October 1, 2006 and 2005, confirming that no impairment of goodwill had occurred in any of our reporting units as of those dates.

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