SAN ANTONIO, Aug. 5, 2015 /PRNewswire/ -- Valero Energy
Partners LP (NYSE: VLP, the Partnership), today reported second
quarter 2015 net income attributable to partners of $33.7 million, or $0.54 per common limited partner unit.
The Partnership generated earnings before interest, income taxes,
depreciation, and amortization (EBITDA) of $42.7 million and distributable cash flow of
$40.1 million. VLP's coverage
ratio for the second quarter of 2015 was 2.17x.
"We're pleased with our growth trajectory," said Joe Gorder, Chairman and Chief Executive Officer
of VLP's general partner. "We're advancing our plans for the
next acquisition and remain on course to reach Valero's target for
$1 billion of drop downs in
2015."
On July 24, 2015, the board of
directors of VLP's general partner declared a second quarter 2015
cash distribution of $0.2925 per
unit. This distribution represents a 5.4 percent increase
from the first quarter of 2015 and an increase of 31.5 percent from
the second quarter of 2014.
Financial Results
Second quarter 2015 revenues were
$60.2 million, an increase of
$28.4 million versus second quarter
2014 revenues. Primary contributors to the increase were
revenues generated from the newly acquired Houston and St. Charles terminals and
higher throughput volumes in the Memphis logistics system.
Operating expenses in the second quarter of 2015 were
$14.4 million, general and
administrative expenses were $3.2
million, and depreciation expense was $7.7 million.
Liquidity and Financial Position
As of June 30, 2015, the Partnership had $152 million of total liquidity consisting of
$52 million in cash and cash equivalents and $100 million available on its revolving credit
facility. Capital expenditures attributable to the
Partnership in the second quarter of 2015 were $1.1 million, including $0.9 million for maintenance and $0.2 million for expansion. For 2015,
capital expenditures attributable to the Partnership are expected
to total $11.6 million, of which
$6.1 million is for
maintenance.
Conference Call
The Partnership's senior management
will host a conference call at 3 p.m.
ET today to discuss this earnings release. A live
broadcast of the conference call will be available on the
Partnership's website at www.valeroenergypartners.com.
About Valero Energy Partners LP
Valero Energy
Partners LP is a fee-based master limited partnership formed by
Valero Energy Corporation to own, operate, develop and acquire
crude oil and refined products pipelines, terminals, and other
transportation and logistics assets. With headquarters in
San Antonio, the Partnership's
assets include crude oil and refined petroleum products pipeline
and terminal systems in the Gulf Coast and Mid-Continent regions of
the United States that are
integral to the operations of seven of Valero's refineries. Please
visit www.valeroenergypartners.com for more information.
Contacts
Investors:
John Locke, Vice President –
Investor Relations, 210-345-3077
Karen Ngo, Manager – Investor
Relations, 210-345-4574
Media:
Bill Day, Vice President –
Communications, 210-345-2928
To download our investor relations mobile app, which offers
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Safe-Harbor Statement
This release contains
forward-looking statements within the meaning of federal securities
laws. These statements discuss future expectations, contain
projections of results of operations or of financial condition or
state other forward-looking information. You can identify
forward-looking statements by words such as "anticipate,"
"believe," "estimate," "expect," "forecast," "project," "could,"
"may," "should," "would," "will" or other similar expressions that
convey the uncertainty of future events or outcomes. These
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the Partnership's control and are difficult to
predict. These statements are often based upon various assumptions,
many of which are based, in turn, upon further assumptions,
including examination of historical operating trends made by the
management of the Partnership. Although the Partnership believes
that these assumptions were reasonable when made, because
assumptions are inherently subject to significant uncertainties and
contingencies, which are difficult or impossible to predict and are
beyond its control, the Partnership cannot give assurance that it
will achieve or accomplish these expectations, beliefs or
intentions. When considering these forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements contained in the Partnership's filings with
the U.S. Securities and Exchange Commission, including the
Partnership's annual reports on Form 10-K and quarterly reports on
Form 10-Q, available on the Partnership's website at
www.valeroenergypartners.com. These risks could cause the
Partnership's actual results to differ materially from those
contained in any forward-looking statement.
Use of Non-GAAP Financial Information
This earnings
release includes the terms "EBITDA," "distributable cash flow," and
"coverage ratio." These terms are supplemental financial
measures that are not defined under U.S. generally accepted
accounting principles (GAAP). We reconcile these non-GAAP measures
to the most directly comparable GAAP measures in the tables that
accompany this release. In note (k) to the tables that
accompany this release, we disclose the reasons why we believe our
use of the non-GAAP financial measures in this release provides
useful information.
VALERO ENERGY
PARTNERS LP
EARNINGS
RELEASE
(In Thousands,
Except per Unit Amounts, per Barrel Amounts, and
Ratios)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Statement of
income data (a):
|
|
|
|
|
|
|
Operating revenues –
related party (b)
|
|
$
|
60,245
|
|
|
$
|
31,843
|
|
|
$
|
102,131
|
|
|
$
|
61,332
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Operating expenses
(c)
|
|
14,374
|
|
|
16,315
|
|
|
32,238
|
|
|
32,552
|
|
General and
administrative expenses (d)
|
|
3,160
|
|
|
3,361
|
|
|
6,725
|
|
|
6,458
|
|
Depreciation expense
(e)
|
|
7,715
|
|
|
6,132
|
|
|
15,203
|
|
|
12,048
|
|
Total costs and
expenses
|
|
25,249
|
|
|
25,808
|
|
|
54,166
|
|
|
51,058
|
|
Operating
income
|
|
34,996
|
|
|
6,035
|
|
|
47,965
|
|
|
10,274
|
|
Other income, net
(f)
|
|
26
|
|
|
493
|
|
|
137
|
|
|
1,159
|
|
Interest and debt
expense, net of capitalized interest (g)
|
|
(1,411)
|
|
|
(221)
|
|
|
(2,012)
|
|
|
(449)
|
|
Income before income
taxes
|
|
33,611
|
|
|
6,307
|
|
|
46,090
|
|
|
10,984
|
|
Income tax expense
(benefit) (h)
|
|
(51)
|
|
|
150
|
|
|
(177)
|
|
|
307
|
|
Net income
|
|
33,662
|
|
|
6,157
|
|
|
46,267
|
|
|
10,677
|
|
Less: Net loss
attributable to Predecessor
|
|
—
|
|
|
(6,043)
|
|
|
(9,516)
|
|
|
(12,005)
|
|
Net income
attributable to partners
|
|
33,662
|
|
|
12,200
|
|
|
55,783
|
|
|
22,682
|
|
Less: General
partner's interest in net income
|
|
1,357
|
|
|
244
|
|
|
2,209
|
|
|
454
|
|
Limited partners'
interest in net income
|
|
$
|
32,305
|
|
|
$
|
11,956
|
|
|
$
|
53,574
|
|
|
$
|
22,228
|
|
|
|
|
|
|
|
|
|
|
Net income per
limited partner unit (basic
and diluted):
|
|
|
|
|
|
|
|
|
Common
units
|
|
$
|
0.54
|
|
|
$
|
0.21
|
|
|
$
|
0.91
|
|
|
$
|
0.39
|
|
Subordinated
units
|
|
$
|
0.54
|
|
|
$
|
0.21
|
|
|
$
|
0.90
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
limited partner units outstanding (basic and
diluted):
|
|
|
|
|
|
|
|
|
Common units –
public
|
|
17,250
|
|
|
17,250
|
|
|
17,250
|
|
|
17,250
|
|
Common units –
Valero
|
|
13,448
|
|
|
11,540
|
|
|
12,816
|
|
|
11,540
|
|
Subordinated units –
Valero
|
|
28,790
|
|
|
28,790
|
|
|
28,790
|
|
|
28,790
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY
PARTNERS LP
EARNINGS
RELEASE
(In Thousands,
Except per Unit Amounts, per Barrel Amounts, and
Ratios)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
highlights (a):
|
|
|
|
|
|
|
Pipeline
transportation:
|
|
|
|
|
|
|
|
|
Pipeline
transportation revenues (b)
|
|
$
|
19,967
|
|
|
$
|
16,006
|
|
|
$
|
39,842
|
|
|
$
|
31,240
|
|
Pipeline
transportation throughput (BPD) (i)
|
|
953,123
|
|
|
870,341
|
|
|
966,399
|
|
|
840,512
|
|
Average pipeline
transportation revenue per barrel (j)
|
|
$
|
0.23
|
|
|
$
|
0.20
|
|
|
$
|
0.23
|
|
|
$
|
0.21
|
|
Terminaling:
|
|
|
|
|
|
|
|
|
Terminaling revenues
(b)
|
|
$
|
40,143
|
|
|
$
|
15,549
|
|
|
$
|
62,019
|
|
|
$
|
29,516
|
|
Terminaling
throughput (BPD)
|
|
1,379,757
|
|
|
632,614
|
|
|
1,095,173
|
|
|
600,911
|
|
Average terminaling
revenue per barrel (j)
|
|
$
|
0.32
|
|
|
$
|
0.27
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
Storage
revenues
|
|
$
|
135
|
|
|
$
|
288
|
|
|
$
|
270
|
|
|
$
|
576
|
|
Total operating
revenues – related party
|
|
$
|
60,245
|
|
|
$
|
31,843
|
|
|
$
|
102,131
|
|
|
$
|
61,332
|
|
Capital
expenditures (a):
|
|
|
|
|
|
|
|
|
Maintenance
|
|
$
|
863
|
|
|
$
|
4,570
|
|
|
$
|
4,223
|
|
|
$
|
8,348
|
|
Expansion
|
|
211
|
|
|
15,155
|
|
|
1,829
|
|
|
33,853
|
|
Total capital
expenditures
|
|
1,074
|
|
|
19,725
|
|
|
6,052
|
|
|
42,201
|
|
Less: Capital
expenditures attributable to Predecessor
|
|
—
|
|
|
17,365
|
|
|
3,693
|
|
|
38,977
|
|
Capital expenditures
attributable to Partnership
|
|
$
|
1,074
|
|
|
$
|
2,360
|
|
|
$
|
2,359
|
|
|
$
|
3,224
|
|
Other financial
information:
|
|
|
|
|
|
|
|
|
Distribution declared
per unit
|
|
$
|
0.2925
|
|
|
$
|
0.2225
|
|
|
$
|
0.5700
|
|
|
$
|
0.4350
|
|
EBITDA attributable
to Partnership (k)
|
|
$
|
42,737
|
|
|
$
|
15,565
|
|
|
$
|
70,547
|
|
|
$
|
29,423
|
|
Distributable cash
flow (k)
|
|
$
|
40,051
|
|
|
$
|
15,650
|
|
|
$
|
67,503
|
|
|
$
|
29,215
|
|
Distribution
declared:
|
|
|
|
|
|
|
|
|
Limited partner units
– public
|
|
$
|
5,048
|
|
|
$
|
3,839
|
|
|
$
|
9,838
|
|
|
$
|
7,506
|
|
Limited partner units
– Valero
|
|
12,355
|
|
|
8,974
|
|
|
24,076
|
|
|
17,544
|
|
General partner units
– Valero
|
|
1,053
|
|
|
261
|
|
|
1,808
|
|
|
511
|
|
Total distribution
declared
|
|
$
|
18,456
|
|
|
$
|
13,074
|
|
|
$
|
35,722
|
|
|
$
|
25,561
|
|
Coverage ratio
(k)
|
|
2.17x
|
|
1.20x
|
|
1.89x
|
|
1.14x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
|
2015
|
|
2014
|
Balance sheet data
(a):
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
$
|
52,042
|
|
|
$
|
236,579
|
|
Total
assets
|
|
|
|
|
|
709,955
|
|
|
891,764
|
|
Current portion of
debt and capital lease obligations
|
|
|
|
|
|
26,284
|
|
|
1,200
|
|
Debt and capital
lease obligations, less current portion
|
|
|
|
|
|
335,675
|
|
|
1,519
|
|
Total debt and
capital lease obligations
|
|
|
|
|
|
361,959
|
|
|
2,719
|
|
Partners'
capital
|
|
|
|
|
|
340,227
|
|
|
880,910
|
|
Working
capital
|
|
|
|
|
|
35,108
|
|
|
238,365
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY
PARTNERS LP
EARNINGS
RELEASE
(In Thousands,
Except per Unit Amounts, per Barrel Amounts, and
Ratios)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Reconciliation of
net income to EBITDA and distributable cash flow
(a)(k):
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
33,662
|
|
|
$
|
6,157
|
|
|
$
|
46,267
|
|
|
$
|
10,677
|
|
Plus:
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
7,715
|
|
|
6,132
|
|
|
15,203
|
|
|
12,048
|
|
Interest and debt
expense, net of capitalized interest
|
|
1,411
|
|
|
221
|
|
|
2,012
|
|
|
449
|
|
Income tax expense
(benefit)
|
|
(51)
|
|
|
150
|
|
|
(177)
|
|
|
307
|
|
EBITDA
|
|
42,737
|
|
|
12,660
|
|
|
63,305
|
|
|
23,481
|
|
Less: EBITDA
attributable to Predecessor
|
|
—
|
|
|
(2,905)
|
|
|
(7,242)
|
|
|
(5,942)
|
|
EBITDA attributable
to Partnership
|
|
42,737
|
|
|
15,565
|
|
|
70,547
|
|
|
29,423
|
|
Plus:
|
|
|
|
|
|
|
|
|
Adjustments related
to minimum throughput commitments
|
|
24
|
|
|
475
|
|
|
4
|
|
|
507
|
|
Projects prefunded by
Valero
|
|
—
|
|
|
853
|
|
|
589
|
|
|
1,628
|
|
Other
|
|
—
|
|
|
—
|
|
|
384
|
|
|
—
|
|
Less:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
1,406
|
|
|
229
|
|
|
1,578
|
|
|
465
|
|
Income taxes
paid
|
|
441
|
|
|
9
|
|
|
441
|
|
|
9
|
|
Maintenance capital
expenditures
|
|
863
|
|
|
1,005
|
|
|
2,002
|
|
|
1,869
|
|
Distributable cash
flow
|
|
$
|
40,051
|
|
|
$
|
15,650
|
|
|
$
|
67,503
|
|
|
$
|
29,215
|
|
Reconciliation of
net cash provided by operating activities to EBITDA and
distributable cash flow (a)(k):
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
42,954
|
|
|
$
|
10,121
|
|
|
$
|
55,461
|
|
|
$
|
23,299
|
|
Plus:
|
|
|
|
|
|
|
|
|
Changes in current
assets and current liabilities
|
|
(1,682)
|
|
|
2,191
|
|
|
6,073
|
|
|
(580)
|
|
Changes in deferred
charges and credits and other operating activities, net
|
|
(41)
|
|
|
(19)
|
|
|
(459)
|
|
|
54
|
|
Interest and debt
expense, net of capitalized interest
|
|
1,411
|
|
|
221
|
|
|
2,012
|
|
|
449
|
|
Current income tax
expense
|
|
95
|
|
|
146
|
|
|
218
|
|
|
259
|
|
EBITDA
|
|
42,737
|
|
|
12,660
|
|
|
63,305
|
|
|
23,481
|
|
Less: EBITDA
attributable to Predecessor
|
|
—
|
|
|
(2,905)
|
|
|
(7,242)
|
|
|
(5,942)
|
|
EBITDA attributable
to Partnership
|
|
42,737
|
|
|
15,565
|
|
|
70,547
|
|
|
29,423
|
|
Plus:
|
|
|
|
|
|
|
|
|
Adjustments related
to minimum throughput commitments
|
|
24
|
|
|
475
|
|
|
4
|
|
|
507
|
|
Projects prefunded by
Valero
|
|
—
|
|
|
853
|
|
|
589
|
|
|
1,628
|
|
Other
|
|
—
|
|
|
—
|
|
|
384
|
|
|
—
|
|
Less:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
1,406
|
|
|
229
|
|
|
1,578
|
|
|
465
|
|
Income taxes
paid
|
|
441
|
|
|
9
|
|
|
441
|
|
|
9
|
|
Maintenance capital
expenditures
|
|
863
|
|
|
1,005
|
|
|
2,002
|
|
|
1,869
|
|
Distributable cash
flow
|
|
$
|
40,051
|
|
|
$
|
15,650
|
|
|
$
|
67,503
|
|
|
$
|
29,215
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY
PARTNERS LP
EARNINGS
RELEASE
(In Thousands,
Except per Unit Amounts, per Barrel Amounts, and
Ratios)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Comparison of
ratio of net income attributable to partners divided by total
distribution declared to coverage ratio (k):
|
|
|
|
|
|
|
|
|
Net income
attributable to partners
|
|
$
|
33,662
|
|
|
$
|
12,200
|
|
|
$
|
55,783
|
|
|
$
|
22,682
|
|
Total distribution
declared
|
|
$
|
18,456
|
|
|
$
|
13,074
|
|
|
$
|
35,722
|
|
|
$
|
25,561
|
|
Ratio of net income
attributable to partners divided by total distribution
declared
|
|
1.82x
|
|
0.93x
|
|
1.56x
|
|
0.89x
|
Coverage ratio:
Distributable cash flow divided by total distribution
declared
|
|
2.17x
|
|
1.20x
|
|
1.89x
|
|
1.14x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present our consolidated statements of
income for the six months ended June 30,
2015 and the three and six months ended June 30, 2014, giving effect to the acquisition
of the Houston and St. Charles
Terminal Services Business for periods prior to March 1, 2015
and the acquisition of the Texas Crude Systems Business for periods
prior to July 1, 2014. See Note (a) of Notes to Earnings
Release for a discussion of the basis of this presentation.
|
|
Six Months Ended
June 30, 2015
|
|
|
Valero
Energy
Partners
LP
|
|
Houston and
St.
Charles
Terminal
Services
Business
(January 1, 2015
to
February 28,
2015)
|
|
Valero
Energy
Partners
LP
(Currently
Reported)
|
Operating revenues –
related party (b)
|
|
$
|
102,131
|
|
|
$
|
—
|
|
|
$
|
102,131
|
|
Costs and
expenses:
|
|
|
|
|
|
|
Operating
expenses
|
|
25,043
|
|
|
7,195
|
|
|
32,238
|
|
General and
administrative expenses
|
|
6,678
|
|
|
47
|
|
|
6,725
|
|
Depreciation
expense
|
|
12,929
|
|
|
2,274
|
|
|
15,203
|
|
Total costs and
expenses
|
|
44,650
|
|
|
9,516
|
|
|
54,166
|
|
Operating income
(loss)
|
|
57,481
|
|
|
(9,516)
|
|
|
47,965
|
|
Other income,
net
|
|
137
|
|
|
—
|
|
|
137
|
|
Interest and debt
expense, net of capitalized interest
|
|
(2,012)
|
|
|
—
|
|
|
(2,012)
|
|
Income (loss) before
income taxes
|
|
55,606
|
|
|
(9,516)
|
|
|
46,090
|
|
Income tax
benefit
|
|
(177)
|
|
|
—
|
|
|
(177)
|
|
Net income
(loss)
|
|
55,783
|
|
|
(9,516)
|
|
|
46,267
|
|
Less: Net loss
attributable to Predecessor
|
|
—
|
|
|
(9,516)
|
|
|
(9,516)
|
|
Net income
attributable to partners
|
|
$
|
55,783
|
|
|
$
|
—
|
|
|
$
|
55,783
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY
PARTNERS LP
EARNINGS
RELEASE
(In Thousands,
Except per Unit Amounts, per Barrel Amounts, and
Ratios)
(Unaudited)
|
|
|
|
|
|
Three Months Ended
June 30, 2014
|
|
|
Valero
Energy
Partners
LP
(Previously
Reported)
|
|
Texas
Crude
Systems
Business
(April 1,
2014
to June
30, 2014)
|
|
Houston and
St.
Charles
Terminal
Services
Business
(April 1,
2014
to June 30,
2014)
|
|
Valero
Energy
Partners
LP
(Currently
Reported)
|
Operating revenues –
related party (b)
|
|
$
|
23,660
|
|
|
$
|
8,183
|
|
|
$
|
—
|
|
|
$
|
31,843
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
5,738
|
|
|
2,108
|
|
|
8,469
|
|
|
16,315
|
|
General and
administrative expenses
|
|
2,848
|
|
|
447
|
|
|
66
|
|
|
3,361
|
|
Depreciation
expense
|
|
3,024
|
|
|
844
|
|
|
2,264
|
|
|
6,132
|
|
Total costs and
expenses
|
|
11,610
|
|
|
3,399
|
|
|
10,799
|
|
|
25,808
|
|
Operating income
(loss)
|
|
12,050
|
|
|
4,784
|
|
|
(10,799)
|
|
|
6,035
|
|
Other income,
net
|
|
491
|
|
|
2
|
|
|
—
|
|
|
493
|
|
Interest and debt
expense, net of capitalized interest
|
|
(221)
|
|
|
—
|
|
|
—
|
|
|
(221)
|
|
Income (loss) before
income taxes
|
|
12,320
|
|
|
4,786
|
|
|
(10,799)
|
|
|
6,307
|
|
Income tax
expense
|
|
120
|
|
|
30
|
|
|
—
|
|
|
150
|
|
Net income
(loss)
|
|
12,200
|
|
|
4,756
|
|
|
(10,799)
|
|
|
6,157
|
|
Less: Net income
(loss) attributable to Predecessor
|
|
—
|
|
|
4,756
|
|
|
(10,799)
|
|
|
(6,043)
|
|
Net income
attributable to partners
|
|
$
|
12,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,200
|
|
|
|
|
|
|
Six Months Ended
June 30, 2014
|
|
|
Valero
Energy
Partners
LP
(Previously
Reported)
|
|
Texas
Crude
Systems
Business
(January 1,
2014
to June
30, 2014)
|
|
Houston and
St.
Charles
Terminal
Services
Business
(January 1,
2014
to June 30,
2014)
|
|
Valero
Energy
Partners
LP
(Currently
Reported)
|
Operating revenues –
related party (b)
|
|
$
|
45,191
|
|
|
$
|
16,141
|
|
|
$
|
—
|
|
|
$
|
61,332
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
11,464
|
|
|
4,010
|
|
|
17,078
|
|
|
32,552
|
|
General and
administrative expenses
|
|
5,443
|
|
|
884
|
|
|
131
|
|
|
6,458
|
|
Depreciation
expense
|
|
6,082
|
|
|
1,687
|
|
|
4,279
|
|
|
12,048
|
|
Total costs and
expenses
|
|
22,989
|
|
|
6,581
|
|
|
21,488
|
|
|
51,058
|
|
Operating income
(loss)
|
|
22,202
|
|
|
9,560
|
|
|
(21,488)
|
|
|
10,274
|
|
Other income,
net
|
|
1,139
|
|
|
20
|
|
|
—
|
|
|
1,159
|
|
Interest and debt
expense, net of capitalized interest
|
|
(449)
|
|
|
—
|
|
|
—
|
|
|
(449)
|
|
Income (loss) before
income taxes
|
|
22,892
|
|
|
9,580
|
|
|
(21,488)
|
|
|
10,984
|
|
Income tax
expense
|
|
210
|
|
|
97
|
|
|
—
|
|
|
307
|
|
Net income
(loss)
|
|
22,682
|
|
|
9,483
|
|
|
(21,488)
|
|
|
10,677
|
|
Less: Net income
(loss) attributable to Predecessor
|
|
—
|
|
|
9,483
|
|
|
(21,488)
|
|
|
(12,005)
|
|
Net income
attributable to partners
|
|
$
|
22,682
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,682
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY PARTNERS LP
EARNINGS
RELEASE
(In Thousands, Except per Unit Amounts, per
Barrel Amounts, and Ratios)
(Unaudited)
The following table presents our balance sheet data as of
December 31, 2014, giving effect to
the acquisition of the Houston and
St. Charles Terminal Services Business. See Note (a) of
Notes to Earnings Release for a discussion of the basis of
this presentation.
|
|
December 31,
2014
|
|
|
Valero
Energy
Partners
LP
(Previously
Reported)
|
|
Houston and
St.
Charles
Terminal
Services
Business
|
|
Valero
Energy
Partners
LP
(Currently
Reported)
|
Cash and cash
equivalents
|
|
$
|
236,579
|
|
|
$
|
—
|
|
|
$
|
236,579
|
|
Total
assets
|
|
596,073
|
|
|
295,691
|
|
|
891,764
|
|
Current portion of
debt and capital lease obligations
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
Debt and capital
lease obligations, less current portion
|
|
1,519
|
|
|
—
|
|
|
1,519
|
|
Total debt and
capital lease obligations
|
|
2,719
|
|
|
—
|
|
|
2,719
|
|
Partners'
capital
|
|
585,219
|
|
|
295,691
|
|
|
880,910
|
|
Working
capital
|
|
238,365
|
|
|
—
|
|
|
238,365
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings
Release on Table Page 7.
|
VALERO ENERGY
PARTNERS LP
NOTES TO EARNINGS
RELEASE
|
|
|
(a)
|
References to the
"Partnership," "we," "us," or "our" refer to Valero Energy Partners
LP, one or more of its subsidiaries, or all of them taken as a
whole for periods after December 16, 2013, the date the Partnership
completed its initial public offering (IPO). For periods prior to
the IPO and periods prior to the Acquisitions (defined below),
those terms refer to Valero Energy Partners LP Predecessor, our
Predecessor for accounting purposes. References in these notes to
"Valero" may refer to Valero Energy Corporation, one or more of its
subsidiaries, or all of them taken as a whole, other than Valero
Energy Partners LP, any of its subsidiaries, or its general
partner.
|
|
|
|
Effective March 1,
2015, we acquired the Houston and St. Charles Terminal Services
Business from Valero (the Houston and St. Charles Terminal
Acquisition) for total consideration of $671.2 million
consisting of (i) cash of $571.2 million and (ii) the issuance
of 1,908,100 common units representing limited partner interests in
us and 38,941 general partner units representing general partner
interests in us having an aggregate value, collectively, of
$100.0 million. We funded the cash distribution to Valero with
$211.2 million of our cash on hand, $200.0 million of
borrowings under our revolving credit facility, and
$160.0 million of proceeds from a subordinated credit
agreement with Valero. We began receiving fees for services
provided by this business commencing on March 1, 2015.
|
|
|
|
Effective
July 1, 2014, we acquired the Texas Crude Systems Business
from Valero (the Texas Crude Systems Acquisition) for total cash
consideration of $154.0 million, and we began receiving fees for
services provided by this business commencing on July 1,
2014.
|
|
|
|
The Texas Crude
Systems Acquisition and the Houston and St. Charles Terminal
Acquisition (collectively, the Acquisitions) were each accounted
for as transfers of a business between entities under the common
control of Valero. As entities under the common control of Valero,
we recorded the Acquisitions on our balance sheet at Valero's
carrying value rather than fair value. Transfers between entities
under common control are accounted for as though the transfer
occurred as of the beginning of the period of transfer, and prior
period financial statements and financial information are
retrospectively adjusted to furnish comparative information.
Accordingly, the statement of income data and operating highlights
and capital expenditures data have been retrospectively adjusted to
include the historical results of operations of the Texas Crude
Systems Business for periods presented prior to July 1, 2014
and the historical results of operations of the Houston and
St. Charles Terminal Services Business for periods presented
prior to March 1, 2015. In addition, the balance sheet data as of
December 31, 2014 has been retrospectively adjusted to include the
assets and liabilities of the Houston and St. Charles Terminal
Services Business.
|
|
|
(b)
|
Operating revenues
include amounts attributable to our Predecessor. Prior to being
acquired by us, the Texas Crude Systems Business generated revenues
by providing fee-based transportation and terminaling services to
Valero, but the Houston and St. Charles Terminal Services
Business did not charge Valero for services provided and did not
generate revenues. Effective with the date of each of the
Acquisitions, we entered into additional schedules to our
commercial agreements with Valero with respect to the services we
provide to Valero using the assets of the acquired businesses. This
resulted in (i) changes to pipeline and terminaling throughput fees
previously charged to Valero by the Texas Crude Systems Business
and (ii) the recognition of terminaling revenues by the Houston and
St. Charles Terminal Services Business.
|
|
|
(c)
|
The decrease in
operating expenses for the three months ended June 30, 2015
compared to the three months ended June 30, 2014 was due
primarily to lower maintenance expense of $2.3 million at the St.
Charles and Houston terminals and the Memphis logistics system. The
decrease in maintenance expense was partially offset by an increase
in insurance expense of $765,000 as a result of the assets of the
Acquisitions being covered under our own insurance policies. Prior
to the Acquisitions, our Predecessor was allocated a portion of
Valero's insurance costs.
|
|
|
(d)
|
The decrease in
general and administrative expenses for the three months ended
June 30, 2015 compared to the three months ended June 30,
2014 was due primarily to transaction costs of $308,000 incurred
during the three months ended June 30, 2014 related to the
July 1, 2014 acquisition of the Texas Crude Systems
Business.
|
|
|
|
The increase in
general and administrative expenses for the six months ended
June 30, 2015 compared to the six months ended June 30,
2014 was due primarily to higher transaction costs of $238,000
during the six months ended June 30, 2015. In 2015, we
incurred transaction costs of $546,000 in connection with the March
1, 2015 acquisition of the Houston and St. Charles Terminal
Services Business. In 2014, we incurred $308,000 in connection with
the July 1, 2014 acquisition of the Texas Crude Systems
Business.
|
|
|
(e)
|
The increase in
depreciation expense for the three and six months ended
June 30, 2015 compared to the three and six months ended
June 30, 2014 was due primarily to the effect of assets placed
in service during 2014, including the expansion of the St. Charles
terminal, the enhancement of pipeline and terminal monitoring
systems at the Memphis products system, and the interconnection
with TransCanada's Cushing Marketlink pipeline at the Lucas crude
system.
|
|
|
(f)
|
The decrease in
"other income, net" for the three and six months ended
June 30, 2015 compared to the three and six months ended
June 30, 2014 was due primarily to a decrease in interest
income (net of bank fees) of $229,000 and $418,000, respectively,
attributable to a reduced cash balance during the three and six
months ended June 30, 2015. In addition, right-of-way fees
decreased $143,000 and $141,000, respectively, and scrap metal
sales decreased $42,000 and $410,000,
respectively.
|
|
|
(g)
|
The increase in
"interest and debt expense, net of capitalized interest" for the
three and six months ended June 30, 2015 compared to the three
and six months ended June 30, 2014 was due primarily to
interest expense incurred on borrowings of $200.0 million
under our revolving credit facility and $160.0 million under a
subordinated credit agreement with Valero in connection with the
acquisition of the Houston and St. Charles Terminal Services
Business. Interest expense on this indebtedness was $1.3 million
and $1.7 million for the three and six months ended June 30,
2015, respectively.
|
|
|
(h)
|
Our income tax
expense (benefit) is associated with the Texas margin tax. In June
2015, the Texas margin tax rate was reduced from 1 percent to 0.75
percent. The impact of this rate reduction resulted in a tax
benefit for the three and six months ended June 30, 2015. In
addition, during the six months ended June 30, 2015, we
reduced our deferred income tax liabilities due to a reduction in
the relative amount of revenue we generate in Texas compared to our
total revenue. This reduction was a result of the acquisition of
the Houston and St. Charles Terminal Services Business (which
includes operations in Louisiana).
|
|
|
(i)
|
Represents the sum of
volumes transported through each separately tariffed pipeline
segment.
|
|
|
(j)
|
Management uses
average revenue per barrel to evaluate performance and compare
profitability to other companies in the industry. There are a
variety of ways to calculate average revenue per barrel; different
companies may calculate it in different ways. We calculate average
revenue per barrel as revenue divided by throughput for the period.
Throughput can be derived by multiplying the throughput barrels per
day (BPD) by the number of days in the period. Investors and
analysts use this financial measure to help analyze and compare
companies in the industry on the basis of operating performance.
This financial measure should not be considered as an alternative
to revenues presented in accordance with U.S. generally accepted
accounting principles (GAAP).
|
|
|
(k)
|
We define EBITDA as
net income before income tax expense, interest expense, and
depreciation expense. We define distributable cash flow as EBITDA
less cash payments during the period for interest, income taxes,
and maintenance capital expenditures, plus adjustments related to
minimum throughput commitments, capital projects prefunded by
Valero, and certain other items. We define coverage ratio as the
ratio of distributable cash flow to the total distribution
declared.
|
|
|
|
EBITDA, distributable
cash flow, and coverage ratio are supplemental financial measures
that are not defined under GAAP. They may be used by management and
external users of our financial statements, such as industry
analysts, investors, lenders, and rating agencies, to:
|
|
|
|
•
|
describe our
expectation of forecasted earnings;
|
|
•
|
assess our operating
performance as compared to other publicly traded limited
partnerships in the transportation and logistics industry, without
regard to historical cost basis or, in the case of EBITDA,
financing methods;
|
|
•
|
assess the ability of
our business to generate sufficient cash to support our decision to
make distributions to our unitholders;
|
|
•
|
assess our ability to
incur and service debt and fund capital expenditures;
and
|
|
•
|
assess the viability
of acquisitions and other capital expenditure projects and the
returns on investment of various investment
opportunities.
|
|
|
|
|
We believe that the
presentation of EBITDA provides useful information to investors in
assessing our financial condition and results of operations. The
GAAP measures most directly comparable to EBITDA are net income and
net cash provided by operating activities. EBITDA should not be
considered an alternative to net income or net cash provided by
operating activities presented in accordance with GAAP. EBITDA has
important limitations as an analytical tool because it excludes
some, but not all, items that affect net income or net cash
provided by operating activities. EBITDA should not be considered
in isolation or as a substitute for analysis of our results as
reported under GAAP. Additionally, because EBITDA may be defined
differently by other companies in our industry, our definition of
EBITDA may not be comparable to similarly titled measures of other
companies, thereby diminishing its utility.
|
|
|
|
We use distributable
cash flow to measure whether we have generated from our operations,
or "earned," an amount of cash sufficient to support the payment of
the minimum quarterly distributions. Our partnership agreement
contains the concept of "operating surplus" to determine whether
our operations are generating sufficient cash to support the
distributions that we are paying, as opposed to returning capital
to our partners. Because operating surplus is a cumulative concept
(measured from the IPO date and compared to cumulative
distributions from the IPO date), we use the term distributable
cash flow to approximate operating surplus on a quarterly or
annual, rather than a cumulative, basis. As a result, distributable
cash flow is not necessarily indicative of the actual cash we have
on hand to distribute or that we are required to
distribute.
|
|
|
|
We use the coverage
ratio to reflect the relationship between our distributable cash
flow and the total distribution declared. We have also provided the
ratio of net income attributable to partners, the most directly
comparable GAAP measure to distributable cash flow, to the total
distribution declared.
|
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SOURCE Valero Energy Partners LP