Valero Energy Partners LP — Investor Presentation (June 2017)
25 slides from Valero Energy Partners LP's investor presentation, Jun 27, 2017
Slide 1: Investor Presentation June 2017
Investor Presentation June 2017 Exhibit 99.01
Slide 2: Disclaimers
Disclaimers This presentation 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-l
Slide 3: Who We Are
Who We Are Sponsored by Premier Independent Refiner, Valero Valero (NYSE:VLO) is general partner and majority owner of Valero Energy Partners LP (NYSE: VLP) $28 billion market capitalization(2) VLP’s assets are integrated with VLO’s refining system Growth Oriented Master Limited Partnership Liquids
Slide 4: Current Macro Environment
Current Macro Environment Forecasted world GDP growth Product shortages in Mexico, Central and South America, Europe, Africa, and Eastern Canada Healthy product demand in lower price environment SUPPLY DEMAND Macro environment themes represent industry consultant views. REGULATORY AND GEOPOLITICAL A
Slide 5: Our Strategic Vision
Our Strategic Vision Maintain safe and environmentally responsible operations ` Generate stable, predictable cash flows, avoiding commodity price risks and protecting revenues with minimum volume commitments (MVCs) and long-term agreements… Demonstrate financial discipline by maintaining a strong ba
Slide 6: Growth-Oriented Logistics MLP with Diversified Portfolio
Growth-Oriented Logistics MLP with Diversified Portfolio
Slide 7: Long Term Agreements Provide Stable and Predictable Cash Flows
Long Term Agreements Provide Stable and Predictable Cash Flows Transportation and terminal services agreements have 10 year initial terms and five year renewal terms Approximately 85% of revenues supported by MVCs No direct commodity price exposure
Slide 8: Executing from a Position of Fundamental Strength
Grow VLP primarily through drop downs from VLO Target organic growth opportunities that are strategic to VLO’s core business or that provide third party revenue Grow annual distributions at target rates of 25% through 2017 and at least 20% for 2018 Executing from a Position of Fundamental Strength S
Slide 9: VLP's Strong Financial Position Provides Flexibility for Growth
Retained distributable cash flow Available to fund growth through acquisitions and organic projects Strong coverage allows for distribution growth without acquisitions through 2017 Sponsor provided seller-financing for acquisitions $555 MM of subordinated loans $255 MM of equity issued Debt and equi
Slide 10: Investing $35 Million in Organic Growth in 2017
Investing $35 Million in Organic Growth in 2017 Diamond Green Diesel (DGD) logistics assets at the St. Charles Terminal Rail loading facility completed in 2Q17 180,000 barrel storage tank expected to be complete in 4Q17 Supported by a long-term, fee based contract through June 2033 $20 MM estimated
Slide 11: VLO Continues to Invest in MLP Eligible Midstream Assets
VLO Continues to Invest in MLP Eligible Midstream Assets Diamond Pipeline 440 miles of 20-inch pipe (200 MBPD capacity) connecting Memphis to Cushing Project is on track for completion in 4Q17 Provides supply flexibility and ability to improve VLO’s crude supply Approximately $460 MM of project cost
Slide 12: Approximately $1 Billion of Estimated MLP Eligible EBITDA
Approximately $1 Billion of Estimated MLP Eligible EBITDA(1) Inventory at VLO Racks, Terminals, and Storage(2) Over 70 million barrels of active shell capacity for crude oil and products 139 truck rack bays Rail Approximately 5,250 purchased railcars, expected to serve long-term needs of ethanol, as
Slide 13: Outperformed Peers and AMZ Since Our IPO
Outperformed Peers(1) and AMZ(2) Since Our IPO VLP67% AMZ-19% (1) Peer group includes MPLX, PSXP, and TLLP. (2) Alerian MLP Index (NYSE: AMZ) includes peers MPLX, PSXP, TLLP, and 39 other MLPs such as EPD, ETP, MMP, PAA, WPZ, OKS, and WES. (3) Total stockholder return (TSR) from Dec 13, 2013, throug
Slide 14: Appendix Contents
Appendix Contents Topic Pages Organizational Structure 15 VLP’s Acquisitions 16 – 19 Map of Valero’s Assets 20 Non-GAAP Reconciliations 21 – 24 IR Contacts 25
Slide 15: Organizational Structure
Organizational Structure(1) Valero Energy Corporation (NYSE: VLO) A wholly owned subsidiary of Valero Energy Corporation Common Units Valero Energy Partners GP LLC (our General Partner) General Partner Units Incentive Distribution Rights Valero Energy Partners LP (NYSE: VLP) (the Partnership) Valero
Slide 16: IPO Assets and Texas Crude Systems Business
IPO Assets and Texas Crude Systems Business Texas Crude Systems Business (7-1-14) Pipelines, truck unloading sites, and storage supporting VLO’s McKee, Three Rivers, and Ardmore refineries McKee system includes 72 MBPD of throughput capacity and 240,000 barrels of storage for crude oil Three Rivers
Slide 17: Houston, St. Charles, and Corpus Christi Terminals
Houston, St. Charles, and Corpus Christi Terminals Corpus Christi (10-1-15) Crude oil, intermediates, and refined products terminaling services supporting VLO’s Corpus Christi East and West refineries 10.1 million barrels of storage on Corpus Christi ship channel Houston and St. Charles (3-1-15) Cru
Slide 18: McKee, Meraux and Three Rivers Terminals
McKee, Meraux and Three Rivers Terminals Meraux and Three Rivers Terminals (9-1-16) Crude oil, intermediates, and products storage capacity supporting VLO’s Meraux and Three Rivers refineries 6.2 million barrels of storage capacity McKee Terminal (4-1-16) Crude oil, intermediates, and products stora
Slide 19: Red River Pipeline
Red River Pipeline Red River Pipeline (1-18-17) 40% undivided interest in Hewitt segment of Red River Pipeline supporting VLO’s Ardmore refinery with a connection from Hewitt to Wasson 138 miles of newly constructed 16-inch crude oil pipeline with 150,000 barrels per day of capacity Two 150,000 barr
Slide 20: Valero's Strong Presence in Advantaged U.S. Gulf Coast and Mid-Continent
Valero’s Strong Presence in Advantaged U.S. Gulf Coast and Mid-Continent
Slide 21: VLP Non-GAAP Disclosures: EBITDA, Distributable Cash Flow, and Debt-to-EBITDA
VLP Non-GAAP Disclosures: EBITDA, Distributable Cash Flow, and Debt-to-EBITDA VLP defines EBITDA as net income before income tax expense, interest expense, and depreciation expense. VLP defines distributable cash flow as EBITDA less (i) EBITDA attributable to its Predecessor and cash payments during
Slide 22: VLP Non-GAAP Disclosures (continued)
VLP Non-GAAP Disclosures: EBITDA, Distributable Cash Flow, and Debt-to-EBITDA (continued) VLP uses distributable cash flow to measure whether it has generated from its operations, or “earned,” an amount of cash sufficient to support the payment of the minimum quarterly distributions. VLP’s partnersh
Slide 23: VLP Non-GAAP Disclosures: Debt-to-EBITDA
VLP Non-GAAP Disclosures: Debt-to-EBITDA VALERO ENERGY PARTNERS LP RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS REPORTED UNDER U.S. GAAP (Unaudited, in Thousands, Except Ratio Amount) Mar 31, 2017 Numerator: Total debt and capital lease obligations $895,057 Three Months Ended Mar 3
Slide 24: Quarterly EBITDA reconciliation 4Q2013-1Q2017
4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 Net income ($6,900) ($8,280) ($6,929) ($7,934) ($10,218) ($269) $19,161 $15,625 $36,795 $35,780 $44,545 $48,707 $59,799 $58,137 Plus: Depreciation expense 8,958 8,319 8,632 10,398 10,560 10,364 10,578 1
Slide 25: IR Contacts
IR Contacts For more information, please contact: John Locke Vice President, Investor Relations 210.345.3077 [email protected] Karen Ngo Senior Manager, Investor Relations 210.345.4574 [email protected] Tom Mahrer Manager, Investor Relations 210.345.1953 [email protected]
Valero Energy Partners — Investor Presentation (June 2017) on 6ix