Valero Energy Partners LP — Investor Presentation (April 2017)
24 slides from Valero Energy Partners LP's investor presentation, Apr 3, 2017
Slide 1: Investor Presentation April 2017
Investor Presentation April 2017 Exhibit 99.01
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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
Slide 3: Who We Are
Who We Are Sponsored by World’s Largest Independent Refiner, VLO VLO is general partner and majority owner of Valero Energy Partners LP (NYSE: VLP) $30 billion market capitalization(1) VLP’s assets are integrated with VLO’s refining system Fee-Based Master Limited Partnership Formed in 2013 by Valer
Slide 4: Current Macro Environment
Current Macro Environment Abundant global supply of crude oil and natural gas Forecasted world GDP growth Product shortages in Latin America, Africa and Eastern Canada Demand response to lower product prices SUPPLY DEMAND North American logistics build out added efficiency and removed mid-continent
Slide 5: Our Strategic Vision
Our Strategic Vision Generate Stable, Predictable Cash Flows Maintain safe and reliable operations Avoid direct exposure to commodity price risks Protect revenues with minimum volume commitments (MVCs) backed by long-term agreements Maintain Top-Tier Growth Profile and Demonstrate Financial Discipli
Slide 6: Growth-Oriented Logistics MLP with Diversified Portfolio, Integrated with VLO's Refining Assets
Growth-Oriented Logistics MLP with Diversified Portfolio(1), Integrated with VLO’s Refining Assets IPO assets Acquisitions (1)Portfolio assets as of Mar 31, 2017.
Slide 7: Red River Pipeline
Red River Pipeline (1) See page 19 for non-GAAP reconciliations. Red River Pipeline (1-18-17) VLP’s first third party asset acquisition 138 miles of newly constructed 16-inch crude oil pipeline with 150,000 barrels per day of capacity 40% undivided interest in: Hewitt segment of Plains All American
Slide 8: 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(1) Approximately 85% of revenues supported by MVCs No direct commodity price exposure (1) Memphis refinery truck rack is exception, wi
Slide 9: 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 10: Executing from a Position of Fundamental Strength
Grow VLP primarily through drop downs from VLO Target organic growth opportunities and midstream deals 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 Maintain investment grade credit rating
Slide 11: Appendix Contents
Appendix Contents Topic Pages Organizational Structure 12 VLP’s Acquisitions 13 – 16 VLP’s Financial Flexibility for Funding Growth 17 Valero’s Refining and Ethanol Assets 18 Valero’s Investment in Diamond Pipeline 19 Non-GAAP Reconciliations 20 – 23 IR Contacts 24
Slide 12: 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 13: 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 14: 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 Assets contributing as expected Hous
Slide 15: McKee Terminal
McKee Terminal McKee Terminal (4-1-16) 75 tanks with 4.4 million barrels of crude oil, intermediates, and products storage capacity Total transaction value of $240 million financed with $139 million revolver borrowings, $65 million cash, and $36 million equity issued to VLO Assets contributing as ex
Slide 16: Meraux and Three Rivers Terminals
Meraux and Three Rivers Terminals Meraux and Three Rivers Terminals (9-1-16) 86 tanks with 6.2 million barrels of crude oil, intermediates, and products storage capacity Total transaction value of $325 million financed with $210 million revolver borrowings, $66 million cash, and $49 million equity i
Slide 17: VLP's Strong Financial Position Provides Flexibility for Growth
Retained distributable cash flow (DCF) Available to fund growth through acquisitions and organic projects Strong coverage allows for distribution growth without acquisitions through 2017 Sponsor support $555 MM of subordinated loans $255 MM of equity issued Debt and equity markets ATM program, appro
Slide 18: Valero's Refining and Ethanol Assets
Valero’s Refining and Ethanol Assets
Slide 19: Valero's Investment in Diamond Pipeline
Valero’s Investment in Diamond Pipeline 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 crude oil blend quality Approximately $925 MM total project cost VLO exer
Slide 20: 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 21: 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 22: 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) December 31, 2016 Numerator: Total debt and capital lease obligations $ 895,355 Year Ended Decembe
Slide 23: Quarterly EBITDA and Net Income Reconciliation
1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 Net income ($8,280) ($6,929) ($7,934) ($10,218) ($269) $19,161 $15,625 $36,795 $35,780 $44,545 $48,707 $59,799 Plus: Depreciation expense 8,319 8,632 10,398 10,560 10,364 10,578 13,760 10,976 11,512 11,821 11,319 11,
Slide 24: 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]
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