Valero Energy Partners LP — Investor Presentation (January 2018)
27 slides from Valero Energy Partners LP's investor presentation, Jan 5, 2018
Slide 1: Investor Update January 2018
Investor Update January 2018 Exhibit 99.01
Slide 2: Disclaimers
Disclaimers This presentation contains forward-looking statements made by Valero Energy Corporation (“VLO” or “Valero”) and Valero Energy Partners LP (“VLP” or the “Partnership”) within the meaning of federal securities laws. These statements discuss future expectations, contain projections of resul
Slide 3: Who We Are
Who We Are (NYSE: VLP) Sponsored by Premier Independent Refiner, Valero Valero (NYSE:VLO) is our general partner and majority owner $40 billion market capitalization(2) VLP’s assets are integrated with VLO’s refining system Growth Oriented Master Limited Partnership Liquids focused logistics assets
Slide 4: Bullish Fundamentals for Valero and Refining Should Drive High Utilization of VLP Assets
Bullish Fundamentals for Valero and Refining Should Drive High Utilization of VLP Assets SUPPLY DEMAND Macro environment themes represent industry consultant views. REGULATORY AND GEOPOLITICAL Evolving U.S. legislative and regulatory landscape Recent tax reform Emerging global developments PRODUCTIO
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: Diversified Asset Portfolio
Diversified Asset 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
Maintain growth profile, targeting drop downs from VLO, organic projects, and midstream acquisitions Grow annual distributions at target rate of at least 20% for 2018 Maintain investment grade credit ratings Executing from a Position of Fundamental Strength Strategy & Financial Highlights Increased
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 2018 Sponsor provided seller-financing for acquisitions $555 MM of subordinated loans $301 MM of equity issued through Nov 1
Slide 10: Delivering Organic Growth: Projects in Execution Phase
Delivering Organic Growth Diamond Green Diesel logistics assets at the St. Charles Terminal Rail loading facility completed in 2Q17 180,000 barrel storage tank expected to be complete in 1Q18 Supported by a long-term, fee based contract through June 2033 Approximately $20 MM total project cost Port
Slide 11: VLO's Recent Investment in MLP Eligible Midstream Assets in the U.S. Mid-Continent
VLO’s Recent Investment in MLP Eligible Midstream Assets in the U.S. Mid-Continent Diamond Pipeline 440 miles of 20-inch pipe (200 MBPD capacity) connecting Memphis to Cushing, started up in Nov 2017 Improves crude supply flexibility and blend quality Approximately $460 MM of project cost for Valero
Slide 12: VLO's Recent Investments in MLP Eligible Midstream Assets in the U.S. Gulf Coast
VLO’s Recent Investments in MLP Eligible Midstream Assets in the U.S. Gulf Coast (1) Valero to own ~70 mile pipeline from Hearne to Williamson County and 40% undivided interest in 135 mile pipeline from Houston to Hearne. Central Texas pipelines and terminals to supply high-growth refined products m
Slide 13: 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 60 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 14: Delivered Peer-Leading Returns, Coverage, and Leverage
Delivered Peer-Leading(1,2) Returns, Coverage, and Leverage VLP71% AMZ-18% (1) Peer group includes MPLX, PSXP, ANDX, and SHLX. (2) Alerian MLP Index (NYSE: AMZ) includes peers MPLX, PSXP, ANDX, SHLX, and 35 other MLPs such as EPD, ETP, MMP, PAA, WPZ, and WES. (3) Total stockholder return (TSR) from
Slide 15: Competitive Strengths
Competitive Strengths Strong Sponsor Strategic relationship with investment grade sponsor VLO Quality Assets High quality, well maintained assets located in advantaged regions Stable and Predictable Revenues Fee-based agreements with no direct exposure to commodity price risks Contracts with 10 year
Slide 16: Appendix Contents
Appendix Contents Topic Pages Organizational Structure 17 VLP Acquisitions 18 – 22 Map of VLO Assets 23 Non-GAAP Disclosures 24 – 26 Investor Relations Contacts 27
Slide 17: 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) Valero Partners Operatin
Slide 18: 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 19: 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 20: 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 21: 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 22: Parkway Pipeline and Port Arthur Terminal
Parkway Pipeline and Port Arthur Terminal Parkway Pipeline and Port Arthur Terminal (11-1-17) Products pipeline linking VLO’s St. Charles refinery with the Plantation and Colonial pipeline systems 141-mile, 16-inch refined petroleum products pipeline with 110,000 barrels per day of capacity with abi
Slide 23: VLO's Strong Presence in Advantaged U.S. Gulf Coast and Mid-Continent
VLO’s Strong Presence in Advantaged U.S. Gulf Coast and Mid-Continent Majority of refineries designated as VPP Star Sites by OSHA, recognizing exemplary occupational safety and health programs
Slide 24: Non-GAAP Disclosures: EBITDA, Distributable Cash Flow, and Debt-to-Adjusted Pro Forma EBITDA
Non-GAAP Disclosures: EBITDA, Distributable Cash Flow, and Debt-to-Adjusted Pro Forma EBITDA VLP defines EBITDA as net income before income tax expense, interest and debt expense, net of capitalized interest, and depreciation expense. VLP defines distributable cash flow as EBITDA less (i) EBITDA att
Slide 25: Non-GAAP Disclosures: Debt-to-EBITDA
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) Sep 30, 2017 Numerator: Total debt and capital lease obligations $895,177 Nine Months Ended Sep 30, 20
Slide 26: Non-GAAP Disclosures: Quarterly EBITDA Reconciliation
4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 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 $58,443 $57,589 Plus: Depreciation expense 8,958 8,319 8,632
Slide 27: Investor Relations Contacts
Investor Relations Contacts For more information, please contact: John Locke Vice President, Investor Relations 210.345.3077 john.locke@valero.com Karen Ngo Senior Manager, Investor Relations 210.345.4574 karen.ngo@valero.com Tom Mahrer Manager, Investor Relations 210.345.1953 tom.mahrer@valero.com
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