SAN ANTONIO, Sept. 23, 2015 /PRNewswire/ -- Valero Energy
Partners LP (NYSE: VLP, the Partnership) today announced that the
board of directors of its general partner has approved the
Partnership's acquisition of the Corpus Christi Terminal Services
Business from a subsidiary of Valero Energy Corporation (NYSE: VLO,
Valero) for total consideration of $465
million. The transaction is expected to close
effective October 1, 2015.
The business to be acquired includes two terminals that support
Valero's Corpus Christi East and West refineries. The assets
consist of 134 tanks with 10.1 million barrels of storage capacity
for crude oil, intermediates, and refined petroleum products.
The Partnership expects to finance the acquisition with
$395 million in borrowings under a
subordinated loan agreement with Valero, as well as the issuance of
additional common units and general partner units to Valero
subsidiaries, valued collectively at approximately $70 million. The newly issued units will be
allocated in a proportion allowing the general partner to maintain
its 2 percent general partner interest.
Upon closing, the Partnership plans to enter into a 10-year
terminaling agreement with a subsidiary of Valero. The
business to be acquired is expected to contribute approximately
$50 million of EBITDA in its first
full year of operation.
"With transactions totaling $1.14
billion, we've exceeded our $1
billion target for acquisitions in 2015," said Joe Gorder, Chief Executive Officer of VLP's
general partner. "We're on course to deliver year-over-year
distribution growth in excess of 25 percent."
The terms of the transaction were approved, subject to the
execution of definitive documentation, by the board of directors of
the general partner, following the approval and recommendation of
the board's conflicts committee. The conflicts committee is
composed of independent directors and was advised by Evercore Group
L.L.C., its financial advisor, and Akin Gump Straus Hauer &
Feld LLP, its legal counsel.
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 eight 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
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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
We define EBITDA as net income before income tax expense, interest
expense, and depreciation expense. EBITDA is a supplemental
financial measure that is not defined under United States generally accepted accounting
principles (GAAP). We believe that the presentation of EBITDA
provides useful information to investors in assessing our financial
condition and results of operations. The GAAP measure most
directly comparable to EBITDA is net income. EBITDA should
not be considered an alternative to net income in accordance with
GAAP. EBITDA has important limitations as an analytical tool
because it excludes some, but not all, items that affect net
income. 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.
VALERO ENERGY
PARTNERS LP
RECONCILIATION OF
FORECASTED NET INCOME UNDER GAAP TO EBITDA
(Unaudited, in
Thousands)
|
|
|
|
Full Year
Beginning
October 1, 2015
Corpus Christi
Terminal Services
Business
|
Forecasted net
income
|
$
29,400
|
Add: Forecasted
depreciation expense
|
6,400
|
Add: Forecasted
interest expense
|
13,700
|
Add: Forecasted
income tax expense
|
100
|
Forecasted
EBITDA
|
$
49,600
|
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SOURCE Valero Energy Partners LP