January 29, 2007 - 8:50 AM EST Valero GP Holdings, LLC Reports Fourth Quarter 2006 Earnings and Announces Quarterly Distribution
Valero GP Holdings, LLC (NYSE:VEH) today announced earnings of $10.3 million, or $0.24 per unit, for the fourth quarter of 2006. For the six months ended December 31, 2006, earnings were $20 million, or $0.47 per unit. Distributable cash flow available to unitholders for the fourth quarter of 2006 was $13.5 million, or $0.32 per unit, and $27.0 million, or $0.64 per unit, for the six months ended December 31, 2006.
With respect to the quarterly distribution to unitholders payable for the fourth quarter of 2006, Valero GP Holdings, LLC also announced that it has declared a distribution of $0.32 per unit, or $1.28 per unit on an annual basis, which will be paid on February 16, 2007, to holders of record as of February 7, 2007.
A conference call with management is scheduled for 2:30 p.m. ET (1:30 p.m. CT) today to discuss the financial results for the fourth quarter of 2006. Investors interested in listening to the presentation may call 800-622-7620, passcode 5994994. International callers may access the presentation by dialing 706-645-0327, passcode 5994994. The company intends to have a playback available following the presentation, which may be accessed by calling 800-642-1687, passcode 5994994. A live broadcast of the conference call will also be available on the company's website at www.valerogpholdings.com.
Valero GP Holdings, LLC is a publicly traded limited liability company that owns the two percent general partner interest, a 21.4 percent limited partner interest and the incentive distribution rights in Valero L.P., one of the largest independent terminal and petroleum liquids pipeline operators in the nation with operations in the United States, the Netherlands Antilles, Canada, Mexico, the Netherlands and the United Kingdom. For more information, visit Valero GP Holdings, LLC's website at www.valerogpholdings.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of Valero GP Holdings, LLC. All forward-looking statements are based on the company's beliefs as well as assumptions made by and information currently available to the company. These statements reflect the company's current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Valero GP Holdings, LLC's filings with the Securities and Exchange Commission.
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Valero GP Holdings, LLC
Consolidated Financial Information
December 31, 2006
(unaudited, thousands of dollars, except unit data and per unit data)
Three Months Ended Six Months Ended
December 31, 2006 December 31, 2006
------------------ -----------------
Statement of Income Data:
Equity in earnings of Valero
L.P. $10,842 $22,479
General and administrative
expenses (659) (1,536)
Other income (expense), net 167 (119)
Interest expense, net (10) (16)
Interest expense - affiliated - (901)
------------------ -----------------
Income before income tax
(expense) benefit 10,340 19,907
Income tax (expense) benefit (17) 113
------------------ -----------------
Net income $10,323 $20,020
================== =================
Basic and diluted net income per
unit $0.24 $0.47
================== =================
Equity in Earnings of Valero
L.P.:
General partner interest (2%) $674 $1,427
General partner incentive
distribution 3,909 7,818
Direct charges to Valero GP
Holdings, LLC (Note 1) (223) (575)
------------------ -----------------
General partner's interest in
earnings of Valero L.P. 4,360 8,670
Limited partner interest in
earnings of Valero L.P. 7,203 15,251
Amortization of step-up in
basis related to Valero L.P.'s
assets and liabilities (721) (1,442)
------------------ -----------------
Equity in earnings of Valero
L.P. $10,842 $22,479
================== =================
Distributable Cash (Note 2):
Cash distributions from Valero
L.P. associated with:
General partner interest (2%) $955 $1,910
Incentive distribution rights 3,909 7,818
Limited partner interest-
common units 9,347 18,697
------------------ -----------------
Total cash distributions from
Valero L.P. 14,211 28,425
Deduct expenses of Valero GP
Holdings, LLC:
General and administrative
expenses (659) (1,536)
Income tax (expense) benefit (17) 113
Interest expense, net - non-
affiliated (10) (16)
------------------ -----------------
Distributable cash $13,525 $26,986
================== =================
Units outstanding 42,500,000 42,500,000
Distributable cash flow per
unit $0.32 $0.64
================== =================
Cash distributions to be paid to
the unitholders of Valero GP
Holdings, LLC:
Distribution per unit (Note
3) $0.32 $0.58
================== =================
Distributions applicable to
public unitholders $13,600 $18,040
Distributions applicable to
Valero Energy - 9,160
------------------ -----------------
Total distributions $13,600 $27,200
================== =================
Valero GP Holdings, LLC
Consolidated Financial Information
December 31, 2006
(unaudited, thousands of dollars, except per unit data)
Notes:
1. We reimbursed Valero L.P. for these costs, and we were in turn
reimbursed by Valero Energy. Generally accepted accounting principles
require us to record this as an increase in our investment in Valero
L.P. and for Valero L.P. to record the full expense and record the
reimbursement as a capital contribution. Valero L.P. allocated 100%
of these costs to us because we paid the amounts in full.
2. Valero GP Holdings, LLC utilizes distributable cash as a financial
measure which is not defined in United States generally accepted
accounting principles. Management uses this financial measure because
it is a widely accepted financial indicator used by investors to
compare general partner performance. In addition, management believes
that this measure provides investors an enhanced perspective of the
ability to make a minimum quarterly distribution. Distributable cash
is not intended to represent cash flows for the period, nor is it
presented as an alternative to net income. It should not be
considered in isolation or as substitutes for a measure of
performance prepared in accordance with United States generally
accepted accounting principles.
The following is a reconciliation of net income to distributable cash
to net cash provided by operating activities (in thousands):
Three Months Ended Six Months Ended
December 31, 2006 December 31, 2006
------------------ -----------------
Net Income $10,323 $20,020
Adjustments to derive
Distributable Cash:
Equity in earnings of Valero
L.P. (10,842) (22,479)
Quarterly distribution from
Valero L.P. 14,211 28,425
Other (income) expense, net (167) 119
Interest expense - affiliated
(a) - 901
------------------ -----------------
Distributable cash 13,525 26,986
Adjustments to Distributable
Cash to derive Net Cash
Provided by Operating
Activities:
Quarterly distribution from
Valero L.P. (14,211) (28,425)
Cash distribution of equity
earnings received from Valero
L.P. 10,842 22,479
Interest expense - affiliated
(a) - (901)
Net effect of changes in
operating accounts 790 1,011
------------------ -----------------
Net cash provided by operating
activities $10,946 $21,150
================== =================
(a) In connection with our initial public offering, Valero Energy made
a capital contribution to us in the form of a note receivable,
including affiliated interest expense. Therefore, affiliated interest
expense is excluded from the calculation of distributable cash.
3. The reported distribution per unit for the period between the
closing of our initial public offering on July 19, 2006 and December
31, 2006 is prorated based upon the actual number of days we were
public and distributions of $0.64 per unit. Additionally, for the
period from July 1 - July 18, 2006 Valero Energy received 100% of our
distributions, which totaled $2.7 million.
Valero GP Holdings, LLC, San Antonio
Media, Mary Rose Brown, Senior Vice President,
Corporate Communications: 210-345-2314
or
Investors, Mark Meador, Senior Manager,
Investor Relations: 210-345-2895
Source: Business Wire (January 29, 2007 - 8:50 AM EST)
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