Valero GP Hldgs Llc (NYSE:VEH)
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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.
Valero GP Holdings, LLCConsolidated Financial
InformationDecember 31, 2006(unaudited,
thousands of dollars, except unit data and per unit data)
Three Months EndedDecember 31, 2006
Six Months EndedDecember 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, LLCConsolidated Financial
InformationDecember 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 EndedDecember 31, 2006
Six Months EndedDecember 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.