Valero GP Hldgs Llc (NYSE:VEH)
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Valero GP Holdings, LLC (NYSE:VEH) today announced earnings of $9.7
million, or $0.23 per unit for the three months ended September 30,
2006, in its first earnings report since it closed an initial public
offering of common units on July 19, 2006. Distributable cash flow
available to unitholders for the third quarter of 2006 was $13.5 million
or $0.317 per unit.
Valero L.P. today announced an increase in their quarterly distribution
from $0.885 per unit to $0.915 per unit. As a result of this increase in
the quarterly distribution from Valero L.P., Valero GP Holdings, LLC has
declared, for the period from its initial public offering on July 19,
2006 to September 30, 2006, a prorated initial quarterly distribution of
$0.2574 per unit, which is based on an increased quarterly distribution
of $0.32 per unit, or $1.28 per unit on an annual basis. This represents
a 6.7 percent increase over the expected quarterly distribution rate of
$0.30 per unit, or $1.20 per unit on an annual basis, as stated in
Valero GP Holdings’ IPO prospectus dated July
14, 2006. The distribution is expected to be paid on November 17, 2006,
to holders of record as of November 7, 2006.
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 third quarter of
2006. Investors interested in listening to the presentation may call
800/622-7620, passcode 8566945. International callers may access the
presentation by dialing 706/645-0327, passcode 8566945. The company
intends to have a playback available following the presentation, which
may be accessed by calling 800/642-1687, passcode 8566945. 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 2 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
web site 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
InformationSeptember 30, 2006(unaudited,
thousands of dollars, except unit data and per unit data)
Three Months EndedSeptember 30, 2006
Statement of Income Data:
Equity in earnings of Valero L.P.
$ 11,637
General and administrative expenses
(877)
Other expense, net
(286)
Interest expense
(6)
Interest expense - affiliated
(901)
Income before income tax benefit
9,567
Income tax expense benefit
130
Net income
$ 9,697
Basic net income per unit
$ 0.23
Weighted average number of basic units outstanding
42,500,000
Diluted net income per unit
$ 0.23
Weighted average number of diluted units outstanding
42,500,626
Equity in Earnings of Valero L.P.:
General partner interest (2%)
$ 753
General partner incentive distribution
3,909
Direct charges to Valero GP Holdings, LLC (Note 1)
(352)
General partner's interest in earnings of Valero L.P.
4,310
Limited partner interest in earnings of Valero L.P.
8,048
Amortization of step-up in basis related to Valero L.P.'s assets and
liabilities
(721)
Equity in earnings of Valero L.P.
$ 11,637
Distributable Cash (Note 2):
Cash distributions expected from Valero L.P. associated with:
General partner interest:
General partner interest (2%)
$ 955
Incentive distribution rights
3,909
Limited partner interest-common units
9,351
Total cash distributions expected from Valero L.P.
14,215
Deduct expenses of Valero GP Holdings, LLC:
General and administrative expenses
(877)
Income tax benefit
130
Interest expense - non-affiliated
(6)
Distributable cash
$ 13,462
Cash distributions to be paid to the unitholders of Valero GP
Holdings, LLC:
Distribution per unit (prorated $0.32 per unit distribution) (Note 3)
$ 0.2574
Distributions to be paid to public unitholders (17,250,000 units)
4,440
Distributions to be paid to Valero Energy (25,250,000 units) (Note 3)
6,499
Cash distributions for the period from July 19, 2006 to September
30, 2006
$ 10,939
Cash distributions to Valero Energy for the period from July 1, 2006
to July 18, 2006
$ 2,661
Total distributions
$ 13,600
Valero GP Holdings, LLCConsolidated Financial
InformationSeptember 30, 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 of Valero L.P. and for Valero L.P. to record the full
expense and 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 EndedSeptember 30, 2006
Net Income
$ 9,697
Adjustments to derive Distributable Cash:
Equity in earnings of Valero L.P.
(11,637)
Quarterly distribution expected from Valero L.P.
14,215
Other expense, net
286
Interest expense - affiliated (a)
901
Distributable cash
13,462
Adjustments to Distributable Cash to derive Net Cash Provided
by Operating Activities:
Quarterly distribution expected from Valero L.P.
(14,215)
Cash distribution of equity earnings received from Valero L.P.
11,637
Interest expense - affiliated (a)
(901)
Net effect of changes in operating accounts
221
Net cash provided by operating activities
$ 10,204
(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 quarterly distribution for the period between the closing
of the offering on July 19, 2006 and September 30, 2006 based on
$0.32 per unit is prorated. The following is the calculation of
the prorated per unit distribution:
(A)
(B)
(A) / (B) = (C)
(D)
(C) x (D) = (E)
Days in quarter after IPO(July 19 - September 30)
Total days in quarter
Percentage of days after IPO
Per unit distribution
Prorated per unit distribution
74
92
80.43%
$0.32
$0.2574
Valero GP Holdings, LLC (NYSE:VEH) today announced earnings of
$9.7 million, or $0.23 per unit for the three months ended September
30, 2006, in its first earnings report since it closed an initial
public offering of common units on July 19, 2006. Distributable cash
flow available to unitholders for the third quarter of 2006 was $13.5
million or $0.317 per unit.
Valero L.P. today announced an increase in their quarterly
distribution from $0.885 per unit to $0.915 per unit. As a result of
this increase in the quarterly distribution from Valero L.P., Valero
GP Holdings, LLC has declared, for the period from its initial public
offering on July 19, 2006 to September 30, 2006, a prorated initial
quarterly distribution of $0.2574 per unit, which is based on an
increased quarterly distribution of $0.32 per unit, or $1.28 per unit
on an annual basis. This represents a 6.7 percent increase over the
expected quarterly distribution rate of $0.30 per unit, or $1.20 per
unit on an annual basis, as stated in Valero GP Holdings' IPO
prospectus dated July 14, 2006. The distribution is expected to be
paid on November 17, 2006, to holders of record as of November 7,
2006.
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 third
quarter of 2006. Investors interested in listening to the presentation
may call 800/622-7620, passcode 8566945. International callers may
access the presentation by dialing 706/645-0327, passcode 8566945. The
company intends to have a playback available following the
presentation, which may be accessed by calling 800/642-1687, passcode
8566945. 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 2 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 web site 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.
-0-
*T
Valero GP Holdings, LLC
Consolidated Financial Information
September 30, 2006
(unaudited, thousands of dollars, except unit data and per unit data)
Three Months Ended
September 30, 2006
-------------------
Statement of Income Data:
Equity in earnings of Valero L.P. $11,637
General and administrative expenses (877)
Other expense, net (286)
Interest expense (6)
Interest expense - affiliated (901)
-------------------
Income before income tax benefit 9,567
Income tax expense benefit 130
-------------------
Net income $9,697
===================
Basic net income per unit $0.23
Weighted average number of basic units
outstanding 42,500,000
Diluted net income per unit $0.23
Weighted average number of diluted units
outstanding 42,500,626
Equity in Earnings of Valero L.P.:
General partner interest (2%) $753
General partner incentive distribution 3,909
Direct charges to Valero GP Holdings, LLC
(Note 1) (352)
-------------------
General partner's interest in earnings of
Valero L.P. 4,310
Limited partner interest in earnings of
Valero L.P. 8,048
Amortization of step-up in basis related to
Valero L.P.'s assets and liabilities (721)
-------------------
Equity in earnings of Valero L.P. $11,637
===================
Distributable Cash (Note 2):
Cash distributions expected from Valero
L.P. associated with:
General partner interest:
General partner interest (2%) $955
Incentive distribution rights 3,909
Limited partner interest-common units 9,351
-------------------
Total cash distributions expected from
Valero L.P. 14,215
Deduct expenses of Valero GP Holdings, LLC:
General and administrative expenses (877)
Income tax benefit 130
Interest expense - non-affiliated (6)
-------------------
Distributable cash $13,462
===================
Cash distributions to be paid to the
unitholders of Valero GP Holdings, LLC:
Distribution per unit (prorated $0.32 per
unit distribution) (Note 3) $0.2574
===================
Distributions to be paid to public
unitholders (17,250,000 units) 4,440
Distributions to be paid to Valero Energy
(25,250,000 units) (Note 3) 6,499
-------------------
Cash distributions for the period from
July 19, 2006 to September 30, 2006 $10,939
===================
Cash distributions to Valero Energy
for the period from July 1, 2006 to
July 18, 2006 $2,661
===================
Total distributions $13,600
===================
*T
-0-
*T
Valero GP Holdings, LLC
Consolidated Financial Information
September 30, 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 of Valero
L.P. and for Valero L.P. to record the full expense and 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
September 30, 2006
-------------------
Net Income $9,697
Adjustments to derive Distributable Cash:
Equity in earnings of Valero L.P. (11,637)
Quarterly distribution expected from Valero L.P. 14,215
Other expense, net 286
Interest expense - affiliated (a) 901
-------------------
Distributable cash 13,462
Adjustments to Distributable Cash to derive Net
Cash Provided by Operating Activities:
Quarterly distribution expected from Valero L.P. (14,215)
Cash distribution of equity earnings received
from Valero L.P. 11,637
Interest expense - affiliated (a) (901)
Net effect of changes in operating accounts 221
-------------------
Net cash provided by operating activities $10,204
===================
(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 quarterly distribution for the period between the closing of
the offering on July 19, 2006 and September 30, 2006 based on $0.32
per unit is prorated. The following is the calculation of the
prorated per unit distribution:
(C) x (D) =
(A) (B) (A) / (B) = (C) (D) (E)
Days in quarter
after IPO Total Prorated per
(July 19 - days in Percentage of Per unit unit
September 30) quarter days after IPO distribution distribution
----------------------------------------------------------------------
74 92 80.43% $0.32 $0.2574
*T