| UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 19, 2004 VALERO L.P. (Exact name of registrant as specified in its charter) |
| Delaware | 1-16417 | 74-2956831 | ||||||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||||||
| of incorporation) | Identification No.) | |||||||
| One Valero Way | |||||
| San Antonio, Texas | 78249 | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
| Registrant's telephone number, including area code: (210) 345-2000 |
| Item 7. | Financial Statements and Exhibits |
| (c) | Exhibits. |
| 99 | .1 | Presentation by Valero L.P. (the "Partnership") August 19, 2004. |
| Item 9. | Regulation FD Disclosure. |
The Partnership is furnishing herewith certain data being presented to analysts and investors on August 19, 2004. The presentation is set forth in Exhibit 99.1 hereto and incorporated by reference herein. The exhibit is not filed but is furnished pursuant to Regulation FD.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VALERO L.P. By: Riverwalk Logistics, L.P. its general partner |
| By: Valero GP, LLC its general partner | |
| Date: August 19, 2004 | By: /s/Bradley C. Barron Name: Bradley C. Barron Title: Corporate Secretary |
EXHIBIT INDEX
| Number | Exhibit |
| 99.1 | Presentation by Valero L.P. (the "Partnership") on August 19, 2004. |
Exhibit 99.1
1
August 2004 Management
Presentation
Forward Looking Statements
Cautionary Statement Regarding Forward-Looking Statements
This presentation 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 L.P.
All
forward-looking statements are based on the partnership's
beliefs as well as assumptions made by and information currently
available to the partnership. These statements reflect the
partnership'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 the
prospectus and prospectus supplement, Valero L.P.’s 2003
annual report on Form 10-K and subsequent filings with the
Securities and Exchange Commission.
2
System Overview
New Jersey
Paulsboro
Refinery
Paulsboro
Refinery
Legend:
Refined Product Terminals
Crude Oil Pipelines
Liquified
Petroleum Gas Pipeline
Hydrogen Pipeline
Crude Oil Storage Tanks
Bulk Feedstock Storage Facilities
Refined Product Pipelines
Valero Energy Refineries
Nuevo Laredo Propane Terminal
Legend:
Refined Product Terminals
Crude Oil Pipelines
Liquified
Petroleum Gas Pipeline
Hydrogen Pipeline
Crude Oil Storage Tanks
Bulk Feedstock Storage Facilities
Refined Product Pipelines
Valero Energy Refineries
Refined Product Pipelines
Dallas/Ft.Worth
Falls
New Mexico
Colorado
Denver
Albuquerque
Amarillo
Mont
Belvieu
Laredo
Rio Grande Valley
El Paso
San Antonio
Colorado Springs
Kansas
Oklahoma
Texas
McKee
Refinery
Ardmore
Refinery
Texas City
Refinery
Corpus Christi
East & West Refineries
Three Rivers
Refinery
Wichita
Lubbock
Nuevo
Laredo
Santa Fe
Tulsa
Abernathy
Houston Refinery
Dallas/Ft.Worth
Falls
New Mexico
Colorado
Denver
Albuquerque
Amarillo
Mont
Belvieu
Laredo
Rio Grande Valley
El Paso
San Antonio
Colorado Springs
Kansas
Oklahoma
Texas
McKee
Refinery
Ardmore
Refinery
Texas City
Refinery
Texas City
Refinery
Corpus Christi
East & West Refineries
Corpus Christi
East & West Refineries
Three Rivers
Refinery
Wichita
Lubbock
Nuevo
Laredo
Santa Fe
Tulsa
Abernathy
Houston Refinery
Houston Refinery
California
Benicia
Refinery
California
Benicia
Refinery
Key Statistics:
3,700 miles of refined
product pipelines
800 miles of crude oil
pipelines
22 terminals with 4.5
million barrels of refined
product storage capacity
4 primary crude oil
storage tank facilities
with 12.6 million barrels
of crude oil storage
capacity
3
Balanced Portfolio of Assets
Refined Product
Pipelines
Crude Oil Pipelines
Crude Oil
Storage Tanks
Refined Product
Terminals
Percentage of total operating income for the six months ended
June 30, 2004
4
Strong Relationship with Valero Energy
5
Valero L.P. assets critical to profitability of 8 Valero Energy
refineries
Long-term handling and throughput agreements in place
100% of crude oil and other feedstocks at 3 refineries
75% of feedstocks and production at 3 refineries
Valero Energy retains all commodity risk
Pre-existing environmental risk retained by Valero Energy
Insurance coverage through Valero Energy’s program
Valero Energy maintains a significant retained interest
46% ownership (44% subordinated common; 2% GP interest)
GP weighted average incentive distribution at around 7.5%
GP’s incentive distribution limited to 25%
Strong Financial Position
(Dollars and Units in thousands, except EPU)
6
Financial Highlights
3 Mos. Ended 6/30/2004
6 Mos. Ended 6/30/2004
Revenues
$55,707
$108,031
Net Income applicable to LPs
$18,222
$36,703
EPU
$0.79
$1.59
EBITDA
$33,026
$65,996
Distributable Cash Flow
applicable to LPs
$22,033
$45,204
Coverage Ratio
1.20x
1.20x
Debt-to-capitalization
47.2%
47.2%
(1)
Buckeye Partners, Enbridge Energy Partners, Enterprise Products Partners, GulfTerra, Kaneb Pipeline Partners, Kinder Morgan Energy
Partners, Magellan Midstream Partners, Northern Border Partners,
Pacific Energy Partners, Plains All American Pipeline, Sunoco Logistics
Partners, TC Pipeline Partners, TEPPCO Partners.
Valero L.P. Has Outperformed Peers Since IPO
50%
100%
150%
200%
250%
300%
4/10/01
9/9/01
2/8/02
7/10/02
12/10/02
5/11/03
10/10/03
3/10/04
8/10/04
Valero L.P.
Peer Group (1)
S&P 500
12/31/01: VLO
acquires UDS
73% interest
4/19/02: Distribution
inc. from $0.60 to
$0.65/unit
7/19/02: Distribution
inc. from $0.65 to
$0.70/unit
7/28/03: Distribution
inc. from $0.70 to
$0.75/unit
3/15/04: GP’s
50% IDRs
limited to 25%
4/26/04: Distribution
inc. from $0.75 to
$0.80/unit
4/10/01: IPO as
Shamrock
Logistics, L.P.
163% total shareholder return since IPO
10% CAGR in distribution since IPO
7
Continued growth through acquisitions
Focused on acquiring stable, fee-based assets which are
accretive to EPU and distributable cash flow
Internal growth
Increase utilization of existing assets
McKee Refinery System
Expand existing systems
South Texas Pipeline System
Dos Laredos
Invest in new logistics projects
Continuous improvement of operations
Control costs
Improve safety and reliability
Upgrade information controls systems
Valero L.P. Strategy
8
McKee Refinery System
Valero LP captures margin on nearly all of Valero Energy’s
McKee refinery feedstock and product movements
Multiple markets available for McKee’s production
Efforts underway to increase utilization on product lines
9
South Texas Pipeline System
Expansion of Valley Line from 23 MBPD to 35 MBPD
Extension of line from Edinburg to Harlingen (40 miles)
Potential opportunities into Northern Mexico
10
Valley Pipeline
Dos Laredos Project
Valero LP supplying 5 mbpd of LPG to Pemex Gas at a new 35,000 bbl
terminal in Nuevo Laredo, Mexico
Construction completed on June 1, 2004
Total investment of approximately $28 million
Annual EBITDA contribution of around $4 million
Opportunities to increase volumes and expand deeper into Mexico
11
Key Investment Highlights
Track record of growth and value creation through
accretive acquisitions
More than doubled in size since IPO in April 2001
Completed nearly $530 million of accretive acquisitions
Balanced portfolio of fee-based assets
No exposure to commodity price volatility
Strong sponsor support
46% owned by Valero Energy
Solid financial position
Modest leverage and conservative capital structure
Track record of strong and consistent cash flow
generation
Strong distribution coverage
12
Appendix
13
Reconciliation of Net Income to EBITDA and
Distributable Cash Flow
The following is a reconciliation of net income to EBITDA and distributable cash flow (in thousands):
$39,724
$51,006
$24,234
$24,744
Distributable cash flow
1,627
975
879
287
Skelly-Belvieu Pipeline Company
Plus distributions from
(2,638)
(5,038)
(1,446)
(3,321)
Less reliability capital expenditures
(7,113)
(10,197)
(4,736)
(5,071)
Less interest expense, net
(1,331)
(730)
(600)
(177)
Pipeline Company
from Skelly-Belvieu
Less equity income
49,179
65,996
30,137
33,026
EDITDA
11,552
16,123
7,269
8,249
Plus depreciation and amortization
7,113
10,197
4,736
5,071
Plus interest expense, net
$30,514
$39,676
$18,132
$19,706
Net income
2003
2004
2003
2004
Three Months Ended
June 30,
Six Months Ended
June 30,
14