LONDON, Feb. 10, 2015 /PRNewswire/ -- VTTI Energy
Partners LP ("VTTI" or the "Partnership") (NYSE: VTTI) today
reported its financial results for the fourth quarter ended
December 31, 2014.
Highlights
- Generated Adjusted EBITDA(1) of
$50.1 million for the fourth quarter
of 2014, exceeding the Adjusted EBITDA of $49.1 million forecast at the time of our initial
public offering in August 2014 (the
"IPO").
- Generated distributable cash flow(1) of $12.7 million for
the fourth quarter of 2014, exceeding the distributable cash flow
of $11.7 million forecast at the time
of the IPO.
- Declared a quarterly cash distribution to unitholders of
$0.2625 per unit with respect to the
fourth quarter of 2014, equivalent to our minimum quarterly
distribution of $0.2625 per unit or
$1.05 per unit on an annualized
basis. The implied distributable cash flow coverage ratio was
1.18x.
- Achieved a record annual Health, Safety and Environmental
("HSE") performance.
- Appointed Yee Yang Chien as the
new chairman of the Board of Directors (the "Board") of VTTI Energy
Partners GP LLC, the sole general partner of VTTI (the "General
Partner"), effective February 1,
2015, replacing our previous chairman, Nasarudin Md Idris,
who has retired from the Board.
- Appointed Captain Rajalingam
Subramaniam to the Board.
(1) Adjusted EBITDA and distributable cash flow are
non-GAAP financial measures. See Appendix A for a
reconciliation to the most directly comparable U.S. GAAP financial
measure.
Financial and Operating Results Overview
The operating and financial performance of VTTI for the fourth
quarter ended December 31, 2014, was
consistent with our expectations, and the Partnership continued to
evaluate growth opportunities and develop a number of greenfield
and organic projects.
Mr. Rob Nijst, Chief Executive
Officer of VTTI, stated: "Our continued strong performance in the
fourth quarter was achieved despite a highly volatile commodity
market environment, demonstrating the stability of our business
model and lack of direct commodity price exposure. As we stated at
the time of the IPO, the profitability and growth of our business
is not dependent upon future investment in oil production and
infrastructure in North America or
elsewhere, but rather is driven by growing product demand levels
and the regional supply and demand energy imbalances that we
continue to see in the global marketplace."
Total operating income for the fourth quarter ended December 31, 2014 was $30.4 million while net income was $11.4 million. Adjusted EBITDA for the fourth
quarter ended December 31, 2014 was
$50.1 million and the Partnership
generated $12.7 million of
distributable cash flow, exceeding the forecasts at the time of the
IPO of $49.1 million and $11.7 million respectively.
In 2014, VTTI also achieved its best ever annual HSE
performance, with a recorded total injury rate of 1.9 injuries per
million hours, which compares favorably with the highest industry
standard.
Cash Distribution
On January 27, 2015, the Board
declared a quarterly cash distribution of $0.2625 per unit with respect to the fourth
quarter of 2014. The implied distributable cash flow coverage ratio
was 1.18x. The distribution was equivalent to our minimum quarterly
distribution of $0.2625 per unit, or
$1.05 per unit on an annualized
basis. The cash distribution will be paid on February 13, 2015 to unitholders of record as of
the close of business on February 6,
2015.
Financing and Liquidity
As of December 31, 2014, the
Partnership had cash and cash equivalents of $36.3 million and total bank debt outstanding of
$573.7 million (excluding restricted
cash and debt held by affiliates), implying a net debt to Adjusted
EBITDA ratio of 2.7x. There was an undrawn amount of
approximately $35 million under the
revolving credit facility entered into at the time of the IPO by
VTTI MLP B.V.. Further, our sponsor, VTTI B.V., has the ability to
lend money to the Partnership from its available sources of
liquidity.
We believe that our current resources, including cash generated
by the operations of the Partnership, are sufficient to meet the
working capital requirements for our current business and to
finance potential growth.
Board Changes
On January 27, 2015, Mr.
Yee Yang Chien was appointed as the
Chairman of our General Partner, effective February 1, 2015, replacing Mr. Datuk Nasarudin
Md Idris. Mr. Yee has served as a director since June 2014 and has 10 years' experience in both
direct shipping and research and investment banking, and is
currently Chief Executive Officer and President of MISC Berhad
("MISC"). Mr. Yee has also served within MISC as Chief Operating
Officer, Group Vice President of Corporate Planning and Vice
President of Corporate Planning and Development. Mr. Yee sits on
the board of several major subsidiaries of MISC including Malaysia
Marine and Heavy Engineering Holdings Berhad and AET Tanker
Holdings Sdn. Bhd.
On January 27, 2015, Captain
Rajalingam Subramaniam was appointed
as a director to the Board, effective February 1, 2015. Captain Subramaniam has served
as Vice President Fleet Management Services of MISC since 2008 and
previously worked as General Manager Shipmanagement and Group Vice
President of AET Shipmanagement. He was appointed as Honorary
Commander of the Royal Malaysian Navy in 2009 and was elected as
the Vice Chairman of the International Tankers Owners' Association
in 2012. He sits on the board of several subsidiaries of MISC
including Malaysia Marine and Heavy Engineering Holdings Berhad as
well as joint venture companies within the MISC group.
Mr. Datuk Nasarudin Md Idris retired from the Board effective on
January 31, 2015.
Outlook
Mr. Rob Nijst, Chief Executive
Officer of VTTI commented: "VTTI has a robust and stable business
model with no direct commodity price exposure. Given our high
quality international portfolio of terminals and strong customer
position, we are well placed to capitalize on long term regional
supply and demand imbalances in energy markets and react to any
opportunities that may arise from changes in market pricing
structures. Our growth strategy remains on track and we continue to
look for expansion opportunities; both internally, from organic
sources or dropdowns from VTTI B.V., and from external strategic
greenfield development and brownfield acquisitions."
Conference Call
VTTI Energy Partners LP will host a
live conference call and audio webcast today, Tuesday February 10th at 9:00 a.m. EST to discuss the Company's fourth
quarter 2014 financial results.
Participants may listen to the conference call by dialing:
US toll free: 1-877-870-4263
UK toll free: 0-800-279-9489
International dial in: +1-412-317-0790
The event may also be accessed via audio webcast at:
http://www.videonewswire.com/event.asp?id=101480
Beginning one hour after the call, an archived recording of the
webcast will be available on VTTI's Investor Relations webpage at:
http://www.vttienergypartners.com/events-presentations.php. This
archived recording will be available for 30 days.
About VTTI Energy Partners LP
VTTI Energy Partners LP is a publicly-traded master limited
partnership formed in April 2014 by
VTTI B.V. to own, operate, develop and acquire refined petroleum
product and crude oil terminaling and related energy infrastructure
assets on a global scale.
Forward Looking Statements
This press release contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
The reader is cautioned not to rely on these forward-looking
statements. All statements, other than statements of historical
facts, that address activities, events or developments that the
Partnership expects, projects, believes or anticipates will or may
occur in the future, including, without limitation, future
operating or financial results and future revenues and expenses,
future, pending or recent acquisitions, general market conditions
and industry trends, the financial condition and liquidity, cash
available for distribution and future capital expenditures are
forward-looking statements. These statements are based on current
expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual
results could vary materially from our expectations and
projections. Risks and uncertainties include, but are not limited
to, the following: future supply of, and demand for, refined
petroleum products and crude oil; general economic conditions; our
future financial condition and liquidity; significant interruptions
in the operations of our customer; dependence on a relatively
limited number of key customers; operational hazards and unforeseen
interruptions, including interruptions from terrorist attacks,
hurricanes, floods or severe storms; reduced volatility in energy
prices; competition from other terminals; changes in trade patterns
and the global flow of oil; uncertain integration of future
acquisitions of terminals or other assets; the ability of our
customers to obtain access to shipping, barge facilities, third
party pipelines or other transportation facilities; maintenance or
remediation capital expenditures on our terminals; environmental
and regulatory conditions, including changes in such laws relating
to climate change or greenhouse gases; health and safety regulatory
conditions, including changes in such laws; costs and liabilities
in responding to contamination at our facilities; our ability to
obtain financing; restrictions in our credit facilities;
fluctuations in currencies and interest rates; our ability to
retain key officers and personnel; the expected cost of, and our
ability to comply with, governmental regulations and
self-regulatory organization standards, as well as standard
regulations imposed by our customers applicable to our business;
risks associated with our international operations; compliance with
the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act; and
tax liabilities associated with indirect taxes on the products we
service. A further list and description of these risks,
uncertainties and other factors can be found in our Registration
Statement on Form F-1 for the IPO which was declared effective by
the United States Securities Exchange Commission on August 1, 2014 and is available via the SEC's
website at www.sec.gov. VTTI undertakes no obligation and does not
intend to update these forward-looking statements to reflect events
or circumstances occurring after this press release. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press
release.
Contacts
Hill + Knowlton Strategies New York,
Peter Poulos, +1 212 885 0588
Hill + Knowlton Strategies Amsterdam,
Tanno Massar, +31 20 4044707
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VTTI ENERGY
PARTNERS LP
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UNAUDITED
CONDENSED INTERIM CONSOLIDATED STATEMENT OF
OPERATIONS
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for the
three months ended December 31, 2014 and 2013
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(in US$
millions)
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Three Months
Ended, December 31,
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2014
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2013
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Revenues, third
parties
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19.5
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22.2
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Revenues,
affiliates
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60.9
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59.4
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Total
revenues
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80.4
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81.6
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Operating costs
and expenses:
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Operating
costs
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24.3
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21.1
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Depreciation
and amortization
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18.1
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18.0
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Selling,
general and administrative
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7.7
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5.6
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Loss on
disposal of property, plant and equipment
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(0.1)
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-
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Loss on
write-off of assets
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-
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-
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Total operating
expenses
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50.0
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44.7
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Total operating
income
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30.4
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36.9
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Other
income/(expense):
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Interest
income/(expense), including related party
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(3.2)
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(5.9)
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Other finance
income/(expense)
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(1.7)
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(0.2)
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Net
profit/(loss) on foreign currency transactions
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(10.4)
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(0.4)
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Fair value
movements derivatives
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5.3
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(1.4)
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Total other
income/(expense), net
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(10.0)
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(7.9)
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Income before
income tax expense
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20.4
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29.0
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Income tax
expense
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(9.0)
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(7.0)
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Net
income
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11.4
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22.0
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Non-controlling
interest
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(7.6)
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(1.5)
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Net
income/(loss) attributable to parents' equity
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3.8
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20.5
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VTTI ENERGY
PARTNERS LP
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UNAUDITED
CONDENSED INTERIM CONSOLIDATED AND COMBINED CARVE-OUT BALANCE
SHEET
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as of December 31,
2014 and December 31, 2013
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(in US$
millions)
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December
31,
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December
31,
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2014
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2013
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ASSETS
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Current
assets:
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Cash and cash
equivalents
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36.3
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54.5
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Restricted
cash
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2.2
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8.0
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Trade accounts
receivable
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9.7
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9.8
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Affiliates
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23.6
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22.8
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Other receivables and
current assets
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21.9
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15.8
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Prepaid
expenses
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1.7
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3.2
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Deferred tax
assets
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0.9
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2.6
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Derivative
assets
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7.7
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0.0
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Total current
assets
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104.0
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116.7
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Long-term
assets:
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Long-term
receivables
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1.2
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14.0
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Long-term prepaid
expenses
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22.7
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23.8
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Deferred tax
assets
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32.8
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40.8
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Property, plant and
equipment
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1,276.8
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1,283.4
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Lease
rights
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40.2
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46.2
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Goodwill
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119.6
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131.4
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Derivative
assets
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15.2
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0.0
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Deferred debt
issuance costs
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0.5
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2.2
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Total long-term
assets
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1,509.0
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1,541.8
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Total
assets
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1,613.0
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1,658.5
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LIABILITIES AND
OWNERS' EQUITY
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Current
liabilities:
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Trade accounts
payable
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16.5
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22.7
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Affiliates
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4.4
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44.8
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Current instalments
of long-term debt
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0.0
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25.1
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Derivative
liabilities
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5.6
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3.6
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Other liabilities and
accrued expenses
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31.4
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26.6
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Total current
liabilities
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57.9
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122.8
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Long-term
liabilities:
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Long-term debt,
excluding current instalments
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573.7
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175.6
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Derivative
liabilities
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8.4
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3.5
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Long-term debt,
affiliates
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56.1
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611.8
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Post-retirement
benefit and post-employment obligation
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11.8
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12.4
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Environmental
provisions
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23.0
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30.1
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Deferred tax
liabilities
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33.0
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46.0
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Other long-term
liabilities
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13.9
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10.6
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Total long-term
liabilities
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719.9
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890.0
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Total
liabilities
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777.8
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1,012.8
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Owner's
equity:
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Parent's
equity
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283.1
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594.8
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Non controlling
interest
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552.1
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50.9
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Total owners'
equity
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835.2
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645.7
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Total liabilities
and owners' equity
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1,613.0
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1,658.5
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Basis of Preparation and Presentation
The accompanying unaudited interim financial statements are
prepared in accordance with accounting principles generally
accepted in the United States of
America ("U.S. GAAP") and applicable rules and regulations
of the U.S. Securities and Exchange Commission (the "SEC") for
interim financial information.
As of August 6, 2014, the
financial statements of the Partnership as a separate legal entity
are presented on a consolidated basis. Prior to August 6, 2014, the statement of operations and
balance sheet have been prepared on a "carve out" basis from the
accounting records of the VTTI Group using actual results of
operations, assets and liabilities attributable to the Partnership,
including allocation of expenses from VTTI and are recorded at
VTTI's historical book value. The Partnership's unaudited interim
financial statements include the assets, liabilities, revenues,
expenses and cash flows directly attributable to the Partnership's
terminal-owning and operating subsidiaries. See Note 2 of the
audited combined carve-out financial statements for the year ended
December 31, 2013, as found in the
Partnership's Registration Statement on Form F-1 for the IPO which
was declared effective by the United States Securities Exchange
Commission on August 1, 2014 and is
available via the SEC's website at www.sec.gov.
APPENDIX A - RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) before interest
expense, income tax expense, depreciation and amortization expense,
as further adjusted to reflect certain other non-cash and
non-recurring items.
Adjusted EBITDA is a non-GAAP supplemental financial measure
that management and external users of our combined financial
statements, such as industry analysts, investors, lenders and
rating agencies, may use to assess our operating performance as
compared to other publicly traded partnerships in the midstream
energy industry, without regard to historical cost basis or
financing methods, and the viability of acquisitions and other
capital expenditure projects and the returns on investment in
various opportunities.
We believe that the presentation of Adjusted EBITDA provides
useful information to management in assessing our financial
condition and results of operations. The U.S. GAAP measure most
directly comparable to Adjusted EBITDA is net income. Our non-GAAP
financial measure of Adjusted EBITDA should not be considered as an
alternative to U.S. GAAP net income. Adjusted EBITDA has important
limitations as an analytical tool because it excludes some but not
all items that affect net income. You should not consider Adjusted
EBITDA in isolation or as a substitute for analysis of our results
as reported under U.S. GAAP. Because Adjusted EBITDA may be defined
differently by other companies in our industry, our definitions of
Adjusted EBITDA may not be comparable to similarly titled measures
of other companies, thereby diminishing its utility. The following
table reconciles net income to Adjusted EBITDA for the fourth
quarter ended December 31, 2014.
(in US$
millions)
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Three Months
Ended
December 31, 2014
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Net
income(a)
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11.4
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Interest expense,
including affiliates
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4.7
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Other
items(b)
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6.9
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Depreciation and
amortization
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18.1
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Income tax
expense
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9.0
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Adjusted
EBITDA(c)
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50.1
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(a) The Partnership has now
completed its determination of the amounts that are due under the
group long-term incentive plan ("the LTIP"). Allocable non-cash
costs of $3.3 million have
accordingly been reflected in the net income for the fourth quarter
ended 31 December, 2014.
(b) Other items consist of non-cash
items in operating expenses, anticipated timing differences between
the recognition and receipt of revenues and unrealized gains and
losses on foreign currency and interest financial derivatives.
(c) Adjusted EBITDA contains a
realized foreign currency gain of $1.3 million resulting from the
financial instrument we have in place to hedge EUR/USD movements in
our operating cash flows.
Distributable Cash Flow ("DCF")
Distributable cash flow represents Adjusted EBITDA after
considering period financial costs including estimated maintenance
and replacement capital expenditures and other reserves established
by the Partnership. Estimated maintenance and replacement capital
expenditures represent capital expenditures required to maintain
over the long-term the operating capacity of, or the revenue
generated by, our capital assets. Distributable cash flow is a
quantitative standard used by investors in publicly-traded
partnerships to assist in evaluating a partnership's ability to
make quarterly cash distributions. Distributable cash flow is a
non-GAAP financial measure and should not be considered as an
alternative to net income or any other indicator of the
Partnership's performance calculated in accordance with U.S. GAAP.
The table below reconciles Adjusted EBITDA to distributable cash
flow for the fourth quarter ended December
31, 2014.
(in US$
millions)
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Three Months
Ended
December 31, 2014
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Adjusted
EBITDA
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50.1
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Cash interest
expense
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(4.7)
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Cash income tax
expense
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-
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Maintenance capital
expenditures
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(4.9)
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Cash flow
attributable to non-controlling interest
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(27.8)
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Distributable cash
flow
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12.7
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Total
distribution
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10.8
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Coverage
ratio
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1.18x
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SOURCE VTTI Energy Partners LP