Q4 2015 Investor Presentation

February 9, 2016
9:00 AM EST
2:00 PM UK
VTTI ENERGY PARTNERS LP
Q4 2015 RESULTS
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DISCLAIMER
Forward Looking Statements
This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You are cautioned not to rely on these forwardlooking statements, which speak only as the date of this presentation. 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 often include the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,”
“project” and similar expressions and are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These
statements are based on current expectations of future events, are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which
are beyond the Partnership’s control and are difficult to predict. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could
vary materially from our expectations and projections. In addition to other factors described herein that could cause VTTI’s actual results to differ materially from those implied
in these forward-looking statements, negative capital market conditions, including a persistence or increase of the current yield on common units, which is higher than
historical yields, could adversely affect VTTI’s ability to meet its distribution growth guidance. Risks and uncertainties include, but are not limited to, such matters as: future
operating or financial results and future revenues and expenses; our future financial condition and liquidity; significant interruptions in the operations of our customers; future
supply of, and demand for, refined petroleum products and crude oil; our ability to renew or extend terminaling services agreements; the credit risk of our customers; our ability
to retain our key customers; including Vitol; operational hazards and unforeseen interruptions, including interruptions from terrorist attacks, hurricanes, floods or severe storms;
volatility in energy prices; competition from other terminals; changes in trade patterns and the global flow of oil; future or pending acquisitions of terminals or other assets;
business strategy, areas of possible expansion and expected capital spending or operating expenses; 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, including expected compliance and effect of restrictive covenants in such
facilities; fluctuations in currencies and interest rates; the adoption of derivatives legislation by Congress; 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; risks associated with our potential
business activities involving countries, entities, and individuals subject to restrictions imposed by U.S. or other governments; 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 Annual Report filed on Form 20F which was filed with
the United States Securities Exchange Commission on April 30, 2015 and amended on May 29, 2015 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 presentation.
Non-GAAP Financial Measures
Adjusted EBITDA and distributable cash flow are non-GAAP financial measures provided in this presentation. Adjusted EBITDA and distributable cash flow reconciliations to
the nearest GAAP financial measure are included in the Appendix to this presentation. Adjusted EBITDA and distributable cash flow are not defined by GAAP and should not
be considered in isolation or as an alternative to net income attributable to VTTI or other financial measures prepared in accordance with GAAP.
VTTI MARKET POSITIONING
VTTI is a unique global terminal MLP, well differentiated from its peers
Cash flow
stability
▪ Long-term, take or pay contracts with no direct commodity price exposure
▪ Reflected in cash flow performance since IPO
Attractive growth
characteristics
▪ Dropdown inventory approximately 3x existing MLP capacity
Positive long-term
trends
▪ Driven by supply-demand imbalances and product demand growth
Premium
portfolio
1099 filer
▪ Active in highly fragmented international terminal market
▪ Not dependent on upstream investment in US (or elsewhere)
▪ High quality, strategically located assets with leading customer service
▪ Resilient financial performance in different market pricing structures
▪ VTTI unitholders receive an annual 1099
▪ No K-1s
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LONG-TERM TRENDS SUPPORTIVE OF INTERNATIONAL TERMINAL DEMAND
~125%
~37%
~55%
Source: BP Statistical Review
•  55% increase in oil demand in
last 30yrs...
Source: BP Statistical Review
•  ...whilst regional flows have
increased at much faster rate
Source: IEA
•  Strong growth in demand
forecast, with continued positive
benefit to VTTI
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STRONG PERFORMANCE THROUGH COMMODITY PRICE CYCLES
Contango
Brent Spot Price
Brent 12m Contango
Contango
Backwardation
(1) Data
shown is for VTTI B.V. as a whole, 2010 and 2011 utilization impacted by acquisition and upgrade of new terminal.
Cumulative rate increase is shown relative to 2007
Source: Bloomberg for price data
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Q4 2015 CORPORATE AND OPERATING REVIEW
•  Previously mentioned VIP acquisition of MISC 50% stake - now closed
•  Drawdown of new senior secured notes for $245 million and €180 million;
weighted average fixed interest rate of 3.9%; average tenor 10yrs
Corporate
Update
-  proceeds used to repay existing RCF
•  15% annualized distribution growth vs Q4 2014
-  fourth consecutive rise at similar level post IPO
-  in line with stated mid-teens target
•  Portfolio utilization levels close to 100% excluding maintenance
•  Strong take-or-pay revenue performance in Q4
Operating
Highlights
•  Total volumes in 2015 of 48 MT increased from 46 MT in 2014
•  Excess throughput revenues impacted by volume distribution across customers /
contracts
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Q4 2015 FINANCIAL AND DEVELOPMENT REVIEW
•  Malaysia Phase 2 assets operational for whole of Q4 2015 and added 1.6MMbls
to existing drop down inventory(1)
Growth
Projects
•  Fujairah expansion on track and is expected to be operational in Q2 2016 adding
further 2.7MMbls to drop down inventory
•  Cape Town project construction now underway
•  Adjusted EBITDA for Q4 2015 of $47.6m negatively impacted by non-rental
revenue reduction despite strong underlying trading
Financial
Highlights
•  Raised distribution by 3.1% over prior quarter in line with mid-teen annual
distribution growth target from $0.2925 to $0.3015 per unit
•  Net debt implies a net debt to annualized Adjusted EBITDA ratio of 2.6x(2)
•  Post year-end RCF reduced from €359m to €300m
(1)
(2)
Malaysian Phase 2 assets are economically for the benefit of VTTI B.V.
Excludes affiliate debt and restricted cash
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Q4 2015 SUMMARY FINANCIALS
Reconciliation of Adjusted EBITDA to Distributable Cash Flow
$ MM
Q4 2015
Q3 2015
Adjusted EBITDA
47.6
57.1
Cash interest expense
(4.9)
(4.6)
0.0
0.0
(4.7)
(3.4)
(24.3)
(31.2)
Distributable cash flow
13.7
17.9
Total distribution
12.4
12.0
Coverage ratio
1.10x
1.49x
Cash income tax expense
Maintenance capital expenditures
Cash flow attributable to non-controlling interest
•  Adjusted EBITDA of $47.6m reflects c.$2m
reduction in excess throughput revenues vs
prior year
•  Q3 2015 positively impacted by $9m
lumpsum receipt
•  Maintenance capex in line with run rate
quarterly level with total for 2015 of c.$20m
•  Coverage ratio of 1.10x in line with stated
target (Q3 2015 impacted by $9m lumpsum
receipt)
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BALANCE SHEET AND HEDGING UPDATE
VTTI Energy Partners LP
(USD $mm)
VIP
Actual
Dec 31 2015
Cash
Cash and cash equivalents(1)
Debt
$270mm RCF
~$200m undrawn
VTTI B.V.
$75m
Loan
VTTI MLP
PARTNERS B.V.
VTTI Operating Revolving Credit Facility(2)
541.6
Net debt
485.7
Net debt / annualized Adjusted EBITDA
2.6x
Hedging Update
PUBLIC
€300mm RCF3)
~$230m undrawn
55.9
VTTI MLP B.V.
• 
Prior USD/EUR hedging program expired in mid-2019
• 
Now extended to end of 2020 at similar rate
• 
Approximately 50% hedged for extension period
(VTTI OPERATING)
USPP $245M / €180M
(1) Excluding restricted cash
(2) Excluding affiliate debt
(3) Facility reduced post year end from €359m to €300m
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OUTLOOK
•  Regional product imbalances and product demand growth continue to drive
fundamental requirement for storage
Market
Dynamics
•  Current contango market in certain products boosting demand, although
financial impact for VTTI limited due to largely contracted portfolio
•  Excess throughput revenue fall in Q4 not a reflection of underlying storage
demand and product flow levels
•  Opportunity to grow existing footprint and enter new markets through
development projects at the VTTI B.V. level
Growth
•  Actively monitoring several ongoing processes and have ROFO on all current
and future VTTI B.V. assets
•  Liquidity available to finance further growth
•  Next dropdown expected mid-2016
Dropdowns
•  Debt financing alternative if equity market remains stressed
•  Projected mid-teens annual distribution growth target
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VTTI ENERGY PARTNERS LP
THANK YOU
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VTTI ENERGY PARTNERS LP
APPENDIX
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FINANCIAL DETAIL Q4 2015
Income Statement (unaudited)
$ MM
Actual
Q4 2015
Revenues
75.2
Operating expenses (incl. D&A)
Other operating income
Total operating income
Total other expense, net
Income before income tax expense
47.1
—
28.1
(7.8)
20.3
Income tax expense
Net income
Interest expense, including affiliates
Other
items(1)
(13.8)
6.5
4.7
4.9
Depreciation and amortization
17.7
Income tax expense
13.8
Adjusted EBITDA
47.6
(1) Other items comprise primarily the impact of FX and related derivatives on our financial results and the receipt of other miscellaneous revenues
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FINANCIAL DETAIL Q4 2015
Balance Sheet December 31, 2015 (unaudited)
$ MM
Cash and cash equivalents(1)
Property, plant & equipment
December 31, 2015
55.9
1,227.2
Other assets
268.3
Total assets
1551.4
Debt(2)
541.6
Other liabilities
336.8
Total equity
673.0
Total liabilities and equity
Net debt
Net debt / Annualized adjusted EBITDA ratio
(1)
(2)
1,551.4
485.7
2.6x
Cash and cash equivalents excludes restricted cash
Debt excludes affiliate debt
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