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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______________ to _______________
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Delaware
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90-1006559
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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One Valero Way
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San Antonio, Texas
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78249
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (210) 345-2000
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
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Smaller reporting company
o
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PAGE
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Item 11
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•
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Lucas Terminal.
Our Lucas terminal is located 12 miles from Valero’s Port Arthur Refinery on 495 acres. The facility consists of seven storage tanks with an aggregate of
1.9 million
barrels of storage capacity. The Lucas terminal receives crude oil through our Nederland pipeline, which connects to the Sunoco Logistics Partners L.P. marine terminal in Nederland, Texas, as well as through connections to the Cameron Highway crude oil pipeline and Enterprise’s Beaumont marine terminal. The terminal connects to TransCanada’s Cushing MarketLink pipeline via our TransCanada connection and to the Seaway crude oil pipeline via our Seaway connection. The Lucas terminal delivers crude oil to Valero’s Port Arthur Refinery through our Lucas pipeline.
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Lucas Pipeline
. Our Lucas pipeline is a 12-mile, 30-inch pipeline with 400,000 barrels per day of capacity that delivers crude oil from our Lucas terminal to Valero’s Port Arthur Refinery.
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Nederland Pipeline.
Our Nederland pipeline is a five-mile, 32-inch pipeline with 600,000 barrels per day of capacity that delivers crude oil to our Lucas terminal from the Sunoco Logistics Nederland marine terminal.
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TransCanada Connection.
Our TransCanada connection has
400,000
barrels per day of capacity and connects our Lucas terminal to TransCanada’s Cushing MarketLink pipeline.
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Seaway Connection
. Our Seaway connection has 750,000 barrels per day of capacity and connects our Lucas terminal to the Seaway crude oil pipeline.
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Port Arthur Products Pipelines (PAPS
–
El Vista)
. Our Port Arthur products pipelines consist of a
four
-mile, 20-inch pipeline with
144,000
barrels per day of capacity that delivers gasoline from Valero’s Port Arthur Refinery to our El Vista terminal and a
three
-mile, 20-inch pipeline with
216,000
barrels per day of capacity that delivers diesel from Valero’s Port Arthur Refinery to our Port Arthur Products Station (PAPS) terminal.
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12-10 Pipeline
. Our 12-10 pipeline consists of 13 miles of 12-inch and 10-inch pipeline with 60,000 barrels per day of capacity that delivers refined petroleum products from Valero’s Port Arthur Refinery to the Enterprise TE Products pipeline connection, the Sunoco Logistics MagTex pipeline connection, and Enterprise’s Beaumont marine terminal.
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•
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PAPS and El Vista Terminals
. Our PAPS terminal consists of eight tanks with 821,000 barrels of diesel storage capacity, and our El Vista terminal consists of eight tanks with 1.2 million barrels of gasoline storage capacity. Our PAPS terminal also contains storage tanks owned by Colonial, which serves as the operator of our PAPS terminal. Each party owns its own tanks at the PAPS terminal and its own external pipelines connecting to the terminal, but certain equipment and improvements located at and serving the terminal are jointly owned. We own all of the El Vista terminal assets.
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McKee to El Paso Pipeline
. Our McKee to El Paso pipeline consists of 408 miles of 10-inch pipeline that delivers diesel and gasoline produced at Valero’s McKee Refinery to our El Paso terminal. The pipeline has a total capacity of 63,000 barrels per day (of which 21,000 barrels per day of capacity are allocable to our 33⅓ percent undivided interest).
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SFPP Pipeline Connection
. Our SFPP pipeline connection consists of 12 miles of 16- and 8-inch pipelines that deliver diesel and gasoline from our El Paso terminal to Kinder Morgan’s SFPP system. The SFPP pipeline connection has 98,400 barrels per day of capacity (of which 33,000 barrels per day of capacity are allocable to our 33⅓ percent undivided interest).
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El Paso Terminal
. Our El Paso terminal is located on 117 acres and consists of 10 storage tanks with 499,000 barrels of storage capacity (of which 166,000
barrels of capacity are allocable to our 33⅓ percent undivided interest). The El Paso terminal receives refined petroleum products delivered to the terminal through our McKee to El Paso pipeline and delivers refined petroleum products to our four-bay truck rack at our El Paso terminal and to Kinder Morgan’s SFPP system through our SFPP pipeline connection. Our El Paso terminal truck rack has 30,000 barrels per day of capacity (of which 10,000 barrels per day of capacity are allocable to our 33⅓ percent undivided interest).
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Collierville Pipeline System
. Our Collierville pipeline system consists of 52 miles of 10- to 20-inch pipelines with 210,000 barrels per day of capacity that deliver crude oil to Valero’s Memphis Refinery. We lease an approximate 13 mile portion of this pipeline, which runs from the Mississippi state line to the Memphis Refinery, from Memphis Light, Gas and Water (MLGW). The initial term of the lease, along with renewal periods available at our option, extend through 2046.
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Collierville Terminal
. Our Collierville terminal is located in Byhalia, Mississippi on 60 acres. The facility consists of three storage tanks with 975,000 barrels of storage capacity. The Collierville terminal receives crude oil delivered to the terminal through the Capline pipeline.
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St
.
James Crude Tank
. We own a 330,000 barrel crude oil storage tank in St. James, Louisiana located on land we lease from Marathon Pipe Line LLC. The tank is used to aggregate crude oil volumes to batch deliveries through the Capline pipeline to our Collierville terminal.
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Shorthorn Pipeline System
. Our Shorthorn pipeline system consists of seven miles of 14-inch pipeline that delivers diesel and gasoline produced at Valero’s Memphis Refinery to our West Memphis terminal and two miles of 12-inch pipeline that delivers diesel and gasoline from our West Memphis terminal and Valero’s Memphis Refinery to Exxon’s Memphis refined petroleum products terminal. We lease the 14-inch pipeline from MLGW. The initial term of the lease, along with renewal periods available at our option, extend through 2046. The Shorthorn pipeline system has a total capacity of 120,000 barrels per day.
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Memphis Airport Pipeline System.
Our Memphis Airport pipeline system consists of a nine-mile, six-inch pipeline that delivers jet fuel produced at Valero’s Memphis Refinery to the Swissport Fueling, Inc. terminal located at the Memphis International Airport and a two-mile, six-inch pipeline that delivers jet fuel from Valero’s Memphis Refinery to the FedEx jet fuel terminal located at the Memphis International Airport. The Memphis Airport pipeline system has a total capacity of 20,000 barrels per day. Both six-inch pipelines are owned by MLGW and we have an agreement with MLGW under which we are the exclusive operator of both pipelines. Our agreement with MLGW automatically renews and MLGW does not have a right to terminate.
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West Memphis Terminal
. Our West Memphis terminal is located in West Memphis, Arkansas on 75 acres. The facility consists of 18 storage tanks with over one million barrels of storage capacity, a truck rack, and a barge dock on the Mississippi River. Our West Memphis terminal receives refined petroleum products through our Shorthorn pipeline system and through a biodiesel truck unloading rack located at the terminal. The terminal delivers refined petroleum products to the five-bay, 50,000 barrels per day truck rack at the terminal, our two-berth, 4,000 barrels per hour barge dock
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Memphis Truck Rack
. Our Memphis truck rack is located on five acres of land adjacent to Valero’s Memphis Refinery. The facility consists of a high-capacity seven-bay truck rack and five biodiesel storage tanks with
8,000
barrels of storage capacity. The truck rack has a capacity of 110,000 barrels per day.
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Corpus Christi East Terminal
. Our Corpus Christi East terminal supports Valero’s Corpus Christi East Refinery. The Corpus Christi East terminal is located on the Corpus Christi ship channel and has storage tanks with
6.2 million
barrels of storage capacity.
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Corpus Christi West Terminal.
Our Corpus Christi West terminal supports Valero’s Corpus Christi West Refinery. The Corpus Christi West terminal is located on the Corpus Christi ship channel and has storage tanks with
3.8 million
barrels of storage capacity.
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Pipeline
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Diameter
(inches)
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Length
(miles)
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Throughput
Capacity
(thousand barrels
per day)
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Commodity
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Associated
Valero
Refinery
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Significant
Third-party
System Connections
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Port Arthur logistics system
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Lucas crude system
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Lucas pipeline
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30
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12
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400
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crude oil
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Port Arthur
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Sunoco Logistics Nederland; Enterprise Beaumont; Cameron Highway; TransCanada Cushing MarketLink
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Nederland pipeline
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32
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5
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600
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crude oil
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Port Arthur
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Sunoco Logistics Nederland
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Port Arthur products system
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20-inch gasoline pipeline
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20
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4
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144
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gasoline
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Port Arthur
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Explorer; Colonial
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20-inch diesel pipeline
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20
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3
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216
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diesel
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Port Arthur
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Explorer; Colonial
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12-10 pipeline
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12, 10
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13
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60
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refined petroleum products
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Port Arthur
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Sunoco Logistics MagTex;
Enterprise TE Products; Enterprise Beaumont |
McKee logistics system
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McKee crude system
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multiple segments
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145
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72
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crude oil
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McKee
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—
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McKee products system
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McKee to El Paso pipeline
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10
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408
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21
(1)
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refined petroleum products
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McKee
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—
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SFPP pipeline connection
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16, 8
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12
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33
(2)
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refined petroleum products
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McKee
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Kinder Morgan's
SFPP System
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Memphis logistics system
(3)
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Collierville crude system
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Collierville pipeline
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10-20
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52
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210
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crude oil
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Memphis
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Capline
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Memphis products system
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Shorthorn pipeline system
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14, 12
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9
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120
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refined petroleum products
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Memphis
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Exxon Memphis
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Memphis Airport pipeline
system
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6
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11
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20
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jet fuel
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Memphis
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Memphis International Airport
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Three Rivers logistics system
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Three Rivers crude system
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12
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3
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110
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crude oil
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Three Rivers
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Harvest Arrowhead, Plains Gardendale, and EOG Eagle Ford West
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Ardmore logistics system
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Hewitt segment of Red River crude oil pipeline
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16
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138
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60
(4)
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crude oil
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Ardmore
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Plains Red River, Plains Cushing
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Wynnewood refined
products pipeline
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12
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30
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90
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refined petroleum products
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Ardmore
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Magellan Central
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(1)
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Capacity shown represents our 33⅓ percent undivided interest in the pipeline. Total capacity for the pipeline is 63,000 barrels per day.
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(2)
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Capacity shown represents our 33⅓ percent undivided interest in the pipeline connection. Total capacity for the pipeline connection is 98,400 barrels per day.
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(3)
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Portions of our Memphis logistics system pipelines are owned by MLGW, but they are operated and maintained exclusively by us under long-term arrangements with MLGW.
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(4)
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Capacity shown represents our 40 percent undivided interest in the pipeline segment. Total capacity for the pipeline segment is 150,000 barrels per day.
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Terminal
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Tank Storage
Capacity
(thousands of
barrels)
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Throughput
Capacity
(thousand
barrels
per day)
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Commodity
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Associated
Valero
Refinery
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Significant
Third-party
System Connections
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Port Arthur logistics system
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Lucas crude system
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Lucas terminal
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1,915
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—
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crude oil
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Port Arthur
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Sunoco Logistics Nederland;
Enterprise Beaumont; Cameron Highway; TransCanada Cushing MarketLink; Seaway |
TransCanada connection
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—
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400
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crude oil
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Port Arthur
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TransCanada Cushing
MarketLink
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Seaway connection
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—
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750
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crude oil
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Port Arthur
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Seaway
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Port Arthur products system
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PAPS terminal
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821
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—
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diesel
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Port Arthur
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Explorer; Colonial
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El Vista terminal
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1,210
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gasoline
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Port Arthur
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Explorer; Colonial
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McKee logistics system
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McKee crude system
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Various terminals
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240
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—
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crude oil
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McKee
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—
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McKee products system
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El Paso terminal
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166
(1)
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—
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refined petroleum products
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McKee
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Kinder Morgan
SFPP System
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El Paso terminal truck rack
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—
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10
(2)
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refined petroleum products
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McKee
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—
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McKee terminal
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4,400
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—
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crude oil and refined petroleum products
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McKee
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NuStar (several); NuStar/Phillips Denver
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Memphis logistics system
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Collierville crude system
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Collierville terminal
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975
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—
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crude oil
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Memphis
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Capline
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St. James crude tank
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330
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—
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crude oil
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Memphis
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Capline
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Memphis products system
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West Memphis terminal
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1,080
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—
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refined petroleum products
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Memphis
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Exxon Memphis;
Enterprise TE Products
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West Memphis terminal truck rack
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—
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50
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refined petroleum products
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Memphis
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—
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West Memphis terminal dock
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—
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4
(3)
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refined petroleum products
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Memphis
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—
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Memphis truck rack
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8
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110
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refined petroleum products
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Memphis
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—
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Three Rivers logistics system
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Three Rivers terminal
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2,250
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—
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crude oil and refined petroleum products
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Three Rivers
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NuStar South Texas
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Ardmore logistics system
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Hewitt Station tanks
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300
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—
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crude oil
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Ardmore
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Plains Red River
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Wynnewood terminal
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180
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—
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refined petroleum products
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Ardmore
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Magellan Central
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____________________________
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See footnotes on page 12.
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Terminal
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Tank Storage
Capacity
(thousands of
barrels)
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Throughput
Capacity
(thousand
barrels
per day)
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Commodity
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Associated
Valero
Refinery
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Significant
Third-party
System Connections
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Houston logistics system
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Houston terminal
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3,642
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—
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crude oil and refined petroleum products
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Houston
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HFOTCO, Magellan crude, Seaway, Kinder Morgan Pasadena & Galena Park, Magellan East Houston &
Galena Park
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St. Charles logistics system
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St. Charles terminal
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10,004
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—
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crude oil and refined petroleum products
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St. Charles
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LOOP, Plantation, Colonial
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Corpus Christi logistics system
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Corpus Christi East terminal
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6,241
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—
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crude oil and refined petroleum products
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Corpus Christi East
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Eagle Ford Pipeline LLC; NuStar North Beach terminal, Eagle Ford pipelines, and South Texas pipeline network
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Corpus Christi West terminal
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3,835
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—
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crude oil and refined petroleum products
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Corpus Christi West
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(same as Corpus Christi East terminal)
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Meraux logistics system
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Meraux terminal
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3,900
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—
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crude oil and refined petroleum products
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Meraux
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LOOP, CAM, Plantation, Colonial
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(1)
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Capacity shown represents our 33⅓ percent undivided interest in the terminal. Total storage capacity is 499,000 barrels.
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(2)
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Capacity shown represents our 33⅓ percent undivided interest in the truck rack. Total capacity is 30,000 barrels per day.
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(3)
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Dock throughput is reflected in thousands of barrels per hour.
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disruption of Valero’s ability to obtain crude oil;
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interruptions at Valero’s refineries and other facilities;
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any decision by Valero to temporarily or permanently curtail or shut down operations at one or more of its refineries or other facilities and reduce or terminate its obligations under our commercial agreements;
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competitors that produce their own supply of feedstocks, have more extensive retail outlets, or have greater financial resources may have a competitive advantage over Valero;
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the ability to obtain credit and financing on acceptable terms, which could also adversely affect the financial strength of business partners;
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the costs to comply with environmental laws and regulations;
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significant losses resulting from the hazards and risks of operations may not be fully covered by insurance, and could adversely affect Valero’s operations and financial results;
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large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date and the project startup date, negatively impacting project returns;
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interruptions of supply and increased costs as a result of Valero’s reliance on third-party transportation of crude oil and refined petroleum products;
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potential losses from Valero’s derivative transactions; and
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the effects of changing commodity and refined product prices.
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the amount of our operating expenses and general and administrative expenses, including reimbursements to Valero, which are not subject to any caps or other limits, in respect of those expenses;
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•
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the amount and timing of capital expenditures and acquisitions we make;
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our debt service requirements and other liabilities, and restrictions contained in our revolving credit facility;
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•
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fluctuations in our working capital needs; and
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the amount of cash reserves established by our general partner.
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we are able to identify attractive acquisition candidates;
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we are able to negotiate acceptable purchase agreements;
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we are able to obtain financing for these acquisitions on economically acceptable terms; and
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we are outbid by competitors.
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damages to facilities, equipment, and surrounding properties caused by third parties, severe weather, natural disasters, and acts of terrorism;
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maintenance, repairs, mechanical or structural failures at our or Valero’s facilities or at third-party facilities on which our or Valero’s operations are dependent, including electrical shortages, power disruptions, and power grid failures;
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damages to and loss of availability of interconnecting third-party pipelines, terminals, and other means of delivering crude oil, feedstocks, and refined petroleum products;
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disruption or failure of information technology systems and network infrastructure due to various causes, including unauthorized access or attack;
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•
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curtailments of operations due to severe seasonal weather; and
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riots, work stoppages, slowdowns or strikes, as well as other industrial disturbances.
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•
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neither our partnership agreement nor any other agreement requires Valero to pursue a business strategy that favors us or utilizes our assets, which could involve decisions by Valero to increase or decrease refinery production, shut down or reconfigure a refinery, shift the focus of its investment and growth to areas not served by our assets, or undertake acquisition opportunities for itself;
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Valero, as our only customer, has an economic incentive to cause us to not seek higher rates and fees, even if such higher rates and fees would reflect those that could be obtained in arm’s-length, third-party transactions;
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Valero’s directors and officers have a fiduciary duty to make decisions beneficial to the stockholders of Valero, which may be contrary to our interests; in addition, many of the officers and directors of our general partner are also officers and/or directors of Valero and will owe fiduciary duties to Valero and its stockholders;
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•
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Valero may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests;
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our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limiting our general partner’s liabilities, and restricting the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;
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except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;
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disputes may arise under our commercial agreements with Valero;
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our general partner will determine the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of cash reserves, each of which can affect the amount of cash that is distributed to our unitholders;
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our general partner will determine the amount and timing of many of our capital expenditures and whether a capital expenditure is classified as an expansion capital expenditure, which would not reduce operating surplus, or a maintenance capital expenditure, which would reduce our operating surplus. This determination can affect the amount of cash that is distributed to our unitholders;
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•
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our general partner will determine which costs incurred by it are reimbursable by us;
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•
|
our general partner may cause us to borrow funds in order to permit the payment of distributions, even if the purpose or effect of the borrowing is to make incentive distributions;
|
•
|
our partnership agreement permits us to classify up to $50 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings, or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions to our general partner in respect of the general partner units or the incentive distribution rights;
|
•
|
our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;
|
•
|
our general partner intends to limit its liability regarding our contractual and other obligations;
|
•
|
our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 80 percent of the common units. As of February 1, 2017, Valero owned 67.7 percent of our common units, and, as a result, Valero did not have the ability to exercise the limited call right;
|
•
|
our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including under the omnibus agreement and our commercial agreements with Valero;
|
•
|
our general partner decides whether to retain separate counsel, accountants, or others to perform services for us; and
|
•
|
our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner, which we refer to as our conflicts committee, or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
|
•
|
whenever our general partner (acting in its capacity as our general partner), the board of directors of our general partner, or any committee thereof (including the conflicts committee) makes a determination or takes, or declines to take, any other action in their respective capacities, our general partner, the board of directors of our general partner, and any committee thereof (including the conflicts committee), as applicable, is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the decision was not adverse to our best interests, and, except as specifically provided by our partnership agreement, will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;
|
•
|
our general partner is not liable to us or our unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;
|
•
|
our general partner and its officers and directors are not liable to us or our limited partners for monetary damages resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and
|
•
|
our general partner is not in breach of its obligations under the partnership agreement (including any duties to us or our unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:
|
◦
|
approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval;
|
◦
|
approved by the vote of a majority of our outstanding common units, excluding any common units owned by our general partner and its affiliates;
|
◦
|
determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
|
◦
|
determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|
•
|
our existing unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash we have available to distribute on each unit may decrease;
|
•
|
because the amount payable to holders of incentive distribution rights is based on a percentage of total available cash, the distributions to holders of incentive distribution rights will increase even if the per unit distribution on common units remains the same;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of our common units may decline.
|
•
|
how to allocate corporate opportunities among us and its other affiliates;
|
•
|
whether to exercise its limited call right;
|
•
|
whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner;
|
•
|
how to exercise its voting rights with respect to the units it owns;
|
•
|
whether to exercise its registration rights;
|
•
|
whether to elect to reset target distribution levels;
|
•
|
whether to transfer the incentive distribution rights to a third party; and
|
•
|
whether or not to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.
|
Quarter Ended
|
|
High
Sale
Price
|
|
Low
Sale
Price
|
|
Quarterly Cash
Distribution
per Unit
|
|
Record
Date
|
|
Distribution
Date
|
||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31
|
|
$
|
44.86
|
|
|
$
|
38.90
|
|
|
$
|
0.4065
|
|
|
February 2, 2017
|
|
February 10, 2017
|
September 30
|
|
47.33
|
|
|
40.14
|
|
|
0.3850
|
|
|
November 3, 2016
|
|
November 10, 2016
|
|||
June 30
|
|
49.55
|
|
|
42.31
|
|
|
0.3650
|
|
|
August 1, 2016
|
|
August 9, 2016
|
|||
March 31
|
|
52.20
|
|
|
39.02
|
|
|
0.3400
|
|
|
May 2, 2016
|
|
May 10, 2016
|
|||
2015:
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31
|
|
53.25
|
|
|
40.64
|
|
|
0.3200
|
|
|
February 4, 2016
|
|
February 11, 2016
|
|||
September 30
|
|
54.50
|
|
|
37.96
|
|
|
0.3075
|
|
|
November 2, 2015
|
|
November 10, 2015
|
|||
June 30
|
|
54.87
|
|
|
48.13
|
|
|
0.2925
|
|
|
August 3, 2015
|
|
August 11, 2015
|
|||
March 31
|
|
55.00
|
|
|
38.53
|
|
|
0.2775
|
|
|
May 1, 2015
|
|
May 12, 2015
|
•
|
less, the amount of cash reserves established by our general partner to:
|
◦
|
provide for the proper conduct of our business (including reserves for our future capital expenditures and anticipated future credit needs requirements and refunds of collected rates reasonably likely to be refunded as a result of a settlement or hearing related to FERC rate proceedings or rate proceedings under applicable law subsequent to that quarter);
|
◦
|
comply with applicable law, any of our or our subsidiaries’ debt instruments or other agreements; or
|
◦
|
provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for distributions if the effect of the establishment of such reserves will prevent us from paying the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter);
|
•
|
plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter.
|
|
|
Total Quarterly
Distribution per Unit
Target Amount
|
|
Marginal Percentage
Interest in Distributions
|
||
|
|
|
Unitholders
|
|
General Partner
|
|
Minimum Quarterly Distribution
|
|
$0.2125
|
|
98%
|
|
2%
|
First Target Distribution
|
|
above $0.2125 up to $0.244375
|
|
98%
|
|
2%
|
Second Target Distribution
|
|
above $0.244375 up to $0.265625
|
|
85%
|
|
15%
|
Third Target Distribution
|
|
above $0.265625 up to $0.31875
|
|
75%
|
|
25%
|
Thereafter
|
|
$0.31875
|
|
50%
|
|
50%
|
•
|
the suspension, reduction, or termination of Valero’s obligation under our commercial agreements and our services and secondment agreement;
|
•
|
changes in global economic conditions and the effects of the global economic downturn on Valero’s business and the business of its suppliers, customers, business partners, and credit lenders;
|
•
|
a material decrease in Valero’s profitability;
|
•
|
disruptions due to equipment interruption or failure at our facilities, Valero’s facilities, or third-party facilities on which our business or Valero’s business is dependent;
|
•
|
the risk of contract cancellation, non-renewal, or failure to perform by Valero’s customers, and Valero’s inability to replace such contracts and/or customers;
|
•
|
Valero’s and our ability to remain in compliance with the terms of its and our outstanding indebtedness;
|
•
|
the timing and extent of changes in commodity prices and demand for Valero’s refined petroleum products;
|
•
|
our ability to obtain credit and financing on acceptable terms in light of uncertainty and illiquidity in credit and capital markets;
|
•
|
actions of customers and competitors;
|
•
|
changes in our cash flows from operations;
|
•
|
state and federal environmental, economic, health and safety, energy, and other policies and regulations, including those related to climate change and any changes therein, and any legal or regulatory investigations, delays, or other factors beyond our control;
|
•
|
operational hazards inherent in refining operations and in transporting and storing crude oil and refined petroleum products;
|
•
|
earthquakes or other natural disasters affecting operations;
|
•
|
changes in capital requirements or in execution of planned capital projects;
|
•
|
the availability and costs of crude oil, other refinery feedstocks, and refined petroleum products;
|
•
|
changes in the cost or availability of third-party vessels, pipelines, and other means of delivering and transporting crude oil, feedstocks, and refined petroleum products;
|
•
|
direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war;
|
•
|
weather conditions affecting our or Valero’s operations or the areas in which Valero markets its refined petroleum products;
|
•
|
seasonal variations in demand for refined petroleum products;
|
•
|
adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any accruals, which affect us or Valero;
|
•
|
risks related to labor relations and workplace safety;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available; and
|
•
|
political developments.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Net income
|
|
$
|
188,831
|
|
|
$
|
71,312
|
|
|
$
|
117,519
|
|
Net income attributable to partners
|
|
204,253
|
|
|
131,878
|
|
|
72,375
|
|
|||
Net income per common unit
|
|
2.85
|
|
|
2.12
|
|
|
0.73
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Operating revenues – related party
|
|
$
|
362,619
|
|
|
$
|
243,624
|
|
|
$
|
118,995
|
|
Costs and expenses:
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
96,115
|
|
|
105,973
|
|
|
(9,858
|
)
|
|||
General and administrative expenses
|
|
15,965
|
|
|
14,520
|
|
|
1,445
|
|
|||
Depreciation expense
|
|
45,965
|
|
|
45,678
|
|
|
287
|
|
|||
Total costs and expenses
|
|
158,045
|
|
|
166,171
|
|
|
(8,126
|
)
|
|||
Operating income
|
|
204,574
|
|
|
77,453
|
|
|
127,121
|
|
|||
Other income, net
|
|
284
|
|
|
223
|
|
|
61
|
|
|||
Interest and debt expense, net of capitalized interest
|
|
(14,915
|
)
|
|
(6,113
|
)
|
|
(8,802
|
)
|
|||
Income before income taxes
|
|
189,943
|
|
|
71,563
|
|
|
118,380
|
|
|||
Income tax expense
|
|
1,112
|
|
|
251
|
|
|
861
|
|
|||
Net income
|
|
188,831
|
|
|
71,312
|
|
|
117,519
|
|
|||
Less: Net loss attributable to Predecessor
|
|
(15,422
|
)
|
|
(60,566
|
)
|
|
45,144
|
|
|||
Net income attributable to partners
|
|
204,253
|
|
|
131,878
|
|
|
72,375
|
|
|||
Less: General partner’s interest in net income
|
|
23,553
|
|
|
6,069
|
|
|
17,484
|
|
|||
Limited partners’ interest in net income
|
|
$
|
180,700
|
|
|
$
|
125,809
|
|
|
$
|
54,891
|
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit – basic and diluted:
|
|
|
|
|
||||||||
Common units
|
|
$
|
2.85
|
|
|
$
|
2.12
|
|
|
|
||
Subordinated units
|
|
$
|
2.38
|
|
|
$
|
2.07
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding – basic and diluted:
|
|
|
|
|
||||||||
Common units
|
|
48,817
|
|
|
31,222
|
|
|
|
||||
Subordinated units
|
|
17,463
|
|
|
28,790
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Operating highlights:
|
|
|
|
|
|
|
||||||
Pipeline transportation:
|
|
|
|
|
|
|
||||||
Pipeline transportation revenues
|
|
$
|
78,451
|
|
|
$
|
81,435
|
|
|
$
|
(2,984
|
)
|
Pipeline transportation throughput (BPD)
(a)
|
|
829,269
|
|
|
949,884
|
|
|
(120,615
|
)
|
|||
Average pipeline transportation revenue per barrel
(b)(c)
|
|
$
|
0.26
|
|
|
$
|
0.23
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
||||||
Terminaling:
|
|
|
|
|
|
|
||||||
Terminaling revenues
|
|
$
|
283,628
|
|
|
$
|
161,649
|
|
|
$
|
121,979
|
|
Terminaling throughput (BPD)
|
|
2,265,150
|
|
|
1,340,407
|
|
|
924,743
|
|
|||
Average terminaling revenue per barrel
(b)
|
|
$
|
0.34
|
|
|
$
|
0.33
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
||||||
Storage revenues
|
|
$
|
540
|
|
|
$
|
540
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Total operating revenues – related party
|
|
$
|
362,619
|
|
|
$
|
243,624
|
|
|
$
|
118,995
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Maintenance
|
|
$
|
13,027
|
|
|
$
|
10,828
|
|
|
$
|
2,199
|
|
Expansion
|
|
10,129
|
|
|
27,281
|
|
|
(17,152
|
)
|
|||
Total capital expenditures
|
|
23,156
|
|
|
38,109
|
|
|
(14,953
|
)
|
|||
Less: Capital expenditures attributable to Predecessor
|
|
3,394
|
|
|
29,632
|
|
|
(26,238
|
)
|
|||
Capital expenditures attributable to Partnership
|
|
$
|
19,762
|
|
|
$
|
8,477
|
|
|
$
|
11,285
|
|
|
|
|
|
|
|
|
||||||
Other financial information:
|
|
|
|
|
|
|
||||||
Distribution declared per unit
|
|
$
|
1.4965
|
|
|
$
|
1.1975
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Distribution declared:
|
|
|
|
|
|
|
||||||
Limited partner units – public
|
|
$
|
32,382
|
|
|
$
|
22,028
|
|
|
|
||
Limited partner units – Valero
|
|
67,560
|
|
|
51,566
|
|
|
|
||||
General partner units – Valero
|
|
21,648
|
|
|
5,003
|
|
|
|
||||
Total distribution declared
|
|
$
|
121,590
|
|
|
$
|
78,597
|
|
|
|
(a)
|
Represents the sum of volumes transported through each separately tariffed pipeline segment divided by the number of days in the period.
|
(b)
|
Average revenue per barrel is calculated as revenue divided by throughput for the period. Throughput is derived by multiplying the throughput barrels per day (BPD) by the number of days in the period.
|
(c)
|
Average pipeline transportation revenue per barrel was higher in 2016 compared to 2015 due primarily to the recognition of $2.2 million of deferred revenue associated with unused minimum volume credits by Valero.
|
•
|
Incremental terminaling throughput from acquired businesses
- We experienced a 111 percent increase in terminaling revenues in 2016 compared to 2015 generated by the terminals we acquired from Valero. The incremental throughput volumes at these terminals had a favorable impact to our operating revenues of $124.1 million.
|
•
|
Lower operating revenues at systems owned or acquired prior to 2015
- We estimate that a decrease in throughput volumes at these systems had an unfavorable impact to our operating revenues of approximately $5.1 million. The decrease is due primarily to a decrease of 25 percent in pipeline transportation throughput volumes and 21 percent in terminaling throughput volumes at our Port Arthur logistics system in 2016 compared to 2015. The decrease in volumes was primarily a result of planned turnaround activity at Valero’s Port Arthur Refinery in September and October 2016, during which time the refinery was largely shut down. In addition, we experienced a decrease of 26 percent in pipeline transportation throughput volumes at our McKee crude system in 2016 compared to 2015 due to decreased crude oil production in the region.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||
Operating highlights:
|
|
|
|
|
|
|
||||||
Pipeline transportation:
|
|
|
|
|
|
|
||||||
Pipeline transportation revenues
|
|
$
|
81,435
|
|
|
$
|
72,737
|
|
|
$
|
8,698
|
|
Pipeline transportation throughput (BPD)
(a)
|
|
949,884
|
|
|
908,095
|
|
|
41,789
|
|
|||
Average pipeline transportation revenue per barrel
(b)
|
|
$
|
0.23
|
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
||||||
Terminaling:
|
|
|
|
|
|
|
||||||
Terminaling revenues
|
|
$
|
161,649
|
|
|
$
|
55,495
|
|
|
$
|
106,154
|
|
Terminaling throughput (BPD)
|
|
1,340,407
|
|
|
545,135
|
|
|
795,272
|
|
|||
Average terminaling revenue per barrel
(b)
|
|
$
|
0.33
|
|
|
$
|
0.28
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
||||||
Storage revenues
|
|
$
|
540
|
|
|
$
|
948
|
|
|
$
|
(408
|
)
|
|
|
|
|
|
|
|
||||||
Total operating revenues – related party
|
|
$
|
243,624
|
|
|
$
|
129,180
|
|
|
$
|
114,444
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Maintenance
|
|
$
|
10,828
|
|
|
$
|
38,445
|
|
|
$
|
(27,617
|
)
|
Expansion
|
|
27,281
|
|
|
83,435
|
|
|
(56,154
|
)
|
|||
Total capital expenditures
|
|
$
|
38,109
|
|
|
$
|
121,880
|
|
|
$
|
(83,771
|
)
|
Less: Capital expenditures attributable to Predecessor
|
|
29,632
|
|
|
111,686
|
|
|
(82,054
|
)
|
|||
Capital expenditures attributable to Partnership
|
|
$
|
8,477
|
|
|
$
|
10,194
|
|
|
$
|
(1,717
|
)
|
|
|
|
|
|
|
|
||||||
Other financial information:
|
|
|
|
|
|
|
||||||
Distribution declared per unit
|
|
$
|
1.1975
|
|
|
$
|
0.9410
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Distribution declared:
|
|
|
|
|
|
|
||||||
Limited partner units – public
|
|
$
|
22,028
|
|
|
$
|
16,238
|
|
|
|
||
Limited partner units – Valero
|
|
51,566
|
|
|
37,950
|
|
|
|
||||
General partner units – Valero
|
|
5,003
|
|
|
1,304
|
|
|
|
||||
Total distribution declared
|
|
$
|
78,597
|
|
|
$
|
55,492
|
|
|
|
(a)
|
Represents the sum of volumes transported through each separately tariffed pipeline segment.
|
(b)
|
Average revenue per barrel is calculated as revenue divided by throughput for the period. Throughput is derived by multiplying the throughput barrels per day by the number of days in the period.
|
Quarterly
Period Ended |
|
Total
Quarterly Distribution (Per Unit) |
|
Total Cash
Distribution (In Thousands) |
|
Declaration
Date
|
|
Record
Date |
|
Distribution
Date
|
|||||
December 31, 2016
|
|
$
|
0.4065
|
|
|
$
|
34,895
|
|
|
January 20, 2017
|
|
February 2, 2017
|
|
February 10, 2017
|
|
September 30, 2016
|
|
0.3850
|
|
|
32,175
|
|
|
October 24, 2016
|
|
November 3, 2016
|
|
November 10, 2016
|
|||
June 30, 2016
|
|
0.3650
|
|
|
28,912
|
|
|
July 21, 2016
|
|
August 1, 2016
|
|
August 9, 2016
|
|||
March 31, 2016
|
|
0.3400
|
|
|
25,608
|
|
|
April 21, 2016
|
|
May 2, 2016
|
|
May 10, 2016
|
|||
December 31, 2015
|
|
0.3200
|
|
|
22,711
|
|
|
January 25, 2016
|
|
February 4, 2016
|
|
February 11, 2016
|
|||
September 30, 2015
|
|
0.3075
|
|
|
20,164
|
|
|
October 15, 2015
|
|
November 2, 2015
|
|
November 10, 2015
|
|||
June 30, 2015
|
|
0.2925
|
|
|
18,456
|
|
|
July 24, 2015
|
|
August 3, 2015
|
|
August 11, 2015
|
|||
March 31, 2015
|
|
0.2775
|
|
|
17,266
|
|
|
April 21, 2015
|
|
May 1, 2015
|
|
May 12, 2015
|
|||
December 31, 2014
|
|
0.2660
|
|
|
15,829
|
|
|
January 26, 2015
|
|
February 5, 2015
|
|
February 12, 2015
|
|||
September 30, 2014
|
|
0.2400
|
|
|
14,102
|
|
|
October 14, 2014
|
|
October 31, 2014
|
|
November 12, 2014
|
|||
June 30, 2014
|
|
0.2225
|
|
|
13,074
|
|
|
July 15, 2014
|
|
August 1, 2014
|
|
August 13, 2014
|
|||
March 31, 2014
|
|
0.2125
|
|
|
12,487
|
|
|
April 17, 2014
|
|
May 1, 2014
|
|
May 14, 2014
|
|||
December 31, 2013 (a)
|
|
0.0370
|
|
|
2,174
|
|
|
January 20, 2014
|
|
January 31, 2014
|
|
February 12, 2014
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows provided by (used in):
|
|
|
|
|
|
||||||||
Operating activities
|
|
$
|
229,894
|
|
|
$
|
108,376
|
|
|
$
|
3,239
|
|
|
Investing activities
|
|
(126,732
|
)
|
|
(428,171
|
)
|
|
(201,942
|
)
|
||||
Financing activities
|
|
(112,454
|
)
|
|
163,999
|
|
|
60,164
|
|
||||
Net decrease in cash and cash equivalents
|
$
|
(9,292
|
)
|
|
$
|
(155,796
|
)
|
|
$
|
(138,539
|
)
|
||
|
|
|
|
|
|
|
|
•
|
fund $480.0 million in acquisitions from Valero consisting of the McKee Terminal Services Business and the Meraux and Three Rivers Terminal Services Business (
$103.6 million
represented Valero’s carrying value in the net assets transferred to us and was reflected as an investing activity, and
$376.4 million
represented the excess purchase price paid over the carrying value and was reflected as a financing activity);
|
•
|
make debt repayments of
$494.9 million
, of which
$494.0 million
related to the Revolver;
|
•
|
pay
$109.4 million
in cash distributions to limited partners and our general partner;
|
•
|
fund
$23.2 million
in capital expenditures; and
|
•
|
pay
$5.3 million
in debt issuance and offering costs.
|
•
|
fund $966.2 million in acquisitions from Valero consisting of the Houston and St. Charles Terminal Services Business and the Corpus Christi Terminal Services Business (
$390.1 million
represented Valero’s carrying value in the net assets transferred to us and was reflected as an investing activity, and
$576.1 million
represented the excess purchase price paid over the carrying value and was reflected as a financing activity);
|
•
|
make debt repayments of
$211.2 million
, of which
$185.0 million
related to the Loan Agreements and $25.0 million related to the Revolver;
|
•
|
pay
$71.7 million
in cash distributions to limited partners and our general partner;
|
•
|
fund
$38.1 million
in capital expenditures; and
|
•
|
pay
$3.0 million
in debt issuance and offering costs.
|
•
|
fund $154.0 million in the acquisition of the Texas Crude Systems Business from Valero ($80.1 million represented Valero’s carrying value in the net assets transferred to us and was reflected as an investing activity, and
$73.9 million
represented the excess purchase price paid over the carrying value and was reflected as a financing activity);
|
•
|
fund
$121.9 million
in capital expenditures;
|
•
|
pay
$41.8 million
in cash distributions to limited partners and our general partner;
|
•
|
pay
$4.3 million
in debt issuance and offering costs; and
|
•
|
make debt repayments of
$1.0 million
on our capital lease obligations.
|
•
|
the construction of a connection to receive crude oil from the Seaway pipeline into our Lucas crude system;
|
•
|
the improvement of assets at our Meraux, Three Rivers, St. Charles, and Houston terminals to extend the useful lives of the tanks; and
|
•
|
the expansion of assets at our Port Arthur products system and St. Charles terminal.
|
•
|
the expansion and improvement of assets at our Corpus Christi, Meraux, and Three Rivers terminals;
|
•
|
the construction of a connection to receive crude oil from the Seaway pipeline into our Lucas crude system; and
|
•
|
the improvement of assets at our St. Charles terminal that will extend the useful lives of the tanks.
|
•
|
new tanks and improvements to tanks and other terminal assets at our St. Charles, Houston, Meraux, and Three Rivers terminals;
|
•
|
the expansion and improvement of assets at our Corpus Christi terminals; and
|
•
|
expansion of the Three Rivers crude system.
|
|
|
Payments Due by Period
|
|
|
||||||||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt (a)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
900,000
|
|
Operating lease obligations
|
|
10,855
|
|
|
10,812
|
|
|
10,796
|
|
|
10,797
|
|
|
10,792
|
|
|
246,036
|
|
|
300,088
|
|
|||||||
Purchase obligations
|
|
53,080
|
|
|
53,080
|
|
|
53,080
|
|
|
53,080
|
|
|
53,080
|
|
|
466,387
|
|
|
731,787
|
|
|||||||
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,169
|
|
|
1,169
|
|
|||||||
Total
|
|
$
|
63,935
|
|
|
$
|
63,892
|
|
|
$
|
63,876
|
|
|
$
|
463,877
|
|
|
$
|
63,872
|
|
|
$
|
1,213,592
|
|
|
$
|
1,933,044
|
|
(a)
|
Excludes amounts related to unamortized discount and debt issuance costs. These items are further described in
Note 5
of Notes to Consolidated Financial Statements.
|
Rating Agency
|
|
Rating
|
Moody’s Investors Service
|
|
Baa3 (stable outlook)
|
Standard & Poor’s Ratings Services
|
|
BBB- (stable outlook)
|
Fitch Ratings
|
|
BBB- (stable outlook)
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
|
|
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
There-
after |
|
Total (a)
|
|
Fair
Value |
||||||||||||||||
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
$
|
506,670
|
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.38
|
%
|
|
4.38
|
%
|
|
|
||||||||||
Floating rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.27
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.27
|
%
|
|
|
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||||||
|
|
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
There-
after |
|
Total (a)
|
|
Fair
Value |
||||||||||||||||
Floating rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
545,000
|
|
|
$
|
—
|
|
|
$
|
545,000
|
|
|
$
|
545,000
|
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.50
|
%
|
|
—
|
%
|
|
1.50
|
%
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(a) Excludes unamortized discount and deferred issuance costs.
|
|
|
|
December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
71,491
|
|
|
$
|
80,783
|
|
|
Receivables from related party
|
|
29,541
|
|
|
18,088
|
|
|||
Receivables
|
|
1,682
|
|
|
—
|
|
|||
Prepaid expenses and other
|
|
997
|
|
|
632
|
|
|||
Total current assets
|
|
103,711
|
|
|
99,503
|
|
|||
Property and equipment, at cost
|
|
1,216,288
|
|
|
1,176,843
|
|
|||
Accumulated depreciation
|
|
(351,208
|
)
|
|
(325,562
|
)
|
|||
Property and equipment, net
|
|
865,080
|
|
|
851,281
|
|
|||
Deferred charges and other assets, net
|
|
3,118
|
|
|
3,322
|
|
|||
Total assets
|
|
$
|
971,909
|
|
|
$
|
954,106
|
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|||||
Current portion of capital lease obligations
|
|
$
|
—
|
|
|
$
|
913
|
|
|
Accounts payable
|
|
10,652
|
|
|
9,264
|
|
|||
Accrued liabilities
|
|
2,150
|
|
|
1,062
|
|
|||
Accrued liabilities – related party
|
|
239
|
|
|
628
|
|
|||
Taxes other than income taxes
|
|
2,457
|
|
|
1,276
|
|
|||
Deferred revenue from related party
|
|
3,525
|
|
|
129
|
|
|||
Total current liabilities
|
|
19,023
|
|
|
13,272
|
|
|||
Debt and capital lease obligations, net of current portion
|
|
525,355
|
|
|
175,246
|
|
|||
Notes payable to related party
|
|
370,000
|
|
|
370,000
|
|
|||
Deferred income taxes
|
|
538
|
|
|
320
|
|
|||
Other long-term liabilities
|
|
1,169
|
|
|
1,116
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|||
Partners’ capital:
|
|
|
|
|
|||||
Common unitholders – public
(21,738,692 and 21,509,651 units outstanding)
|
|
548,619
|
|
|
581,489
|
|
|||
Common unitholder – Valero
(45,687,271 and 15,018,602 units outstanding)
|
|
(482,197
|
)
|
|
28,430
|
|
|||
Subordinated unitholder – Valero
(0 and 28,789,989 units outstanding)
|
|
—
|
|
|
(313,961
|
)
|
|||
General partner – Valero
(1,375,721 and 1,332,829 units outstanding)
|
|
(10,598
|
)
|
|
(5,805
|
)
|
|||
Net investment
|
|
—
|
|
|
103,999
|
|
|||
Total partners’ capital
|
|
55,824
|
|
|
394,152
|
|
|||
Total liabilities and partners’ capital
|
|
$
|
971,909
|
|
|
$
|
954,106
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating revenues – related party
|
|
$
|
362,619
|
|
|
$
|
243,624
|
|
|
$
|
129,180
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|||||||
Operating expenses (a)
|
|
96,115
|
|
|
105,973
|
|
|
111,114
|
|
||||
General and administrative expenses (b)
|
|
15,965
|
|
|
14,520
|
|
|
13,602
|
|
||||
Depreciation expense
|
|
45,965
|
|
|
45,678
|
|
|
37,909
|
|
||||
Total costs and expenses
|
|
158,045
|
|
|
166,171
|
|
|
162,625
|
|
||||
Operating income (loss)
|
|
204,574
|
|
|
77,453
|
|
|
(33,445
|
)
|
||||
Other income, net
|
|
284
|
|
|
223
|
|
|
1,504
|
|
||||
Interest and debt expense, net of capitalized interest (c)
|
|
(14,915
|
)
|
|
(6,113
|
)
|
|
(872
|
)
|
||||
Income (loss) before income taxes
|
|
189,943
|
|
|
71,563
|
|
|
(32,813
|
)
|
||||
Income tax expense
|
|
1,112
|
|
|
251
|
|
|
548
|
|
||||
Net income (loss)
|
|
188,831
|
|
|
71,312
|
|
|
(33,361
|
)
|
||||
Less: Net loss attributable to Predecessor
|
|
(15,422
|
)
|
|
(60,566
|
)
|
|
(92,642
|
)
|
||||
Net income attributable to partners
|
|
204,253
|
|
|
131,878
|
|
|
59,281
|
|
||||
Less: General partner’s interest in net income
|
|
23,553
|
|
|
6,069
|
|
|
1,379
|
|
||||
Limited partners’ interest in net income
|
|
$
|
180,700
|
|
|
$
|
125,809
|
|
|
$
|
57,902
|
|
|
|
|
|
|
|
|
|
|||||||
Net income per limited partner unit –
basic and diluted:
|
|
|
|
|
|
|
|||||||
Common units
|
|
$
|
2.85
|
|
|
$
|
2.12
|
|
|
$
|
1.01
|
|
|
Subordinated units
|
|
$
|
2.38
|
|
|
$
|
2.07
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average limited partner units outstanding:
|
|
|
|
|
|
|
|||||||
Common units – basic
|
|
48,817
|
|
|
31,222
|
|
|
28,790
|
|
||||
Common units – diluted
|
|
48,817
|
|
|
31,222
|
|
|
28,791
|
|
||||
Subordinated units – basic and diluted
|
|
17,463
|
|
|
28,790
|
|
|
28,790
|
|
||||
|
|
|
|
|
|
|
|||||||
Cash distribution declared per unit
|
|
$
|
1.4965
|
|
|
$
|
1.1975
|
|
|
$
|
0.9410
|
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental information – each income statement line item reflected below includes expenses incurred for services or financing provided by related party as follows:
|
|||||||||||||
(a) Operating expenses – related party
|
|
$
|
61,649
|
|
|
$
|
55,649
|
|
|
$
|
45,432
|
|
|
(b) General and administrative expenses – related party
|
|
$
|
12,539
|
|
|
$
|
11,695
|
|
|
$
|
11,141
|
|
|
(c) Interest and debt expense – related party
|
|
$
|
6,608
|
|
|
$
|
3,190
|
|
|
$
|
—
|
|
|
|
Partnership
|
|
|
|
|
||||||||||||||||||
|
|
Common
Unitholders
Public
|
|
Common
Unitholder Valero |
|
Subordinated
Unitholder
Valero |
|
General
Partner
Valero
|
|
Net
Investment
|
|
Total
|
||||||||||||
Balance as of December 31, 2013
|
$
|
369,825
|
|
|
$
|
75,998
|
|
|
$
|
189,601
|
|
|
$
|
6,167
|
|
|
$
|
470,107
|
|
|
$
|
1,111,698
|
|
|
Net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to Predecessor
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92,642
|
)
|
|
(92,642
|
)
|
|||||||
Attributable to partners
|
17,346
|
|
|
11,605
|
|
|
28,951
|
|
|
1,379
|
|
|
—
|
|
|
59,281
|
|
|||||||
Net transfers from Valero Energy Corporation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187,026
|
|
|
187,026
|
|
|||||||
Allocation of Valero Energy Corporation’s net investment in the Texas Crude Systems Business
|
—
|
|
|
22,276
|
|
|
55,572
|
|
|
2,268
|
|
|
(80,116
|
)
|
|
—
|
|
|||||||
Consideration paid to Valero Energy Corporation for the Texas Crude Systems Business
|
—
|
|
|
(42,818
|
)
|
|
(106,822
|
)
|
|
(4,360
|
)
|
|
—
|
|
|
(154,000
|
)
|
|||||||
Cash distributions to unitholders and distribution equivalent right payments
|
(12,285
|
)
|
|
(8,217
|
)
|
|
(20,498
|
)
|
|
(837
|
)
|
|
—
|
|
|
(41,837
|
)
|
|||||||
Unit-based compensation
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|||||||
Balance as of December 31, 2014
|
374,954
|
|
|
58,844
|
|
|
146,804
|
|
|
4,617
|
|
|
484,375
|
|
|
1,069,594
|
|
|||||||
Net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to Predecessor
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,566
|
)
|
|
(60,566
|
)
|
|||||||
Attributable to partners
|
37,183
|
|
|
28,548
|
|
|
60,078
|
|
|
6,069
|
|
|
—
|
|
|
131,878
|
|
|||||||
Net transfers from Valero Energy Corporation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,334
|
|
|
70,334
|
|
|||||||
Allocation of Valero Energy Corporation’s net investment in acquisitions
|
—
|
|
|
111,433
|
|
|
267,700
|
|
|
11,011
|
|
|
(390,144
|
)
|
|
—
|
|
|||||||
Consideration paid to Valero Energy Corporation for acquisitions
|
—
|
|
|
(330,539
|
)
|
|
(773,685
|
)
|
|
(31,996
|
)
|
|
—
|
|
|
(1,136,220
|
)
|
|||||||
Units issued to Valero Energy Corporation in connection with acquisitions
|
—
|
|
|
166,600
|
|
|
—
|
|
|
3,400
|
|
|
—
|
|
|
170,000
|
|
|||||||
Units issued in public offering
|
188,915
|
|
|
—
|
|
|
—
|
|
|
4,011
|
|
|
—
|
|
|
192,926
|
|
|||||||
Noncash capital contributions from Valero Energy Corporation
|
—
|
|
|
8,898
|
|
|
18,063
|
|
|
787
|
|
|
—
|
|
|
27,748
|
|
|||||||
Cash distributions to unitholders and distribution equivalent right payments
|
(19,736
|
)
|
|
(15,354
|
)
|
|
(32,921
|
)
|
|
(3,704
|
)
|
|
—
|
|
|
(71,715
|
)
|
|||||||
Unit-based compensation
|
173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|||||||
Balance as of December 31, 2015
|
581,489
|
|
|
28,430
|
|
|
(313,961
|
)
|
|
(5,805
|
)
|
|
103,999
|
|
|
394,152
|
|
|||||||
Net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to Predecessor
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,422
|
)
|
|
(15,422
|
)
|
|||||||
Attributable to partners
|
58,688
|
|
|
76,690
|
|
|
45,322
|
|
|
23,553
|
|
|
—
|
|
|
204,253
|
|
|||||||
Net transfers from Valero Energy Corporation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,030
|
|
|
15,030
|
|
|||||||
Allocation of Valero Energy Corporation’s net investment in acquisitions
|
—
|
|
|
67,800
|
|
|
32,758
|
|
|
3,049
|
|
|
(103,607
|
)
|
|
—
|
|
|||||||
Consideration paid to Valero Energy Corporation for acquisitions
|
—
|
|
|
(397,859
|
)
|
|
(153,067
|
)
|
|
(14,074
|
)
|
|
—
|
|
|
(565,000
|
)
|
|||||||
Units issued to Valero Energy Corporation in connection with acquisitions
|
—
|
|
|
83,300
|
|
|
—
|
|
|
1,700
|
|
|
—
|
|
|
85,000
|
|
|||||||
Conversion of subordinated units
|
—
|
|
|
(406,374
|
)
|
|
406,374
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Units issued in public offering
|
11,091
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
11,289
|
|
|||||||
Transfers to (from) partners
|
(72,452
|
)
|
|
76,584
|
|
|
—
|
|
|
(4,132
|
)
|
|
—
|
|
|
—
|
|
|||||||
Noncash capital contributions from Valero Energy Corporation
|
—
|
|
|
22,730
|
|
|
12,084
|
|
|
918
|
|
|
—
|
|
|
35,732
|
|
|||||||
Cash distributions to unitholders and distribution equivalent right payments
|
(30,393
|
)
|
|
(33,498
|
)
|
|
(29,510
|
)
|
|
(16,005
|
)
|
|
—
|
|
|
(109,406
|
)
|
|||||||
Unit-based compensation
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|||||||
Balance as of December 31, 2016
|
$
|
548,619
|
|
|
$
|
(482,197
|
)
|
|
$
|
—
|
|
|
$
|
(10,598
|
)
|
|
$
|
—
|
|
|
$
|
55,824
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|||||||
Net income (loss)
|
|
$
|
188,831
|
|
|
$
|
71,312
|
|
|
$
|
(33,361
|
)
|
|
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
|
|
|
|
|
|
|
|||||||
Depreciation expense
|
|
45,965
|
|
|
45,678
|
|
|
37,909
|
|
||||
Deferred income tax expense (benefit)
|
|
408
|
|
|
(228
|
)
|
|
43
|
|
||||
Changes in current assets and current liabilities
|
|
(5,956
|
)
|
|
(8,973
|
)
|
|
(1,318
|
)
|
||||
Changes in deferred charges and credits and other operating activities, net
|
|
646
|
|
|
587
|
|
|
(34
|
)
|
||||
Net cash provided by operating activities
|
|
229,894
|
|
|
108,376
|
|
|
3,239
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(23,156
|
)
|
|
(38,109
|
)
|
|
(121,880
|
)
|
||||
Acquisitions from Valero Energy Corporation
|
|
(103,607
|
)
|
|
(390,144
|
)
|
|
(80,116
|
)
|
||||
Other investing activities, net
|
|
31
|
|
|
82
|
|
|
54
|
|
||||
Net cash used in investing activities
|
|
(126,732
|
)
|
|
(428,171
|
)
|
|
(201,942
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|||||||
Proceeds from debt borrowings
|
|
349,000
|
|
|
200,000
|
|
|
—
|
|
||||
Proceeds from issuances of senior notes
|
|
499,795
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from notes payable to related party
|
|
—
|
|
|
555,000
|
|
|
—
|
|
||||
Repayments of debt and capital lease obligations
|
|
(494,913
|
)
|
|
(26,200
|
)
|
|
(1,048
|
)
|
||||
Repayment of note payable to related party
|
|
—
|
|
|
(185,000
|
)
|
|
—
|
|
||||
Payment of debt issuance costs
|
|
(4,462
|
)
|
|
(2,322
|
)
|
|
(1,071
|
)
|
||||
Proceeds from issuance of common units
|
|
9,724
|
|
|
189,683
|
|
|
—
|
|
||||
Proceeds from issuance of general partner units
|
|
198
|
|
|
4,011
|
|
|
—
|
|
||||
Payment of offering costs
|
|
(883
|
)
|
|
(666
|
)
|
|
(3,223
|
)
|
||||
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets
|
|
(376,393
|
)
|
|
(576,076
|
)
|
|
(73,884
|
)
|
||||
Cash distributions to unitholders and distribution equivalent right payments
|
|
(109,406
|
)
|
|
(71,715
|
)
|
|
(41,837
|
)
|
||||
Net transfers from Valero Energy Corporation
|
|
14,886
|
|
|
77,284
|
|
|
181,227
|
|
||||
Net cash provided by (used in) financing activities
|
|
(112,454
|
)
|
|
163,999
|
|
|
60,164
|
|
||||
Net decrease in cash and cash equivalents
|
|
(9,292
|
)
|
|
(155,796
|
)
|
|
(138,539
|
)
|
||||
Cash and cash equivalents at beginning of year
|
|
80,783
|
|
|
236,579
|
|
|
375,118
|
|
||||
Cash and cash equivalents at end of year
|
|
$
|
71,491
|
|
|
$
|
80,783
|
|
|
$
|
236,579
|
|
1.
|
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICES
|
2.
|
ACQUISITIONS
|
3.
|
RELATED-PARTY AGREEMENTS AND TRANSACTIONS
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Trade receivables – related party
|
|
$
|
36,889
|
|
|
$
|
26,103
|
|
Due to related party
|
|
(7,348
|
)
|
|
(8,015
|
)
|
||
Receivables from related party
|
|
$
|
29,541
|
|
|
$
|
18,088
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net transfers from Valero
per statements of partners’ capital |
|
$
|
15,030
|
|
|
$
|
70,334
|
|
|
$
|
187,026
|
|
|
Less: Noncash transfers from (to) Valero
|
|
144
|
|
|
(6,950
|
)
|
|
5,799
|
|
||||
Net transfers from Valero
per statements of cash flows |
|
$
|
14,886
|
|
|
$
|
77,284
|
|
|
$
|
181,227
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Minimum rental revenues
|
|
$
|
232,211
|
|
|
$
|
128,468
|
|
|
$
|
16,806
|
|
|
Contingent rental revenues
|
|
41,519
|
|
|
22,949
|
|
|
5,520
|
|
||||
Total lease revenues
|
|
$
|
273,730
|
|
|
$
|
151,417
|
|
|
$
|
22,326
|
|
2017
|
$
|
270,603
|
|
2018
|
270,603
|
|
|
2019
|
270,603
|
|
|
2020
|
271,344
|
|
|
2021
|
270,603
|
|
|
Thereafter
|
2,299,322
|
|
|
Total minimum rental payments
|
$
|
3,653,078
|
|
4.
|
PROPERTY AND EQUIPMENT
|
|
|
December 31, 2016
|
|
||||||||||
|
|
Non-Leased
Assets
|
|
Assets
Leased
to Valero
|
|
Total
|
|
||||||
Land
|
|
$
|
4,672
|
|
|
$
|
—
|
|
|
4,672
|
|
|
|
Pipelines and related assets
|
|
224,656
|
|
|
47,366
|
|
|
272,022
|
|
|
|||
Terminals and related assets
|
|
112,614
|
|
|
793,765
|
|
|
906,379
|
|
|
|||
Other
|
|
9,538
|
|
|
—
|
|
|
9,538
|
|
|
|||
Construction in progress
|
|
23,677
|
|
|
—
|
|
|
23,677
|
|
|
|||
Property and equipment, at cost
|
|
375,157
|
|
|
841,131
|
|
|
1,216,288
|
|
|
|||
Accumulated depreciation
|
|
(115,538
|
)
|
|
(235,670
|
)
|
|
(351,208
|
)
|
|
|||
Property and equipment, net
|
|
$
|
259,619
|
|
|
$
|
605,461
|
|
|
$
|
865,080
|
|
|
|
|
|
December 31, 2015
|
|
||||||||||
|
|
|
Non-Leased
Assets
|
|
Assets
Leased
to Valero
|
|
Total
|
|
||||||
Land
|
|
|
$
|
4,672
|
|
|
$
|
—
|
|
|
4,672
|
|
|
|
Pipelines and related assets
|
|
228,586
|
|
|
46,739
|
|
|
275,325
|
|
|
||||
Terminals and related assets
|
|
276,263
|
|
|
580,194
|
|
|
856,457
|
|
|
||||
Other
|
|
9,352
|
|
|
—
|
|
|
9,352
|
|
|
||||
Construction in progress
|
|
31,037
|
|
|
—
|
|
|
31,037
|
|
|
||||
Property and equipment, at cost
|
|
549,910
|
|
|
626,933
|
|
|
1,176,843
|
|
|
||||
Accumulated depreciation
|
|
(180,543
|
)
|
|
(145,019
|
)
|
|
(325,562
|
)
|
|
||||
Property and equipment, net
|
|
$
|
369,367
|
|
|
$
|
481,914
|
|
|
$
|
851,281
|
|
|
5.
|
DEBT, CAPITAL LEASE OBLIGATIONS, AND NOTES PAYABLE TO RELATED PARTY
|
|
Final
Maturity
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
|||||
Revolving credit facility
|
2020
|
|
$
|
30,000
|
|
|
$
|
175,000
|
|
Senior Notes, 4.375%
|
2026
|
|
500,000
|
|
|
—
|
|
||
Net unamortized discount and debt issuance costs
|
|
|
(4,645
|
)
|
|
—
|
|
||
Total debt
|
|
|
525,355
|
|
|
175,000
|
|
||
Capital lease obligations, including unamortized fair value adjustment
|
|
|
—
|
|
|
1,159
|
|
||
Total debt and capital lease obligations
|
|
|
525,355
|
|
|
176,159
|
|
||
Less: Current portion
|
|
|
—
|
|
|
(913
|
)
|
||
Debt and capital lease obligations, less current portion
|
|
|
$
|
525,355
|
|
|
$
|
175,246
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Interest and debt expense incurred
|
$
|
14,997
|
|
|
$
|
6,144
|
|
|
$
|
872
|
|
Less: Capitalized interest
|
82
|
|
|
31
|
|
|
—
|
|
|||
Interest and debt expense, net of capitalized interest
|
$
|
14,915
|
|
|
$
|
6,113
|
|
|
$
|
872
|
|
6.
|
ASSET RETIREMENT OBLIGATIONS
|
|
|
|
December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance as of beginning of year
|
|
$
|
1,021
|
|
|
$
|
975
|
|
|
$
|
931
|
|
|
Accretion expense
|
|
48
|
|
|
46
|
|
|
44
|
|
||||
Balance as of end of year
|
|
$
|
1,069
|
|
|
$
|
1,021
|
|
|
$
|
975
|
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
Agreements With
|
|
|
||||||||
|
|
Related Party
|
|
Others
|
|
Total
|
||||||
2017
|
|
$
|
9,743
|
|
|
$
|
1,112
|
|
|
$
|
10,855
|
|
2018
|
|
9,744
|
|
|
1,068
|
|
|
10,812
|
|
|||
2019
|
|
9,744
|
|
|
1,052
|
|
|
10,796
|
|
|||
2020
|
|
9,745
|
|
|
1,052
|
|
|
10,797
|
|
|||
2021
|
|
9,745
|
|
|
1,047
|
|
|
10,792
|
|
|||
Thereafter
|
|
220,674
|
|
|
25,362
|
|
|
246,036
|
|
|||
Total minimum rental payments
|
|
$
|
269,395
|
|
|
$
|
30,693
|
|
|
$
|
300,088
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Minimum rental expenses – related party
|
|
$
|
8,946
|
|
|
$
|
5,803
|
|
|
$
|
37
|
|
|
Minimum rental expenses
|
|
815
|
|
|
1,327
|
|
|
1,404
|
|
||||
Total minimum rental expenses
|
|
$
|
9,761
|
|
|
$
|
7,130
|
|
|
$
|
1,441
|
|
8.
|
CASH DISTRIBUTIONS
|
Quarterly
Period
Ended
|
|
Total
Quarterly
Distribution
(Per Unit)
|
|
Total Cash
Distribution
(In Thousands)
|
|
Declaration
Date
|
|
Record
Date
|
|
Distribution
Date
|
|||||
December 31, 2016
|
|
$
|
0.4065
|
|
|
$
|
34,895
|
|
|
January 20, 2017
|
|
February 2, 2017
|
|
February 10, 2017
|
|
September 30, 2016
|
|
0.3850
|
|
|
32,175
|
|
|
October 24, 2016
|
|
November 3, 2016
|
|
November 10, 2016
|
|||
June 30, 2016
|
|
0.3650
|
|
|
28,912
|
|
|
July 21, 2016
|
|
August 1, 2016
|
|
August 9, 2016
|
|||
March 31, 2016
|
|
0.3400
|
|
|
25,608
|
|
|
April 21, 2016
|
|
May 2, 2016
|
|
May 10, 2016
|
|||
December 31, 2015
|
|
0.3200
|
|
|
22,711
|
|
|
January 25, 2016
|
|
February 4, 2016
|
|
February 11, 2016
|
|||
September 30, 2015
|
|
0.3075
|
|
|
20,164
|
|
|
October 15, 2015
|
|
November 2, 2015
|
|
November 10, 2015
|
|||
June 30, 2015
|
|
0.2925
|
|
|
18,456
|
|
|
July 24, 2015
|
|
August 3, 2015
|
|
August 11, 2015
|
|||
March 31, 2015
|
|
0.2775
|
|
|
17,266
|
|
|
April 21, 2015
|
|
May 1, 2015
|
|
May 12, 2015
|
|||
December 31, 2014
|
|
0.2660
|
|
|
15,829
|
|
|
January 26, 2015
|
|
February 5, 2015
|
|
February 12, 2015
|
|||
September 30, 2014
|
|
0.2400
|
|
|
14,102
|
|
|
October 14, 2014
|
|
October 31, 2014
|
|
November 12, 2014
|
|||
June 30, 2014
|
|
0.2225
|
|
|
13,074
|
|
|
July 15, 2014
|
|
August 1, 2014
|
|
August 13, 2014
|
|||
March 31, 2014
|
|
0.2125
|
|
|
12,487
|
|
|
April 17, 2014
|
|
May 1, 2014
|
|
May 14, 2014
|
|||
December 31, 2013 (a)
|
|
0.0370
|
|
|
2,174
|
|
|
January 20, 2014
|
|
January 31, 2014
|
|
February 12, 2014
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||
(a) This quarterly distribution reflects the pro rata portion of the minimum quarterly distribution rate of $0.2125 for the partial quarter beginning December 16, 2013 and ending December 31, 2013.
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
General partner’s distributions:
|
|
|
|
|
|
|
|||||||
General partner’s distributions
|
|
$
|
2,294
|
|
|
$
|
1,572
|
|
|
$
|
1,110
|
|
|
General partner’s incentive distribution rights (IDRs)
|
|
19,354
|
|
|
3,431
|
|
|
194
|
|
||||
Total general partner’s distributions
|
|
21,648
|
|
|
5,003
|
|
|
1,304
|
|
||||
Limited partners’ distributions:
|
|
|
|
|
|
|
|||||||
Common – public
|
|
32,362
|
|
|
22,016
|
|
|
16,232
|
|
||||
Common – Valero
|
|
47,263
|
|
|
17,090
|
|
|
10,859
|
|
||||
Subordinated – Valero
|
|
20,297
|
|
|
34,476
|
|
|
27,091
|
|
||||
Total limited partners’ distributions
|
|
99,922
|
|
|
73,582
|
|
|
54,182
|
|
||||
DERs
|
|
20
|
|
|
12
|
|
|
6
|
|
||||
Total cash distributions, including DERs
|
|
$
|
121,590
|
|
|
$
|
78,597
|
|
|
$
|
55,492
|
|
9.
|
NET INCOME PER LIMITED PARTNER UNIT
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
|
|
|
Limited Partners
|
|
|
|
|
||||||||||||
|
|
General
Partner |
|
Common
Units |
|
Subordinated
Units |
|
Restricted
Units |
|
Total
|
||||||||||
Allocation of net income to determine net income available to limited partners:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions, excluding general partner’s IDRs
|
|
$
|
2,294
|
|
|
$
|
79,625
|
|
|
$
|
20,297
|
|
|
$
|
—
|
|
|
$
|
102,216
|
|
General partner’s IDRs
|
|
19,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,354
|
|
|||||
DERs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||
Distributions and DERs declared
|
|
21,648
|
|
|
79,625
|
|
|
20,297
|
|
|
20
|
|
|
121,590
|
|
|||||
Undistributed earnings
|
|
1,905
|
|
|
59,452
|
|
|
21,289
|
|
|
17
|
|
|
82,663
|
|
|||||
Net income available to
limited partners – basic and diluted |
|
$
|
23,553
|
|
|
$
|
139,077
|
|
|
$
|
41,586
|
|
|
$
|
37
|
|
|
$
|
204,253
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit – basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average units outstanding
|
|
|
|
48,817
|
|
|
17,463
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit – basic and diluted
|
|
|
|
$
|
2.85
|
|
|
$
|
2.38
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
|
|
|
Limited Partners
|
|
|
|
|
||||||||||||
|
|
General
Partner
|
|
Common
Units
|
|
Subordinated
Units
|
|
Restricted Units
|
|
Total
|
||||||||||
Allocation of net income to determine net income available to limited partners:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions, excluding general partner’s IDRs
|
|
$
|
1,572
|
|
|
$
|
39,106
|
|
|
$
|
34,476
|
|
|
$
|
—
|
|
|
$
|
75,154
|
|
General partner’s IDRs
|
|
3,431
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,431
|
|
|||||
DERs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||
Distributions and DERs declared
|
|
5,003
|
|
|
39,106
|
|
|
34,476
|
|
|
12
|
|
|
78,597
|
|
|||||
Undistributed earnings
|
|
1,066
|
|
|
27,162
|
|
|
25,045
|
|
|
8
|
|
|
53,281
|
|
|||||
Net income available to
limited partners – basic and diluted
|
|
$
|
6,069
|
|
|
$
|
66,268
|
|
|
$
|
59,521
|
|
|
$
|
20
|
|
|
$
|
131,878
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit – basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average units outstanding
|
|
|
|
31,222
|
|
|
28,790
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit – basic and diluted
|
|
|
|
$
|
2.12
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
|
|
|
Limited Partners
|
|
|
|
|
||||||||||||
|
|
General
Partner
|
|
Common
Units
|
|
Subordinated
Units
|
|
Restricted
Units
|
|
Total
|
||||||||||
Allocation of net income to determine net income available to limited partners:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions, excluding general
partner’s IDRs
|
|
$
|
1,110
|
|
|
$
|
27,091
|
|
|
$
|
27,091
|
|
|
$
|
—
|
|
|
$
|
55,292
|
|
General partner’s IDRs
|
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
194
|
|
|||||
DERs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||
Distributions and DERs declared
|
|
1,304
|
|
|
27,091
|
|
|
27,091
|
|
|
6
|
|
|
55,492
|
|
|||||
Undistributed earnings
|
|
75
|
|
|
1,857
|
|
|
1,857
|
|
|
—
|
|
|
3,789
|
|
|||||
Net income available to
limited partners – basic
|
|
$
|
1,379
|
|
|
28,948
|
|
|
28,948
|
|
|
$
|
6
|
|
|
$
|
59,281
|
|
||
Add: DERs
|
|
|
|
6
|
|
|
—
|
|
|
|
|
|
|
|||||||
Net income available to
limited partners – diluted
|
|
|
|
$
|
28,954
|
|
|
$
|
28,948
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit –
basic:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average units outstanding
|
|
|
|
28,790
|
|
|
28,790
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit –
basic
|
|
|
|
$
|
1.01
|
|
|
$
|
1.01
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit – diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average units outstanding
|
|
|
|
28,790
|
|
|
28,790
|
|
|
|
|
|
||||||||
Common equivalent units for restricted units
|
|
|
|
1
|
|
|
—
|
|
|
|
|
|
||||||||
Weighted-average units outstanding –
diluted
|
|
|
|
28,791
|
|
|
28,790
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per limited partner unit –
diluted
|
|
|
|
$
|
1.01
|
|
|
$
|
1.01
|
|
|
|
|
|
10.
|
PARTNERS’ CAPITAL
|
|
|
|
Common
|
|
|
|
General
Partner
|
|
|
|||||||
|
|
|
Public
|
|
Valero
|
|
Subordinated
|
|
|
Total
|
||||||
Balance as of December 31, 2013
|
|
17,250,000
|
|
|
11,539,989
|
|
|
28,789,989
|
|
|
1,175,102
|
|
|
58,755,080
|
|
|
Unit-based compensation
|
|
5,208
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,208
|
|
|
Balance as of December 31, 2014
|
|
17,255,208
|
|
|
11,539,989
|
|
|
28,789,989
|
|
|
1,175,102
|
|
|
58,760,288
|
|
|
Unit-based compensation
|
|
4,443
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,443
|
|
|
Units issued in connection with
acquisitions (see Note 2)
|
|
—
|
|
|
3,478,613
|
|
|
—
|
|
|
70,992
|
|
|
3,549,605
|
|
|
Units issued in public offering
|
|
4,250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,250,000
|
|
|
General partner units issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,735
|
|
|
86,735
|
|
|
Balance as of December 31, 2015
|
|
21,509,651
|
|
|
15,018,602
|
|
|
28,789,989
|
|
|
1,332,829
|
|
|
66,651,071
|
|
|
Unit-based compensation (see Note 11)
|
|
5,958
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,958
|
|
|
Units issued in connection with
acquisitions (see Note 2)
|
|
—
|
|
|
1,878,680
|
|
|
—
|
|
|
38,340
|
|
|
1,917,020
|
|
|
Conversion of subordinated units
|
|
—
|
|
|
28,789,989
|
|
|
(28,789,989
|
)
|
|
—
|
|
|
—
|
|
|
Units issued under ATM program
|
|
223,083
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223,083
|
|
|
General partner units issued to maintain 2% interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,552
|
|
|
4,552
|
|
|
Balance as of December 31, 2016
|
|
21,738,692
|
|
|
45,687,271
|
|
|
—
|
|
|
1,375,721
|
|
|
68,801,684
|
|
11.
|
UNIT-BASED COMPENSATION
|
|
Number of
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
Per Unit
|
|||
Nonvested units as of January 1, 2016
|
9,651
|
|
|
$
|
37.32
|
|
Granted
|
5,958
|
|
|
45.34
|
|
|
Vested
|
(1,482
|
)
|
|
40.54
|
|
|
Nonvested units as of December 31, 2016
|
14,127
|
|
|
40.36
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted-average grant-date fair value per share of restricted units granted
|
$
|
45.34
|
|
|
$
|
40.54
|
|
|
$
|
34.58
|
|
Fair value of restricted units vested
|
73
|
|
|
—
|
|
|
—
|
|
12.
|
INCOME TAXES
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current U.S. state
|
|
$
|
704
|
|
|
$
|
479
|
|
|
$
|
505
|
|
|
Deferred U.S. state
|
|
408
|
|
|
(228
|
)
|
|
43
|
|
||||
Income tax expense
|
|
$
|
1,112
|
|
|
$
|
251
|
|
|
$
|
548
|
|
13.
|
EMPLOYEE BENEFIT PLANS
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Pension and postretirement costs
|
|
$
|
19
|
|
|
$
|
54
|
|
|
$
|
126
|
|
|
Defined contribution plan costs
|
|
15
|
|
|
45
|
|
|
111
|
|
14.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Decrease (increase) in current assets:
|
|
|
|
|
|
|
||||||
Receivables from related party
|
|
$
|
(11,453
|
)
|
|
$
|
(9,589
|
)
|
|
$
|
2,945
|
|
Prepaid expenses and other
|
|
(365
|
)
|
|
95
|
|
|
(451
|
)
|
|||
Increase (decrease) in current liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
586
|
|
|
(631
|
)
|
|
(4,778
|
)
|
|||
Accrued liabilities
|
|
1,088
|
|
|
139
|
|
|
842
|
|
|||
Accrued liabilities – related party
|
|
(389
|
)
|
|
497
|
|
|
54
|
|
|||
Taxes other than income taxes
|
|
1,181
|
|
|
511
|
|
|
31
|
|
|||
Deferred revenue from related party
|
|
3,396
|
|
|
5
|
|
|
39
|
|
|||
Changes in current assets and current liabilities
|
|
$
|
(5,956
|
)
|
|
$
|
(8,973
|
)
|
|
$
|
(1,318
|
)
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Transfer (from) to Valero for:
|
|
|
|
|
|
|
|||||||
Deferred income taxes
|
|
$
|
(190
|
)
|
|
$
|
(282
|
)
|
|
$
|
(154
|
)
|
|
Change in accrued capital expenditures
|
|
46
|
|
|
7,232
|
|
|
(5,645
|
)
|
||||
Capital expenditures included in accounts payable
|
|
(904
|
)
|
|
(5,496
|
)
|
|
(786
|
)
|
||||
Noncash capital contributions from Valero Energy Corporation for projects related to acquisitions
|
|
35,732
|
|
|
27,748
|
|
|
—
|
|
||||
Units issued to Valero Energy Corporation in connection with acquisitions (see Note 2)
|
|
85,000
|
|
|
170,000
|
|
|
—
|
|
||||
Offering costs included in accounts payable
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
||||
Units issued under ATM program included in receivables
|
|
1,682
|
|
|
—
|
|
|
—
|
|
•
|
the conversion of all of our outstanding subordinated units into common units having an aggregate value of
$406.4 million
described in
Note 10
; and
|
•
|
the transfers to (from) partners reflect the impact of ownership changes occurring as a result of the issuance of common units (i) to Valero for the acquisition of the Meraux and Three Rivers Terminal Services Business and (ii) under our ATM Program, described in
Note 10
.
|
|
|
Investing
Cash
Outflow
|
|
Financing
Cash
Outflow
|
|
Total
Cash
Outflow
|
||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
||||||
McKee Terminal Services Business
|
|
$
|
51,361
|
|
|
$
|
152,639
|
|
|
$
|
204,000
|
|
Meraux and Three Rivers Terminal Services Business
|
|
52,246
|
|
|
223,754
|
|
|
276,000
|
|
|||
|
|
$
|
103,607
|
|
|
$
|
376,393
|
|
|
$
|
480,000
|
|
Year ended December 31, 2015:
|
|
|
|
|
|
|
||||||
Houston and St. Charles Terminal Services Business
|
|
$
|
296,109
|
|
|
$
|
275,111
|
|
|
$
|
571,220
|
|
Corpus Christi Terminal Services Business
|
|
94,035
|
|
|
300,965
|
|
|
395,000
|
|
|||
|
|
$
|
390,144
|
|
|
$
|
576,076
|
|
|
$
|
966,220
|
|
Year ended December 31, 2014:
|
|
|
|
|
|
|
||||||
Texas Crude Systems Business
|
|
$
|
80,116
|
|
|
$
|
73,884
|
|
|
$
|
154,000
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest paid
|
|
$
|
13,873
|
|
|
$
|
5,367
|
|
|
$
|
899
|
|
|
Income taxes paid
|
|
505
|
|
|
441
|
|
|
74
|
|
15.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
71,491
|
|
|
$
|
71,491
|
|
|
$
|
80,783
|
|
|
$
|
80,783
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|||||||||
Debt (excluding capital leases)
|
525,355
|
|
|
536,670
|
|
|
175,000
|
|
|
175,000
|
|
|||||
Notes payable to related party
|
370,000
|
|
|
370,000
|
|
|
370,000
|
|
|
370,000
|
|
•
|
The fair value of cash and cash equivalents approximates the carrying value due to the low level of credit risk of these assets combined with their market interest rates. The fair value measurement for cash and cash equivalents is categorized as Level 1 in the fair value hierarchy. Fair values determined by Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets.
|
•
|
The fair value of our variable rate debt and notes payable to related party approximate their carrying values as our borrowings bear interest based upon short-term floating market interest rates. The fair value of our fixed-rate Senior Notes is determined primarily using the market approach based on quoted prices provided by vendor pricing services. The fair value measurement for these liabilities is categorized as Level 2 in the fair value hierarchy. Fair values determined by Level 2 utilize inputs that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
16.
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
2016 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Operating revenues – related party
|
|
$
|
78,767
|
|
|
$
|
87,664
|
|
|
$
|
92,040
|
|
|
$
|
104,148
|
|
Operating income
|
|
38,604
|
|
|
48,042
|
|
|
52,538
|
|
|
65,390
|
|
||||
Net income
|
|
35,780
|
|
|
44,545
|
|
|
48,707
|
|
|
59,799
|
|
||||
Net income attributable to partners
|
|
43,298
|
|
|
49,447
|
|
|
51,709
|
|
|
59,799
|
|
||||
Limited partners’ interest in net income
|
|
39,794
|
|
|
44,234
|
|
|
45,075
|
|
|
51,597
|
|
||||
Net income per limited partner unit –
|
|
|
|
|
|
|
|
|
||||||||
basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Common units
|
|
0.61
|
|
|
0.67
|
|
|
0.77
|
|
|
0.77
|
|
||||
Subordinated units
|
|
0.61
|
|
|
0.67
|
|
|
0.29
|
|
|
—
|
|
|
|
|
2015 Quarter Ended
|
||||||||||||||
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Operating revenues – related party
|
|
$
|
41,886
|
|
|
$
|
60,245
|
|
|
$
|
62,037
|
|
|
$
|
79,456
|
|
|
Operating income
|
|
95
|
|
|
20,495
|
|
|
17,064
|
|
|
39,799
|
|
|||||
Net income (loss)
|
|
(269
|
)
|
|
19,161
|
|
|
15,625
|
|
|
36,795
|
|
|||||
Net income attributable to partners
|
|
22,121
|
|
|
33,662
|
|
|
31,428
|
|
|
44,667
|
|
|||||
Limited partners’ interest in net income
|
|
21,269
|
|
|
32,305
|
|
|
29,816
|
|
|
42,419
|
|
|||||
Net income per limited partner unit –
|
|
|
|
|
|
|
|
|
|||||||||
basic and diluted:
|
|
|
|
|
|
|
|
|
|||||||||
Common units
|
|
0.37
|
|
|
0.54
|
|
|
0.51
|
|
|
0.69
|
|
|||||
Subordinated units
|
|
0.36
|
|
|
0.54
|
|
|
0.49
|
|
|
0.66
|
|
|
|
Valero
Energy
Partners LP
(Previously
Reported)
|
|
McKee
Terminal
Services
Business
|
|
Meraux and
Three Rivers
Terminal
Services
Business |
|
Valero
Energy
Partners LP
(Currently
Reported) |
||||||||
Quarter ended March 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
$
|
46,122
|
|
|
$
|
(3,081
|
)
|
|
$
|
(4,437
|
)
|
|
$
|
38,604
|
|
Net income (loss)
|
|
43,298
|
|
|
(3,081
|
)
|
|
(4,437
|
)
|
|
35,780
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Quarter ended June 30, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
52,944
|
|
|
—
|
|
|
(4,902
|
)
|
|
48,042
|
|
||||
Net income (loss)
|
|
49,447
|
|
|
—
|
|
|
(4,902
|
)
|
|
44,545
|
|
Name
|
|
Age *
|
|
Position with Valero Energy Partners GP LLC
|
Joseph W. Gorder
|
|
59
|
|
Chairman of the Board and Chief Executive Officer
|
Richard F. Lashway
|
|
53
|
|
Director, President and Chief Operating Officer
|
Donna M. Titzman
|
|
53
|
|
Director, Senior Vice President, Chief Financial Officer and Treasurer
|
Jay D. Browning
|
|
58
|
|
Executive Vice President and General Counsel
|
Robert S. Beadle
|
|
67
|
|
Director
|
Timothy J. Fretthold
|
|
67
|
|
Director
|
Randall J. Larson
|
|
59
|
|
Director
|
R. Lane Riggs
|
|
51
|
|
Director
|
•
|
Governance Guidelines,
|
•
|
Code of Business Conduct and Ethics,
|
•
|
Code of Ethics for Senior Financial Officers, and
|
•
|
Audit Committee charter.
|
•
|
Joseph W. Gorder, Chief Executive Officer,
|
•
|
Richard F. Lashway, President and Chief Operating Officer,
|
•
|
Jay D. Browning, Executive Vice President and General Counsel, and
|
•
|
Donna M. Titzman, Senior Vice President, Chief Financial Officer and Treasurer.
|
|
|
Fees Earned or
Paid in Cash
|
|
Unit Awards (1)
|
|
Other Income (3)
|
|
Total
|
||||||||
Robert S. Beadle
|
|
$
|
75,000
|
|
|
$
|
90,045
|
|
|
$
|
—
|
|
|
$
|
165,045
|
|
Timothy J. Fretthold
|
|
75,000
|
|
|
90,045
|
|
|
11,769
|
|
|
176,814
|
|
||||
Joseph W. Gorder
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Randall J. Larson
|
|
75,000
|
|
|
90,045
|
|
|
—
|
|
|
165,045
|
|
||||
Richard F. Lashway
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
R. Lane Riggs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Donna M. Titzman
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
(1)
|
The amounts shown represent the grant date fair value of awards granted in 2016, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation–Stock Compensation (FASB ASC Topic 718). In 2016, each of our independent directors who was serving on the Board on January 14, 2016, received a grant of 1,986 restricted common units. The following table presents the number of unvested restricted common units held by each independent director as of December 31, 2016.
|
Name
|
|
Unvested Restricted Units
|
|
Robert S. Beadle
|
|
4,709
|
|
Timothy J. Fretthold
|
|
4,709
|
|
Randall J. Larson
|
|
4,709
|
|
(2)
|
Mr. Gorder, Mr. Lashway, Mr. Riggs, and Ms. Titzman do not receive any compensation as directors of our general partner, and did not receive any compensation as directors of our general partner in 2016.
|
(3)
|
The amount presented for Mr. Fretthold represents Valero’s payment in 2016 to Mr. Fretthold under a severance agreement for prior service with a predecessor of Valero. This arrangement is described in Item 13., “Certain Relationships and Related Transactions, and Director Independence—Supplemental Death Benefit Agreements and Severance Agreement.”
|
Joseph W. Gorder
|
Richard F. Lashway
|
|
Robert S. Beadle
|
R. Lane Riggs
|
|
Timothy J. Fretthold
|
Donna M. Titzman
|
|
Randall J. Larson
|
|
|
*
|
We do not have a Compensation Committee. Accordingly, the Compensation Committee Report required by Item 407(e)(5) of Regulation S-K is given by the board of directors of our general partner.
|
Name of Beneficial Owner (1)
|
|
Common Units
|
|
General Partner Units
|
|
Total Partnership Interests
|
|||||||||
|
Number
|
|
Percent
|
|
Number
|
|
Percent
|
|
Percent
|
||||||
Valero Energy Corporation (2)
|
|
45,687,271
|
|
|
67.67
|
%
|
|
1,377,334
|
|
|
100.00
|
%
|
|
68.32
|
%
|
Tortoise Capital Advisors,
L.L.C. (3)
|
|
5,112,718
|
|
|
7.57
|
%
|
|
—
|
|
|
—
|
|
|
7.42
|
%
|
Goldman Sachs Asset
Management (4)
|
|
4,713,862
|
|
|
6.98
|
%
|
|
—
|
|
|
—
|
|
|
6.84
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Directors & Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|||||
Robert S. Beadle
|
|
17,202
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Jay D. Browning
|
|
5,500
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Timothy J. Fretthold
|
|
17,202
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Joseph W. Gorder
|
|
50,000
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Randall J. Larson
|
|
27,202
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Richard F. Lashway
|
|
10,000
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
R. Lane Riggs
|
|
5,500
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Donna M. Titzman
|
|
11,000
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Directors and executive officers as a group (8 persons)
|
|
143,606
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
*
|
Less than 1 percent.
|
(1)
|
The address for the beneficial owners listed in this table is One Valero Way, San Antonio, Texas 78249.
|
(2)
|
Valero Energy Corporation directly or indirectly owns the following entities, which own the units listed below. Valero Energy Corporation may be deemed to beneficially own the units and interests held by each of the entities.
|
Name of Entity
|
|
Common
Units
|
|
General
Partner Units
|
||
Valero Energy Partners GP LLC
|
|
—
|
|
|
1,377,334
|
|
Valero Terminaling and Distribution Company
|
|
45,687,271
|
|
|
—
|
|
Total Valero subsidiaries
|
|
45,687,271
|
|
|
1,377,334
|
|
(3)
|
Tortoise Capital Advisors, L.L.C., 11550 Ash Street, Suite 300, Leawood, Kansas 66211, filed an amended Schedule 13G with the SEC on February 14, 2017, reporting that it or certain of its affiliates beneficially owned in the aggregate 5,112,718 Common Units, that it had sole voting and sole dispositive power over 97,988 of our Common Units, shared voting power over 4,412,508 of our Common Units, and shared dispositive power over 5,014,730 of our Common Units.
|
(4)
|
Goldman Sachs Asset Management, 200 West Street, New York, NY 10282, filed an amended Schedule 13G with the SEC on January 27, 2017, reporting that it or certain of its affiliates beneficially owned in the aggregate 4,713,862 Common Units, and that it had shared voting and dispositive power over those Common Units.
|
Name of Beneficial Owner (1)
|
|
Shares Held (2)
|
|
Shares Under
Options (3)
|
|
Total Shares of
Valero
Common Stock
|
|
Percent of
Class
|
|||
Robert S. Beadle
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
Jay D. Browning
|
|
202,282
|
|
|
32,219
|
|
|
234,501
|
|
|
*
|
Timothy J. Fretthold
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
Joseph W. Gorder
|
|
396,049
|
|
|
232,186
|
|
|
628,235
|
|
|
*
|
Randall J. Larson
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
Richard F. Lashway
|
|
36,860
|
|
|
2,333
|
|
|
39,193
|
|
|
*
|
R. Lane Riggs
|
|
132,253
|
|
|
31,522
|
|
|
163,775
|
|
|
*
|
Donna M. Titzman
|
|
192,223
|
|
|
35,123
|
|
|
227,346
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|||
All directors and executive officers as a group (8 persons)
|
|
959,667
|
|
|
333,383
|
|
|
1,293,050
|
|
|
*
|
*
|
Less than 1 percent.
|
(1)
|
The address for all beneficial owners in this table is One Valero Way, San Antonio, Texas 78249.
|
(2)
|
Includes shares allocated under Valero’s thrift plan and shares of restricted stock (and for Mr. Browning, shares owned by his spouse).
|
(3)
|
Represents shares of Valero’s common stock that may be acquired under stock options. Stock options that may be exercised only in the event of a change of control of Valero Energy Corporation are excluded.
|
Plan category
|
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under equity
compensation plans
|
|
Equity compensation plans approved
by security holders:
|
|
|
|
|
|
|
|
Valero Energy Partners LP 2013
Incentive Compensation Plan
|
|
14,127
|
|
n/a
|
|
2,984,391
|
|
Category
|
|
2016
|
|
2015
|
||||
Audit fees
(1)
|
|
$
|
2,075
|
|
|
$
|
1,325
|
|
Audit-related fees
|
|
—
|
|
|
—
|
|
||
Tax fees
|
|
—
|
|
|
—
|
|
||
All other fees
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
2,075
|
|
|
$
|
1,325
|
|
(1)
|
Represents fees for professional services rendered for the audit of the annual financial statements included in our annual reports on Form 10-K, review of our interim financial statements included in our quarterly reports on Form 10-Q, the audit of the effectiveness of our internal control over financial reporting, audits of acquired businesses, and services that are normally provided by the principal auditor (
e.g
., comfort letters, statutory audits, attest services, consents, and assistance with and review of documents filed with the SEC).
|
|
Page
|
Management’s report on internal control over financial reporting
|
|
Report of independent registered public accounting firm
|
|
Consolidated balance sheets as of December 31, 2016 and 2015
|
|
Consolidated statements of income for the years ended December 31, 2016, 2015, and 2014
|
|
Consolidated statements of partners’ capital for the years ended December 31, 2016, 2015, and 2014
|
|
Consolidated statements of cash flows for the years ended December 31, 2016, 2015, and 2014
|
|
Notes to consolidated financial statements
|
|
|
|
|
3.01
|
|
—
|
Certificate of Limited Partnership of Valero Energy Partners LP–incorporated by reference to Exhibit 3.1 to the Partnership’s Registration Statement on Form S-1 filed September 19, 2013 (SEC File No. 333-191259).
|
|
|
|
|
3.02
|
|
—
|
First Amended and Restated Agreement of Limited Partnership of Valero Energy Partners LP dated December 16, 2013–incorporated by reference to Exhibit 3.1 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
3.03
|
|
—
|
Certificate of Formation of Valero Energy Partners GP LLC–incorporated by reference to Exhibit 3.3 to the Partnership’s Registration Statement on Form S-1 filed September 19, 2013 (SEC File No. 333-191259).
|
|
|
|
|
3.04
|
|
—
|
First Amended and Restated Limited Liability Company Agreement of Valero Energy Partners GP LLC dated December 16, 2013–incorporated by reference to Exhibit 3.2 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
4.01
|
|
—
|
Indenture dated November 30, 2016, between Valero Energy Partners LP and U.S. Bank National Association, as trustee–incorporated by reference to Exhibit 4.1 to the Partnership’s Post-Effective Amendment No. 1 to Registration Statement on Form S-3 (Reg. No. 333-208052) filed November 30, 2016.
|
|
|
|
|
4.02
|
|
—
|
Terms and Form of 4.375% Senior Notes due 2026
–
incorporated by reference to Exhibit 4.2 to the Partnership’s Current Report on Form 8-K dated and filed December 9, 2016 (SEC File No. 1-36232).
|
|
|
|
|
10.01
|
|
—
|
Amended and Restated Omnibus Agreement dated July 1, 2014, by and among Valero Energy Corporation, Valero Marketing and Supply Company, Valero Terminaling and Distribution Company, The Premcor Refining Group Inc., The Premcor Pipeline Co., Valero Energy Partners LP, Valero Energy Partners GP LLC, Valero Partners Operating Co. LLC, Valero Partners EP, LLC, Valero Partners Lucas, LLC, Valero Partners Memphis, LLC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC, and Valero Partners Wynnewood, LLC–incorporated by reference to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K dated and filed July 1, 2014 (SEC File No. 1-36232).
|
|
|
|
10.02
|
|
—
|
Amendment and Restatement of Schedules to Amended and Restated Omnibus Agreement, dated September 1, 2016, by and among the parties thereto–incorporated by reference to Exhibit 10.03 to the Partnership’s Current Report on Form 8-K dated and filed September 1, 2016 (SEC File No. 1-36232).
|
|
|
|
|
10.03
|
|
—
|
Amended and Restated Services and Secondment Agreement, dated March 1, 2015, by and among Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C., Valero Refining-Texas, L.P., and Valero Energy Partners GP LLC–incorporated by reference to Exhibit 10.04 to the Partnership’s Current Report on Form 8-K dated March 1, 2015, and filed March 5, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.04
|
|
—
|
Amendment and Restatement of Exhibits to Amended and Restated Services and Secondment Agreement, dated September 1, 2016, by and among Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C., Valero Refining-Texas, L.P., and Valero Energy Partners GP LLC–incorporated by reference to Exhibit 10.05 to the Partnership’s Current Report on Form 8-K dated and filed September 1, 2016 (SEC File No. 1-36232).
|
|
|
|
|
10.05
|
|
—
|
Tax Sharing Agreement dated December 16, 2013 by and between Valero Energy Partners LP and Valero Energy Corporation–incorporated by reference to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
10.06
|
|
—
|
Master Transportation Services Agreement dated December 16, 2013 by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company–incorporated by reference to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
10.07
|
|
—
|
Master Terminal Services Agreement dated December 16, 2013 by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company–incorporated by reference to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
10.08
|
|
—
|
Contribution, Conveyance and Assumption Agreement dated December 16, 2013 by and among Valero Energy Partners LP, Valero Energy Partners GP LLC, Valero Partners Operating Co. LLC, Valero Energy Corporation, Valero Terminaling and Distribution Company, The Premcor Pipeline Co., The Premcor Refining Group Inc. and Valero Refining Company-Tennessee, L.L.C.–incorporated by reference to Exhibit 10.8 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
|
10.09
|
|
—
|
Purchase and Sale Agreement, dated as of July 1, 2014, between The Shamrock Pipe Line Corporation, Valero Plains Company LLC and Valero Terminaling and Distribution Company, as Sellers, and Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Operating Co. LLC, as Buyers–incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K dated and filed July 1, 2014 (SEC File No. 1-36232).
|
|
|
|
|
10.10
|
|
—
|
Contribution Agreement, dated March 1, 2015, by and among Valero Refining-New Orleans, L.L.C., Valero Terminaling and Distribution Company, and Valero Energy Partners LP–incorporated by reference to Exhibit 10.01 to the Partnership’s Current Report on Form 8-K dated March 1, 2015, and filed March 5, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.11
|
|
—
|
Transaction Agreement, dated October 1, 2015, by and among Valero Terminaling and Distribution Company and Valero Energy Partners LP–incorporated by reference to Exhibit 10.01 to the Partnership’s Current Report on Form 8-K dated and filed October 1, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.12
|
|
—
|
Contribution Agreement, dated April 1, 2016, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP–incorporated by reference to Exhibit 10.01 to the Partnership’s Current Report on Form 8-K dated and filed April 1, 2016 (SEC File No. 1-36232).
|
|
|
|
|
10.13
|
|
—
|
Contribution Agreement, dated September 1, 2016, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP–incorporated by reference to Exhibit 10.01 to the Partnership’s Current Report on Form 8-K dated and filed September 1, 2016 (SEC File No. 1-36232).
|
|
|
|
|
+10.14
|
|
—
|
Valero Energy Partners LP 2013 Incentive Compensation Plan–incorporated by reference to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
|
|
|
|
+10.15
|
|
—
|
Form of Restricted Unit Award Agreement (for independent directors) (2014 grant) under the Valero Energy Partners LP 2013 Incentive Compensation Plan–incorporated by reference to Exhibit 10.09 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013 (SEC File No. 1-36232).
|
|
|
|
|
+10.16
|
|
—
|
Form of Restricted Unit Award Agreement (for independent directors) (2015 grant) under the Valero Energy Partners LP 2013 Incentive Compensation Plan–incorporated by reference to Exhibit 10.16 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014 (SEC File No. 1-36232).
|
|
|
|
|
+10.17
|
|
—
|
Form of Restricted Unit Award Agreement (for independent directors) (2016 grant) under the Valero Energy Partners LP 2013 Incentive Compensation Plan–incorporated by reference to Exhibit 10.27 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015 (SEC File No. 1-36232).
|
|
|
|
|
*+10.18
|
|
—
|
Form of Restricted Unit Award Agreement (for independent directors) (2017 grant) under the Valero Energy Partners LP 2013 Incentive Compensation Plan.
|
|
|
|
|
10.19
|
|
—
|
Amended and Restated Credit Agreement, dated as of November 12, 2015, among Valero Energy Partners LP as Borrower; JPMorgan Chase Bank, N.A. as Administrative Agent; and the lenders named therein–incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K dated November 12, 2015, and filed November 13, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.20
|
|
—
|
Amended and Restated Subordinated Credit Agreement, dated as of November 12, 2015, by and between Valero Energy Partners LP and Valero Energy Corporation and the parties named therein (amending and restating that certain $160 million Subordinated Credit Agreement dated March 2, 2015)–incorporated by reference to Exhibit 10.29 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.21
|
|
—
|
Amended and Restated Subordinated Credit Agreement, dated as of November 12, 2015, by and between Valero Energy Partners LP and Valero Energy Corporation and the parties named therein (amending and restating that certain $395 million Subordinated Credit Agreement dated October 1, 2015)–incorporated by reference to Exhibit 10.30 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015 (SEC File No. 1-36232).
|
|
|
|
|
10.22
|
|
—
|
Subordination Agreement dated December 9, 2016, between Valero Energy Partners LP and Valero Energy Corporation–incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K dated and filed December 9, 2016 (SEC File No. 1-36232).
|
|
|
|
|
10.23
|
|
—
|
Equity Distribution Agreement dated September 16, 2016, by and among Valero Energy Partners LP, Valero Energy Partners GP LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC–incorporated by reference to Exhibit 1.1 to the Partnership’s Current Report on Form 8-K dated and filed September 16, 2016 (SEC File No. 1-36232).
|
|
|
|
|
*12.01
|
|
—
|
Statements of Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
14.01
|
|
—
|
Code of Ethics for Senior Financial Officers–incorporated by reference to Exhibit 14.01 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013 (SEC File No. 1-36232).
|
|
|
|
|
*21.01
|
|
—
|
List of Subsidiaries of Valero Energy Partners LP.
|
|
|
|
|
*23.01
|
|
—
|
Consent of KPMG LLP.
|
|
|
|
|
*24.01
|
|
—
|
Power of Attorney dated February 27, 2017 (on the signature page of this Form 10-K).
|
|
|
|
|
*31.01
|
|
—
|
Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal executive officer.
|
|
|
|
|
*31.02
|
|
—
|
Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal financial officer.
|
|
|
|
|
**32.01
|
|
—
|
Section 1350 Certifications (under Section 906 of the Sarbanes-Oxley Act of 2002).
|
|
|
|
99.01
|
|
—
|
Audit Committee Pre-Approval Policy–incorporated by reference to Exhibit 99.01 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015 (SEC File No. 1-36232).
|
|
|
|
|
***101
|
|
—
|
Interactive Data Files
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
***
|
Submitted electronically herewith.
|
+
|
Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.
|
VALERO ENERGY PARTNERS LP
|
|
|
(Registrant)
|
|
|
|
|
|
by:
|
Valero Energy Partners GP LLC
|
|
|
its general partner
|
|
|
|
|
|
|
|
by:
|
/s/ Joseph W. Gorder
|
|
|
Joseph W. Gorder
|
|
|
Chief Executive Officer
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph W. Gorder
|
|
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
|
|
February 27, 2017
|
(Joseph W. Gorder)
|
|
|
||
|
|
|
|
|
/s/ Donna M. Titzman
|
|
Senior Vice President, Chief Financial
Officer, Treasurer and Director
(Principal Financial and Accounting Officer)
|
|
February 27, 2017
|
(Donna M. Titzman)
|
|
|
||
|
|
|
|
|
/s/ Richard F. Lashway
|
|
President, Chief Operating Officer and
Director
|
|
February 27, 2017
|
(Richard F. Lashway)
|
|
|
||
|
|
|
|
|
/s/ Robert S. Beadle
|
|
Director
|
|
February 27, 2017
|
(Robert S. Beadle)
|
|
|
||
|
|
|
|
|
/s/ Timothy J. Fretthold
|
|
Director
|
|
February 27, 2017
|
(Timothy J. Fretthold)
|
|
|
||
|
|
|
|
|
/s/ Randall J. Larson
|
|
Director
|
|
February 27, 2017
|
(Randall J. Larson)
|
|
|
||
|
|
|
|
|
/s/ R. Lane Riggs
|
|
Director
|
|
February 27, 2017
|
(R. Lane Riggs)
|
|
|
||
|
|
|
|
|
1.
|
Award
. The Participant is awarded
1,999
Restricted Units under the Plan. The Restricted Units are granted hereunder in tandem with an equal number of Distribution Equivalent Rights (“
DERs
”).
|
2.
|
Restricted Period
. The Restricted Units granted hereunder are subject to a Restricted Period as follows. Except to the extent otherwise provided in the Plan, the Participant’s rights to and interest in the Restricted Units described herein shall vest and accrue to the Participant in the following increments: (i)
667
Restricted Units on
January 5, 2018
; (ii)
666
Restricted Units on
January 5, 2019
; and (iii)
666
Restricted Units on
January 5, 2020
. The restrictions may terminate prior to the expiration of such periods as set forth in the Plan. Upon the vesting of each Restricted Unit awarded under this Agreement, the Participant will be entitled to receive an unrestricted common Unit of Valero Energy Partners LP.
|
3.
|
DERs
. DERs with respect to the Restricted Units will be paid to the Participant in cash as of each record payment date during the period such Restricted Units are outstanding. The DERs are subject to the same restrictions as the Restricted Units.
|
4.
|
Code Section 409A
. The issuance of Units under this Award shall be made on or as soon as reasonably practical following the applicable date of vesting, but in any event no later than the 15th day of the third month following the end of the year in which the applicable date of vesting occurs. With respect to the receipt of DERs, the cash payment made in connection therewith shall be made each quarter on the payment date prescribed by the board of directors of the Company for the quarterly distribution of the Partnership, if any, declared and paid in accordance with Section 6.3 of the Partnership’s First Amended and Restated Agreement of Limited Partnership. This Agreement and the award evidenced hereby are intended to comply, and shall be administered consistently, in all respects with Section 409A of the Code and the regulations promulgated thereunder. If necessary in order to ensure such compliance, this Agreement may be reformed consistent with guidance issued by the Internal Revenue Service.
|
5.
|
Assignment/Encumbrance
. Neither this Award nor any right under this Agreement may be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of descent and distribution. This Agreement shall be binding upon the parties hereto and their respective heirs, legal representatives, and successors.
|
6.
|
The Plan
. By accepting this Award, the Participant hereby accepts and agrees to be bound by all of the terms, provisions, conditions, and limitations of the Plan, and any subsequent amendment or amendments, as if the same had been set forth in this Agreement.
|
7.
|
Governing Law
. This Agreement is governed by the laws of the State of Texas.
|
VALERO ENERGY PARTNERS GP LLC
|
|
Participant:
|
|
|
|
|
|
by:
|
|
|
|
|
Joseph W. Gorder
|
|
|
|
Chief Executive Officer
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
189,943
|
|
|
|
$
|
71,563
|
|
|
|
$
|
(32,813
|
)
|
|
|
$
|
(23,969
|
)
|
|
|
$
|
(36,453
|
)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
18,251
|
|
|
|
8,521
|
|
|
|
1,352
|
|
|
|
714
|
|
|
|
942
|
|
|
|||||
Amortization of capitalized interest
|
4
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
(82
|
)
|
|
|
(31
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Total earnings
|
$
|
208,116
|
|
|
|
$
|
80,054
|
|
|
|
$
|
(31,461
|
)
|
|
|
$
|
(23,255
|
)
|
|
|
$
|
(35,511
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and debt expense, net
of capitalized interest
|
$
|
14,915
|
|
|
|
$
|
6,113
|
|
|
|
$
|
872
|
|
|
|
$
|
198
|
|
|
|
$
|
307
|
|
|
Capitalized interest
|
82
|
|
|
|
31
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Rental expense interest factor (a)
|
3,254
|
|
|
|
2,377
|
|
|
|
480
|
|
|
|
516
|
|
|
|
635
|
|
|
|||||
Total fixed charges
|
$
|
18,251
|
|
|
|
$
|
8,521
|
|
|
|
$
|
1,352
|
|
|
|
$
|
714
|
|
|
|
$
|
942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
11.4
|
|
x
|
|
9.4
|
|
x
|
|
(b)
|
|
|
|
(b)
|
|
|
|
(c)
|
|
|
(a)
|
The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.
|
(b)
|
For the years ended December 31, 2012, 2013, and 2014, earnings was insufficient to cover fixed charges and the deficiency was $36.5 million, $24.0 million, and $32.8 million, respectively.
|
Name of Entity
|
|
State of Incorporation/Organization
|
|
|
|
VALERO MKS LOGISTICS, L.L.C.
|
|
Delaware
|
VALERO PARTNERS CCTS, LLC
|
|
Delaware
|
VALERO PARTNERS CORPUS EAST, LLC
|
|
Delaware
|
VALERO PARTNERS CORPUS WEST, LLC
|
|
Delaware
|
VALERO PARTNERS EP, LLC
|
|
Delaware
|
VALERO PARTNERS HOUSTON, LLC
|
|
Delaware
|
VALERO PARTNERS LOUISIANA, LLC
|
|
Delaware
|
VALERO PARTNERS LUCAS, LLC
|
|
Delaware
|
VALERO PARTNERS MEMPHIS, LLC
|
|
Delaware
|
VALERO PARTNERS MERAUX, LLC
|
|
Delaware
|
VALERO PARTNERS MCKEE, LLC
|
|
Delaware
|
VALERO PARTNERS NORTH TEXAS, LLC
|
|
Delaware
|
VALERO PARTNERS OPERATING CO. LLC
|
|
Delaware
|
VALERO PARTNERS PAPS, LLC
|
|
Delaware
|
VALERO PARTNERS SOUTH TEXAS, LLC
|
|
Delaware
|
VALERO PARTNERS THREE RIVERS, LLC
|
|
Delaware
|
VALERO PARTNERS WEST MEMPHIS, LLC
|
|
Delaware
|
VALERO PARTNERS WYNNEWOOD, LLC
|
|
Delaware
|
|
|
|
/s/ Joseph W. Gorder
|
|
|
Joseph W. Gorder
|
|
|
Chief Executive Officer, Valero Energy Partners GP LLC
|
|
|
(the general partner of Valero Energy Partners LP)
|
|
/s/ Donna M. Titzman
|
|
|
Donna M. Titzman
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer, Valero Energy Partners GP LLC
|
||
(the general partner of Valero Energy Partners LP)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Joseph W. Gorder
|
|
|
Joseph W. Gorder
|
|
|
Chief Executive Officer
|
|
|
Valero Energy Partners GP LLC
|
|
|
(the general partner of Valero Energy Partners LP)
|
|
|
February 27, 2017
|
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Donna M. Titzman
|
|
|
Donna M. Titzman
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
||
Valero Energy Partners GP LLC
|
|
|
(the general partner of Valero Energy Partners LP)
|
|
|
February 27, 2017
|
|
|