Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Entity Information | ||
Entity Registrant Name | VALERO ENERGY PARTNERS LP | |
Entity Central Index Key | 1,583,103 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Common Unitholders Public [Member] | ||
Entity Information | ||
Entity Common Stock, Units Outstanding | 32,278,253 | |
Subordinated Unitholder Valero [Member] | ||
Entity Information | ||
Entity Common Stock, Units Outstanding | 28,789,989 | |
General Partner Valero [Member] | ||
Entity Information | ||
Entity Common Stock, Units Outstanding | 1,246,094 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 50,563 | $ 236,579 |
Receivables from related party | 13,395 | 8,499 |
Prepaid expenses and other | 760 | 727 |
Total current assets | 64,718 | 245,805 |
Property and equipment, at cost | 835,366 | 819,104 |
Accumulated depreciation | (195,160) | (174,530) |
Property and equipment, net | 640,206 | 644,574 |
Deferred charges and other assets, net | 1,264 | 1,385 |
Total assets | 706,188 | 891,764 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 1,183 | 1,200 |
Accounts payable | 5,013 | 4,297 |
Accrued liabilities | 1,275 | 1,054 |
Taxes other than income taxes | 1,235 | 765 |
Deferred revenue from related party | 146 | 124 |
Total current liabilities | 8,852 | 7,440 |
Debt and capital lease obligations, net of current portion | 175,381 | 1,519 |
Note payable to related party | 160,000 | 0 |
Deferred income taxes | 463 | 830 |
Other long-term liabilities | $ 1,103 | $ 1,065 |
Commitments and contingencies | ||
Partners’ capital: | ||
Common unitholders – public (17,259,651 and 17,255,208 units outstanding) | $ 384,976 | $ 374,954 |
Common unitholder – Valero (13,448,089 and 11,539,989 units outstanding) | 64,712 | 58,844 |
Subordinated unitholder – Valero (28,789,989 and 28,789,989 units outstanding) | (87,204) | 146,804 |
General partner – Valero (1,214,043 and 1,175,102 units outstanding) | (2,095) | 4,617 |
Net investment | 0 | 295,691 |
Total partners’ capital | 360,389 | 880,910 |
Total liabilities and partners’ capital | $ 706,188 | $ 891,764 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Sep. 30, 2015 | Dec. 31, 2014 |
Partners' Capital [Abstract] | ||
Common unitholders – public, units outstanding | 17,259,651 | 17,255,208 |
Common unitholder – Valero, units outstanding | 13,448,089 | 11,539,989 |
Subordinated unitholder – Valero, units outstanding | 28,789,989 | 28,789,989 |
General partner – Valero, units outstanding | 1,214,043 | 1,175,102 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||
Operating revenues – related party | $ 62,037 | $ 33,666 | [1],[2] | $ 164,168 | $ 94,998 | [1],[2] |
Costs and expenses: | ||||||
Operating expenses | 15,042 | 17,510 | [2] | 47,280 | 50,062 | [2] |
General and administrative expenses | 3,444 | 3,133 | [2] | 10,169 | 9,591 | [2] |
Depreciation expense | 10,684 | 7,178 | [2] | 25,887 | 19,226 | [2] |
Total costs and expenses | 29,170 | 27,821 | [2] | 83,336 | 78,879 | [2] |
Operating income | 32,867 | 5,845 | [2] | 80,832 | 16,119 | [2] |
Other income, net | 29 | 156 | [2] | 166 | 1,315 | [2] |
Interest and debt expense, net of capitalized interest | (1,353) | (214) | [2] | (3,365) | (663) | [2] |
Income before income taxes | 31,543 | 5,787 | [2] | 77,633 | 16,771 | [2] |
Income tax expense (benefit) | 115 | 129 | [2] | (62) | 436 | [2] |
Net income | 31,428 | 5,658 | [2] | 77,695 | 16,335 | [2] |
Less: Net loss attributable to Predecessor | 0 | (11,885) | [2] | (9,516) | (23,890) | [2] |
Net income attributable to partners | 31,428 | 17,543 | [2] | 87,211 | 40,225 | [2] |
Less: General partner’s interest in net income | 1,612 | 351 | 3,821 | 805 | ||
Limited partners’ interest in net income | $ 29,816 | $ 17,192 | $ 83,390 | $ 39,420 | ||
Net income per limited partner unit – basic and diluted: | ||||||
Common units | $ 0.51 | $ 0.30 | $ 1.43 | $ 0.68 | ||
Subordinated units | $ 0.49 | $ 0.30 | $ 1.40 | $ 0.68 | ||
Weighted-average limited partner units outstanding: | ||||||
Common units – basic | 30,698 | 28,790 | 30,279 | 28,790 | ||
Common units – diluted | 30,698 | 28,791 | 30,279 | 28,791 | ||
Subordinated units – basic and diluted | 28,790 | 28,790 | 28,790 | 28,790 | ||
Cash distribution declared per unit | $ 0.3075 | $ 0.2400 | $ 0.8775 | $ 0.6750 | ||
[1] | Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. | |||||
[2] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Consolidated Statements of Part
Consolidated Statements of Partners' Capital (Unaudited) - USD ($) $ in Thousands | Total | Common Unitholders Public [Member] | Common Unitholder Valero [Member] | Subordinated Unitholder Valero [Member] | General Partner Valero [Member] | Net Investment [Member] | ||
Beginning balance at Dec. 31, 2013 | $ 970,073 | $ 369,825 | $ 75,998 | $ 189,601 | $ 6,167 | $ 328,482 | ||
Increase (Decrease) in Partners' Capital Roll Forward | ||||||||
Net income (loss) attributable to Predecessor | [1] | (23,890) | 0 | 0 | 0 | 0 | (23,890) | |
Net income (loss) attributable to partners | 40,225 | [1] | 11,814 | 7,896 | 19,710 | 805 | 0 | |
Net transfers from Valero Energy Corporation | [1] | 65,202 | 0 | 0 | 0 | 0 | 65,202 | |
Allocation of Valero Energy Corporation’s net investment in acquired assets | 0 | 0 | 22,276 | 55,572 | 2,268 | (80,116) | ||
Consideration paid to Valero Energy Corporation for the acquisitions | (154,000) | 0 | (42,818) | (106,822) | (4,360) | 0 | ||
Cash distributions to unitholders | (27,733) | (8,142) | (5,447) | (13,589) | (555) | 0 | ||
Distribution equivalent right payments | (2) | (2) | 0 | 0 | 0 | 0 | ||
Unit-based compensation | 51 | 51 | 0 | 0 | 0 | 0 | ||
Ending balance at Sep. 30, 2014 | [1] | 869,926 | 373,546 | 57,905 | 144,472 | 4,325 | 289,678 | |
Beginning balance at Dec. 31, 2014 | 880,910 | 374,954 | 58,844 | 146,804 | 4,617 | 295,691 | ||
Increase (Decrease) in Partners' Capital Roll Forward | ||||||||
Net income (loss) attributable to Predecessor | (9,516) | 0 | 0 | 0 | 0 | (9,516) | ||
Net income (loss) attributable to partners | 87,211 | 24,348 | 18,406 | 40,636 | 3,821 | 0 | ||
Net transfers from Valero Energy Corporation | 9,934 | 0 | 0 | 0 | 0 | 9,934 | ||
Allocation of Valero Energy Corporation’s net investment in acquired assets | 0 | 0 | 82,330 | 205,396 | 8,383 | (296,109) | ||
Consideration paid to Valero Energy Corporation for the acquisitions | (671,220) | 0 | (186,625) | (465,592) | (19,003) | 0 | ||
Units issued to Valero Energy Corporation in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 100,000 | 0 | 98,000 | 0 | 2,000 | 0 | ||
Noncash capital contributions from Valero Energy Corporation | 14,518 | 0 | 4,493 | 9,620 | 405 | 0 | ||
Cash distributions to unitholders | (51,542) | (14,420) | (10,736) | (24,068) | (2,318) | 0 | ||
Distribution equivalent right payments | (9) | (9) | 0 | 0 | 0 | 0 | ||
Unit-based compensation | 103 | 103 | 0 | 0 | 0 | 0 | ||
Ending balance at Sep. 30, 2015 | $ 360,389 | $ 384,976 | $ 64,712 | $ (87,204) | $ (2,095) | $ 0 | ||
[1] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | [1] | |
Cash flows from operating activities: | |||
Net income | $ 77,695 | $ 16,335 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation expense | 25,887 | 19,226 | |
Deferred income tax expense (benefit) | (400) | 43 | |
Changes in current assets and current liabilities | (4,643) | (1,935) | |
Changes in deferred charges and credits and other operating activities, net | 341 | (44) | |
Net cash provided by operating activities | 98,880 | 33,625 | |
Cash flows from investing activities: | |||
Capital expenditures | (7,246) | (54,800) | |
Acquisitions from Valero Energy Corporation | (296,109) | (80,116) | |
Proceeds from dispositions of property and equipment | 70 | 33 | |
Net cash used in investing activities | (303,285) | (134,883) | |
Cash flows from financing activities: | |||
Proceeds from debt borrowings | 200,000 | 0 | |
Repayment of debt | (25,000) | 0 | |
Proceeds from note payable to related party | 160,000 | 0 | |
Payments of capital lease obligations | (884) | (772) | |
Offering costs | 0 | (3,223) | |
Debt issuance costs | 0 | (1,071) | |
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets | (275,111) | (73,884) | |
Cash distributions to unitholders and distribution equivalent right payments | (51,551) | (27,735) | |
Net transfers from Valero Energy Corporation | 10,935 | 63,659 | [2] |
Net cash provided by (used in) financing activities | 18,389 | (43,026) | |
Net decrease in cash and cash equivalents | (186,016) | (144,284) | |
Cash and cash equivalents at beginning of period | 236,579 | 375,118 | |
Cash and cash equivalents at end of period | $ 50,563 | $ 230,834 | |
[1] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. | ||
[2] | Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | 1. BUSINESS AND BASIS OF PRESENTATION Business Valero Energy Partners LP (the Partnership) is a fee-based master limited partnership formed by Valero (defined below) in July 2013 to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. References in this report to “Partnership,” “we,” “us,” or “our” refer to Valero Energy Partners LP, one or more of its subsidiaries, or all of them taken as a whole. References in this report to “Valero” refer collectively to Valero Energy Corporation and its subsidiaries, other than Valero Energy Partners LP, any of its subsidiaries, or its general partner. We acquired the Texas Crude Systems Business and the Houston and St. Charles Terminal Services Business (the Houston and St. Charles Terminals Acquisition) from Valero (collectively, the Acquisitions) on July 1, 2014 and March 1, 2015 , respectively. See Note 3 for further discussion of the Houston and St. Charles Terminals Acquisition. As of September 30, 2015 , our assets consisted of crude oil and refined petroleum products pipeline and terminal systems in the United States (U.S.) Gulf Coast and U.S. Mid-Continent regions that are integral to the operations of seven of Valero’s refineries. On October 1, 2015 , we acquired the Corpus Christi Terminal Services Business from Valero as further described in Note 3 . We generate operating revenues by providing fee-based transportation and terminaling services to Valero. Basis of Presentation Our consolidated financial statements include the accounts of the Partnership as well as our Predecessor (defined below). All intercompany accounts and transactions have been eliminated. The Acquisitions were accounted for as transfers of businesses between entities under common control. As entities under the common control of Valero, we recorded the Acquisitions on our balance sheet at Valero’s carrying value rather than fair value. Transfers between entities under common control are accounted for as though the transfer occurred as of the beginning of the period of transfer, and prior period financial statements and financial information are retrospectively adjusted to furnish comparative information. Accordingly, the Partnership’s financial statements and related notes have been retrospectively adjusted to include the historical results of the Acquisitions for all periods presented prior to the effective dates of each acquisition. We refer to the historical results of the Acquisitions prior to their respective acquisition dates as those of our “Predecessor.” The combined financial statements of our Predecessor were derived from the consolidated financial statements and accounting records of Valero and reflect the combined historical financial position, results of operations, and cash flows of our Predecessor as if the Acquisitions had been combined for periods prior to the effective date of each acquisition. There were no transactions between the operations of our Predecessor; therefore, there were no intercompany transactions or accounts to be eliminated in connection with the combination of those operations. In addition, our Predecessor’s statements of income include direct charges for the management and operation of our assets and certain expenses allocated by Valero for general corporate services, such as treasury, accounting, and legal services. These expenses were charged, or allocated, to our Predecessor based on the nature of the expenses. Prior to the Acquisitions, our Predecessor transferred cash to Valero daily and Valero funded our Predecessor’s operating and investing activities as needed. Therefore, transfers of cash to and from Valero’s cash management system are reflected as a component of net investment and are reflected as a financing activity in our statements of cash flows. In addition, interest income was not included on the net cash transfers to Valero. The financial information presented for the periods after the effective dates of the Acquisitions represents the consolidated financial position, results of operations, and cash flows of the Partnership. These unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Financial information for the three and nine months ended September 30, 2015 and 2014 included in these Condensed Notes to Consolidated Financial Statements is derived from our unaudited financial statements. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements of the Partnership included in our current report on Form 8-K filed with the Securities and Exchange Commission (SEC) on September 24, 2015, which reflect retrospective adjustments to the Partnership’s 2014 Form 10-K filed with the SEC on February 27, 2015 for the historical results of operations and financial position of the Houston and St. Charles Terminals Acquisition. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. New Accounting Pronouncements In May 2014, the Accounting Standards Codification (ASC) was amended and a new accounting standard, ASC Topic 606, “Revenue from Contracts with Customers,” was issued to clarify the principles for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires improved interim and annual disclosures that enable the users of financial statements to better understand the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the effective date of the new standard was deferred by one year. As a result, the standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those reporting periods, and can be adopted either retrospectively to each prior reporting period presented using a practical expedient, as allowed by the standard, or retrospectively with a cumulative-effect adjustment to partners’ capital as of the date of initial application. Early adoption is permitted, but not before the original effective date, which was for annual reporting periods beginning after December 15, 2016, including interim reporting periods within those reporting periods. We are currently evaluating the effect that adopting this standard will have on our financial statements and related disclosures. In February 2015, the provisions of ASC Topic 810, “Consolidation,” were amended to improve consolidation guidance for certain types of legal entities. The guidance modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provides a scope exception from consolidation guidance for certain money market funds. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. These provisions may also be adopted retrospectively in previously issued financial statements for one or more years with a cumulative-effect adjustment to partners’ capital as of the beginning of the first year restated. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations. In April 2015, the provisions of ASC Subtopic 835-30, “Interest–Imputation of Interest,” were amended to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a note be reported in the balance sheet as a direct deduction from the face amount of that note, consistent with debt discounts, and that amortization of debt issuance costs be reported as interest expense. In August 2015, these provisions were further amended with guidance from the SEC staff that they would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These provisions are to be applied retrospectively and are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations. Also in April 2015, the provisions of ASC Topic 260, “Earnings Per Share,” were amended to provide guidance on how master limited partnerships apply the two-class method of calculating earnings per unit for historical periods when they receive net assets in a dropdown transaction that is accounted for as a transaction between entities under common control as required under Subtopic 805-50, “Business Combinations–Related Issues.” The amendments specify that for purposes of calculating earnings per unit under the two-class method for periods before the date of a dropdown transaction, earnings or losses of a transferred business should be allocated entirely to the general partner. Qualitative disclosures are also required to describe how the rights to earnings or losses differ before and after the dropdown transaction for purposes of computing earnings per unit under the two-class method. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted, and should be applied retrospectively for all financial statements presented. We have historically calculated our net income per unit after a dropdown transaction as prescribed by these provisions; therefore, the adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations, but will result in additional disclosures. In September 2015, the provisions of ASC Topic 805, “Business Combinations,” were amended to simplify the accounting and reporting of adjustments made to provisional amounts recognized in a business combination. The amendment requires that an acquirer (i) record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and (ii) present separately on the statement of income or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, and should be applied prospectively to adjustments made to provisional amounts that occur after the effective date. Earlier application is permitted for financial statements that have not yet been issued. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations; however, it may result in changes to the manner in which adjustments to provisional amounts recognized in a future business combination, if any, are presented in our financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 3. ACQUISITIONS Houston and St. Charles Terminals Acquisition Effective March 1, 2015 , we acquired two subsidiaries from Valero that own and operate crude oil, intermediates, and refined petroleum products terminals supporting Valero’s Houston Refinery (in Houston, Texas) and St. Charles Refinery (in Norco, Louisiana) for total consideration of $671.2 million , which consisted of (i) a cash distribution of $571.2 million and (ii) the issuance of 1,908,100 common units and 38,941 general partner units having an aggregate value of $100.0 million . We funded the cash distribution to Valero with $211.2 million of our cash on hand, $200.0 million of borrowings under our revolving credit facility, and $160.0 million of proceeds from a subordinated credit agreement we entered into with Valero. See Note 6 for further discussion of the borrowings under our revolving credit facility and subordinated credit agreement. In connection with the acquisition, we entered into various agreements with Valero related to the acquisition agreement, including amended and restated schedules to our omnibus agreement, an amended and restated services and secondment agreement, lease agreements, and additional schedules to our commercial agreements. See Note 4 for a summary of the terms of these agreements. The results of operations of the Houston and St. Charles Terminal Services Business after the effective date of the acquisition are included in “Valero Energy Partners LP,” and the results of operations prior to the effective date of the acquisition are included in “ Houston and St. Charles Terminal Services Business .” The following table presents our consolidated statement of income for the nine months ended September 30, 2015 as though the acquisition had occurred at the beginning of the period (in thousands): Nine Months Ended September 30, 2015 Valero Energy Partners LP Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 164,168 $ — $ 164,168 Costs and expenses: Operating expenses 40,085 7,195 47,280 General and administrative expenses 10,122 47 10,169 Depreciation expense 23,613 2,274 25,887 Total costs and expenses 73,820 9,516 83,336 Operating income (loss) 90,348 (9,516 ) 80,832 Other income, net 166 — 166 Interest and debt expense, net of capitalized interest (3,365 ) — (3,365 ) Income (loss) before income taxes 87,149 (9,516 ) 77,633 Income tax benefit (62 ) — (62 ) Net income (loss) 87,211 (9,516 ) 77,695 Less: Net loss attributable to Predecessor — (9,516 ) (9,516 ) Net income attributable to partners $ 87,211 $ — $ 87,211 The following table presents our previously reported consolidated statement of income for the three months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Three Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 33,666 $ — $ 33,666 Costs and expenses: Operating expenses 8,553 8,957 17,510 General and administrative expenses 3,065 68 3,133 Depreciation expense 4,318 2,860 7,178 Total costs and expenses 15,936 11,885 27,821 Operating income (loss) 17,730 (11,885 ) 5,845 Other income, net 156 — 156 Interest and debt expense, net of capitalized interest (214 ) — (214 ) Income (loss) before income taxes 17,672 (11,885 ) 5,787 Income tax expense 129 — 129 Net income (loss) 17,543 (11,885 ) 5,658 Less: Net loss attributable to Predecessor — (11,885 ) (11,885 ) Net income attributable to partners $ 17,543 $ — $ 17,543 The following table presents our previously reported consolidated statement of income for the nine months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Nine Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 94,998 $ — $ 94,998 Costs and expenses: Operating expenses 24,027 26,035 50,062 General and administrative expenses 9,392 199 9,591 Depreciation expense 12,087 7,139 19,226 Total costs and expenses 45,506 33,373 78,879 Operating income (loss) 49,492 (33,373 ) 16,119 Other income, net 1,315 — 1,315 Interest and debt expense, net of capitalized interest (663 ) — (663 ) Income (loss) before income taxes 50,144 (33,373 ) 16,771 Income tax expense 436 — 436 Net income (loss) 49,708 (33,373 ) 16,335 Less: Net income (loss) attributable to Predecessor 9,483 (33,373 ) (23,890 ) Net income attributable to partners $ 40,225 $ — $ 40,225 The cash flows of the Houston and St. Charles Terminal Services Business after the effective date of the acquisition are included in “Valero Energy Partners LP,” and the cash flows prior to the effective date of the acquisition are included in “ Houston and St. Charles Terminal Services Business .” The following table presents our consolidated statement of cash flows for the nine months ended September 30, 2015 as though the acquisition had occurred at the beginning of the period (in thousands): Nine Months Ended September 30, 2015 Valero Energy Partners LP Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Cash flows from operating activities: Net income (loss) $ 87,211 $ (9,516 ) $ 77,695 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation expense 23,613 2,274 25,887 Deferred income tax benefit (400 ) — (400 ) Changes in current assets and current liabilities (4,643 ) — (4,643 ) Changes in deferred charges and credits and other operating activities, net 341 — 341 Net cash provided by (used in) operating activities 106,122 (7,242 ) 98,880 Cash flows from investing activities: Capital expenditures (3,553 ) (3,693 ) (7,246 ) Acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation (296,109 ) — (296,109 ) Proceeds from dispositions of property and equipment 70 — 70 Net cash used in investing activities (299,592 ) (3,693 ) (303,285 ) Cash flows from financing activities: Proceeds from debt borrowings 200,000 — 200,000 Repayment of debt (25,000 ) — (25,000 ) Proceeds from note payable to related party 160,000 — 160,000 Payments of capital lease obligations (884 ) — (884 ) Excess purchase price paid to Valero Energy Corporation over the carrying value of the Houston and St. Charles Terminal Services Business (275,111 ) — (275,111 ) Cash distributions to unitholders and distribution equivalent right payments (51,551 ) — (51,551 ) Net transfers from Valero Energy Corporation — 10,935 10,935 Net cash provided by financing activities 7,454 10,935 18,389 Net decrease in cash and cash equivalents (186,016 ) — (186,016 ) Cash and cash equivalents at beginning of period 236,579 — 236,579 Cash and cash equivalents at end of period $ 50,563 $ — $ 50,563 The following table presents our previously reported consolidated statement of cash flows for the nine months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Nine Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Cash flows from operating activities: Net income (loss) $ 49,708 $ (33,373 ) $ 16,335 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation expense 12,087 7,139 19,226 Deferred income tax expense 43 — 43 Changes in current assets and current liabilities (1,935 ) — (1,935 ) Changes in deferred charges and credits and other operating activities, net (44 ) — (44 ) Net cash provided by (used in) operating activities 59,859 (26,234 ) 33,625 Cash flows from investing activities: Capital expenditures (7,282 ) (47,518 ) (54,800 ) Acquisition of the Texas Crude Systems Business from Valero Energy Corporation (80,116 ) — (80,116 ) Proceeds from dispositions of property and equipment 33 — 33 Net cash used in investing activities (87,365 ) (47,518 ) (134,883 ) Cash flows from financing activities: Payments of capital lease obligations (772 ) — (772 ) Offering costs (3,223 ) — (3,223 ) Debt issuance costs (1,071 ) — (1,071 ) Excess purchase price paid to Valero Energy Corporation over the carrying value of the Texas Crude Systems Business (73,884 ) — (73,884 ) Cash distributions to unitholders and distribution equivalent right payments (27,735 ) — (27,735 ) Net transfers from (to) Valero Energy Corporation (10,093 ) 73,752 63,659 Net cash provided by (used in) financing activities (116,778 ) 73,752 (43,026 ) Net decrease in cash and cash equivalents (144,284 ) — (144,284 ) Cash and cash equivalents at beginning of period 375,118 — 375,118 Cash and cash equivalents at end of period $ 230,834 $ — $ 230,834 Acquisition of the Corpus Christi Terminal Services Business Effective October 1, 2015 , we acquired Valero’s Corpus Christi East Terminal and Corpus Christi West Terminal (collectively, the Corpus Christi Terminal Services Business) for total consideration of $465.0 million , which consisted of (i) a cash distribution of $ 395.0 million and (ii) the issuance of 1,570,513 common units and 32,051 general partner units having an aggregate value of $70.0 million . We funded the cash distribution to Valero with proceeds from a subordinated credit agreement we entered into with Valero. The Corpus Christi Terminal Services Business is engaged in the business of terminaling crude oil, intermediates, and refined petroleum products at terminals in Corpus Christi, Texas and supports Valero’s Corpus Christi East and West Refineries. We also entered into various agreements with Valero effective with the acquisition, including amended and restated schedules to our amended and restated omnibus agreement, amended and restated exhibits to our amended services and secondment agreement, additional schedules to our commercial agreements with respect to the related logistics assets, and lease agreements. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | 4. RELATED-PARTY TRANSACTIONS Agreements Effective with the Houston and St. Charles Terminals Acquisition The following agreements became effective on March 1, 2015 , the date of the Houston and St. Charles Terminals Acquisition. Commercial Agreements We entered into additional schedules under our existing master transportation services agreement and master terminal services agreement (collectively, the commercial agreements) with Valero with respect to each terminal acquired. Each schedule has an initial term through March 1, 2025 and, in the case of the Houston terminal, provides us an option to renew for one additional five -year term, and, in the case of the St. Charles terminal, provides us an option to renew through January 31, 2030 . Amended and Restated Omnibus Agreement We entered into amended and restated schedules to our amended and restated omnibus agreement with Valero that include the following modifications, among others: • the indemnification obligations of Valero and the Partnership were extended to apply to the Houston terminal and the St. Charles terminal; • our payment of an annual administrative fee was increased from $9.2 million to $10.4 million per year, which amount is prorated for the remainder of 2015 based on the number of days from March 1, 2015 to December 31, 2015; and • the grant to Valero of a right of first refusal with respect to the Houston terminal and the St. Charles terminal. Amended and Restated Services and Secondment Agreement Our general partner entered into an amended and restated services and secondment agreement with Valero to provide for the additional secondment of employees to our general partner for the provision of services with respect to the assets acquired in the Houston and St. Charles Terminals Acquisition. Lease and Access Agreements We entered into two lease and access agreements with Valero with respect to the land on which each terminal is located. Each agreement has an initial term through March 1, 2025 with four automatic successive renewal periods of five years each, provided that the final renewal period for the St. Charles terminal agreement will end on December 31, 2044 . Either party may terminate the lease after the initial term by providing written notice. Initially, our base rent under the Houston and St. Charles terminal agreements totals $6.4 million per year and each agreement is subject to annual inflation escalators. Subordinated Credit Agreement We entered into a subordinated credit agreement with Valero as further described in Note 6 . Summary of Related-Party Transactions Receivables from related party consist of the following (in thousands): September 30, December 31, Trade receivables – related party $ 19,058 $ 10,515 Due to related party (5,663 ) (2,016 ) Receivables from related party $ 13,395 $ 8,499 Deferred revenue from related party represents the unearned revenues from Valero associated with Valero’s quarterly deficiency payment, which is the result of Valero not meeting its minimum quarterly throughput commitments under our commercial agreements. The following table reflects significant transactions with Valero (in thousands): Three Months Nine Months 2015 2014 (a) 2015 2014 (a) Operating revenues – related party $ 62,037 $ 33,666 $ 164,168 $ 94,998 Operating expenses 7,437 6,542 21,247 18,559 General and administrative expenses 2,648 2,481 7,808 7,666 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. Costs associated with Valero’s benefit plans were included in the costs allocated to our Predecessor. Our share of costs associated with pension and postretirement and defined contribution plans was as follows (in thousands): Three Months Nine Months 2015 2014 (a) 2015 2014 (a) Pension and postretirement costs $ — $ 3 $ 2 $ 78 Defined contribution plan costs — 2 2 68 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. Concentration Risk All of our operating revenues were derived from transactions with Valero and all of our receivables were due from Valero. Therefore, we are subject to the business risks associated with Valero’s business. Leases Certain schedules under our commercial agreements with Valero are considered operating leases under U.S. GAAP. These agreements contain minimum throughput requirements and escalation clauses to adjust transportation tariffs and to adjust terminaling and storage fees to reflect changes in price indices. Revenues from all lease agreements are recorded within “operating revenues – related party” in our consolidated statements of income. Contingent lease revenues from all lease agreements totaled $5.5 million and $2.3 million for the three months ended September 30, 2015 and 2014 , respectively, and $13.3 million and $3.2 million for the nine months ended September 30, 2015 and 2014 , respectively. As of September 30, 2015 , future minimum rentals to be received related to these noncancelable lease agreements were as follows (in thousands): Remainder of 2015 $ 32,219 2016 127,824 2017 127,824 2018 127,824 2019 127,824 Thereafter 637,196 Total minimum rental payments $ 1,180,711 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Major classes of property and equipment consisted of the following (in thousands): September 30, 2015 Non-Leased Assets Assets Under Operating Leases (a) Total Pipelines and related assets $ 228,574 $ 46,541 $ 275,115 Terminals and related assets 110,506 420,715 531,221 Other 9,295 — 9,295 Land 4,672 — 4,672 Construction-in-progress 15,063 — 15,063 Property and equipment, at cost 368,110 467,256 835,366 Accumulated depreciation (115,611 ) (79,549 ) (195,160 ) Property and equipment, net $ 252,499 $ 387,707 $ 640,206 December 31, 2014 Non-Leased Assets Assets Under Operating Leases (a) Total Pipelines and related assets $ 227,780 $ 45,695 $ 273,475 Terminals and related assets 432,047 72,326 504,373 Other 9,439 — 9,439 Land 4,672 — 4,672 Construction-in-progress 27,145 — 27,145 Property and equipment, at cost 701,083 118,021 819,104 Accumulated depreciation (155,511 ) (19,019 ) (174,530 ) Property and equipment, net $ 545,572 $ 99,002 $ 644,574 (a) Represents assets owned by us for which we are the lessor (see Note 4). Substantially all of the assets acquired in the Houston and St. Charles Terminals Acquisition were reflected as assets under operating leases on March 1, 2015. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | 6. DEBT Revolving Credit Facility We have a $300.0 million senior unsecured revolving credit facility agreement (the Revolver) with a group of lenders. The Revolver matures in December 2018 . The Revolver includes sub-facilities for swingline loans and letters of credit. Our obligations under the Revolver are jointly and severally guaranteed by our directly owned subsidiary, Valero Partners Operating Co. LLC. The Revolver contains certain restrictive covenants, including a covenant that requires us to maintain a ratio of total debt to EBITDA (as described in the Revolver) for the prior four fiscal quarters of not greater than 5.0 to 1.0 as of the last day of each fiscal quarter ( 5.5 to 1.0 during the specified period following certain acquisitions). The Revolver contains representations and warranties, affirmative and negative covenants, and events of default that are usual and customary for an agreement of this type that could, among other things, limit our ability to pay distributions to our unitholders. In connection with the Houston and St. Charles Terminals Acquisition as described in Note 3 , we borrowed $200.0 million under the Revolver on March 2, 2015 . This borrowing bears interest at a variable rate, which was 1.5 percent as of September 30, 2015 . Accrued interest is payable in arrears on each Interest Payment Date (as defined in the Revolver) and on the maturity date. On July 1, 2015, we repaid $25.0 million on the Revolver. As of September 30, 2015 , we had $175.0 million of borrowings and no letters of credit outstanding under the Revolver. As of December 31, 2014 , we had no borrowings and no letters of credit outstanding under the Revolver. As of September 30, 2015 and December 31, 2014 , we were in compliance with the Revolver’s restrictive covenants. Subordinated Credit Agreement On March 2, 2015, we entered into a subordinated credit agreement with Valero (the Loan Agreement) under which we borrowed $160.0 million (the loan) to finance a portion of the Houston and St. Charles Terminals Acquisition as described in Note 3 . The loan matures on March 1, 2020 and may be prepaid at any time without penalty; we are not permitted to reborrow amounts. The loan bears interest at the LIBO Rate (as defined in the Loan Agreement) plus the applicable margin. Accrued interest is payable in arrears on each Interest Payment Date (as defined in the Loan Agreement) and on the maturity date. As of September 30, 2015 , the interest rate was 1.447 percent. The payment of amounts owing under the Loan Agreement are subordinated to our obligations under our Revolver with third-party lenders. The Loan Agreement contains customary terms regarding covenants, representations, default, and remedies, including covenants that limit the creation of liens, the incurrence of debt by us or our subsidiaries, the payment of distributions, and the entry into securitization transactions, sale/leaseback transactions, certain restrictive agreements, consolidations, mergers, and the sale of all or substantially all of our assets. The Loan Agreement also includes a covenant that requires, as of the last day of each fiscal quarter, the ratio of Consolidated Total Debt (as defined in the Loan Agreement) to Consolidated EBITDA (as defined in the Loan Agreement) for the four -quarter period ending on such day not to exceed 5.0 to 1.0 (or 5.5 to 1.0 during a specified acquisition period). As of September 30, 2015 , we had $160.0 million outstanding under the Loan Agreement and we were in compliance with the ratio of consolidated total debt to consolidated EBITDA. Capitalized Interest Capitalized interest was approximately $6,000 and $12,000 for the three and nine months ended September 30, 2015 , respectively. We had no capitalized interest for the three and nine months ended September 30, 2014 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Operating Leases We have long-term operating lease commitments for land used in the terminaling and transportation of crude oil and refined petroleum products. Certain leases contain escalation clauses and renewal options that allow for the same rental payment over the new lease term or a revised rental payment based on fair rental value or negotiated value. We expect that, in the normal course of business, our leases will be renewed or replaced by other leases. As of September 30, 2015 , our future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year were as follows (in thousands): Remainder of 2015 $ 1,609 2016 6,487 2017 6,486 2018 6,472 2019 6,443 Thereafter 33,753 Total minimum rental payments $ 61,250 Rental expense for all operating leases was $1.7 million and $4.2 million for the three and nine months ended September 30, 2015 , respectively. Rental expense for all operating leases was $0.3 million and $0.8 million for the three and nine months ended September 30, 2014 , respectively, as retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. Litigation Matters From time to time, we are party to claims and legal proceedings arising in the ordinary course of business. We also may be required by existing laws and regulations to report the release of hazardous substances and begin a remediation study. We have not recorded a loss contingency liability as there are no matters for which a loss has been incurred. We re-evaluate and update our loss contingency liabilities as matters progress over time, and we believe that any changes to the recorded liabilities will not be material to our financial position, results of operations, or liquidity. |
Cash Distributions
Cash Distributions | 9 Months Ended |
Sep. 30, 2015 | |
Partners' Capital [Abstract] | |
CASH DISTRIBUTIONS | 8. CASH DISTRIBUTIONS Our partnership agreement prescribes the amount and priority of cash distributions that the common and subordinated unitholders and general partner will receive. Our distributions are declared subsequent to quarter end. The table below summarizes information related to our quarterly cash distributions: Quarterly Period Ended Total Quarterly Distribution (Per Unit) Total Cash Distribution (In Thousands) Declaration Date Record Date Distribution Date 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. The following table reflects the allocation of total cash distributions to the general and limited partners and distribution equivalent right (DER) payments applicable to the period in which the distributions and DERs were earned (in thousands): Three Months Ended Nine Months Ended 2015 2014 2015 2014 General partner’s distributions: General partner’s distributions $ 404 $ 282 $ 1,118 $ 793 General partner’s incentive distribution 982 — 2,076 — Total general partner’s distributions 1,386 282 3,194 793 Limited partners’ distributions: Common – public 5,305 4,139 15,137 11,643 Common – Valero 4,618 2,770 12,284 7,790 Subordinated – Valero 8,853 6,909 25,263 19,433 Total limited partners’ distributions 18,776 13,818 52,684 38,866 DERs 2 2 8 4 Total cash distributions, including DERs $ 20,164 $ 14,102 $ 55,886 $ 39,663 |
Net Income Per Limited Partner
Net Income Per Limited Partner Unit | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
NET INCOME PER LIMITED PARTNER UNIT | 9. NET INCOME PER LIMITED PARTNER UNIT Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per limited partner unit. We calculate net income available to limited partners based on the distributions pertaining to each period’s net income. After considering the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the general partner, limited partners, and other participating securities in accordance with the contractual terms of our partnership agreement and as prescribed under the two-class method. Participating securities include IDRs and awards under our Valero Energy Partners LP 2013 Incentive Compensation Plan (2013 ICP) that receive DERs. However, the terms of our partnership agreement limit the general partner’s incentive distribution to the amount of available cash, which, as defined in our partnership agreement, is net of reserves deemed appropriate. As such, IDRs are not allocated undistributed earnings or distributions in excess of earnings in the calculation of net income per limited partner unit. Basic net income per limited partner unit is determined pursuant to the two-class method for master limited partnerships. The two-class method is an earnings allocation formula that is used to determine earnings to our general partner, common unitholders, and participating securities according to (i) distributions pertaining to each period’s net income and (ii) participation rights in undistributed earnings. Diluted net income per limited partner unit is also determined using the two-class method, unless the treasury stock method is more dilutive. For the three and nine months ended September 30, 2015 , we used the two-class method to determine diluted net income per limited partner unit. We did not have any potentially dilutive instruments outstanding during the three and nine months ended September 30, 2015 . Net income per unit was computed as follows (in thousands, except per unit amounts): Three Months Ended September 30, 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 $ 404 $ 9,923 $ 8,853 $ — $ 19,180 General partner’s IDRs 982 — — — 982 DERs — — — 2 2 Distributions and DERs declared 1,386 9,923 8,853 2 20,164 Undistributed earnings 226 5,691 5,345 2 11,264 Net income available to limited partners – basic and diluted $ 1,612 $ 15,614 $ 14,198 $ 4 $ 31,428 Net income per limited partner unit – basic and diluted: Weighted-average units outstanding 30,698 28,790 Net income per limited partner unit – basic and diluted $ 0.51 $ 0.49 Three Months Ended September 30, 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 $ 282 $ 6,909 $ 6,909 $ — $ 14,100 DERs — — — 2 2 Distributions and DERs declared 282 6,909 6,909 2 14,102 Undistributed earnings 69 1,683 1,687 2 3,441 Net income available to limited partners – basic $ 351 8,592 8,596 $ 4 $ 17,543 Add: DERs 4 — Net income available to limited partners – diluted $ 8,596 $ 8,596 Net income per limited partner unit – basic: Weighted-average units outstanding 28,790 28,790 Net income per limited partner unit – basic $ 0.30 $ 0.30 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 $ 0.30 $ 0.30 Nine Months Ended September 30, 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 $ 1,118 $ 27,421 $ 25,263 $ — $ 53,802 General partner’s IDRs 2,076 — — — 2,076 DERs — — — 8 8 Distributions and DERs declared 3,194 27,421 25,263 8 55,886 Undistributed earnings 627 15,733 14,960 5 31,325 Net income available to limited partners – basic and diluted $ 3,821 $ 43,154 $ 40,223 $ 13 $ 87,211 Net income per limited partner unit – basic and diluted: Weighted-average units outstanding 30,279 28,790 Net income per limited partner unit – basic and diluted $ 1.43 $ 1.40 Nine Months Ended September 30, 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 $ 793 $ 19,433 $ 19,433 $ — $ 39,659 DERs — — — 4 4 Distributions and DERs declared 793 19,433 19,433 4 39,663 Undistributed earnings 12 273 277 — 562 Net income available to limited partners – basic $ 805 19,706 19,710 $ 4 $ 40,225 Add: DERs 4 — Net income available to limited partners – diluted $ 19,710 $ 19,710 Net income per limited partner unit – basic: Weighted-average units outstanding 28,790 28,790 Net income per limited partner unit – basic $ 0.68 $ 0.68 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 $ 0.68 $ 0.68 |
Unit Activity
Unit Activity | 9 Months Ended |
Sep. 30, 2015 | |
Partners' Capital Notes [Abstract] | |
UNIT ACTIVITY | 10. UNIT ACTIVITY Activity in the number of units was as follows: 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 September 30, 2014 17,255,208 11,539,989 28,789,989 1,175,102 58,760,288 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 the acquisition of the Houston and St. Charles Terminal Services Business (see Note 3) — 1,908,100 — 38,941 1,947,041 Balance as of September 30, 2015 17,259,651 13,448,089 28,789,989 1,214,043 60,711,772 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 11. SUPPLEMENTAL CASH FLOW INFORMATION In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in thousands): Nine Months Ended 2015 2014 Decrease (increase) in current assets: Receivables from related party $ (6,354 ) $ 2,955 Prepaid expenses and other (33 ) (1,462 ) Increase (decrease) in current liabilities: Accounts payable 1,031 (4,408 ) Accrued liabilities 221 686 Taxes other than income taxes 470 65 Deferred revenue from related party 22 229 Changes in current assets and current liabilities $ (4,643 ) $ (1,935 ) The above changes in current assets and current liabilities differ from changes between amounts reflected in the applicable balance sheets for the respective periods for the following reasons: • amounts accrued for capital expenditures are reflected in investing activities when such amounts are paid, and • amounts accrued for offering costs and debt issuance costs were reflected in financing activities when paid. We attributed $80.1 million of the total $154.0 million cash consideration paid for the acquisition of the Texas Crude Systems Business to the historical carrying value of this acquisition (an investing cash outflow). The remaining $73.9 million of cash consideration paid represents the excess purchase price paid over carrying value of this acquisition (a financing cash outflow). We attributed $296.1 million of the total $571.2 million cash consideration paid for the Houston and St. Charles Terminals Acquisition to the historical carrying value of this acquisition (an investing cash outflow). The remaining $275.1 million of cash consideration represents the excess purchase price paid over the carrying value of this acquisition (a financing cash outflow). There were no significant noncash investing activities for the nine months ended September 30, 2015 . Noncash financing activities for the nine months ended September 30, 2015 included: • a capital contribution of $14.5 million for projects that were funded by Valero related primarily to the Houston and St. Charles terminals. Valero agreed to fund these projects as part of the Houston and St. Charles Terminals Acquisition, and • the issuance of 1,908,100 common units and 38,941 general partner units having an aggregate value of $100.0 million in connection with the Houston and St. Charles Terminals Acquisition described in Note 3 . There were no significant noncash investing or financing activities for the nine months ended September 30, 2014 . The following is a reconciliation of the amounts presented as net transfers from Valero on our statements of partners’ capital and statements of cash flows (in thousands): Nine Months Ended 2015 2014 (a) Net transfers from Valero per statement of partners’ capital $ 9,934 $ 65,202 Less: Noncash transfers from (to) Valero (1,001 ) 1,543 Net transfers from Valero per statement of cash flows $ 10,935 $ 63,659 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. Noncash transfers from (to) Valero primarily represent the change in amounts accrued by our Predecessor for capital expenditures as we do not reflect capital expenditures in our statements of cash flows until such amounts are paid. Cash flows related to interest and income taxes paid were as follows (in thousands): Nine Months Ended 2015 2014 (a) Interest paid $ 2,952 $ 686 Income taxes paid 441 74 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12. FAIR VALUE OF FINANCIAL INSTRUMENTS 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 values of our debt and note payable to related party approximate their carrying values as our borrowings bear interest based upon short-term floating market interest rates. 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. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated financial statements include the accounts of the Partnership as well as our Predecessor (defined below). All intercompany accounts and transactions have been eliminated. The Acquisitions were accounted for as transfers of businesses between entities under common control. As entities under the common control of Valero, we recorded the Acquisitions on our balance sheet at Valero’s carrying value rather than fair value. Transfers between entities under common control are accounted for as though the transfer occurred as of the beginning of the period of transfer, and prior period financial statements and financial information are retrospectively adjusted to furnish comparative information. Accordingly, the Partnership’s financial statements and related notes have been retrospectively adjusted to include the historical results of the Acquisitions for all periods presented prior to the effective dates of each acquisition. We refer to the historical results of the Acquisitions prior to their respective acquisition dates as those of our “Predecessor.” The combined financial statements of our Predecessor were derived from the consolidated financial statements and accounting records of Valero and reflect the combined historical financial position, results of operations, and cash flows of our Predecessor as if the Acquisitions had been combined for periods prior to the effective date of each acquisition. There were no transactions between the operations of our Predecessor; therefore, there were no intercompany transactions or accounts to be eliminated in connection with the combination of those operations. In addition, our Predecessor’s statements of income include direct charges for the management and operation of our assets and certain expenses allocated by Valero for general corporate services, such as treasury, accounting, and legal services. These expenses were charged, or allocated, to our Predecessor based on the nature of the expenses. Prior to the Acquisitions, our Predecessor transferred cash to Valero daily and Valero funded our Predecessor’s operating and investing activities as needed. Therefore, transfers of cash to and from Valero’s cash management system are reflected as a component of net investment and are reflected as a financing activity in our statements of cash flows. In addition, interest income was not included on the net cash transfers to Valero. The financial information presented for the periods after the effective dates of the Acquisitions represents the consolidated financial position, results of operations, and cash flows of the Partnership. These unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Financial information for the three and nine months ended September 30, 2015 and 2014 included in these Condensed Notes to Consolidated Financial Statements is derived from our unaudited financial statements. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. These unaudited financial statements and notes thereto should be read in conjunction with the audited financial statements of the Partnership included in our current report on Form 8-K filed with the Securities and Exchange Commission (SEC) on September 24, 2015, which reflect retrospective adjustments to the Partnership’s 2014 Form 10-K filed with the SEC on February 27, 2015 for the historical results of operations and financial position of the Houston and St. Charles Terminals Acquisition. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. On an ongoing basis, we review our estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Accounting Standards Codification (ASC) was amended and a new accounting standard, ASC Topic 606, “Revenue from Contracts with Customers,” was issued to clarify the principles for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires improved interim and annual disclosures that enable the users of financial statements to better understand the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the effective date of the new standard was deferred by one year. As a result, the standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those reporting periods, and can be adopted either retrospectively to each prior reporting period presented using a practical expedient, as allowed by the standard, or retrospectively with a cumulative-effect adjustment to partners’ capital as of the date of initial application. Early adoption is permitted, but not before the original effective date, which was for annual reporting periods beginning after December 15, 2016, including interim reporting periods within those reporting periods. We are currently evaluating the effect that adopting this standard will have on our financial statements and related disclosures. In February 2015, the provisions of ASC Topic 810, “Consolidation,” were amended to improve consolidation guidance for certain types of legal entities. The guidance modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provides a scope exception from consolidation guidance for certain money market funds. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. These provisions may also be adopted retrospectively in previously issued financial statements for one or more years with a cumulative-effect adjustment to partners’ capital as of the beginning of the first year restated. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations. In April 2015, the provisions of ASC Subtopic 835-30, “Interest–Imputation of Interest,” were amended to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a note be reported in the balance sheet as a direct deduction from the face amount of that note, consistent with debt discounts, and that amortization of debt issuance costs be reported as interest expense. In August 2015, these provisions were further amended with guidance from the SEC staff that they would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These provisions are to be applied retrospectively and are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations. Also in April 2015, the provisions of ASC Topic 260, “Earnings Per Share,” were amended to provide guidance on how master limited partnerships apply the two-class method of calculating earnings per unit for historical periods when they receive net assets in a dropdown transaction that is accounted for as a transaction between entities under common control as required under Subtopic 805-50, “Business Combinations–Related Issues.” The amendments specify that for purposes of calculating earnings per unit under the two-class method for periods before the date of a dropdown transaction, earnings or losses of a transferred business should be allocated entirely to the general partner. Qualitative disclosures are also required to describe how the rights to earnings or losses differ before and after the dropdown transaction for purposes of computing earnings per unit under the two-class method. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted, and should be applied retrospectively for all financial statements presented. We have historically calculated our net income per unit after a dropdown transaction as prescribed by these provisions; therefore, the adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations, but will result in additional disclosures. In September 2015, the provisions of ASC Topic 805, “Business Combinations,” were amended to simplify the accounting and reporting of adjustments made to provisional amounts recognized in a business combination. The amendment requires that an acquirer (i) record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and (ii) present separately on the statement of income or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. These provisions are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, and should be applied prospectively to adjustments made to provisional amounts that occur after the effective date. Earlier application is permitted for financial statements that have not yet been issued. The adoption of this guidance effective January 1, 2016 will not affect our financial position or results of operations; however, it may result in changes to the manner in which adjustments to provisional amounts recognized in a future business combination, if any, are presented in our financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Consolidated statements of income and statements of cash flows, including the operations of the Houston and St. Charles Terminals Acquisition | The following table presents our consolidated statement of income for the nine months ended September 30, 2015 as though the acquisition had occurred at the beginning of the period (in thousands): Nine Months Ended September 30, 2015 Valero Energy Partners LP Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 164,168 $ — $ 164,168 Costs and expenses: Operating expenses 40,085 7,195 47,280 General and administrative expenses 10,122 47 10,169 Depreciation expense 23,613 2,274 25,887 Total costs and expenses 73,820 9,516 83,336 Operating income (loss) 90,348 (9,516 ) 80,832 Other income, net 166 — 166 Interest and debt expense, net of capitalized interest (3,365 ) — (3,365 ) Income (loss) before income taxes 87,149 (9,516 ) 77,633 Income tax benefit (62 ) — (62 ) Net income (loss) 87,211 (9,516 ) 77,695 Less: Net loss attributable to Predecessor — (9,516 ) (9,516 ) Net income attributable to partners $ 87,211 $ — $ 87,211 The following table presents our consolidated statement of cash flows for the nine months ended September 30, 2015 as though the acquisition had occurred at the beginning of the period (in thousands): Nine Months Ended September 30, 2015 Valero Energy Partners LP Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Cash flows from operating activities: Net income (loss) $ 87,211 $ (9,516 ) $ 77,695 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation expense 23,613 2,274 25,887 Deferred income tax benefit (400 ) — (400 ) Changes in current assets and current liabilities (4,643 ) — (4,643 ) Changes in deferred charges and credits and other operating activities, net 341 — 341 Net cash provided by (used in) operating activities 106,122 (7,242 ) 98,880 Cash flows from investing activities: Capital expenditures (3,553 ) (3,693 ) (7,246 ) Acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation (296,109 ) — (296,109 ) Proceeds from dispositions of property and equipment 70 — 70 Net cash used in investing activities (299,592 ) (3,693 ) (303,285 ) Cash flows from financing activities: Proceeds from debt borrowings 200,000 — 200,000 Repayment of debt (25,000 ) — (25,000 ) Proceeds from note payable to related party 160,000 — 160,000 Payments of capital lease obligations (884 ) — (884 ) Excess purchase price paid to Valero Energy Corporation over the carrying value of the Houston and St. Charles Terminal Services Business (275,111 ) — (275,111 ) Cash distributions to unitholders and distribution equivalent right payments (51,551 ) — (51,551 ) Net transfers from Valero Energy Corporation — 10,935 10,935 Net cash provided by financing activities 7,454 10,935 18,389 Net decrease in cash and cash equivalents (186,016 ) — (186,016 ) Cash and cash equivalents at beginning of period 236,579 — 236,579 Cash and cash equivalents at end of period $ 50,563 $ — $ 50,563 The following table presents our previously reported consolidated statement of cash flows for the nine months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Nine Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Cash flows from operating activities: Net income (loss) $ 49,708 $ (33,373 ) $ 16,335 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation expense 12,087 7,139 19,226 Deferred income tax expense 43 — 43 Changes in current assets and current liabilities (1,935 ) — (1,935 ) Changes in deferred charges and credits and other operating activities, net (44 ) — (44 ) Net cash provided by (used in) operating activities 59,859 (26,234 ) 33,625 Cash flows from investing activities: Capital expenditures (7,282 ) (47,518 ) (54,800 ) Acquisition of the Texas Crude Systems Business from Valero Energy Corporation (80,116 ) — (80,116 ) Proceeds from dispositions of property and equipment 33 — 33 Net cash used in investing activities (87,365 ) (47,518 ) (134,883 ) Cash flows from financing activities: Payments of capital lease obligations (772 ) — (772 ) Offering costs (3,223 ) — (3,223 ) Debt issuance costs (1,071 ) — (1,071 ) Excess purchase price paid to Valero Energy Corporation over the carrying value of the Texas Crude Systems Business (73,884 ) — (73,884 ) Cash distributions to unitholders and distribution equivalent right payments (27,735 ) — (27,735 ) Net transfers from (to) Valero Energy Corporation (10,093 ) 73,752 63,659 Net cash provided by (used in) financing activities (116,778 ) 73,752 (43,026 ) Net decrease in cash and cash equivalents (144,284 ) — (144,284 ) Cash and cash equivalents at beginning of period 375,118 — 375,118 Cash and cash equivalents at end of period $ 230,834 $ — $ 230,834 The following table presents our previously reported consolidated statement of income for the three months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Three Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 33,666 $ — $ 33,666 Costs and expenses: Operating expenses 8,553 8,957 17,510 General and administrative expenses 3,065 68 3,133 Depreciation expense 4,318 2,860 7,178 Total costs and expenses 15,936 11,885 27,821 Operating income (loss) 17,730 (11,885 ) 5,845 Other income, net 156 — 156 Interest and debt expense, net of capitalized interest (214 ) — (214 ) Income (loss) before income taxes 17,672 (11,885 ) 5,787 Income tax expense 129 — 129 Net income (loss) 17,543 (11,885 ) 5,658 Less: Net loss attributable to Predecessor — (11,885 ) (11,885 ) Net income attributable to partners $ 17,543 $ — $ 17,543 The following table presents our previously reported consolidated statement of income for the nine months ended September 30, 2014 retrospectively adjusted for the acquisition (in thousands): Nine Months Ended September 30, 2014 Valero Energy Partners LP (Previously Reported) Houston and St. Charles Terminal Services Business Valero Energy Partners LP (Currently Reported) Operating revenues – related party $ 94,998 $ — $ 94,998 Costs and expenses: Operating expenses 24,027 26,035 50,062 General and administrative expenses 9,392 199 9,591 Depreciation expense 12,087 7,139 19,226 Total costs and expenses 45,506 33,373 78,879 Operating income (loss) 49,492 (33,373 ) 16,119 Other income, net 1,315 — 1,315 Interest and debt expense, net of capitalized interest (663 ) — (663 ) Income (loss) before income taxes 50,144 (33,373 ) 16,771 Income tax expense 436 — 436 Net income (loss) 49,708 (33,373 ) 16,335 Less: Net income (loss) attributable to Predecessor 9,483 (33,373 ) (23,890 ) Net income attributable to partners $ 40,225 $ — $ 40,225 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Summary of related-party transactions | The following table reflects significant transactions with Valero (in thousands): Three Months Nine Months 2015 2014 (a) 2015 2014 (a) Operating revenues – related party $ 62,037 $ 33,666 $ 164,168 $ 94,998 Operating expenses 7,437 6,542 21,247 18,559 General and administrative expenses 2,648 2,481 7,808 7,666 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. Receivables from related party consist of the following (in thousands): September 30, December 31, Trade receivables – related party $ 19,058 $ 10,515 Due to related party (5,663 ) (2,016 ) Receivables from related party $ 13,395 $ 8,499 |
Summary of employee benefit plan costs | Our share of costs associated with pension and postretirement and defined contribution plans was as follows (in thousands): Three Months Nine Months 2015 2014 (a) 2015 2014 (a) Pension and postretirement costs $ — $ 3 $ 2 $ 78 Defined contribution plan costs — 2 2 68 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |
Future minimum rentals to be received related to noncancelable lease agreements | As of September 30, 2015 , future minimum rentals to be received related to these noncancelable lease agreements were as follows (in thousands): Remainder of 2015 $ 32,219 2016 127,824 2017 127,824 2018 127,824 2019 127,824 Thereafter 637,196 Total minimum rental payments $ 1,180,711 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Major classes of property and equipment | Major classes of property and equipment consisted of the following (in thousands): September 30, 2015 Non-Leased Assets Assets Under Operating Leases (a) Total Pipelines and related assets $ 228,574 $ 46,541 $ 275,115 Terminals and related assets 110,506 420,715 531,221 Other 9,295 — 9,295 Land 4,672 — 4,672 Construction-in-progress 15,063 — 15,063 Property and equipment, at cost 368,110 467,256 835,366 Accumulated depreciation (115,611 ) (79,549 ) (195,160 ) Property and equipment, net $ 252,499 $ 387,707 $ 640,206 December 31, 2014 Non-Leased Assets Assets Under Operating Leases (a) Total Pipelines and related assets $ 227,780 $ 45,695 $ 273,475 Terminals and related assets 432,047 72,326 504,373 Other 9,439 — 9,439 Land 4,672 — 4,672 Construction-in-progress 27,145 — 27,145 Property and equipment, at cost 701,083 118,021 819,104 Accumulated depreciation (155,511 ) (19,019 ) (174,530 ) Property and equipment, net $ 545,572 $ 99,002 $ 644,574 (a) Represents assets owned by us for which we are the lessor (see Note 4). Substantially all of the assets acquired in the Houston and St. Charles Terminals Acquisition were reflected as assets under operating leases on March 1, 2015. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year | As of September 30, 2015 , our future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year were as follows (in thousands): Remainder of 2015 $ 1,609 2016 6,487 2017 6,486 2018 6,472 2019 6,443 Thereafter 33,753 Total minimum rental payments $ 61,250 |
Cash Distributions (Tables)
Cash Distributions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Partners' Capital [Abstract] | |
Distributions made to unitholders | The table below summarizes information related to our quarterly cash distributions: Quarterly Period Ended Total Quarterly Distribution (Per Unit) Total Cash Distribution (In Thousands) Declaration Date Record Date Distribution Date 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. The following table reflects the allocation of total cash distributions to the general and limited partners and distribution equivalent right (DER) payments applicable to the period in which the distributions and DERs were earned (in thousands): Three Months Ended Nine Months Ended 2015 2014 2015 2014 General partner’s distributions: General partner’s distributions $ 404 $ 282 $ 1,118 $ 793 General partner’s incentive distribution 982 — 2,076 — Total general partner’s distributions 1,386 282 3,194 793 Limited partners’ distributions: Common – public 5,305 4,139 15,137 11,643 Common – Valero 4,618 2,770 12,284 7,790 Subordinated – Valero 8,853 6,909 25,263 19,433 Total limited partners’ distributions 18,776 13,818 52,684 38,866 DERs 2 2 8 4 Total cash distributions, including DERs $ 20,164 $ 14,102 $ 55,886 $ 39,663 |
Net Income Per Limited Partne25
Net Income Per Limited Partner Unit (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of net income per unit | Net income per unit was computed as follows (in thousands, except per unit amounts): Three Months Ended September 30, 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 $ 404 $ 9,923 $ 8,853 $ — $ 19,180 General partner’s IDRs 982 — — — 982 DERs — — — 2 2 Distributions and DERs declared 1,386 9,923 8,853 2 20,164 Undistributed earnings 226 5,691 5,345 2 11,264 Net income available to limited partners – basic and diluted $ 1,612 $ 15,614 $ 14,198 $ 4 $ 31,428 Net income per limited partner unit – basic and diluted: Weighted-average units outstanding 30,698 28,790 Net income per limited partner unit – basic and diluted $ 0.51 $ 0.49 Three Months Ended September 30, 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 $ 282 $ 6,909 $ 6,909 $ — $ 14,100 DERs — — — 2 2 Distributions and DERs declared 282 6,909 6,909 2 14,102 Undistributed earnings 69 1,683 1,687 2 3,441 Net income available to limited partners – basic $ 351 8,592 8,596 $ 4 $ 17,543 Add: DERs 4 — Net income available to limited partners – diluted $ 8,596 $ 8,596 Net income per limited partner unit – basic: Weighted-average units outstanding 28,790 28,790 Net income per limited partner unit – basic $ 0.30 $ 0.30 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 $ 0.30 $ 0.30 Nine Months Ended September 30, 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 $ 1,118 $ 27,421 $ 25,263 $ — $ 53,802 General partner’s IDRs 2,076 — — — 2,076 DERs — — — 8 8 Distributions and DERs declared 3,194 27,421 25,263 8 55,886 Undistributed earnings 627 15,733 14,960 5 31,325 Net income available to limited partners – basic and diluted $ 3,821 $ 43,154 $ 40,223 $ 13 $ 87,211 Net income per limited partner unit – basic and diluted: Weighted-average units outstanding 30,279 28,790 Net income per limited partner unit – basic and diluted $ 1.43 $ 1.40 Nine Months Ended September 30, 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 $ 793 $ 19,433 $ 19,433 $ — $ 39,659 DERs — — — 4 4 Distributions and DERs declared 793 19,433 19,433 4 39,663 Undistributed earnings 12 273 277 — 562 Net income available to limited partners – basic $ 805 19,706 19,710 $ 4 $ 40,225 Add: DERs 4 — Net income available to limited partners – diluted $ 19,710 $ 19,710 Net income per limited partner unit – basic: Weighted-average units outstanding 28,790 28,790 Net income per limited partner unit – basic $ 0.68 $ 0.68 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 $ 0.68 $ 0.68 |
Unit Activity (Tables)
Unit Activity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Partners' Capital Notes [Abstract] | |
Unit rollforward | Activity in the number of units was as follows: 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 September 30, 2014 17,255,208 11,539,989 28,789,989 1,175,102 58,760,288 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 the acquisition of the Houston and St. Charles Terminal Services Business (see Note 3) — 1,908,100 — 38,941 1,947,041 Balance as of September 30, 2015 17,259,651 13,448,089 28,789,989 1,214,043 60,711,772 |
Supplemental Cash Flow Inform27
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of cash flows, supplemental disclosures | In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in thousands): Nine Months Ended 2015 2014 Decrease (increase) in current assets: Receivables from related party $ (6,354 ) $ 2,955 Prepaid expenses and other (33 ) (1,462 ) Increase (decrease) in current liabilities: Accounts payable 1,031 (4,408 ) Accrued liabilities 221 686 Taxes other than income taxes 470 65 Deferred revenue from related party 22 229 Changes in current assets and current liabilities $ (4,643 ) $ (1,935 ) Cash flows related to interest and income taxes paid were as follows (in thousands): Nine Months Ended 2015 2014 (a) Interest paid $ 2,952 $ 686 Income taxes paid 441 74 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |
Reconciliation of net transfers from (to) Valero | The following is a reconciliation of the amounts presented as net transfers from Valero on our statements of partners’ capital and statements of cash flows (in thousands): Nine Months Ended 2015 2014 (a) Net transfers from Valero per statement of partners’ capital $ 9,934 $ 65,202 Less: Noncash transfers from (to) Valero (1,001 ) 1,543 Net transfers from Valero per statement of cash flows $ 10,935 $ 63,659 (a) Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |
Business and Basis of Present28
Business and Basis of Presentation (Details) - Majority Shareholder [Member] - refineries | Oct. 01, 2015 | Sep. 30, 2015 |
Business and Basis of Presentation (Textual) | ||
Number of Valero owned refineries | 7 | |
Texas Crude Systems Business [Member] | ||
Business and Basis of Presentation (Textual) | ||
Effective date of the acquisition | Jul. 1, 2014 | |
Houston and St. Charles Terminal Services Business [Member] | ||
Business and Basis of Presentation (Textual) | ||
Effective date of the acquisition | Mar. 1, 2015 | |
Corpus Christi Terminal Services Business [Member] | Subsequent Event [Member] | ||
Business and Basis of Presentation (Textual) | ||
Effective date of the acquisition | Oct. 1, 2015 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Oct. 01, 2015USD ($)shares | Mar. 01, 2015USD ($)subsidiariesshares | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | ||
Consolidated Statements of Income | ||||||||
Operating revenues – related party | $ 62,037 | $ 33,666 | [1],[2] | $ 164,168 | $ 94,998 | [1],[2] | ||
Costs and expenses: | ||||||||
Operating expenses | 15,042 | 17,510 | [2] | 47,280 | 50,062 | [2] | ||
General and administrative expenses | 3,444 | 3,133 | [2] | 10,169 | 9,591 | [2] | ||
Depreciation expense | 10,684 | 7,178 | [2] | 25,887 | 19,226 | [2] | ||
Total costs and expenses | 29,170 | 27,821 | [2] | 83,336 | 78,879 | [2] | ||
Operating income | 32,867 | 5,845 | [2] | 80,832 | 16,119 | [2] | ||
Other income, net | 29 | 156 | [2] | 166 | 1,315 | [2] | ||
Interest and debt expense, net of capitalized interest | (1,353) | (214) | [2] | (3,365) | (663) | [2] | ||
Income before income taxes | 31,543 | 5,787 | [2] | 77,633 | 16,771 | [2] | ||
Income tax expense (benefit) | 115 | 129 | [2] | (62) | 436 | [2] | ||
Net income | 31,428 | 5,658 | [2] | 77,695 | 16,335 | [2] | ||
Less: Net loss attributable to Predecessor | 0 | (11,885) | [2] | (9,516) | (23,890) | [2] | ||
Net income attributable to partners | 31,428 | 17,543 | [2] | 87,211 | 40,225 | [2] | ||
Cash flows from operating activities: | ||||||||
Net income (loss) | 31,428 | 5,658 | [2] | 77,695 | 16,335 | [2] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation expense | 10,684 | 7,178 | [2] | 25,887 | 19,226 | [2] | ||
Deferred income tax expense (benefit) | (400) | 43 | [2] | |||||
Changes in current assets and current liabilities | (4,643) | (1,935) | [2] | |||||
Changes in deferred charges and credits and other operating activities, net | 341 | (44) | [2] | |||||
Net cash provided by operating activities | 98,880 | 33,625 | [2] | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (7,246) | (54,800) | [2] | |||||
Acquisitions from Valero Energy Corporation | (296,109) | (80,116) | [2] | |||||
Proceeds from dispositions of property and equipment | 70 | 33 | [2] | |||||
Net cash used in investing activities | (303,285) | (134,883) | [2] | |||||
Cash flows from financing activities: | ||||||||
Proceeds from debt borrowings | 200,000 | 0 | [2] | |||||
Repayment of debt | (25,000) | 0 | [2] | |||||
Proceeds from note payable to related party | 160,000 | 0 | [2] | |||||
Payments of capital lease obligations | (884) | (772) | [2] | |||||
Offering costs | 0 | (3,223) | [2] | |||||
Debt issuance costs | 0 | (1,071) | [2] | |||||
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets | (275,111) | (73,884) | [2] | |||||
Cash distributions to unitholders and distribution equivalent right payments | (51,551) | (27,735) | [2] | |||||
Net transfers from Valero Energy Corporation | 10,935 | 63,659 | [1],[2] | |||||
Net cash provided by (used in) financing activities | 18,389 | (43,026) | [2] | |||||
Net decrease in cash and cash equivalents | (186,016) | (144,284) | [2] | |||||
Cash and cash equivalents at beginning of period | $ 50,563 | 236,579 | 375,118 | [2] | ||||
Cash and cash equivalents at end of period | 50,563 | 230,834 | [2] | $ 50,563 | 230,834 | [2] | ||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 1,947,041 | |||||||
Valero Energy Partners LP [Member] | ||||||||
Consolidated Statements of Income | ||||||||
Operating revenues – related party | 33,666 | $ 164,168 | 94,998 | |||||
Costs and expenses: | ||||||||
Operating expenses | 8,553 | 40,085 | 24,027 | |||||
General and administrative expenses | 3,065 | 10,122 | 9,392 | |||||
Depreciation expense | 4,318 | 23,613 | 12,087 | |||||
Total costs and expenses | 15,936 | 73,820 | 45,506 | |||||
Operating income | 17,730 | 90,348 | 49,492 | |||||
Other income, net | 156 | 166 | 1,315 | |||||
Interest and debt expense, net of capitalized interest | (214) | (3,365) | (663) | |||||
Income before income taxes | 17,672 | 87,149 | 50,144 | |||||
Income tax expense (benefit) | 129 | (62) | 436 | |||||
Net income | 17,543 | 87,211 | 49,708 | |||||
Less: Net loss attributable to Predecessor | 0 | 0 | 9,483 | |||||
Net income attributable to partners | 17,543 | 87,211 | 40,225 | |||||
Cash flows from operating activities: | ||||||||
Net income (loss) | 17,543 | 87,211 | 49,708 | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation expense | 4,318 | 23,613 | 12,087 | |||||
Deferred income tax expense (benefit) | (400) | 43 | ||||||
Changes in current assets and current liabilities | (4,643) | (1,935) | ||||||
Changes in deferred charges and credits and other operating activities, net | 341 | (44) | ||||||
Net cash provided by operating activities | 106,122 | 59,859 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (3,553) | (7,282) | ||||||
Acquisitions from Valero Energy Corporation | (296,109) | (80,116) | ||||||
Proceeds from dispositions of property and equipment | 70 | 33 | ||||||
Net cash used in investing activities | (299,592) | (87,365) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from debt borrowings | 200,000 | |||||||
Repayment of debt | (25,000) | |||||||
Proceeds from note payable to related party | 160,000 | |||||||
Payments of capital lease obligations | (884) | (772) | ||||||
Offering costs | (3,223) | |||||||
Debt issuance costs | (1,071) | |||||||
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets | (275,111) | (73,884) | ||||||
Cash distributions to unitholders and distribution equivalent right payments | (51,551) | (27,735) | ||||||
Net transfers from Valero Energy Corporation | 0 | (10,093) | ||||||
Net cash provided by (used in) financing activities | 7,454 | (116,778) | ||||||
Net decrease in cash and cash equivalents | (186,016) | (144,284) | ||||||
Cash and cash equivalents at beginning of period | 50,563 | 236,579 | 375,118 | |||||
Cash and cash equivalents at end of period | 50,563 | 230,834 | 50,563 | 230,834 | ||||
Common Unitholder Valero [Member] | ||||||||
Costs and expenses: | ||||||||
Less: Net loss attributable to Predecessor | 0 | 0 | [2] | |||||
Net income attributable to partners | $ 18,406 | 7,896 | ||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 1,908,100 | |||||||
General Partner Valero [Member] | ||||||||
Costs and expenses: | ||||||||
Less: Net loss attributable to Predecessor | $ 0 | 0 | [2] | |||||
Net income attributable to partners | $ 3,821 | 805 | ||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 38,941 | |||||||
Houston and St. Charles Terminal Services Business [Member] | Adjustments for Acquisitions of Businesses Under Common Control [Member] | ||||||||
Consolidated Statements of Income | ||||||||
Operating revenues – related party | 0 | $ 0 | 0 | |||||
Costs and expenses: | ||||||||
Operating expenses | 8,957 | 7,195 | 26,035 | |||||
General and administrative expenses | 68 | 47 | 199 | |||||
Depreciation expense | 2,860 | 2,274 | 7,139 | |||||
Total costs and expenses | 11,885 | 9,516 | 33,373 | |||||
Operating income | (11,885) | (9,516) | (33,373) | |||||
Other income, net | 0 | 0 | 0 | |||||
Interest and debt expense, net of capitalized interest | 0 | 0 | 0 | |||||
Income before income taxes | (11,885) | (9,516) | (33,373) | |||||
Income tax expense (benefit) | 0 | 0 | 0 | |||||
Net income | (11,885) | (9,516) | (33,373) | |||||
Less: Net loss attributable to Predecessor | (11,885) | (9,516) | (33,373) | |||||
Net income attributable to partners | 0 | 0 | 0 | |||||
Cash flows from operating activities: | ||||||||
Net income (loss) | (11,885) | (9,516) | (33,373) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation expense | 2,860 | 2,274 | 7,139 | |||||
Deferred income tax expense (benefit) | 0 | 0 | ||||||
Changes in current assets and current liabilities | 0 | 0 | ||||||
Changes in deferred charges and credits and other operating activities, net | 0 | 0 | ||||||
Net cash provided by operating activities | (7,242) | (26,234) | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (3,693) | (47,518) | ||||||
Acquisitions from Valero Energy Corporation | 0 | 0 | ||||||
Proceeds from dispositions of property and equipment | 0 | 0 | ||||||
Net cash used in investing activities | (3,693) | (47,518) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from debt borrowings | 0 | |||||||
Repayment of debt | 0 | |||||||
Proceeds from note payable to related party | 0 | |||||||
Payments of capital lease obligations | 0 | 0 | ||||||
Offering costs | 0 | |||||||
Debt issuance costs | 0 | |||||||
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets | 0 | 0 | ||||||
Cash distributions to unitholders and distribution equivalent right payments | 0 | 0 | ||||||
Net transfers from Valero Energy Corporation | 10,935 | 73,752 | ||||||
Net cash provided by (used in) financing activities | 10,935 | 73,752 | ||||||
Net decrease in cash and cash equivalents | 0 | 0 | ||||||
Cash and cash equivalents at beginning of period | $ 0 | 0 | 0 | |||||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | ||||||||
Cash flows from investing activities: | ||||||||
Acquisitions from Valero Energy Corporation | $ (296,100) | |||||||
Cash flows from financing activities: | ||||||||
Proceeds from debt borrowings | 200,000 | |||||||
Proceeds from note payable to related party | 160,000 | |||||||
Excess purchase price paid to Valero Energy Corporation over the carrying value of acquired assets | (275,100) | |||||||
Acquisitions (Textual) | ||||||||
Effective date of acquisition from Valero | Mar. 1, 2015 | |||||||
Cash consideration transferred to acquire businesses | $ 571,200 | |||||||
Number of subsidiaries acquired from Valero | subsidiaries | 2 | |||||||
Value of consideration transferred for acquisitions from Valero | $ 671,200 | |||||||
Consideration transferred for the acquisitions from Valero, units Issued | 100,000 | $ 100,000 | ||||||
Payments to acquire businesses, cash on hand | $ 211,200 | |||||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | Common Unitholder Valero [Member] | ||||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 1,908,100 | 1,908,100 | ||||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | General Partner Valero [Member] | ||||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 38,941 | 38,941 | ||||||
Majority Shareholder [Member] | Corpus Christi Terminal Services Business [Member] | Subsequent Event [Member] | ||||||||
Acquisitions (Textual) | ||||||||
Effective date of acquisition from Valero | Oct. 1, 2015 | |||||||
Cash consideration transferred to acquire businesses | $ 395,000 | |||||||
Value of consideration transferred for acquisitions from Valero | 465,000 | |||||||
Consideration transferred for the acquisitions from Valero, units Issued | $ 70,000 | |||||||
Majority Shareholder [Member] | Corpus Christi Terminal Services Business [Member] | Common Unitholder Valero [Member] | Subsequent Event [Member] | ||||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 1,570,513 | |||||||
Majority Shareholder [Member] | Corpus Christi Terminal Services Business [Member] | General Partner Valero [Member] | Subsequent Event [Member] | ||||||||
Acquisitions (Textual) | ||||||||
Units issued in connection with the acquisitions from Valero | shares | 32,051 | |||||||
[1] | Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. | |||||||
[2] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Mar. 01, 2015USD ($)lease_agreementsrenewal | Feb. 28, 2015USD ($) | Dec. 31, 2014USD ($) | |||
Receivables from Related Party | |||||||||
Receivables from related party | $ 13,395 | $ 13,395 | $ 8,499 | ||||||
Significant Related-Party Transactions | |||||||||
Operating revenues – related party | 62,037 | $ 33,666 | [1],[2] | 164,168 | $ 94,998 | [1],[2] | |||
Majority Shareholder [Member] | |||||||||
Receivables from Related Party | |||||||||
Trade receivables – related party | 19,058 | 19,058 | 10,515 | ||||||
Due to related party | (5,663) | (5,663) | (2,016) | ||||||
Receivables from related party | 13,395 | 13,395 | $ 8,499 | ||||||
Significant Related-Party Transactions | |||||||||
Operating expenses | 7,437 | 6,542 | [1] | 21,247 | 18,559 | [1] | |||
General and administrative expenses | 2,648 | 2,481 | [1] | 7,808 | 7,666 | [1] | |||
Summary of Employee Benefit Plan Costs | |||||||||
Pension and postretirement costs | 0 | 3 | [1] | 2 | 78 | [1] | |||
Defined contribution plan costs | 0 | 2 | [1] | 2 | 68 | [1] | |||
Future Minimum Rentals to be Received on Noncancelable Lease Agreements | |||||||||
Remainder of 2015 | 32,219 | 32,219 | |||||||
2,016 | 127,824 | 127,824 | |||||||
2,017 | 127,824 | 127,824 | |||||||
2,018 | 127,824 | 127,824 | |||||||
2,019 | 127,824 | 127,824 | |||||||
Thereafter | 637,196 | 637,196 | |||||||
Total minimum rental payments | 1,180,711 | 1,180,711 | |||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Contingent lease revenues | 5,500 | $ 2,300 | $ 13,300 | $ 3,200 | |||||
Majority Shareholder [Member] | Omnibus Agreement [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Annual administrative fee | $ 10,400 | $ 9,200 | |||||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Effective date of acquisition from Valero | Mar. 1, 2015 | ||||||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | Commercial Agreements [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Agreement expiration date, initial term | Mar. 1, 2025 | ||||||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | Lease and Access Agreements [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Agreement expiration date, initial term | Mar. 1, 2025 | ||||||||
Number of renewal options | renewal | 4 | ||||||||
Number of lease and access agreements with Valero | lease_agreements | 2 | ||||||||
Duration of renewal option, lease and access agreements | 5 years | ||||||||
Base rent for lease agreement | $ 6,400 | $ 6,400 | |||||||
Majority Shareholder [Member] | Houston Terminal Agreement [Member] | Commercial Agreements [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Number of renewal options | renewal | 1 | ||||||||
Duration of renewal option, commercial agreements | 5 years | ||||||||
Majority Shareholder [Member] | St. Charles Terminal Agreement [Member] | Commercial Agreements [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Agreement expiration date, renewal term | Jan. 31, 2030 | ||||||||
Majority Shareholder [Member] | St. Charles Terminal Agreement [Member] | Lease and Access Agreements [Member] | |||||||||
Related-Party Agreements and Transactions (Textual) | |||||||||
Agreement expiration date, renewal term | Dec. 31, 2044 | ||||||||
[1] | Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. | ||||||||
[2] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | $ 368,110 | $ 701,083 | |
Accumulated depreciation, property and equipment excluding assets subject to operating lease | (115,611) | (155,511) | |
Property and equipment excluding assets subject to operating lease, net | 252,499 | 545,572 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 467,256 | 118,021 |
Accumulated depreciation, assets under operating leases | [1] | (79,549) | (19,019) |
Assets under operating leases, net | [1] | 387,707 | 99,002 |
Property and Equipment, Total | |||
Property and equipment, at cost | 835,366 | 819,104 | |
Accumulated depreciation | (195,160) | (174,530) | |
Property and equipment, net | 640,206 | 644,574 | |
Pipelines and Related Assets [Member] | |||
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | 228,574 | 227,780 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 46,541 | 45,695 |
Property and Equipment, Total | |||
Property and equipment, at cost | 275,115 | 273,475 | |
Terminals and Related Assets [Member] | |||
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | 110,506 | 432,047 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 420,715 | 72,326 |
Property and Equipment, Total | |||
Property and equipment, at cost | 531,221 | 504,373 | |
Other [Member] | |||
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | 9,295 | 9,439 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 0 | 0 |
Property and Equipment, Total | |||
Property and equipment, at cost | 9,295 | 9,439 | |
Land [Member] | |||
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | 4,672 | 4,672 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 0 | 0 |
Property and Equipment, Total | |||
Property and equipment, at cost | 4,672 | 4,672 | |
Construction-in-Progress [Member] | |||
Non-Leased Assets | |||
Property and equipment excluding assets subject to operating lease, at cost | 15,063 | 27,145 | |
Assets Under Operating Leases | |||
Assets under operating leases, at cost | [1] | 0 | 0 |
Property and Equipment, Total | |||
Property and equipment, at cost | $ 15,063 | $ 27,145 | |
[1] | Represents assets owned by us for which we are the lessor (see Note 4). Substantially all of the assets acquired in the Houston and St. Charles Terminals Acquisition were reflected as assets under operating leases on March 1, 2015. |
Debt, Revolving Credit Facility
Debt, Revolving Credit Facility (Details) | Jul. 01, 2015USD ($) | Mar. 02, 2015USD ($) | Sep. 30, 2015USD ($)quarter | Sep. 30, 2014USD ($) | [1] | Dec. 31, 2014USD ($) |
Revolving Credit Facility (Textual) | ||||||
Borrowings under the Revolver | $ 200,000,000 | $ 0 | ||||
Repayments on the Revolver | 25,000,000 | $ 0 | ||||
Line of Credit [Member] | Revolving Credit Facility [Member] | ||||||
Revolving Credit Facility (Textual) | ||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | |||||
Line of credit facility, expiration date | Dec. 31, 2018 | |||||
Number of prior quarterly reporting periods used for total debt to EBITDA ratio | quarter | 4 | |||||
Borrowings under the Revolver | $ 200,000,000 | |||||
Line of credit facility, interest rate, at period end | 1.50% | |||||
Repayments on the Revolver | $ 25,000,000 | |||||
Line of credit facility, amount outstanding | $ 175,000,000 | $ 0 | ||||
Line of Credit [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Revolving Credit Facility (Textual) | ||||||
Covenant ratio of total debt to EBITDA per terms of agreement | 5 | |||||
Covenant ratio of total debt to EBITDA following certain acquisitions per terms of agreement | 5.5 | |||||
Line of Credit [Member] | Letter of Credit [Member] | ||||||
Revolving Credit Facility (Textual) | ||||||
Line of credit facility, amount outstanding | $ 0 | $ 0 | ||||
[1] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Debt, Subordinated Credit Agree
Debt, Subordinated Credit Agreement (Details) $ in Thousands | Mar. 02, 2015USD ($) | Sep. 30, 2015USD ($)quarter | Sep. 30, 2014USD ($) | [1] | Dec. 31, 2014USD ($) |
Subordinated Credit Agreement (Textual) | |||||
Proceeds from the subordinated credit agreement with Valero | $ 160,000 | $ 0 | |||
Note payable to related party | $ 160,000 | $ 0 | |||
Subordinated Debt [Member] | Majority Shareholder [Member] | |||||
Subordinated Credit Agreement (Textual) | |||||
Proceeds from the subordinated credit agreement with Valero | $ 160,000 | ||||
Subordinated credit agreement, expiration date | Mar. 1, 2020 | ||||
Subordinated credit agreement, rate at period end | 1.447% | ||||
Number of prior quarterly reporting periods used for total debt to EBITDA ratio | quarter | 4 | ||||
Note payable to related party | $ 160,000 | ||||
Subordinated Debt [Member] | Majority Shareholder [Member] | Maximum [Member] | |||||
Subordinated Credit Agreement (Textual) | |||||
Covenant ratio of total debt to EBITDA per terms of agreement | 5 | ||||
Covenant ratio of total debt to EBITDA following certain acquisitions per terms of agreement | 5.5 | ||||
[1] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. |
Debt, Capitalized Interest (Det
Debt, Capitalized Interest (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Capitalized Interest (Textual) | ||||
Capitalized interest | $ 6,000 | $ 0 | $ 12,000 | $ 0 |
Commitments and Contingencies35
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Future Minimum Rentals on Operating Leases | ||||
Remainder of 2015 | $ 1,609 | $ 1,609 | ||
2,016 | 6,487 | 6,487 | ||
2,017 | 6,486 | 6,486 | ||
2,018 | 6,472 | 6,472 | ||
2,019 | 6,443 | 6,443 | ||
Thereafter | 33,753 | 33,753 | ||
Total minimum rental payments | 61,250 | 61,250 | ||
Commitments And Contingencies (Textual) | ||||
Rental expense for operating leases | $ 1,700 | $ 300 | $ 4,200 | $ 800 |
Cash Distributions (Details)
Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2015 | Aug. 11, 2015 | May. 12, 2015 | Feb. 12, 2015 | Nov. 12, 2014 | Aug. 13, 2014 | May. 14, 2014 | Feb. 12, 2014 | [1] | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Quarterly Cash Distributions | |||||||||||||
Total quarterly distribution (per unit) | $ 0.2925 | $ 0.2775 | $ 0.2660 | $ 0.2400 | $ 0.2225 | $ 0.2125 | $ 0.0370 | $ 0.3075 | $ 0.2400 | $ 0.8775 | $ 0.6750 | ||
Distributions | $ 18,456 | $ 17,266 | $ 15,829 | $ 14,102 | $ 13,074 | $ 12,487 | $ 2,174 | $ 20,164 | $ 14,102 | $ 55,886 | $ 39,663 | ||
General Partner’s Distribution, Including Incentive Distribution Rights [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 1,386 | 282 | 3,194 | 793 | |||||||||
General Partner Valero [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 404 | 282 | 1,118 | 793 | |||||||||
General Partner IDRs [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 982 | 0 | 2,076 | 0 | |||||||||
Limited Partner, Common and Subordinated Units [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 18,776 | 13,818 | 52,684 | 38,866 | |||||||||
Common Unitholders Public [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 5,305 | 4,139 | 15,137 | 11,643 | |||||||||
Distribution Equivalent Rights [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 2 | 2 | 8 | 4 | |||||||||
Common Unitholder Valero [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | 4,618 | 2,770 | 12,284 | 7,790 | |||||||||
Subordinated Unitholder Valero [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Distributions | $ 8,853 | $ 6,909 | $ 25,263 | $ 19,433 | |||||||||
Subsequent Event [Member] | |||||||||||||
Quarterly Cash Distributions | |||||||||||||
Total quarterly distribution (per unit) | $ 0.3075 | ||||||||||||
Distributions | $ 20,164 | ||||||||||||
[1] | This quarterly distribution reflects the pro rata portion of the minimum quarterly distribution rate of $0.2125 for the partial quarter beginning December 16, 2013 and ending December 31, 2013. |
Net Income Per Limited Partne37
Net Income Per Limited Partner Unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Allocation of net income to determine net income available to limited partners: | ||||
Distributions, excluding general partner's IDRs | $ 19,180 | $ 14,100 | $ 53,802 | $ 39,659 |
General partner’s IDRs | 982 | 2,076 | ||
DERs | 2 | 2 | 8 | 4 |
Distributions and DERs declared | 20,164 | 14,102 | 55,886 | 39,663 |
Undistributed earnings, basic and diluted | 11,264 | 31,325 | ||
Undistributed earnings, basic | 3,441 | 562 | ||
Net income available to limited partners – basic | $ 17,543 | $ 40,225 | ||
Net income available to limited partners – basic and diluted | $ 31,428 | $ 87,211 | ||
Net income per limited partner unit – diluted: | ||||
Weighted-average units outstanding – diluted | 30,698 | 28,791 | 30,279 | 28,791 |
Net income per limited partner unit – basic and diluted: | ||||
Net income per limited partner unit basic and diluted | $ 0.51 | $ 0.30 | $ 1.43 | $ 0.68 |
General Partner Valero [Member] | ||||
Allocation of net income to determine net income available to limited partners: | ||||
Distributions, excluding general partner's IDRs | $ 404 | $ 282 | $ 1,118 | $ 793 |
General partner’s IDRs | 982 | 2,076 | ||
DERs | 0 | |||
Distributions and DERs declared | 1,386 | 282 | 3,194 | 793 |
Undistributed earnings, basic and diluted | 226 | 627 | ||
Undistributed earnings, basic | 69 | 12 | ||
Net income available to limited partners – basic | 351 | 805 | ||
Net income available to limited partners – basic and diluted | 1,612 | 3,821 | ||
Limited Partner, Common Units [Member] | ||||
Allocation of net income to determine net income available to limited partners: | ||||
Distributions, excluding general partner's IDRs | 9,923 | 6,909 | 27,421 | 19,433 |
DERs | 0 | |||
Distributions and DERs declared | 9,923 | 6,909 | 27,421 | 19,433 |
Undistributed earnings, basic and diluted | 5,691 | 15,733 | ||
Undistributed earnings, basic | 1,683 | 273 | ||
Net income available to limited partners – basic | 8,592 | 19,706 | ||
Add: DERs | 4 | 4 | ||
Net income available to limited partners – diluted | $ 8,596 | $ 19,710 | ||
Net income available to limited partners – basic and diluted | $ 15,614 | $ 43,154 | ||
Net income per limited partner unit – basic: | ||||
Weighted-average units outstanding – basic | 28,790 | 28,790 | ||
Net Income per limited partner unit – basic | $ 0.30 | $ 0.68 | ||
Net income per limited partner unit – diluted: | ||||
Weighted-average units outstanding – basic | 28,790 | 28,790 | ||
Common equivalent units for restricted units | 1 | 1 | ||
Weighted-average units outstanding – diluted | 28,791 | 28,791 | ||
Net income per limited partner unit – diluted | $ 0.30 | $ 0.68 | ||
Net income per limited partner unit – basic and diluted: | ||||
Weighted-average units outstanding | 30,698 | 30,279 | ||
Net income per limited partner unit basic and diluted | $ 0.51 | $ 1.43 | ||
Restricted Units [Member] | ||||
Allocation of net income to determine net income available to limited partners: | ||||
Distributions, excluding general partner's IDRs | $ 0 | |||
DERs | $ 2 | 2 | $ 8 | $ 4 |
Distributions and DERs declared | 2 | 2 | 8 | 4 |
Undistributed earnings, basic and diluted | 2 | 5 | ||
Undistributed earnings, basic | 2 | |||
Net income available to limited partners – basic | 4 | 4 | ||
Net income available to limited partners – basic and diluted | 4 | 13 | ||
Subordinated Unitholder Valero [Member] | ||||
Allocation of net income to determine net income available to limited partners: | ||||
Distributions, excluding general partner's IDRs | 8,853 | 6,909 | 25,263 | 19,433 |
DERs | 0 | |||
Distributions and DERs declared | 8,853 | 6,909 | 25,263 | 19,433 |
Undistributed earnings, basic and diluted | 5,345 | 14,960 | ||
Undistributed earnings, basic | 1,687 | 277 | ||
Net income available to limited partners – basic | 8,596 | 19,710 | ||
Add: DERs | 0 | |||
Net income available to limited partners – diluted | $ 8,596 | $ 19,710 | ||
Net income available to limited partners – basic and diluted | $ 14,198 | $ 40,223 | ||
Net income per limited partner unit – basic: | ||||
Weighted-average units outstanding – basic | 28,790 | 28,790 | ||
Net Income per limited partner unit – basic | $ 0.30 | $ 0.68 | ||
Net income per limited partner unit – diluted: | ||||
Weighted-average units outstanding – basic | 28,790 | 28,790 | ||
Common equivalent units for restricted units | 0 | |||
Weighted-average units outstanding – diluted | 28,790 | 28,790 | ||
Net income per limited partner unit – diluted | $ 0.30 | $ 0.68 | ||
Net income per limited partner unit – basic and diluted: | ||||
Weighted-average units outstanding | 28,790 | 28,790 | ||
Net income per limited partner unit basic and diluted | $ 0.49 | $ 1.40 |
Unit Activity (Details)
Unit Activity (Details) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Partners' Capital Roll Forward (Units) | ||
Beginning balance | 58,760,288 | 58,755,080 |
Unit-based compensation | 4,443 | 5,208 |
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 1,947,041 | |
Ending balance | 60,711,772 | 58,760,288 |
Common Unitholders Public [Member] | ||
Partners' Capital Roll Forward (Units) | ||
Beginning balance | 17,255,208 | 17,250,000 |
Unit-based compensation | 4,443 | 5,208 |
Ending balance | 17,259,651 | 17,255,208 |
Common Unitholder Valero [Member] | ||
Partners' Capital Roll Forward (Units) | ||
Beginning balance | 11,539,989 | 11,539,989 |
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 1,908,100 | |
Ending balance | 13,448,089 | 11,539,989 |
Subordinated Unitholder Valero [Member] | ||
Partners' Capital Roll Forward (Units) | ||
Beginning balance | 28,789,989 | 28,789,989 |
Ending balance | 28,789,989 | 28,789,989 |
General Partner Valero [Member] | ||
Partners' Capital Roll Forward (Units) | ||
Beginning balance | 1,175,102 | 1,175,102 |
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 38,941 | |
Ending balance | 1,214,043 | 1,175,102 |
Supplemental Cash Flow Inform39
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | Mar. 01, 2015 | Jul. 01, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Decrease (increase) in current assets: | ||||||
Receivables from related party | $ (6,354) | $ 2,955 | ||||
Prepaid expenses and other | (33) | (1,462) | ||||
Increase (decrease) in current liabilities: | ||||||
Accounts payable | 1,031 | (4,408) | ||||
Accrued liabilities | 221 | 686 | ||||
Taxes other than income taxes | 470 | 65 | ||||
Deferred revenue from related party | 22 | 229 | ||||
Changes in current assets and current liabilities | (4,643) | (1,935) | [1] | |||
Reconciliation of Net Transfers from/to Valero | ||||||
Net transfers from Valero per statement of partners’ capital | 9,934 | 65,202 | [2] | |||
Less: Noncash transfers to Valero | (1,001) | |||||
Less: Noncash transfers from Valero | [2] | 1,543 | ||||
Net transfers from Valero per statement of cash flows | 10,935 | 63,659 | [1],[2] | |||
Cash Flows Related to Interest and Income Taxes Paid | ||||||
Interest paid | 2,952 | 686 | [2] | |||
Income taxes paid | 441 | 74 | [2] | |||
Supplemental Cash Flow Elements (Textual) | ||||||
Cash consideration paid attributed to the historical carrying value of assets acquired | 296,109 | 80,116 | [1] | |||
Cash consideration paid in excess of the carrying value of assets acquired | 275,111 | $ 73,884 | [1] | |||
Noncash capital contributions from Valero Energy Corporation | $ 14,518 | |||||
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 1,947,041 | |||||
General Partner Valero [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Noncash capital contributions from Valero Energy Corporation | $ 405 | |||||
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 38,941 | |||||
Common Unitholder Valero [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Noncash capital contributions from Valero Energy Corporation | $ 4,493 | |||||
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 1,908,100 | |||||
Majority Shareholder [Member] | Texas Crude Systems Business [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Cash consideration paid attributed to the historical carrying value of assets acquired | $ 80,100 | |||||
Cash consideration paid for assets acquired, total | 154,000 | |||||
Cash consideration paid in excess of the carrying value of assets acquired | $ 73,900 | |||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Cash consideration paid attributed to the historical carrying value of assets acquired | $ 296,100 | |||||
Cash consideration paid for assets acquired, total | 571,200 | |||||
Cash consideration paid in excess of the carrying value of assets acquired | 275,100 | |||||
Noncash capital contributions from Valero Energy Corporation | $ 14,500 | |||||
Amount issued in connection with the acquisition of the Houston and St. Charles Terminal Acquisition, noncash financing | $ 100,000 | $ 100,000 | ||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | General Partner Valero [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 38,941 | 38,941 | ||||
Majority Shareholder [Member] | Houston and St. Charles Terminal Services Business [Member] | Common Unitholder Valero [Member] | ||||||
Supplemental Cash Flow Elements (Textual) | ||||||
Units issued in connection with the acquisition of the Houston and St. Charles Terminal Services Business | 1,908,100 | 1,908,100 | ||||
[1] | Financial information has been retrospectively adjusted for the acquisition of the Houston and St. Charles Terminal Services Business from Valero Energy Corporation. See Notes 1 and 3. | |||||
[2] | Financial information has been retrospectively adjusted for the Houston and St. Charles Terminals Acquisition. |