8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 1, 2014

VALERO ENERGY PARTNERS LP

(Exact name of registrant as specified in its charter)

Delaware	1-36232	90-1006559
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Valero Way San Antonio, Texas	78249
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (210) 345-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

As reported in a Current Report on Form 8-K filed by Valero Energy Partners LP (the Partnership) on July 1, 2014 (the Initial Form 8-K), amended as of July 2, 2014 (Amendment No. 1), the Partnership completed the acquisition of certain assets and interests (the Texas Crude Systems Business) from certain subsidiaries of Valero Energy Corporation (Valero) on July 1, 2014. This amendment is being filed to amend Item 9.01 Financial Statements and Exhibits of the Initial Form 8-K, as amended by Amendment No. 1, to provide certain financial statements of the Texas Crude Systems Business and to provide the unaudited pro forma financial information of the Partnership in connection with this acquisition.

No other modification to the Initial Form 8-K, as amended, is being made by this amendment.

Item 9.01    Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Audited historical combined financial statements of the Texas Crude Systems Business as of and for the year ended December 31, 2013, and unaudited historical combined financial statements as of March 31, 2014 and for the three months ended March 31, 2014 and 2013, together with the related notes to the combined financial statements, a copy of which is filed as Exhibit 99.1 hereto and incorporated herein by reference.

(b) Pro Forma Financial Information.

Unaudited pro forma consolidated financial statements of Valero Energy Partners LP as of and for the three months ended March 31, 2014 and for each of the years in the three-year period ended December 31, 2013, a copy of which is filed as Exhibit 99.2 hereto and incorporated herein by reference.

(d) Exhibits.

Exhibit No.	Description
10.1*	Purchase and Sale Agreement, dated as of July 1, 2014, between The Shamrock Pipe Line Corporation, Valero Plains Company LLC and Valero Terminaling and Distribution Company, as Sellers, and Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Operating Co. LLC, as Buyers.
10.2*	Amended and Restated Omnibus Agreement, dated July 1, 2014, by and among Valero Energy Corporation, a Delaware corporation, Valero Marketing and Supply Company, Valero Terminaling and Distribution Company, The Premcor Refining Group Inc., The Premcor Pipeline Co., Valero Energy Partners LP, Valero Energy Partners GP LLC, Valero Partners Operating Co. LLC, Valero Partners EP, LLC, Valero Partners Lucas, LLC, Valero Partners Memphis, LLC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Wynnewood, LLC.
10.3*	Amendment Number One to Services and Secondment Agreement, dated July 1, 2014, by and among Valero Services, Inc., a Delaware corporation, Valero Refining Company-Tennessee, L.L.C. and Valero Energy Partners GP LLC.

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10.4	Master Transportation Services Agreement dated December 16, 2013 by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company - incorporated by reference to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
10.5	Master Terminal Services Agreement dated December 16, 2013 by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company - incorporated by reference to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
10.6*	Transportation Services Schedule (McKee Crude System), dated July 1, 2014, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company.
10.7*	Transportation Services Schedule (Three Rivers Crude System), dated July 1, 2014, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company.
10.8*	Terminal Services Schedule (Wynnewood Products System), dated July 1, 2014, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company.
10.9*	Transportation Services Schedule (Wynnewood Products System), dated July 1, 2014, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company.
23.1	Consent of KPMG LLP, independent registered public accounting firm.
99.1	Audited historical combined financial statements of the Texas Crude Systems Business as of and for the year ended December 31, 2013, and unaudited historical combined financial statements as of March 31, 2014 and for the three months ended March 31, 2014 and 2013, together with the related notes to the combined financial statements.
99.2	Unaudited pro forma consolidated financial statements of Valero Energy Partners LP as of and for the three months ended March 31, 2014 and for each of the years in the three-year period ended December 31, 2013.
* Previously filed

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		VALERO ENERGY PARTNERS LP
		(Registrant)
		By:	Valero Energy Partners GP LLC,
			its general partner
Date:	July 25, 2014	By:	/s/ Donna M. Titzman
			Donna M. Titzman
			Senior Vice President, Chief Financial Officer,
			and Treasurer
			(Principal Financial and Accounting Officer)

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EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Unitholders of Valero Energy Partners LP and

The Board of Directors of Valero Energy Partners GP LLC

We consent to the incorporation by reference in the Registration Statement (No.333-193348) on Form S-8 of Valero Energy Partners LP of our report dated July 25, 2014, with respect to the combined financial statements of the Texas Crude Systems Business as of and for the year ended December 31, 2013 included in this Current Report on Form 8-K/A (Amendment No. 2) of Valero Energy Partners LP.

/s/ KPMG LLP

San Antonio, Texas

July 25, 2014

EX-99.1

EXHIBIT 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Unitholders of Valero Energy Partners LP and

the Board of Directors of Valero Energy Partners GP LLC

We have audited the accompanying combined balance sheet of the Texas Crude Systems Business as of December 31, 2013, and the related combined statements of income, changes in net investment, and cash flows for the year then ended. These combined financial statements are the responsibility of the Texas Crude Systems Business’s management. Our responsibility is to express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Texas Crude Systems Business as of December 31, 2013, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

San Antonio, Texas

July 25, 2014

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TEXAS CRUDE SYSTEMS BUSINESS

COMBINED BALANCE SHEETS

(In Thousands)

	March 31,			December 31,
	2014			2013
	(Unaudited)
ASSETS
Cash and cash equivalents	$	—		$	—
Total current assets	—			—
Property and equipment, at cost	93,102			92,785
Accumulated depreciation	(12,475		)	(11,637		)
Property and equipment, net	80,627			81,148
Total assets	$	80,627		$	81,148
LIABILITIES AND NET INVESTMENT
Long-term deferred income taxes	$	163		$	127
Other long-term liabilities	377			448
Total liabilities	540			575
Commitments and contingencies
Net investment	80,087			80,573
Total liabilities and net investment	$	80,627		$	81,148

See Notes to Combined Financial Statements.

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TEXAS CRUDE SYSTEMS BUSINESS

COMBINED STATEMENTS OF INCOME

(In Thousands)

	Three Months Ended March 31,				Year Ended December 31,
	2014		2013		2013
	(Unaudited)
Operating revenues – related party	$	7,958	$	6,515	$	30,456
Costs and expenses:
Operating expenses	1,902		1,789		7,454
General and administrative expenses	437		394		1,717
Depreciation expense	843		773		3,183
Total costs and expenses	3,182		2,956		12,354
Operating income	4,776		3,559		18,102
Other income, net	18		—		—
Income before income taxes	4,794		3,559		18,102
Income tax expense	67		36		247
Net income	$	4,727	$	3,523	$	17,855

See Notes to Combined Financial Statements.

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TEXAS CRUDE SYSTEMS BUSINESS

COMBINED STATEMENTS OF CHANGES IN NET INVESTMENT

(In Thousands)

	Three Months Ended March 31,						Year Ended December 31,
	2014			2013			2013
	(Unaudited)
Balance as of beginning of period	$	80,573		$	75,891		$	75,891
Net income	4,727			3,523			17,855
Net transfers to Valero	(5,213		)	(1,533		)	(13,173		)
Balance as of end of period	$	80,087		$	77,881		$	80,573

See Notes to Combined Financial Statements.

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TEXAS CRUDE SYSTEMS BUSINESS

COMBINED STATEMENTS OF CASH FLOWS

(In Thousands)

	Three Months Ended March 31,						Year Ended December 31,
	2014			2013			2013
	(Unaudited)
Cash flows from operating activities:
Net income	$	4,727		$	3,523		$	17,855
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	843			773			3,183
Deferred income tax expense	36			—			127
Decrease in other long-term liabilities	(76		)	(1		)	(17		)
Net cash provided by operating activities	5,530			4,295			21,148
Cash flows from investing activities:
Capital expenditures	(257		)	(2,618		)	(8,063		)
Proceeds from dispositions of property and equipment	—			—			8
Net cash used in investing activities	(257		)	(2,618		)	(8,055		)
Cash flows from financing activities:
Net transfers to Valero	(5,273		)	(1,677		)	(13,093		)
Net cash used in financing activities	(5,273		)	(1,677		)	(13,093		)
Net change in cash and cash equivalents	—			—			—
Cash and cash equivalents at beginning of period	—			—			—
Cash and cash equivalents at end of period	$	—		$	—		$	—

See Notes to Combined Financial Statements.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND BASIS OF PRESENTATION

Business

References in this report to “we,” “us,” or “our” refer to Texas Crude Systems Business as described below. References in this report to the “Partnership,” refer to Valero Energy Partners LP, one or more of its consolidated 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.

Effective July 1, 2014, the Partnership entered into a Purchase and Sale Agreement with certain subsidiaries of Valero to acquire the Texas Crude Systems Business (the Acquisition) for total cash consideration of $154.0 million. In connection with the Acquisition, the Partnership entered into various commercial agreements with Valero regarding transportation and terminaling services to be provided by the Partnership to Valero with respect to the crude oil and products systems described below, and the Partnership amended and restated its omnibus agreement with Valero. In addition, our general partner entered into an amended services and secondment agreement with Valero.

The Texas Crude Systems Business is engaged in the business of transporting, terminaling, and storing crude oil and refined petroleum products through various pipeline and terminal systems. The Texas Crude Systems Business consists of:

• McKee Crude System. The McKee Crude System is a crude oil system that supports Valero’s McKee refinery located in Sunray, Texas. The system has a throughput capacity of 72,000barrels per day and consists of more than 200 miles of pipelines, 20 crude oil truck unloading sites with lease automatic custody transfer units, and approximately 240,000barrels of storage capacity.

• Three Rivers Crude System. The Three Rivers Crude System, located in the Eagle Ford shale region in South Texas, consists of 11 crude oil truck unloading sites with lease automatic custody transfer units and a 1-mile, 12-inch pipeline with a capacity of 110,000 barrels per day. The system delivers crude oil received from the truck unloading sites and pipeline connections to tanks at Valero’s Three Rivers refinery. The system also receives locally produced crude oil via connections to the Harvest Arrowhead pipeline system and the Plains Gardendale pipeline for processing at the Three Rivers refinery or for shipment through third-party pipelines to Valero’s two refineries in Corpus Christi, Texas.

• Wynnewood Products System. The Wynnewood Products System is the primary distribution outlet for Valero’s Ardmore Refinery in Ardmore, Oklahoma. The Wynnewood Products System consists of a 30‑mile, 12‑inch refined petroleum products pipeline with 90,000 barrels per day of capacity and two tanks with a total of 180,000 barrels of storage capacity. The system connects Valero’s Ardmore refinery to the Magellan refined products pipeline system.

We generate revenues by charging fees for transporting crude oil and refined petroleum products through our pipelines and for terminaling crude oil and storing refined petroleum products. Because we do not take ownership of or receive any payments based on the value of the crude oil or refined petroleum products that we handle and do not engage in the trading of any commodities, we have no direct exposure to commodity price fluctuations. Our operations consist of one reportable segment.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Basis of Presentation

These financial statements were derived from the consolidated financial statements and accounting records of Valero. These financial statements reflect the combined historical financial position, results of operations, and cash flows of the Texas Crude Systems Business that are owned by direct and indirect wholly owned subsidiaries of Valero, including an allocable portion of Valero’s corporate costs.

These financial statements are presented as if the operations of the Texas Crude Systems Business had been combined for all periods presented. There were no transactions among the operations of the Texas Crude Systems Business; therefore, there were no intercompany transactions or accounts to be eliminated in connection with the combination of these operations. The assets and liabilities in the combined balance sheets have been reflected on a historical cost basis as all of the assets and liabilities presented are wholly owned by Valero and will be transferred within Valero’s consolidated group. The combined statements of income also include expense allocations for certain corporate functions historically performed by Valero and not allocated to the Texas Crude Systems Business, including allocations of general corporate expenses related to executive oversight, accounting, treasury, tax, legal, procurement, information technology, and engineering. These allocations were based primarily on specific identification of time and/or activities associated with the Texas Crude Systems Business, employee headcount, or capital expenditures. Our management believes the assumptions underlying the financial statements, including the assumptions regarding the allocation of general corporate expenses from Valero, are reasonable. Nevertheless, the financial statements may not include all of the expenses that would have been incurred had we been a stand-alone company during the periods presented and may not reflect our financial position, results of operations, and cash flows had we been a stand-alone company during the periods presented.

Valero uses a centralized approach to the cash management and financing of its operations. We transfer cash to Valero daily and Valero funds our operating and investing activities as needed. Accordingly, cash held by Valero at the corporate level was not allocated to us for any of the periods presented. We reflected transfers of cash to and from Valero’s cash management system as a component of net investment on our combined balance sheets, and these net transfers of cash are reflected as a financing activity in our combined statements of cash flows. We have also not included any interest income on the net cash transfers to Valero.

The financial statements as of March 31, 2014, and for the three months ended March 31, 2014 and 2013, included herein, are unaudited. These financial statements include all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the combined financial position of the Texas Crude Systems Business and its results of operations and cash flows for the interim periods. Unless otherwise specified, all such adjustments are of a normal and recurring nature. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.

We have evaluated events that occurred after March 31, 2014 through the date the audited financial statements were issued. Any material subsequent events that occurred during this time have been properly recognized or disclosed in these financial statements.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Net Investment

Net investment represents Valero’s historical investment in us, our accumulated net earnings after taxes, and the net effect of transactions with, and allocations from, Valero.

Use of Estimates

The preparation of financial statements in conformity with United States (U.S.) generally accepted accounting principles (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.

Property and Equipment

The cost of property and equipment purchased or constructed, including betterments of property assets, is capitalized. However, the cost of repairs and normal maintenance of property and equipment is expensed when incurred. Betterments of property and equipment are those that extend the useful lives of the property and equipment or improve the safety of our operations. The cost of property and equipment constructed includes certain overhead costs allocable to the construction activities.

When property and equipment are retired or replaced, the cost and related accumulated depreciation are eliminated, with any gain or loss reflected in depreciation expense, unless such amounts are reported separately due to materiality.

Depreciation of property and equipment is recorded on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the related asset.

Impairment of Assets

Long-lived assets, which include property and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. A long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. If a long-lived asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discounted estimated net cash flows or other appropriate methods.

Asset Retirement Obligations

We record a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to retire a tangible long-lived asset at the time we incur that liability, which is generally when the asset is purchased, constructed, or leased. We record the liability when we have a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability’s fair value.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Environmental Matters

Liabilities for future remediation costs are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on the completion of investigations or other studies or a commitment to a formal plan of action. Amounts recorded for environmental liabilities have not been reduced by possible recoveries from third parties and have not been measured on a discounted basis.

Revenue Recognition

Revenues are recognized for the transportation of crude oil and refined petroleum products based on the delivery of actual volumes transported at agreed-upon rates. Revenues are recognized for crude oil terminaling based on agreed-upon rates related to actual throughput volumes. Revenues are recognized for the storage of refined products based on a fixed monthly fee.

Employee Benefit Plans

The employees supporting our operations are employees of Valero. Their payroll costs and employee benefit plan costs are charged to us by Valero. Valero sponsors various employee pension and postretirement health and life insurance plans. For purposes of these financial statements, we are considered to be participating in multiemployer benefit plans of Valero. As a participant in multiemployer benefit plans, we recognize as expense in each period an allocation from Valero, and we do not recognize any employee benefit plan assets or liabilities. While we are considered to participate in multiemployer plans of Valero for the purposes of presenting these financial statements, those benefit plans are not technically multiemployer plans. Therefore, we have not included the disclosures required for multiemployer plans.

Income Taxes

Income taxes are accounted for under the asset and liability method, as if we were a separate taxpayer rather than a member of Valero’s consolidated tax return. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

Our taxable income was included in the consolidated U.S. federal income tax returns of Valero and in certain consolidated state income tax returns. Following the Acquisition, our operations will be treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of the taxable income. Therefore, we have excluded income taxes from these financial statements, except for certain states that tax partnerships.

We classify any interest expense and penalties related to the underpayment of income taxes in income tax expense.

Comprehensive Income

We have not reported comprehensive income due to the absence of items of other comprehensive income in the periods presented.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Financial Instruments

We did not own financial instruments during the periods presented.

Net Income per Unit

During the periods presented, we were wholly owned by Valero. Accordingly, we have not presented net income per unit.

3. RELATED-PARTY TRANSACTIONS

We are part of the consolidated operations of Valero and all of our revenues were derived from transactions with Valero. We provided crude oil and refined petroleum products pipeline transportation, terminaling, and storage services to Valero. The rates used for these revenue transactions may be materially different than rates we might have received had they been transacted with third parties.

Valero also provided substantial labor and overhead support to us related to Valero employees for their operation of business and management oversight of our day-to-day operations. Employee benefit expenses such as medical insurance, life insurance, and employee benefit plan expenses, including stock-based compensation, were allocated to us based on Valero’s determination of actual costs attributable to employees who provide services to us and were recorded as components of operating expenses and general and administrative expenses. As discussed in Note 1, Valero also charged us for certain corporate functions performed on our behalf that were recorded as general and administrative expenses. Allocations for general and administrative services included such items as executive oversight, accounting, treasury, tax, legal, procurement, information technology, and engineering. These allocations were based primarily on specific identification of time and/or activities associated with the Texas Crude Systems Business, employee headcount, or capital expenditures.

Our management believes the charges allocated to us are a reasonable reflection of the utilization of services provided. However, those allocations may not fully reflect the expenses that would have been incurred had we been a stand-alone company during the periods presented and cannot be presumed to be carried out on an arm’s-length basis as the requisite conditions of competitive, free-market dealings may not exist.

The following table reflects significant transactions with Valero (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2014		2013		2013
	(Unaudited)
Operating revenues – related party	$	7,958	$	6,515	$	30,456
Operating expenses	510		470		2,005
General and administrative expenses	437		394		1,717

For purposes of these financial statements, payables and receivables related to transactions between us and Valero are included as a component of net investment on our combined balance sheets.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Net Investment

The following is a reconciliation of the amounts presented as net transfers to Valero on our statements of net investment and statements of cash flows (in thousands):

	Three Months Ended March 31,						Year Ended December 31,
	2014			2013			2013
	(Unaudited)
Net transfers to Valero per statements of changes in net investment	$	(5,213	)	$	(1,533	)	$	(13,173	)
Less: Noncash transfers from (to) Valero	60			144			(80		)
Net transfers to Valero per statements of cash flows	$	(5,273	)	$	(1,677	)	$	(13,093	)

Noncash transfers primarily represent the change in amounts accrued for capital expenditures as we do not reflect capital expenditures in our statements of cash flows until such amounts are paid. For the year ended December 31, 2013, noncash transfers also included property and equipment transferred from Valero to us.

Concentration Risk

Our revenues were derived solely from Valero. Therefore, we are subject to the business risks associated with Valero’s business.

4. PROPERTY AND EQUIPMENT

Major classes of property and equipment consisted of the following (in thousands):

	March 31, 2014			December 31, 2013
	(Unaudited)
Pipelines and related assets	$	35,763		$	35,692
Terminals and related assets	51,087			51,087
Other	3,795			3,729
Land	1,584			1,584
Construction-in-progress	873			693
Property and equipment, at cost	93,102			92,785
Accumulated depreciation	(12,475		)	(11,637		)
Property and equipment, net	$	80,627		$	81,148

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

5. OTHER LONG-TERM LIABILITIES

Asset Retirement Obligations

We have asset retirement obligations with respect to certain of our crude oil pipelines, terminals, and related assets, that we are required to perform under law or contract once the asset is retired from service, and we have recognized obligations to restore certain leased properties to substantially the same condition as when such property was delivered to us or to its improved condition as prescribed by the lease agreements. With respect to property and equipment related to our refined petroleum products operations, it is our practice and current intent to maintain these assets and continue to make improvements to these assets as long as supply and demand for refined petroleum products exists. As a result, we believe that these assets have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time; therefore, no asset retirement obligations have been recorded for these assets as of March 31, 2014andDecember 31, 2013. We will recognize a liability at such time when sufficient information exists to estimate a range of potential settlement dates that is needed to employ a present value technique to estimate fair value.

Changes in our asset retirement obligations were as follows (in thousands):

	March 31, 2014		December 31, 2013
	(Unaudited)
Balance as of beginning of period	$	372	$	353
Accretion expense	5		19
Balance as of end of period	$	377	$	372

We do not expect any short-term spending and, as a result, there is no current liability reported for asset retirement obligations as of March 31, 2014 and December 31, 2013. Accretion expense is reflected in depreciation expense.

There are no assets that are legally restricted for purposes of settling our asset retirement obligations.

Accrued Environmental Costs

We had no accrued environmental costs as of March 31, 2014. We had accrued environmental costs of $76,000 as of December 31, 2013 related to oversight costs for the cleanup at a terminal location.

6.    COMMITMENTS AND CONTINGENCIES

Operating Leases

We have long-term operating lease commitments primarily for land used in the transportation and terminaling of crude oil at our McKee Crude System. We expect that, in the normal course of business, our leases will be renewed or replaced by other leases.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

As of December 31, 2013, our future minimum rentals for leases having initial or remaining noncancelable lease terms in excess of one year were as follows (in thousands):

2014	$	3
2015	3
2016	3
2017	3
2018	3
Thereafter	48
Total minimum rental payments	$	63

Rental expense for all operating leases was $4,000 and $6,000 for the three months ended March 31, 2014 and 2013, respectively, and $24,000 for the year ended December 31, 2013.

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 we have determined that 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.

7. INCOME TAXES

Components of income tax expense were as follows (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2014		2013		2013
	(Unaudited)
Current U.S. state	$	31	$	36	$	120
Deferred U.S. state	36		—		127
Income tax expense	$	67	$	36	$	247

Our income tax expense results from state laws that apply to entities organized as partnerships, primarily in the state of Texas. The difference between income tax expense recorded by us and income taxes computed by applying the statutory federal income tax rate (35% for all periods presented) to income before income tax expense is due to the fact that the majority of our income is not subject to federal income tax as described above.

The tax effects of significant temporary differences representing deferred income tax liabilities related to property and equipment resulting from a change in the law during the second quarter of 2013 with respect to the Texas margin tax, which allows certain pipeline entities to take higher deductions for purposes of computing Texas margin tax.

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TEXAS CRUDE SYSTEMS BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

As of March 31, 2014 and December 31, 2013, we had no liability reported for unrecognized tax benefits. We did not have any interest or penalties related to income taxes during the three months ended March 31, 2014 and 2013, and the year ended December 31, 2013.

8. EMPLOYEE BENEFIT PLANS

Pension and Retirement Savings Plans

Employees of Valero who directly or indirectly support our operations participate in the pension, postretirement health and life insurance, and defined contribution benefit plans sponsored by Valero. Costs associated with these benefit plans were included in the costs allocated to us from Valero and were included in operating expenses or general and administrative expenses, depending on the nature of the employee’s role in our operations.

Stock-based Compensation

We do not have any stock compensation plans. Eligible Valero employees that supported our operations participated in Valero’s 2011 Omnibus Stock Incentive Plan (the OSIP), which authorizes the grant of various stock and stock-based awards. Awards available under the OSIP include options to purchase shares of common stock of Valero, performance awards that vest upon the achievement of an objective performance goal, stock appreciation rights, and restricted stock that vests over a period determined by Valero’s compensation committee. Prior to the approval of the OSIP by Valero’s stockholders, most of the equity awards granted to our employees were made under Valero’s 2005 Omnibus Stock Incentive Plan and 2003 Employee Stock Incentive Plan. Certain Valero employees supporting our operations were historically granted these types of awards. Stock-based compensation costs were allocated to us from Valero and were included in operating expenses and general and administrative expenses.

Summary of Employee Benefit Plan Costs

Our share of pension and postretirement costs, defined contribution plan costs, and stock-based compensation costs was as follows (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2014		2013		2013
	(Unaudited)
Pension and postretirement costs	$	32	$	67	$	249
Defined contribution plan costs	29		25		92
Stock-based compensation costs	2		2		38

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EX-99.2

EXHIBIT 99.2

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Set forth on the following pages are the unaudited pro forma consolidated balance sheet as of March 31, 2014 and the unaudited pro forma consolidated statements of income for the three months ended March 31, 2014 and the years ended December 31, 2013, 2012, and 2011 (together with the notes to the unaudited pro forma consolidated financial statements, the “pro forma financial statements”), of Valero Energy Partners LP. Unless otherwise stated or the context otherwise indicates, all references to “Valero Energy Partners,” “the Partnership,” “us,” “our,” “we,” or similar expressions for time periods prior to the initial public offering (the Offering) of common units of Valero Energy Partners LP on December 16, 2013, refer to Valero Energy Partners LP Predecessor, “our Predecessor” for accounting purposes. For time periods subsequent to the Offering, these terms refer to Valero Energy Partners LP, one or more of its consolidated subsidiaries, or all of them taken as a whole. The pro forma financial statements have been prepared based on the consolidated financial statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and our Annual Report on Form 10-K for the year ended December 31, 2013 with certain pro forma adjustments made to those financial statements as further discussed below. The pro forma financial statements should be read in conjunction with such historical consolidated financial statements, including the related financial statement notes.

Effective July 1, 2014, the Partnership entered into a Purchase and Sale Agreement (the Purchase Agreement) with certain subsidiaries of Valero Energy Corporation (Valero) to acquire the Texas Crude Systems Business (the Acquired Assets) from Valero (the Acquisition) for total cash consideration of $154.0 million. In connection with the Acquisition, the Partnership entered into various commercial agreements with Valero that are considered operating leases for accounting purposes and an amended and restated omnibus agreement with Valero. In addition, our general partner entered into an amended services and secondment agreement with Valero.

The Texas Crude Systems Business is engaged in the business of transporting, terminaling, and storing crude oil and refined petroleum products through various pipeline and terminal systems. The Texas Crude Systems Business consists of:

• McKee Crude System. The McKee Crude System is a crude oil system that supports Valero’s McKee refinery located in Sunray, Texas. The system has a throughput capacity of 72,000 barrels per day and consists of more than 200 miles of pipelines, 20 crude oil truck unloading sites with lease automatic custody transfer units, and approximately 240,000barrels of storage capacity.

• Three Rivers Crude System. The Three Rivers Crude System, located in the Eagle Ford shale region in South Texas, consists of 11 crude oil truck unloading sites with lease automatic custody transfer units and a 1-mile, 12-inch pipeline with a capacity of 110,000 barrels per day. The system delivers crude oil received from the truck unloading sites and pipeline connections to tanks at Valero’s Three Rivers refinery. The system also receives locally produced crude oil via connections to the Harvest Arrowhead pipeline system and the Plains Gardendale pipeline for processing at the Three Rivers refinery or for shipment through third-party pipelines to Valero’s two refineries in Corpus Christi, Texas.

• Wynnewood Products System. The Wynnewood Products System is the primary distribution outlet for Valero’s Ardmore Refinery in Ardmore, Oklahoma. The Wynnewood Products System consists of a 30‑mile, 12-inch refined petroleum products pipeline with 90,000 barrels per day of capacity

1

and two tanks with a total of 180,000 barrels of storage capacity. The system connects Valero’s Ardmore refinery to the Magellan refined products pipeline system.

The Partnership owns and operates all of the Acquired Assets and receives fees for services commencing on July 1, 2014. Pursuant to the terms of the amended services and secondment agreement, the Partnership reimburses Valero for the costs (including wages and benefits) of certain personnel seconded to our general partner to provide certain operational services to us in support of our pipeline, terminaling, and storage facilities, including the Acquired Assets. Pursuant to the terms of the amended and restated omnibus agreement, the operational and administrative support fee owed by us to Valero increased from $7.9 million to $9.3 million annually as of July 1, 2014 for additional services provided in connection with the Acquired Assets.

The assets and liabilities acquired are recorded at historical cost as the Acquisition is considered to be a reorganization of entities under common control. The pro forma adjustments are based on currently available information and certain estimates and assumptions; therefore, actual adjustments may differ from the pro forma adjustments. However, our management believes the assumptions are reasonable for presenting the significant effects of the transactions and that the pro forma adjustments give appropriate effect to those assumptions, are factually supportable, and are properly applied in the pro forma financial statements.

The pro forma adjustments have been prepared as if the transactions to be effected at the Acquisition had taken place on March 31, 2014, in the case of the unaudited pro forma consolidated balance sheet, and as of January 1, 2013, in the case of the unaudited pro forma consolidated statements of income for the three months ended March 31, 2014 and the year ended December 31, 2013. Pro forma adjustments were not applied to the unaudited pro forma consolidated statements of income for the years ended December 31, 2012 and 2011, as the presentation of pro forma transactions cannot meaningfully or accurately depict what operating results would have been had the Acquisition occurred at a date earlier than January 1, 2013.

The pro forma financial statements give pro forma effect to the matters described in the accompanying notes, including:

• the acquisition of the Texas Crude Systems Business from Valero for total cash consideration of $154.0 million;

• our entry into certain commercial agreements with Valero, and the recognition of transportation, terminaling, and storage revenue under those agreements for the volumes transported and stored by the Acquired Assets during the periods presented at historical rates;

• our entry into an amended and restated omnibus agreement with Valero;

• our general partner’s entry into an amended services and secondment agreement with Valero;

• the payment of insurance premiums in excess of those allocated by Valero in the Acquired Assets’ consolidated financial statements for business interruption, property, and third-party liability insurance coverage; and

• the increase in the tax basis for certain acquired assets which results in a reduced deferred tax liability and income tax expense.

The pro forma financial statements may not be indicative of the results that actually would have occurred if the Acquisition had occurred on the dates indicated, or the results that will be obtained in the future.

2

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

March 31, 2014

(In Thousands)

	Historical			Acquired Assets			Pro Forma Adjustments				Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	383,859		$	—		$	(154,308	)	(a)	$	229,551
Receivables from related party	7,008			—			—				7,008
Prepaid expenses and other	398			—			—				398
Total current assets	391,265			—			(154,308		)		236,957
Property and equipment, at cost	377,677			93,102			—				470,779
Accumulated depreciation	(106,253		)	(12,475		)	—				(118,728		)
Property and equipment, net	271,424			80,627			—				352,051
Deferred charges and other assets, net	1,632			—			—				1,632
Total assets	$	664,321		$	80,627		$	(154,308	)		$	590,640
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Current portion of capital lease obligations	$	1,084		$	—		$	—			$	1,084
Accounts payable	7,535			—			—				7,535
Accrued liabilities	518			—			—				518
Taxes other than income taxes	349			—			—				349
Deferred revenue from related party	748			—			—				748
Total current liabilities	10,234			—			—				10,234
Capital lease obligations, net of current portion	2,704			—			—				2,704
Deferred income taxes	822			163			(91		)	(b)	894
Other long-term liabilities	651			377			—				1,028
Total liabilities	14,411			540			(91		)		14,860
Partners’ capital:
Common unitholders – public (17,255,208 units issued and outstanding)	372,276			—			(91		)	(c)	372,185
Common unitholder – Valero (11,539,989 units issued and outstanding)	77,629			—			(20,586		)	(c)	57,043
Subordinated unitholder – Valero (28,789,989 units issued and outstanding)	193,672			—			(51,357		)	(c)	142,315
General partner – Valero (1,175,102 units issued and outstanding)	6,333			—			(2,096		)	(c)	4,237
Net investment	—			80,087			(80,087		)	(d)	—
Total partners’ capital	649,910			80,087			(154,217		)		575,780
Total liabilities and partners’ capital	$	664,321		$	80,627		$	(154,308	)		$	590,640

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

3

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

THREE MONTHS ENDED MARCH 31, 2014

(In Thousands)

(Unaudited)

	Historical			Acquired Assets		Pro Forma Adjustments				Pro Forma
Operating revenues – related party	$	21,531		$	7,958	$	(529	)	(e)	$	28,960
Costs and expenses:
Operating expenses	5,726			1,902		171			(f)	7,799
General and administrative expenses	2,595			437		(109		)	(g)	2,923
Depreciation expense	3,058			843		—				3,901
Total costs and expenses	11,379			3,182		62				14,623
Operating income	10,152			4,776		(591		)		14,337
Other income, net	648			18		—				666
Interest expense	(228		)	—		—				(228		)
Income before income taxes	10,572			4,794		(591		)		14,775
Income tax expense	90			67		(29		)	(b)	128
Net income	10,482			4,727		(562		)		14,647
Less: General partner’s interest in net income	210			95		(12		)		293
Limited partners’ interest in net income	$	10,272		$	4,632	$	(550	)		$	14,354
Net income per limited partner unit (basic and diluted):
Common units	$	0.18								$	0.25		(h)
Subordinated units	$	0.18								$	0.25		(h)
Weighted-average limited partner units outstanding:
Common units – public (basic)	17,250									17,250
Common units – public (diluted)	17,252									17,252
Common units – Valero (basic and diluted)	11,540									11,540
Subordinated units – Valero (basic and diluted)	28,790									28,790

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

4

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2013

(In Thousands)

	Historical			Acquired Assets		Pro Forma Adjustments				Pro Forma
	(Audited)			(Audited)
Operating revenues – related party	$	94,529		$	30,456	$	(335	)	(e)	$	124,650
Costs and expenses:
Operating expenses	24,751			7,454		683			(f)	32,888
General and administrative expenses	5,478			1,717		(404		)	(g)	6,791
Depreciation expense	13,073			3,183		—				16,256
Total costs and expenses	43,302			12,354		279				55,935
Operating income	51,227			18,102		(614		)		68,715
Other income, net	309			—		—				309
Interest expense	(198		)	—		—				(198		)
Income before income taxes	51,338			18,102		(614		)		68,826
Income tax expense	1,187			247		(31		)	(b)	1,403
Net income	50,151			17,855		(583		)		67,423
Less: Net income attributable to Predecessor	48,110			16,975		—				65,085
Net income attributable to partners	2,041			880		(583		)		2,338
Less: General partner’s interest in net income	41			17		(11		)		47
Limited partners’ interest in net income	$	2,000		$	863	$	(572	)		$	2,291
Net income per limited partner unit (basic and diluted):
Common units	$	0.03								$	0.04		(h)
Subordinated units	$	0.03								$	0.04		(h)
Weighted-average limited partner units outstanding (basic and diluted):
Common units – public	17,250									17,250
Common units – Valero	11,540									11,540
Subordinated units – Valero	28,790									28,790

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

5

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2012

(In Thousands)

	Historical			Acquired Assets		Pro Forma
	(Audited)			(Unaudited)
Operating revenues – related party	$	86,804		$	28,605	$	115,409
Operating revenues – third party	—			480		480
Total revenues	86,804			29,085		115,889
Costs and expenses:
Operating expenses	26,249			8,225		34,474
General and administrative expenses	5,016			1,530		6,546
Depreciation expense	12,881			3,669		16,550
Total costs and expenses	44,146			13,424		57,570
Operating income	42,658			15,661		58,319
Other income, net	337			—		337
Interest expense	(307		)	—		(307		)
Income before income taxes	42,688			15,661		58,349
Income tax expense	403			149		552
Net income	$	42,285		$	15,512	$	57,797

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

6

VALERO ENERGY PARTNERS LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2011

(In Thousands)

	Historical			Acquired Assets		Pro Forma
	(Audited)			(Unaudited)
Operating revenues – related party	$	73,136		$	17,797	$	90,933
Costs and expenses:
Operating expenses	26,373			6,622		32,995
General and administrative expenses	4,351			1,315		5,666
Depreciation expense	15,978			2,134		18,112
Total costs and expenses	46,702			10,071		56,773
Operating income	26,434			7,726		34,160
Other income, net	142			—		142
Interest expense	(429		)	—		(429		)
Income before income taxes	26,147			7,726		33,873
Income tax expense	311			73		384
Net income	$	25,836		$	7,653	$	33,489

See Notes to Unaudited Pro Forma Consolidated Financial Statements.

7

VALERO ENERGY PARTNERS LP

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(a) This adjustment reflects the following decreases to cash:

• payment of $154.0 million for the Acquired Assets.

• Payment of estimated transaction costs of $308,000 associated with the Acquisition, including legal services and consulting services.

(b) These adjustments reflect the entry to account for the increase in the tax basis for the Acquired Assets, which results in a reduced deferred tax liability and income tax expense.

(c) This adjustment reflects the following increases and decreases to partners’ capital:

• Increases to partners’ capital: the elimination of Valero’s net investment in the Acquired Assets and its reclassification to partners’ capital and the increase in tax basis for the Acquired Assets.

• Decreases to partners’ capital: payment of total consideration for the Acquired Assets of $154.0 million and estimated expenses and costs of the Acquisition of $308,000, including legal services and transaction consulting services

(d) This adjustment reflects the elimination of Valero’s net investment in the Acquired Assets, and its reclassification to partners’ capital.

(e) This adjustment reflects revenues associated with the execution of commercial agreements with Valero. Transportation, terminaling, and storage revenues were calculated using the tariff rates and fees in the commercial agreements to be entered into with Valero at the time of the Acquisition, which in some instances are lower than historical tariff rates. Volumes used were historical volumes transported on pipelines, terminaled, or stored in facilities included in the Acquired Assets’ combined financial statements.

(f) This adjustment reflects $171,000 for the three months ended March 31, 2014 and $683,000 for the year ended December 31, 2013 for insurance premiums in excess of those allocated by Valero in the Acquired Assets’ combined financial statements for business interruption, property, and third-party liability insurance coverage. The insurance premiums that we will incur are based on quotes from a Valero captive insurance company from which we will obtain insurance coverage.

(g) This adjustment reflects a net reduction to general and administrative expenses for the pro rata impact of the annual administrative fee payable by the Partnership to Valero. The annual administrative fee increased from $7.9 million to $9.3 million as of July 1, 2014, for the management of our day-to-day operations after the closing of the Acquisition under the amended and restated omnibus agreement. However, the pro rata impact of the administrative fee increase is less than the administrative expenses allocated to the Acquired Assets by Valero resulting in a net reduction to general and administrative expenses.

8

VALERO ENERGY PARTNERS LP

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(h) We compute net income per unit using the two-class method. Net income available to common and subordinated unitholders for purposes of the basic income per unit computation is allocated between the common and subordinated unitholders by applying the provisions of the partnership agreement as if all net income for the period had been distributed as cash. Under the two-class method, any excess of distributions declared over net income shall be allocated to the partners based on their respective sharing of income specified in the partnership agreement. For purposes of the pro forma calculation, we have assumed that distributions were declared for each common and subordinated unit equal to the minimum quarterly distribution for each quarter during 2013 and the first three months of 2014. Pro forma basic net income per unit is determined by dividing the pro forma net income available to common and subordinated unitholders of the Partnership by the number of common and subordinated units outstanding for the periods presented.

Pursuant to the partnership agreement, the general partner is entitled to receive certain incentive distributions that, when applying the provisions of the partnership agreement as if all net income for the period had been distributed as cash, will result in less net income allocable to common and subordinated unitholders provided that the net income exceeds certain targets. The incentive distribution rights are a separate equity interest and represent participating securities. No cash distributions would have been declared on the incentive distribution rights during the periods, based upon the assumption that distributions were declared equal to the minimum quarterly distribution.

9