
10.	PARTNERS’ CAPITAL

Unit Activity

Activity in the number of units was as follows:



	Common				General Partner
	Public	Valero	Subordinated		General Partner	Total
Balance as of December 31, 2014	17,255,208	11,539,989	28,789,989		1,175,102	58,760,288
Unit-based compensation	4,443	—	—		—	4,443
Units issued in connection with acquisitions (see Note 2)	—	3,478,613	—		70,992	3,549,605
Unit issuance	4,250,000	—	—		—	4,250,000
General partner units issued to maintain 2% interest	—	—	—		86,735	86,735
Balance as of December 31, 2015	21,509,651	15,018,602	28,789,989		1,332,829	66,651,071
Unit-based compensation	5,958	—	—		—	5,958
Units issued in connection with acquisitions (see Note 2)	—	1,878,680	—		38,340	1,917,020
Conversion of subordinated units	—	28,789,989	(28,789,989	)	—	—
Units issued under ATM Program	223,083	—	—		—	223,083
General partner units issued to maintain 2% interest	—	—	—		4,552	4,552
Balance as of December 31, 2016	21,738,692	45,687,271	—		1,375,721	68,801,684
Unit-based compensation (see Note 11)	5,997	—	—		—	5,997
Units issued in connection with acquisitions (see Note 2)	—	1,081,315	—		22,068	1,103,383
Units issued under ATM Program	742,897	—	—		—	742,897
General partner units issued to maintain 2% interest	—	—	—		15,602	15,602
Balance as of December 31, 2017	22,487,586	46,768,586	—		1,413,391	70,669,563

ATM Program

On September 16, 2016, we entered into an equity distribution agreement pursuant to which we may offer and sell from time to time our common units having an aggregate offering price of up to $350.0 million based on amounts, at prices, and on terms to be determined by market conditions and other factors at the time of our offerings (such continuous offering program, or at-the-market program, referred to as our “ATM Program”). As of December 31, 2017, we have sold common units having an aggregate value of $45.5 million under our ATM Program, resulting in $304.5 million remaining available.

The following table summarizes activities of the common units issued under our ATM Program and general partner units issued to maintain the 2.0 percent general partner interest in the Partnership (in thousands, except unit amounts):



	Units Issued	Total Proceeds		Offering Costs		Net Proceeds
Year ended December 31, 2017:
Common – public	742,897	$	35,728	$	594	$	35,134
General partner	15,602	748		—		748

Year ended December 31, 2016:
Common – public	223,083	9,724		107		9,617
General partner	4,552	198		—		198

The 2015 Offering

On November 24, 2015, we completed a public offering (the 2015 Offering) of 4,250,000 of our common units at a price of $46.25 per unit and received gross proceeds of $196.6 million. After deducting the underwriting discount and other offering costs totaling $7.7 million, our net proceeds were $188.9 million. Concurrent with the 2015 Offering, our general partner contributed $4.0 million in exchange for 86,735 general partner units to maintain its 2.0 percent general partner interest in the Partnership.

Subordinated Unit Conversion

The requirements under our partnership agreement for the conversion of all of our outstanding subordinated units into common units were satisfied upon the payment of our quarterly cash distribution on August 9, 2016. Therefore, effective August 10, 2016, all of our subordinated units, which were owned by Valero, were converted on a one-for-one basis into common units. The conversion of the subordinated units does not impact the amount of cash distributions paid or the total number of outstanding units.

Transfers to (from) Partners

Subsequent to the expiration of the subordination period on August 10, 2016, all of our common units have equal rights, including rights to distributions and to our net assets in the event of liquidation. As a result, a reallocation of the carrying values of our public common unitholders’ interest in us and Valero’s common unitholder interest in us is required when a change in ownership occurs in order for the portion of those carrying values associated with activity subsequent to the subordination period to be equal to the respective unitholders’ ownership interests (in units) in us. The transfers to (from) partners resulted from the issuance of equity to Valero in connection with our acquisitions from Valero (as described in Note 2) and the issuance of equity under our ATM Program.