EX-99.1 2 a13-10698_1ex99d1.htm EX-99.1

Exhibit 99.1

 

NuStar Energy Reports Increased Total Distributable Cash Flow in First Quarter of 2013

 

Quarterly Distribution Remains at $1.095 Per Unit

 

Construction on Second Rail Car Off-Loading Facility at St. James has Begun

 

SAN ANTONIO, April 24, 2013 — NuStar Energy L.P. (NYSE: NS) today announced first quarter distributable cash flow from continuing operations available to limited partners was $54.7 million, or $0.70 per unit, compared to 2012 first quarter distributable cash flow from continuing operations of $51.1 million, or $0.72 per unit.  First quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $91.6 million compared to first quarter 2012 EBITDA of $106.3 million.

 

NuStar Energy L.P. reported first quarter net income applicable to limited partners of $13.3 million, or $0.17 per unit, compared to $16.0 million, or $0.23 per unit, earned in the first quarter of 2012.

 

The partnership also announced that its board of directors has declared a first quarter 2013 distribution of $1.095 per unit.  The first quarter 2013 distribution will be paid on May 10, 2013, to holders of record as of May 6, 2013.  Distributable cash flow available to limited partners covers the distribution to the limited partners by 0.64 times for the first quarter of 2013.

 

“Recent growth in the Eagle Ford Shale region and the sale of 50% of our Asphalt Operations in the third quarter of 2012 contributed to improved distributable cash flow results during the quarter,” said Curt Anastasio, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.  “We expect our 2013 distributable cash flow results to be higher than last year.”

 

In regard to the first quarter performance Anastasio said, “Our pipeline segment continues to benefit from several internal growth projects completed in the Eagle Ford shale region during the past couple of years and the December 2012 crude oil asset acquisition from TexStar.  Throughputs on our Eagle Ford crude oil pipeline systems increased by 55% compared to the first quarter of 2012, however these increases were partially offset by lower throughputs on some other pipelines as a result of turnarounds at some of our customer’s refineries.”

 

Anastasio then added, “Internal growth projects completed at our St. James and St. Eustatius terminal facilities in 2012 and during the first quarter of 2013 benefited our storage segment.  However, these internal growth project benefits were more than offset by reduced demand for storage at several of our terminal facilities and the impact of the turnarounds and operating issues I mentioned earlier.”

 

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Anastasio then commented on the company’s fuels marketing segment by saying, “Primarily as a result of weak demand for bunkers and fuel oil, coupled with increased competition in the Caribbean, our fuels marketing segment generated a loss during the quarter.”

 

Addressing the recent strategic transformation of the company Anastasio stated, “Beginning in the first quarter of 2013 NuStar has less exposure to margin-based operations than we have had in several years.  This reduced margin-base exposure should lead to less volatile distributable cash flows in the future.”

 

Internal Growth Project Update

 

“Early in the first quarter we placed a total of 1.7 million barrels of new storage capacity in service at our St. Eustatius and St. James, Louisiana terminal facilities,” said Anastasio.  “We continue to work on a pipeline project for ConocoPhillips and continue to lay crude oil gathering lines that will supply additional crude oil volumes to our Eagle Ford crude oil pipeline system.  All of these projects are expected to contribute to 2013 storage and pipeline segment results.”

 

Anastasio went on to say, “NuStar recently began the construction of a second rail-car offloading facility at our St. James terminal with Great Northern Gathering & Marketing, LLC being a major customer.  This facility should be operational and contributing to our storage segment results in the fourth quarter of 2013.”

 

Full-Year 2013 Outlook

 

Commenting on the earnings outlook for 2013, Anastasio said, “We continue to expect the EBITDA results for all three of our segments to be higher than last year.  Our pipeline segment should benefit from our Eagle Ford Shale region internal growth pipeline projects completed in 2012 and later in 2013 as well as from the crude oil assets acquired from TexStar.  The storage segment is projected to benefit from the completion of the two rail car offloading projects at our St. James, Louisiana terminal and the recent completion of the storage expansion projects at our St. Eustatius terminal and our St. James, Louisiana terminal.  Our fuels marketing segment’s 2013 results should improve over the remainder of 2013 and as compared to 2012, primarily due to higher earnings in the bunkering and heavy fuel oil operations.”

 

Anastasio then said, “These higher 2013 segment results should also lead to higher distributable cash flow and an improved coverage ratio for the year.”

 

With regard to capital spending projections Anastasio added, “NuStar expects to spend $400 to $425 million on internal growth projects during 2013, primarily on projects in the Eagle Ford Shale, while our reliability capital spending should be in the range of $35 to $45 million.”

 

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A conference call with management is scheduled for 10:00 a.m. ET (9:00 a.m. CT) today, April 24, 2013, to discuss the financial and operational results for the first quarter of 2013.  Investors interested in listening to the presentation may call 800/622-7620, passcode 31554334.  International callers may access the presentation by dialing 706/645-0327, passcode 31554334.  The company intends to have a playback available following the presentation, which may be accessed by calling 800/585-8367, passcode 31554334.  International callers may access the playback by calling 404/537-3406, passcode 31554334.  A live broadcast of the conference call will also be available on the company’s Web site at www.nustarenergy.com.

 

NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, is one of the largest independent liquids terminal and pipeline operators in the nation.  NuStar currently has 8,621 miles of pipeline; 88 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids; and 50% ownership in a joint venture that owns a terminal and an asphalt refinery with a throughput capacity of 74,000 barrels per day.  The partnership’s combined system has approximately 97 million barrels of storage capacity, and NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, the United Kingdom and Turkey.  For more information, visit NuStar Energy L.P.’s Web site at www.nustarenergy.com.

 

This release serves as qualified notice to nominees under Treasury Regulation Sections 1.1446-4(b)(4) and (d).  Please note that 100% of NuStar’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business.  Accordingly, all of NuStar’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals and corporations, as applicable.  Nominees, and not NuStar, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.

 

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Cautionary Statement Regarding Forward-Looking Statements

 

This press release includes forward-looking statements regarding future events.  All forward-looking statements are based on the partnership and company’s beliefs as well as assumptions made by and information currently available to the partnership and company.  These statements reflect the partnership and company’s current views with respect to future events and are subject to various risks, uncertainties and assumptions.  These risks, uncertainties and assumptions are discussed in NuStar Energy L.P. and NuStar GP Holdings, LLC’s 2012 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.

 

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NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information

(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Statement of Income Data (Note 1):

 

 

 

 

 

Revenues:

 

 

 

 

 

Service revenues

 

$

227,283

 

$

209,719

 

Product sales

 

772,427

 

1,399,686

 

Total revenues

 

999,710

 

1,609,405

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of product sales

 

752,254

 

1,354,530

 

Operating expenses

 

117,574

 

125,114

 

General and administrative expenses

 

27,494

 

27,167

 

Depreciation and amortization expense

 

42,926

 

43,575

 

Total costs and expenses

 

940,248

 

1,550,386

 

Operating income

 

59,462

 

59,019

 

Equity in (loss) earnings of joint ventures

 

(11,143

)

2,386

 

Interest expense, net

 

(30,113

)

(21,377

)

Other income, net

 

368

 

1,367

 

Income from continuing operations before income tax expense

 

18,574

 

41,395

 

Income tax expense

 

2,536

 

3,443

 

Income from continuing operations

 

16,038

 

37,952

 

Income from discontinued operations

 

8,366

 

(11,698

)

Net income

 

$

24,404

 

$

26,254

 

 

 

 

 

 

 

Net income applicable to limited partners

 

$

13,268

 

$

16,008

 

 

 

 

 

 

 

Net income (loss) per unit applicable to limited partners:

 

 

 

 

 

Continuing operations

 

$

0.06

 

$

0.39

 

Discontinued operations

 

0.11

 

(0.16

)

Total

 

$

0.17

 

$

0.23

 

 

 

 

 

 

 

Weighted average limited partner units outstanding

 

77,886,078

 

70,756,078

 

 

 

 

 

 

 

EBITDA from continuing operations (Note 2)

 

$

91,613

 

$

106,347

 

 

 

 

 

 

 

Distributable cash flow from continuing operations (Note 2)

 

$

67,423

 

$

62,674

 

 

 

 

March31,

 

December31,

 

 

 

2013

 

2012

 

Balance Sheet Data:

 

 

 

 

 

Debt, including current portion (a)

 

$

2,418,317

 

$

2,411,004

 

Partners’ equity (b)

 

2,509,180

 

2,584,995

 

Debt-to-capitalization ratio (a) / ((a)+(b))

 

49.1

%

48.3

%

 


 

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Segment Data:

 

 

 

 

 

Storage:

 

 

 

 

 

Throughput (barrels/day)

 

669,604

 

739,076

 

Throughput revenues

 

$

22,361

 

$

22,264

 

Storage lease revenues

 

121,958

 

123,165

 

Total revenues

 

144,319

 

145,429

 

Operating expenses

 

68,710

 

65,982

 

Depreciation and amortization expense

 

24,431

 

23,300

 

Segment operating income

 

$

51,178

 

$

56,147

 

 

 

 

 

 

 

Pipeline:

 

 

 

 

 

Refined products pipelines throughput (barrels/day)

 

471,294

 

491,570

 

Crude oil pipelines throughput (barrels/day)

 

351,193

 

330,081

 

Total throughput (barrels/day)

 

822,487

 

821,651

 

Revenues

 

$

93,277

 

$

77,761

 

Operating expenses

 

37,406

 

27,564

 

Depreciation and amortization expense

 

15,990

 

12,981

 

Segment operating income

 

$

39,881

 

$

37,216

 

 

 

 

 

 

 

Fuels marketing:

 

 

 

 

 

Product sales

 

$

773,008

 

$

1,403,260

 

Cost of product sales

 

758,732

 

1,360,518

 

Gross margin

 

14,276

 

42,742

 

Operating expenses

 

15,862

 

42,655

 

Depreciation and amortization expense

 

7

 

5,480

 

Segment operating loss

 

$

(1,593

)

$

(5,393

)

 

 

 

 

 

 

Consolidation and intersegment eliminations:

 

 

 

 

 

Revenues

 

$

(10,894

)

$

(17,045

)

Cost of product sales

 

(6,478

)

(5,988

)

Operating expenses

 

(4,404

)

(11,087

)

Total

 

$

(12

)

$

30

 

 

 

 

 

 

 

Consolidated Information:

 

 

 

 

 

Revenues

 

$

999,710

 

$

1,609,405

 

Cost of product sales

 

752,254

 

1,354,530

 

Operating expenses

 

117,574

 

125,114

 

Depreciation and amortization expense

 

40,428

 

41,761

 

Segment operating income

 

89,454

 

88,000

 

General and administrative expenses

 

27,494

 

27,167

 

Other depreciation and amortization expense

 

2,498

 

1,814

 

Consolidated operating income

 

$

59,462

 

$

59,019

 

 


 

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Per Unit Data)

 

Notes:

1.              The results of operations for the San Antonio Refinery and related assets have been reported as discontinued operations for all periods presented.

 

2.              NuStar Energy L.P. utilizes two financial measures, EBITDA from continuing operations and distributable cash flow from continuing operations, which are not defined in United States generally accepted accounting principles.  Management uses these financial measures because they are widely accepted financial indicators used by investors to compare partnership performance.  In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the partnership’s assets and the cash that the business is generating.  Neither EBITDA from continuing operations nor distributable cash flow from continuing operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income from continuing operations.  They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

 

The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and distributable cash flow from continuing operations:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Income from continuing operations

 

$

16,038

 

$

37,952

 

Plus interest expense, net

 

30,113

 

21,377

 

Plus income tax expense

 

2,536

 

3,443

 

Plus depreciation and amortization expense

 

42,926

 

43,575

 

EBITDA from continuing operations

 

91,613

 

106,347

 

Equity in loss (earnings) of joint ventures

 

11,143

 

(2,386

)

Interest expense, net

 

(30,113

)

(21,377

)

Reliability capital expenditures

 

(5,742

)

(4,628

)

Income tax expense

 

(2,536

)

(3,443

)

Distributions from joint venture

 

4,652

 

—

 

Mark-to-market impact on hedge transactions (a)

 

(1,594

)

(11,839

)

Distributable cash flow from continuing operations

 

67,423

 

62,674

 

 

 

 

 

 

 

Distributable cash flow from continuing operations attributable to noncontrolling interest

 

(92

)

2

 

Distributable cash flow from continuing operations available to general partner

 

12,766

 

11,598

 

Distributable cash flow from continuing operations available to limited partners

 

$

54,749

 

$

51,074

 

 

 

 

 

 

 

Distributable cash flow from continuing operations per limited partner unit

 

$

0.70

 

$

0.72

 

 

(a)         Distributable cash flow from continuing operations excludes the impact of unrealized mark-to-market gains and losses that arise from valuing certain derivative contracts, as well as the associated hedged inventory.  The gain or loss associated with these contracts is realized in distributable cash flow from continuing operations when the contracts are settled.