News Release
NuStar Energy Announces Increased EPU, EBITDA and Distributable Cash Flow Results in First Quarter of 2014
Meets Analysts’ Consensus Expectations
Reports Highest Distributable Cash Flow Since 1st Quarter 2009
Reports Highest 1st Quarter Coverage Ratio Since 1st Quarter 2009
Phase 1 of the South Texas Crude Oil Pipeline Expansion Nears Completion
The partnership also announced that its board of directors has declared
a first quarter 2014 distribution of
“NuStar’s first quarter EPU and distributable cash flow results were our
strongest first quarter results since 2009,” said
“During the first quarter, we took steps to improve NuStar’s
profitability by divesting our remaining interest in the asphalt joint
venture and by finalizing several agreements related to our pipeline and
terminal operations. In February, we announced the signing of a
long-term agreement with
Internal Growth Project Update
In mid-February, NuStar completed the construction of a private marine
loading dock at its
Phase 1 of the South Texas Crude Oil Pipeline expansion is scheduled to start service in May of 2014 and will allow for increased throughputs of 35,000 barrels per day. Phase 2, which will allow for an additional 65,000 barrels per day, is expected to come on line during the first quarter of 2015.
NuStar’s 12-inch pipeline between
2014 Earnings Guidance
“NuStar’s second quarter EPU and EBITDA results as well as our coverage ratio should also exceed last year’s second quarter results. EBITDA results in our pipeline and fuels marketing segments are expected to be higher than last year’s second quarter primarily due to increased pipeline throughputs and improved results in our bunkering operations. Second quarter storage segment results are expected to be down slightly compared to the same quarter last year,” said Barron.
“Reaffirming the 2014 guidance we provided in February, we expect our
pipeline segment EBITDA to be
Barron went on to say, “We expect to spend
First Quarter 2014 Earnings Conference Call Details
A conference call with management is scheduled for
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
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
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NuStar Energy L.P. and Subsidiaries Consolidated Financial Information (Unaudited, Thousands of Dollars, Except Unit and Per Unit Data) |
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| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| Statement of Income Data (Note 1): | ||||||||
| Revenues: | ||||||||
| Service revenues | $ | 229,338 | $ | 225,759 | ||||
| Product sales | 619,875 | 772,427 | ||||||
| Total revenues | 849,213 | 998,186 | ||||||
| Costs and expenses: | ||||||||
| Cost of product sales | 594,959 | 752,254 | ||||||
| Operating expenses | 106,065 | 113,517 | ||||||
| General and administrative expenses | 20,856 | 27,494 | ||||||
| Depreciation and amortization expense | 46,230 | 41,563 | ||||||
| Total costs and expenses | 768,110 | 934,828 | ||||||
| Operating income | 81,103 | 63,358 | ||||||
| Equity in loss of joint ventures | (4,306 | ) | (11,143 | ) | ||||
| Interest expense, net | (34,417 | ) | (30,991 | ) | ||||
| Interest income from related party | 1,055 | 1,122 | ||||||
| Other income, net | 3,678 | 344 | ||||||
| Income from continuing operations before income tax expense | 47,113 | 22,690 | ||||||
| Income tax expense | 4,117 | 3,091 | ||||||
| Income from continuing operations | 42,996 | 19,599 | ||||||
| (Loss) income from discontinued operations, net of tax | (3,359 | ) | 4,805 | |||||
| Net income | $ | 39,637 | $ | 24,404 | ||||
| Net income applicable to limited partners | $ | 28,144 | $ | 13,268 | ||||
| Net income (loss) per unit applicable to limited partners: | ||||||||
| Continuing operations | $ | 0.40 | $ | 0.10 | ||||
| Discontinued operations | (0.04 | ) | 0.07 | |||||
| Total | $ | 0.36 | $ | 0.17 | ||||
| Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | ||||||
| EBITDA from continuing operations (Note 2) | $ | 126,705 | $ | 94,122 | ||||
| DCF from continuing operations (Note 2) | $ | 90,712 | $ | 69,886 | ||||
| March 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| Balance Sheet Data: | ||||||||
| Long-term debt | $ | 2,710,117 | $ | 2,655,553 | ||||
| Partners’ equity | $ | 1,843,484 | $ | 1,903,794 | ||||
| Consolidated debt coverage ratio (Note 3) | 4.4x | 4.4x | ||||||
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NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (Unaudited, Thousands of Dollars, Except Barrel Data) |
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| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| Pipeline: | ||||||||
| Refined products pipelines throughput (barrels/day) | 472,971 | 471,294 | ||||||
| Crude oil pipelines throughput (barrels/day) | 359,418 | 351,193 | ||||||
| Total throughput (barrels/day) | 832,389 | 822,487 | ||||||
| Throughput revenues | $ | 102,959 | $ | 93,277 | ||||
| Operating expenses | 31,617 | 37,406 | ||||||
| Depreciation and amortization expense | 18,352 | 15,990 | ||||||
| Segment operating income | $ | 52,990 | $ | 39,881 | ||||
| Storage: | ||||||||
| Throughput (barrels/day) | 821,338 | 669,604 | ||||||
| Throughput revenues | $ | 27,470 | $ | 22,361 | ||||
| Storage lease revenues | 105,096 | 119,316 | ||||||
| Total revenues | 132,566 | 141,677 | ||||||
| Operating expenses | 65,267 | 64,653 | ||||||
| Depreciation and amortization expense | 25,292 | 23,068 | ||||||
| Segment operating income | $ | 42,007 | $ | 53,956 | ||||
| Fuels Marketing: | ||||||||
| Product sales | $ | 620,971 | $ | 773,008 | ||||
| Cost of product sales | 599,475 | 758,732 | ||||||
| Gross margin | 21,496 | 14,276 | ||||||
| Operating expenses | 11,931 | 15,862 | ||||||
| Depreciation and amortization expense | 7 | 7 | ||||||
| Segment operating income (loss) | $ | 9,558 | $ | (1,593 | ) | |||
| Consolidation and Intersegment Eliminations: | ||||||||
| Revenues | $ | (7,283 | ) | $ | (9,776 | ) | ||
| Cost of product sales | (4,516 | ) | (6,478 | ) | ||||
| Operating expenses | (2,750 | ) | (4,404 | ) | ||||
| Total | $ | (17 | ) | $ | 1,106 | |||
| Consolidated Information: | ||||||||
| Revenues | $ | 849,213 | $ | 998,186 | ||||
| Cost of product sales | 594,959 | 752,254 | ||||||
| Operating expenses | 106,065 | 113,517 | ||||||
| Depreciation and amortization expense | 43,651 | 39,065 | ||||||
| Segment operating income | 104,538 | 93,350 | ||||||
| General and administrative expenses | 20,856 | 27,494 | ||||||
| Other depreciation and amortization expense | 2,579 | 2,498 | ||||||
| Consolidated operating income | $ | 81,103 | $ | 63,358 | ||||
Consolidated
Financial Information - Continued
(Unaudited, Thousands of
Dollars, Except Per Unit Data)
Notes:
| (1) | The results of operations for the following have been reported as discontinued operations for all periods presented: (i) the San Antonio Refinery and related assets, which we sold on January 1, 2013, and (ii) certain storage assets that were classified as “Assets held for sale” on the consolidated balance sheet as of December 31, 2013. | |
| (2) | NuStar Energy L.P. utilizes financial measures, earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, distributable cash flow (DCF) from continuing operations and DCF from continuing operations per unit, which are not defined in U.S. 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. None of EBITDA from continuing operations, DCF from continuing operations or DCF from continuing operations per unit are intended to represent cash flows from operations for the period, nor are they presented as an alternative to net income or income from continuing operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with U.S. generally accepted accounting principles. | |
| The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and DCF from continuing operations: |
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| Income from continuing operations | $ | 42,996 | $ | 19,599 | ||||
| Plus interest expense, net and interest income from related party | 33,362 | 29,869 | ||||||
| Plus income tax expense | 4,117 | 3,091 | ||||||
| Plus depreciation and amortization expense | 46,230 | 41,563 | ||||||
| EBITDA from continuing operations | 126,705 | 94,122 | ||||||
| Equity in loss of joint ventures | 4,306 | 11,143 | ||||||
| Interest expense, net and interest income from related party | (33,362 | ) | (29,869 | ) | ||||
| Reliability capital expenditures | (4,759 | ) | (5,477 | ) | ||||
| Income tax expense | (4,117 | ) | (3,091 | ) | ||||
| Distributions from joint ventures | 2,366 | 4,652 | ||||||
| Other items | (442 | ) | — | |||||
| Mark-to-market impact on hedge transactions (a) | 15 | (1,594 | ) | |||||
| DCF from continuing operations | $ | 90,712 | $ | 69,886 | ||||
| Less DCF from continuing operations available to general partner | 12,766 | 12,766 | ||||||
| DCF from continuing operations available to limited partners | $ | 77,946 | $ | 57,120 | ||||
| DCF from continuing operations per limited partner unit | $ | 1.00 | $ | 0.73 | ||||
| (a) | DCF 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 DCF from continuing operations when the contracts are settled. | |||
| (3) | The consolidated debt coverage ratio is calculated as consolidated indebtedness to consolidated EBITDA, as defined in our $1.5 billion five-year revolving credit agreement. | |||
Source:
NuStar Energy, L.P., San Antonio
Investors, Chris Russell,
Treasurer and Vice President Investor Relations
Investor Relations:
210-918-3507
or
Media, Mary Rose Brown, Executive Vice
President,
Corporate Communications: 210-918-2314
Web site: http://www.nustarenergy.com
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210-918-INVR (4687)
