News Release
NuStar Energy Covers Distribution in the Fourth Quarter and for the Full-Year 2014
2014 EBITDA and DCF Highest in Partnership’s History
Pipeline and Storage Segment Throughput Volumes Increase to Record Levels in the Fourth Quarter
Recently Closed on Immediately Accretive Transaction to Acquire
Full Ownership in
“2014 was a great year for NuStar,” said
“Record throughput volumes in both our pipeline and storage segments,
the renewal of eight million barrels of storage at two key storage
facilities, the completion of Phase 1 of our South Texas Crude Oil
Pipeline Expansion and our new state-of-the-art dock in
Barron went on to say, “Earlier this month, we announced that we
acquired the remaining 50% interest in a refined products terminal in
Fourth Quarter and Full Year Earnings Results
Fourth quarter earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations were
The partnership reported fourth quarter net income applicable to limited
partners of
For the year ended
The partnership also announced that its board of directors has declared
a fourth quarter 2014 distribution of
2015 Earnings Guidance
“First quarter 2015 EBITDA results for our pipeline and storage segments
should be higher than last year’s first quarter. Both segments should
continue to benefit from increased throughput volumes from Phase 1 of
our South Texas Crude Oil Pipeline System, which came online in the
second quarter of 2014, while our storage segment will also benefit from
incremental EBITDA associated with our recent acquisition of the
Commenting on full-year 2015 guidance, Barron said, “Our pipeline
segment EBITDA should be
With regard to capital spending projections for 2015, Barron went on to
say, “We plan to spend
Fourth Quarter Earnings Conference Call Details
A conference call with management is scheduled for
Investors interested in listening to the live presentation or a replay via the internet may access the presentation directly by clicking here or by logging on to NuStar Energy L.P.’s Web site at www.nustarenergy.com.
The presentation will disclose certain non-GAAP financial measures.
Reconciliations of certain of these non-GAAP financial measures to U.S.
GAAP may be found in this press release, with additional reconciliations
located on the Financials page of the Investors section of
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 Energy L.P.’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, such as the partnership’s future performance. All
forward-looking statements are based on the partnership’s beliefs as
well as assumptions made by and information currently available to the
partnership. These statements reflect the partnership’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.’s and
| NuStar Energy L.P. and Subsidiaries | |||||||||||||||||
| Consolidated Financial Information | |||||||||||||||||
| (Unaudited, Thousands of Dollars, Except Unit and Per Unit Data) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Statement of Income Data: | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Service revenues | $ | 270,895 | $ | 237,216 | $ | 1,026,446 | $ | 938,138 | |||||||||
| Product sales | 410,843 | 548,171 | 2,048,672 | 2,525,594 | |||||||||||||
| Total revenues | 681,738 | 785,387 | 3,075,118 | 3,463,732 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of product sales | 389,020 | 525,760 | 1,967,528 | 2,453,997 | |||||||||||||
| Operating expenses | 135,359 | 112,463 | 472,925 | 454,396 | |||||||||||||
| General and administrative expenses | 27,070 | 25,108 | 96,056 | 91,086 | |||||||||||||
| Depreciation and amortization expense | 48,943 | 45,805 | 191,708 | 178,921 | |||||||||||||
| Goodwill impairment loss | — | 304,453 | — | 304,453 | |||||||||||||
| Total costs and expenses | 600,392 | 1,013,589 | 2,728,217 | 3,482,853 | |||||||||||||
| Operating income (loss) | 81,346 | (228,202 | ) | 346,901 | (19,121 | ) | |||||||||||
| Equity in earnings (loss) of joint ventures | 3,059 | (13,341 | ) | 4,796 | (39,970 | ) | |||||||||||
| Interest expense, net | (31,735 | ) | (34,270 | ) | (131,226 | ) | (127,119 | ) | |||||||||
| Interest income from related party | — | 1,553 | — | 6,113 | |||||||||||||
| Other income, net | 2,683 | 3,424 | 4,499 | 7,341 | |||||||||||||
|
Income (loss) from continuing operations before
income tax expense |
55,353 | (270,836 | ) | 224,970 | (172,756 | ) | |||||||||||
| Income tax expense | 484 | 4,666 | 10,801 | 12,753 | |||||||||||||
| Income (loss) from continuing operations | 54,869 | (275,502 | ) | 214,169 | (185,509 | ) | |||||||||||
| Loss from discontinued operations, net of tax (Note 1) | (1,475 | ) | (99,778 | ) | (3,791 | ) | (99,162 | ) | |||||||||
| Net income (loss) | $ | 53,394 | $ | (375,280 | ) | $ | 210,378 | $ | (284,671 | ) | |||||||
| Net income (loss) applicable to limited partners | $ | 41,522 | $ | (368,327 | ) | $ | 163,339 | $ | (311,516 | ) | |||||||
| Net income (loss) per unit applicable to limited partners | |||||||||||||||||
| Continuing operations | $ | 0.55 | $ | (3.60 | ) | $ | 2.14 | $ | (2.89 | ) | |||||||
| Discontinued operations (Note 1) | (0.01 | ) | (1.13 | ) | (0.04 | ) | (1.11 | ) | |||||||||
| Total | $ | 0.54 | $ | (4.73 | ) | $ | 2.10 | $ | (4.00 | ) | |||||||
| Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | 77,886,078 | 77,886,078 | |||||||||||||
| EBITDA from continuing operations (Note 2) | $ | 136,031 | $ | (192,314 | ) | $ | 547,904 | $ | 127,171 | ||||||||
| DCF from continuing operations (Note 2) | $ | 108,173 | $ | 88,115 | $ | 405,890 | $ | 308,877 | |||||||||
| December 31, | |||||||||||||||||
| 2014 | 2013 | ||||||||||||||||
| Balance Sheet Data: | |||||||||||||||||
| Debt, including current portion (a) | $ | 2,826,452 | $ | 2,655,553 | |||||||||||||
| Partners’ equity (b) | 1,716,210 | 1,903,794 | |||||||||||||||
| Consolidated debt coverage ratio (Note 3) | 4.0x | 4.4x | |||||||||||||||
| NuStar Energy L.P. and Subsidiaries | |||||||||||||||||
| Consolidated Financial Information - Continued | |||||||||||||||||
| (Unaudited, Thousands of Dollars, Except Barrel Data) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Pipeline: | |||||||||||||||||
| Refined products pipelines throughput (barrels/day) | 533,521 | 514,975 | 510,737 | 487,021 | |||||||||||||
| Crude oil pipelines throughput (barrels/day) | 490,969 | 377,937 | 437,757 | 365,749 | |||||||||||||
| Total throughput (barrels/day) | 1,024,490 | 892,912 | 948,494 | 852,770 | |||||||||||||
| Throughput revenues | $ | 130,812 | $ | 109,768 | $ | 477,030 | $ | 411,529 | |||||||||
| Operating expenses | 44,421 | 31,769 | 154,106 | 134,365 | |||||||||||||
| Depreciation and amortization expense | 20,036 | 18,832 | 77,691 | 68,871 | |||||||||||||
| Segment operating income | $ | 66,355 | $ | 59,167 | $ | 245,233 | $ | 208,293 | |||||||||
| Storage: | |||||||||||||||||
| Throughput (barrels/day) | 918,929 | 807,414 | 887,607 | 781,213 | |||||||||||||
| Throughput revenues | $ | 31,867 | $ | 27,629 | $ | 123,051 | $ | 104,553 | |||||||||
| Storage lease revenues | 111,142 | 105,956 | 441,455 | 451,996 | |||||||||||||
| Total revenues | 143,009 | 133,585 | 564,506 | 556,549 | |||||||||||||
| Operating expenses | 74,952 | 71,596 | 277,554 | 279,712 | |||||||||||||
| Depreciation and amortization expense | 26,368 | 24,439 | 103,848 | 99,868 | |||||||||||||
| Goodwill and asset impairment loss | — | 304,453 | — | 304,453 | |||||||||||||
| Segment operating income (loss) | $ | 41,689 | $ | (266,903 | ) | $ | 183,104 | $ | (127,484 | ) | |||||||
| Fuels Marketing: | |||||||||||||||||
| Product sales | $ | 414,205 | $ | 549,167 | $ | 2,060,017 | $ | 2,527,698 | |||||||||
| Cost of product sales | 392,734 | 530,197 | 1,983,339 | 2,474,612 | |||||||||||||
| Gross margin | 21,471 | 18,970 | 76,678 | 53,086 | |||||||||||||
| Operating expenses | 18,563 | 11,849 | 51,857 | 53,185 | |||||||||||||
| Depreciation and amortization expense | — | 7 | 16 | 27 | |||||||||||||
| Segment operating income (loss) | $ | 2,908 | $ | 7,114 | $ | 24,805 | $ | (126 | ) | ||||||||
| Consolidation and Intersegment Eliminations: | |||||||||||||||||
| Revenues | $ | (6,288 | ) | $ | (7,133 | ) | $ | (26,435 | ) | $ | (32,044 | ) | |||||
| Cost of product sales | (3,714 | ) | (4,437 | ) | (15,811 | ) | (20,615 | ) | |||||||||
| Operating expenses | (2,577 | ) | (2,751 | ) | (10,592 | ) | (12,866 | ) | |||||||||
| Total | $ | 3 | $ | 55 | $ | (32 | ) | $ | 1,437 | ||||||||
| Consolidated Information: | |||||||||||||||||
| Revenues | $ | 681,738 | $ | 785,387 | $ | 3,075,118 | $ | 3,463,732 | |||||||||
| Cost of product sales | 389,020 | 525,760 | 1,967,528 | 2,453,997 | |||||||||||||
| Operating expenses | 135,359 | 112,463 | 472,925 | 454,396 | |||||||||||||
| Depreciation and amortization expense | 46,404 | 43,278 | 181,555 | 168,766 | |||||||||||||
| Goodwill and asset impairment loss | — | 304,453 | — | 304,453 | |||||||||||||
| Segment operating income (loss) | 110,955 | (200,567 | ) | 453,110 | 82,120 | ||||||||||||
| General and administrative expenses | 27,070 | 25,108 | 96,056 | 91,086 | |||||||||||||
| Other depreciation and amortization expense | 2,539 | 2,527 | 10,153 | 10,155 | |||||||||||||
| Consolidated operating income (loss) | $ | 81,346 | $ | (228,202 | ) | $ | 346,901 | $ | (19,121 | ) | |||||||
|
NuStar Energy L.P. and Subsidiaries |
||
|
Consolidated Financial Information - Continued |
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|
(Unaudited, Thousands of Dollars, Except Per Unit Data) |
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|
Notes: |
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| (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, DCF from continuing operations per unit, adjusted net income and adjusted net income per unit (EPU), which are not defined in U.S. generally accepted accounting principles (GAAP). 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, DCF from continuing operations per unit, adjusted net income and adjusted EPU 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 GAAP. For purposes of segment reporting, we do not allocate general and administrative expenses to our reported operating segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the segment reconciliations exclude any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. | |
| The following is a reconciliation of income (loss) from continuing operations to EBITDA from continuing operations and DCF from continuing operations: | ||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Income (loss) from continuing operations | $ | 54,869 | $ | (275,502 | ) | $ | 214,169 | $ | (185,509 | ) | |||||||
|
Plus interest expense, net and interest income from related party |
31,735 | 32,717 | 131,226 | 121,006 | |||||||||||||
| Plus income tax expense | 484 | 4,666 | 10,801 | 12,753 | |||||||||||||
| Plus depreciation and amortization expense | 48,943 | 45,805 | 191,708 | 178,921 | |||||||||||||
| EBITDA from continuing operations | 136,031 | (192,314 | ) | 547,904 | 127,171 | ||||||||||||
| Equity in (earnings) loss of joint ventures | (3,059 | ) | 13,341 | (4,796 | ) | 39,970 | |||||||||||
| Interest expense, net and interest income from related party | (31,735 | ) | (32,717 | ) | (131,226 | ) | (121,006 | ) | |||||||||
| Reliability capital expenditures | (10,373 | ) | (11,600 | ) | (28,635 | ) | (39,939 | ) | |||||||||
| Income tax expense | (484 | ) | (4,666 | ) | (10,801 | ) | (12,753 | ) | |||||||||
| Distributions from joint ventures | 1,708 | 2,169 | 7,587 | 7,956 | |||||||||||||
| Other items (a) | 11,686 | 315,718 | 19,732 | 311,675 | |||||||||||||
| Mark-to-market impact on hedge transactions (b) | 4,399 | (1,816 | ) | 6,125 | (4,197 | ) | |||||||||||
| DCF from continuing operations | $ | 108,173 | $ | 88,115 | $ | 405,890 | $ | 308,877 | |||||||||
|
Less DCF from continuing operations available to general partner |
12,766 | 12,766 | 51,064 | 51,064 | |||||||||||||
|
DCF from continuing operations available to limited partners |
$ | 95,407 | $ | 75,349 | $ | 354,826 | $ | 257,813 | |||||||||
|
DCF from continuing operations per limited partner unit |
$ | 1.23 | $ | 0.97 | $ | 4.56 | $ | 3.31 | |||||||||
| (a) | Other items for the three months and year ended December 31, 2014 mainly consist of (i) a net increase in deferred revenue associated with throughput deficiency payments and construction reimbursements and (ii) a lower of cost or market adjustment of $3.8 million. Other items for the three months and year ended December 31, 2013 mainly consist of (i) a non-cash goodwill impairment charge totaling $304.5 million and (ii) an increase in deferred revenue associated with throughput deficiency payments and construction reimbursements received in the period. | |
| (b) | 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. | |
|
NuStar Energy L.P. and Subsidiaries |
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| Consolidated Financial Information - Continued | |||||||||||||||||
| (Unaudited, Thousands of Dollars, Except Per Unit Data) | |||||||||||||||||
| Notes (continued): | |||||||||||||||||
|
The following is a reconciliation of net loss and EPU to adjusted net income and EPU: |
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|
Three Months Ended December 31, 2013 |
Year Ended December 31, 2013 |
||||||||||||||||
| Net loss / EPU | $ | (375,280 | ) | $ | (4.73 | ) | $ | (284,671 | ) | $ | (4.00 | ) | |||||
| Certain adjustments: | |||||||||||||||||
| Goodwill and asset impairment loss | 406,982 | 4.99 | 406,982 | 4.99 | |||||||||||||
| Gain on sale of certain assets | — | — | (9,295 | ) | (0.12 | ) | |||||||||||
| Other adjustments | (3,387 | ) | (0.05 | ) | (8,928 | ) | (0.12 | ) | |||||||||
| Total certain adjustments | 403,595 | 4.94 | 388,759 | 4.75 | |||||||||||||
| Adjusted net income | 28,315 | 104,088 | |||||||||||||||
| GP interest and incentive and noncontrolling interest | (11,751 | ) | (45,251 | ) | |||||||||||||
| Adjusted net income / EPU applicable to limited partners | $ | 16,564 | $ | 0.21 | $ | 58,837 | $ | 0.75 | |||||||||
The following is a reconciliation of projected incremental operating
income to projected incremental EBITDA for the year ended
| Pipeline Segment | Storage Segment | ||||||
| Projected incremental operating income | $ | 15,000 - 30,000 | $ | 5,000 - 20,000 | |||
| Plus projected incremental depreciation and amortization expense | 10,000 - 15,000 | 5,000 - 10,000 | |||||
| Projected incremental EBITDA | $ | 25,000 - 45,000 | $ | 10,000 - 30,000 | |||
The following is a reconciliation of projected operating income to projected EBITDA for our fuels marketing segment:
|
Year Ended |
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| Projected operating income | $ | 20,000 - 30,000 | ||
| Plus projected depreciation and amortization expense | — | |||
| Projected EBITDA | $ | 20,000 - 30,000 | ||
| (3) | The consolidated debt coverage ratio is calculated as consolidated debt 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)
