News Release
NuStar Energy Covers Quarterly Distribution for the First Time Since the Third Quarter of 2011
On Track to Cover Distribution for the Full Year 2014
Quarterly Results improved in all Three Operating Segments
17% increase in Quarterly Pipeline Throughput Volumes
Second quarter earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations was
The partnership reported second quarter net income applicable to limited
partners of
The partnership also announced that its board of directors has declared
a second quarter 2014 distribution of
“All three of our operating segments continued to perform well in the
second quarter,” said
Barron went on to say, “Our coverage ratio in the second quarter was our highest since the third quarter of 2011 and was better than we initially projected. Higher than expected throughput volumes in both our pipeline and storage segments, as well as the deferral of some maintenance expenses and reliability capital spending to the back half of 2014 helped drive the coverage ratio to 1.10 times.”
Internal Growth Project Update
Phase 2 of the South Texas Crude Oil Pipeline expansion is expected to
come on line during the first quarter of 2015 and will allow for
increased throughputs of up to 65,000 barrels per day. NuStar’s 12-inch
pipeline between
2014 Earnings Guidance
“NuStar’s third quarter EPU and EBITDA results as well as our coverage ratio should exceed last year’s third quarter results. Similar to the second quarter, third quarter EBITDA results in our pipeline, storage and fuels marketing segments are all expected to be higher than last year’s third quarter,” said Barron.
“In regard to full year 2014 guidance, we still expect our pipeline
segment EBITDA to be
Barron went on to say, “Our 2014 internal growth spending projections
have been reduced slightly to reflect the deferral of spending on some
of our key growth projects into 2015. Spending is now expected to be in
the range of
Second Quarter 2014 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.
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
NuStar Energy L.P. and Subsidiaries | ||||||||||||||||
Consolidated Financial Information | ||||||||||||||||
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Statement of Income Data: | ||||||||||||||||
Revenues: | ||||||||||||||||
Service revenues | $ | 259,562 | $ | 231,451 | $ | 488,900 | $ | 457,210 | ||||||||
Product sales | 490,183 | 670,563 | 1,110,058 | 1,442,990 | ||||||||||||
Total revenues | 749,745 | 902,014 | 1,598,958 | 1,900,200 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of product sales | 473,755 | 648,766 | 1,068,714 | 1,401,020 | ||||||||||||
Operating expenses | 115,537 | 111,315 | 221,602 | 224,832 | ||||||||||||
General and administrative expenses | 23,163 | 19,653 | 44,019 | 47,147 | ||||||||||||
Depreciation and amortization expense | 47,936 | 45,308 | 94,166 | 86,871 | ||||||||||||
Total costs and expenses | 660,391 | 825,042 | 1,428,501 | 1,759,870 | ||||||||||||
Operating income | 89,354 | 76,972 | 170,457 | 140,330 | ||||||||||||
Equity in earnings (loss) of joint ventures | 3,294 | (10,128 | ) | (1,012 | ) | (21,271 | ) | |||||||||
Interest expense, net | (33,122 | ) | (31,035 | ) | (67,539 | ) | (62,026 | ) | ||||||||
Interest income from related party | — | 1,610 | 1,055 | 2,732 | ||||||||||||
Other (expense) income, net | (474 | ) | 2,184 | 3,204 | 2,528 | |||||||||||
Income from continuing operations before income tax expense |
59,052 | 39,603 | 106,165 | 62,293 | ||||||||||||
Income tax expense | 1,865 | 4,891 | 5,982 | 7,982 | ||||||||||||
Income from continuing operations | 57,187 | 34,712 | 100,183 | 54,311 | ||||||||||||
(Loss) income from discontinued operations, net of tax (Note 1) |
(1,788 | ) | (1,743 | ) | (5,147 | ) | 3,062 | |||||||||
Net income | $ | 55,399 | $ | 32,969 | $ | 95,036 | $ | 57,373 | ||||||||
Net income applicable to limited partners | $ | 43,599 | $ | 21,619 | $ | 71,743 | $ | 34,887 | ||||||||
Net income (loss) per unit applicable to limited partners: | ||||||||||||||||
Continuing operations | $ | 0.58 | $ | 0.30 | $ | 0.98 | $ | 0.40 | ||||||||
Discontinued operations (Note 1) | (0.02 | ) | (0.02 | ) | (0.06 | ) | 0.05 | |||||||||
Total | $ | 0.56 | $ | 0.28 | $ | 0.92 | $ | 0.45 | ||||||||
Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | 77,886,078 | 77,886,078 | ||||||||||||
EBITDA from continuing operations (Note 2) | $ | 140,110 | $ | 114,336 | $ | 266,815 | $ | 208,458 | ||||||||
DCF from continuing operations (Note 2) | $ | 106,321 | $ | 69,565 | $ | 197,033 | $ | 139,451 | ||||||||
June 30, | December 31, | |||||||||||||||
2014 | 2013 | 2013 | ||||||||||||||
Balance Sheet Data: | ||||||||||||||||
Long-term debt | $ | 2,726,629 | $ | 2,500,948 |
$ |
2,655,553 | ||||||||||
Partners’ equity | $ | 1,809,359 | $ | 2,440,266 |
$ |
1,903,794 | ||||||||||
Consolidated debt coverage ratio (Note 3) | 4.0x | 4.3x | 4.4x |
NuStar Energy L.P. and Subsidiaries | ||||||||||||||||
Consolidated Financial Information - Continued | ||||||||||||||||
(Unaudited, Thousands of Dollars, Except Barrel Data) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Pipeline: | ||||||||||||||||
Refined products pipelines throughput (barrels/day) | 521,391 | 459,663 | 497,315 | 465,446 | ||||||||||||
Crude oil pipelines throughput (barrels/day) | 427,122 | 350,850 | 393,457 | 351,021 | ||||||||||||
Total throughput (barrels/day) | 948,513 | 810,513 | 890,772 | 816,467 | ||||||||||||
Throughput revenues | $ | 117,798 | $ | 96,976 | $ | 220,757 | $ | 190,253 | ||||||||
Operating expenses | 38,072 | 29,101 | 69,689 | 66,507 | ||||||||||||
Depreciation and amortization expense | 19,490 | 16,648 | 37,842 | 32,638 | ||||||||||||
Segment operating income | $ | 60,236 | $ | 51,227 | $ | 113,226 | $ | 91,108 | ||||||||
Storage: | ||||||||||||||||
Throughput (barrels/day) | 894,194 | 813,345 | 857,967 | 741,872 | ||||||||||||
Throughput revenues | $ | 31,216 | $ | 26,626 | $ | 58,686 | $ | 48,987 | ||||||||
Storage lease revenues | 113,770 | 116,053 | 218,866 | 235,369 | ||||||||||||
Total revenues | 144,986 | 142,679 | 277,552 | 284,356 | ||||||||||||
Operating expenses | 69,091 | 72,212 | 134,358 | 136,865 | ||||||||||||
Depreciation and amortization expense | 25,888 | 26,055 | 51,180 | 49,123 | ||||||||||||
Segment operating income | $ | 50,007 | $ | 44,412 | $ | 92,014 | $ | 98,368 | ||||||||
Fuels Marketing: | ||||||||||||||||
Product sales and other revenue | $ | 493,651 | $ | 670,604 | $ | 1,114,622 | $ | 1,443,612 | ||||||||
Cost of product sales | 477,830 | 654,202 | 1,077,305 | 1,412,934 | ||||||||||||
Gross margin | 15,821 | 16,402 | 37,317 | 30,678 | ||||||||||||
Operating expenses | 10,996 | 12,964 | 22,927 | 28,826 | ||||||||||||
Depreciation and amortization expense | 4 | 6 | 11 | 13 | ||||||||||||
Segment operating income | $ | 4,821 | $ | 3,432 | $ | 14,379 | $ | 1,839 | ||||||||
Consolidation and Intersegment Eliminations: | ||||||||||||||||
Revenues | $ | (6,690 | ) | $ | (8,245 | ) | $ | (13,973 | ) | $ | (18,021 | ) | ||||
Cost of product sales | (4,075 | ) | (5,436 | ) | (8,591 | ) | (11,914 | ) | ||||||||
Operating expenses | (2,622 | ) | (2,962 | ) | (5,372 | ) | (7,366 | ) | ||||||||
Total | $ | 7 | $ | 153 | $ | (10 | ) | $ | 1,259 | |||||||
Consolidated Information: | ||||||||||||||||
Revenues | $ | 749,745 | $ | 902,014 | $ | 1,598,958 | $ | 1,900,200 | ||||||||
Cost of product sales | 473,755 | 648,766 | 1,068,714 | 1,401,020 | ||||||||||||
Operating expenses | 115,537 | 111,315 | 221,602 | 224,832 | ||||||||||||
Depreciation and amortization expense | 45,382 | 42,709 | 89,033 | 81,774 | ||||||||||||
Segment operating income | 115,071 | 99,224 | 219,609 | 192,574 | ||||||||||||
General and administrative expenses | 23,163 | 19,653 | 44,019 | 47,147 | ||||||||||||
Other depreciation and amortization expense | 2,554 | 2,599 | 5,133 | 5,097 | ||||||||||||
Consolidated operating income | $ | 89,354 | $ | 76,972 | $ | 170,457 | $ | 140,330 | ||||||||
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
(2)
The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and DCF from continuing operations:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Income from continuing operations | $ | 57,187 | $ | 34,712 | $ | 100,183 | $ | 54,311 | ||||||||
Plus interest expense, net and interest income from related party |
33,122 | 29,425 | 66,484 | 59,294 | ||||||||||||
Plus income tax expense | 1,865 | 4,891 | 5,982 | 7,982 | ||||||||||||
Plus depreciation and amortization expense | 47,936 | 45,308 | 94,166 | 86,871 | ||||||||||||
EBITDA from continuing operations | 140,110 | 114,336 | 266,815 | 208,458 | ||||||||||||
Equity in (earnings) loss of joint ventures | (3,294 | ) | 10,128 | 1,012 | 21,271 | |||||||||||
Interest expense, net and interest income from related party |
(33,122 | ) | (29,425 | ) | (66,484 | ) | (59,294 | ) | ||||||||
Reliability capital expenditures | (7,239 | ) | (10,987 | ) | (11,998 | ) | (16,464 | ) | ||||||||
Income tax expense | (1,865 | ) | (4,891 | ) | (5,982 | ) | (7,982 | ) | ||||||||
Distributions from joint ventures | 728 | — | 3,094 | 4,652 | ||||||||||||
Other items (a) | 4,311 | (6,500 | ) | 3,869 | (6,500 | ) | ||||||||||
Mark-to-market impact of hedge transactions (b) | 6,692 | (3,096 | ) | 6,707 | (4,690 | ) | ||||||||||
DCF from continuing operations | $ | 106,321 | $ | 69,565 | $ | 197,033 | $ | 139,451 | ||||||||
Less DCF from continuing operations available to
general partner |
12,766 | 12,766 | 25,532 | 25,532 | ||||||||||||
DCF from continuing operations available to
limited partners |
$ | 93,555 | $ | 56,799 | $ | 171,501 | $ | 113,919 | ||||||||
DCF from continuing operations per limited partner unit | $ | 1.20 | $ | 0.73 | $ | 2.20 | $ | 1.46 |
(a) For 2014, other items consist of a net increase in deferred revenue
associated with throughput deficiency payments and construction
reimbursements. For 2013, other items consist of a
(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.
(3) The consolidated debt coverage ratio is calculated as consolidated
indebtedness to consolidated EBITDA, as defined in our
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