UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2008 (April 22, 2008)
NuStar Energy L.P.
(Exact name of registrant as specified in its charter)
Delaware | 001-16417 | 74-2956831 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
2330 North Loop 1604 West
San Antonio, Texas 78248
(Address of principal executive offices)
(210) 918-2000
(Registrants telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
The purpose of this Form 8-K/A is to correct the earnings information previously provided by NuStar Energy L.P. on April 22, 2008. This Form 8-K/A replaces the consolidated financial information tables furnished with the Current Report on Form 8-K filed by NuStar Energy L.P. on April 22, 2008. The revised consolidated financial information tables are furnished as Exhibit 99.1 hereto and are incorporated by reference herein.
As corrected, NuStar Energy L.P.s first quarter 2008 net income applicable to limited partners was $49.7 million, or $1.01 per unit, which is $2.1 million, or $0.04 per unit less than previously reported. As corrected, first quarter 2008 results continue to represent the highest quarterly earnings in the partnerships history and the previously announced quarterly distribution of $0.985 per unit, payable on May 14, 2008 to unitholders of record on May 7, 2008, remains unchanged.
This correction is principally due to an error in the accounting for our physical barrels of refined product inventories that qualify for hedge accounting under Statement of Financial Accounting Standards No. 133.
The information in this report is being furnished, not filed, pursuant to Item 2.02 of Form 8-K. Accordingly, the information in this report, including the consolidated financial information, will not be incorporated by reference into any registration statement filed by NuStar Energy under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
NON-GAAP FINANCIAL MEASURES
The consolidated financial information discloses certain financial measures, EBITDA, distributable cash flow, and distributable cash flow per unit, that are non-GAAP financial measures as defined under SEC rules. The consolidated financial information furnishes a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. 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 partnerships assets and the cash that the business is generating. Neither EBITDA, distributable cash flow, nor distributable cash flow per unit are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from 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.
Item 9.01 | Financial Statements and Exhibits. |
(c) | Exhibits. |
99.1 | Revised Consolidated Financial Information for the quarter ended March 31, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NUSTAR ENERGY L.P. | ||||||||||
By: | Riverwalk Logistics, L.P. its general partner | |||||||||
By: | NuStar GP, LLC its general partner | |||||||||
Date: April 28, 2008 | By: | /s/ Bradley C. Barron | ||||||||
Name: | Bradley C. Barron | |||||||||
Title: | Secretary |
Exhibit 99.1
NuStar Energy L.P.
Consolidated Financial Information
March 31, 2008 and 2007
(unaudited, thousands of dollars, except unit data and per unit data)
Three Months Ended March 31, |
||||||||
2008 | 2007 | |||||||
REVISED | ||||||||
Statement of Income Data: |
||||||||
Revenues: |
||||||||
Service revenues |
$ | 180,116 | $ | 160,353 | ||||
Product sales |
412,658 | 136,471 | ||||||
Total revenues |
592,774 | 296,824 | ||||||
Costs and expenses: |
||||||||
Cost of product sales |
393,009 | 127,927 | ||||||
Operating expenses |
88,450 | 81,212 | ||||||
General and administrative expenses |
16,083 | 14,908 | ||||||
Depreciation and amortization expense |
30,046 | 27,342 | ||||||
Total costs and expenses |
527,588 | 251,389 | ||||||
Operating income |
65,186 | 45,435 | ||||||
Equity earnings from joint ventures |
2,201 | 1,611 | ||||||
Interest expense, net |
(16,865 | ) | (18,854 | ) | ||||
Other income, net |
9,909 | 6,623 | ||||||
Income before income tax expense |
60,431 | 34,815 | ||||||
Income tax expense |
4,562 | 3,692 | ||||||
Net income |
55,869 | 31,123 | ||||||
Less net income applicable to general partner (Note 1) |
(6,202 | ) | (4,454 | ) | ||||
Net income applicable to limited partners |
$ | 49,667 | $ | 26,669 | ||||
Net income per unit applicable to limited partners (Note 1) |
$ | 1.01 | $ | 0.57 | ||||
Weighted average number of basic units outstanding |
49,409,749 | 46,809,749 | ||||||
EBITDA (Note 2) |
$ | 107,342 | $ | 81,011 | ||||
Distributable cash flow (Note 2) |
$ | 73,339 | $ | 52,228 | ||||
March 31, 2008 |
December 31, 2007 |
|||||||
REVISED | ||||||||
Balance Sheet Data: |
||||||||
Debt, including current portion (a) |
$ | 2,203,299 | $ | 1,446,289 | ||||
Partners' equity (b) |
1,992,448 | 1,994,832 | ||||||
Debt-to-capitalization ratio (a) / ((a)+(b)) |
52.5 | % | 42.0 | % |
NuStar Energy L.P.
Consolidated Financial InformationContinued
March 31, 2008 and 2007
(unaudited, thousands of dollars, except barrel information)
Three Months Ended March 31, |
||||||||
2008 | 2007 | |||||||
REVISED | ||||||||
Operating Data: |
||||||||
Refined product terminals: (Note 3) |
||||||||
Throughput (barrels/day) |
291,762 | 241,774 | ||||||
Throughput revenues |
$ | 13,498 | $ | 11,737 | ||||
Storage lease revenues |
83,708 | 73,864 | ||||||
Total revenues |
97,206 | 85,601 | ||||||
Operating expenses |
51,663 | 50,810 | ||||||
Depreciation and amortization expense |
14,021 | 13,188 | ||||||
Segment operating income |
$ | 31,522 | $ | 21,603 | ||||
Refined product pipelines: (Note 3) |
||||||||
Throughput (barrels/day) |
694,772 | 616,728 | ||||||
Revenues |
$ | 60,745 | $ | 53,424 | ||||
Operating expenses |
25,918 | 24,365 | ||||||
Depreciation and amortization expense |
11,368 | 11,008 | ||||||
Segment operating income |
$ | 23,459 | $ | 18,051 | ||||
Crude oil pipelines: |
||||||||
Throughput (barrels/day) |
405,964 | 347,617 | ||||||
Revenues |
$ | 15,034 | $ | 12,349 | ||||
Operating expenses |
3,939 | 3,373 | ||||||
Depreciation and amortization expense |
1,237 | 1,233 | ||||||
Segment operating income |
$ | 9,858 | $ | 7,743 | ||||
Crude oil storage tanks: |
||||||||
Throughput (barrels/day) |
503,489 | 539,214 | ||||||
Revenues |
$ | 11,907 | $ | 10,813 | ||||
Operating expenses |
2,335 | 2,770 | ||||||
Depreciation and amortization expense |
1,930 | 1,913 | ||||||
Segment operating income |
$ | 7,642 | $ | 6,130 | ||||
Refining and marketing: (Note 3) |
||||||||
Product sales |
$ | 412,658 | $ | 136,471 | ||||
Cost of product sales |
396,182 | 129,043 | ||||||
Operating expenses |
6,218 | 612 | ||||||
Depreciation and amortization expense |
688 | | ||||||
Segment operating income |
$ | 9,570 | $ | 6,816 | ||||
Consolidation and intersegment eliminations: |
||||||||
Revenues |
$ | (4,776 | ) | $ | (1,834 | ) | ||
Cost of product sales |
(3,173 | ) | (1,116 | ) | ||||
Operating expenses |
(1,623 | ) | (718 | ) | ||||
Depreciation and amortization expense |
802 | | ||||||
Total |
$ | (782 | ) | $ | | |||
Consolidated information: |
||||||||
Revenues |
$ | 592,774 | $ | 296,824 | ||||
Cost of product sales |
393,009 | 127,927 | ||||||
Operating expenses |
88,450 | 81,212 | ||||||
Depreciation and amortization expense |
30,046 | 27,342 | ||||||
Segment operating income |
81,269 | 60,343 | ||||||
General and administrative expenses |
16,083 | 14,908 | ||||||
Consolidated operating income |
$ | 65,186 | $ | 45,435 | ||||
NuStar Energy L.P.
Consolidated Financial InformationContinued
March 31, 2008 and 2007
(unaudited, thousands of dollars, except unit data and per unit data)
Notes:
1. | Net income is allocated between limited partners and the general partner's interests based on provisions in the partnership agreement. The net income applicable to limited partners is divided by the weighted average number of limited partnership units outstanding in computing the net income per unit applicable to limited partners. The following table details the calculation of net income applicable to the general partner: |
Three Months Ended March 31, |
||||||||
2008 | 2007 | |||||||
REVISED | ||||||||
Net income applicable to general partner and limited partners' interest |
$ | 55,869 | $ | 31,123 | ||||
General partner incentive distribution |
5,188 | 3,910 | ||||||
Net income after general partner incentive distribution |
50,681 | 27,213 | ||||||
General partner interest |
2 | % | 2 | % | ||||
General partner allocation of net income after general partner incentive distribution |
1,014 | 544 | ||||||
General partner incentive distribution |
5,188 | 3,910 | ||||||
Net income applicable to general partner |
$ | 6,202 | $ | 4,454 | ||||
2. | NuStar Energy L.P. utilizes two financial measures, EBITDA and distributable cash flow, 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 nor distributable cash flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income. 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 net income to EBITDA and distributable cash flow:
Three Months Ended March 31, |
||||||||
2008 | 2007 | |||||||
REVISED | ||||||||
Net income |
$ | 55,869 | $ | 31,123 | ||||
Plus interest expense, net |
16,865 | 18,854 | ||||||
Plus income tax expense |
4,562 | 3,692 | ||||||
Plus depreciation and amortization expense |
30,046 | 27,342 | ||||||
EBITDA |
107,342 | 81,011 | ||||||
Less equity earnings from joint ventures |
(2,201 | ) | (1,611 | ) | ||||
Less interest expense, net |
(16,865 | ) | (18,854 | ) | ||||
Less reliability capital expenditures |
(7,704 | ) | (4,626 | ) | ||||
Less income tax expense |
(4,562 | ) | (3,692 | ) | ||||
Plus distributions from joint ventures |
500 | | ||||||
Mark-to-market impact on hedge transactions (a) |
(3,171 | ) | | |||||
Distributable cash flow |
73,339 | 52,228 | ||||||
General partner's interest in distributable cash flow |
(6,929 | ) | (4,864 | ) | ||||
Limited partners' interest in distributable cash flow |
$ | 66,410 | $ | 47,364 | ||||
Weighted average number of limited partnership units outstanding |
49,409,749 | 46,809,749 | ||||||
Distributable cash flow per limited partner unit |
$ | 1.344 | $ | 1.012 |
(a) | Distributable cash flow excludes the impact of mark-to-market gains and losses which arise from valuing certain derivative contracts that are considered economic hedges. We enter into these contracts to mitigate our exposure to price fluctuations related to our inventory. |
3. | The refining and marketing segment includes our two asphalt refineries, which we acquired on March 20, 2008, as well as our marketing and trading operations. During the fourth quarter of 2007, we revised the manner in which we internally evaluate our segment performance and made certain organizational changes. As a result, we changed the way we report our segmental information such that all product sales and related costs and assets are included in the refining and marketing segment. Previous periods have been restated to conform to this presentation. |