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SEC Filings
NUSTAR ENERGY L.P. filed this Form 10-Q on 05/15/2002
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Item 2.  Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations

Certain Forward-Looking Statements

This quarterly report on Form 10-Q contains certain "forward-looking" statements
as such term is defined in Section 27A of the Securities Act of 1933 and Section
21E of the  Securities  Exchange Act of 1934,  and  information  relating to the
Partnership  that is based on the beliefs of management  as well as  assumptions
made by and  information  currently  available to management.  When used in this
report, the words "anticipate," "believe," "estimate," "expect" and "intend" and
words or phrases of similar  expressions,  as they relate to the  Partnership or
management,  identify  forward-looking  statements.  Such statements reflect the
current  views of  management  with respect to future  events and are subject to
certain  risks,  uncertainties  and  assumptions  relating to the operations and
results of operations,  including those relating to competitive  factors such as
competing pipelines, pricing pressures, changes in market conditions, reductions
in production at the refineries that the Partnership supplies with crude oil and
whose  refined  production  it  transports,   inability  to  acquire  additional
non-affiliated pipeline entities or assets, reductions in space allocated to the
Partnership in  interconnecting  third party pipelines,  shifts in market demand
and general economic conditions and other factors.

Should one or more of these risks or  uncertainties  materialize,  or should any
underlying  assumptions  prove  incorrect,  actual  results or outcomes may vary
materially from the forward-looking statements described herein.


The  Partnership's  results of operations  may be affected by seasonal  factors,
such as the demand  for  petroleum  products,  which  vary  during the year,  or
industry factors that may be specific to a particular period, such as the demand
for  refined  products,   industry  supply  capacity  and  refinery  maintenance

On February  1, 2002,  the  Partnership  acquired  the  Wichita  Falls Crude Oil
Pipeline and Storage  Business (the Wichita Falls  Business)  from Valero Energy
for a total cost of  $64,000,000.  Since the  acquisition  of the Wichita  Falls
Business  represents  the  transfer  of a business  under the common  control of
Valero  Energy,  the balance sheet as of December 31, 2001 (the earliest date on
which common  control  existed) and the  statements of income and cash flows for
the month ended  January 31, 2002  (preceding  the  acquisition  date) have been
restated to include the Wichita Falls Business.  As a result, the financial data
and  operating  data which follow under  "Results of  Operations"  represent the
consolidated  and combined results of Valero L.P.,  Valero Logistics  Operations
and the Wichita Falls Business as follows:
o    consolidated  results of the  Partnership  as of March 31, 2002 and for the
     two months ended March 31, 2002;
o    combined  results of the  Partnership  and the Wichita Falls Business as of
     December 31, 2001 and for the one month ended January 31, 2002; and
o    combined  results of Valero L.P. and Valero  Logistics  Operations  for the
     three months ended March 31, 2001.