News Release
NuStar Energy L.P. and NuStar GP Holdings, LLC Announce Merger Agreement, Anticipated Distribution Reset and Earnings Results for Fourth Quarter 2017
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Under the terms of the definitive agreement, NSH unitholders would
receive 0.55 of a Partnership common unit in exchange for each NSH unit
they own at closing, representing a premium of approximately 1.7% based
on the closing prices of the Partnership’s common units and of NSH’s
units on
“After much discussion and deliberation, the NS and NSH Boards reached
an agreement to simplify in a way that we believe will allow us to
capitalize on attractive growth opportunities and to best manage our
business over the long term,” said
Board Chairman
“NuStar has a bright future. We have great assets, great management and great employees. We just completed a major acquisition in the Permian, which I feel will transform the company. It is meeting, and in some cases, exceeding our expectations and will continue to be a great platform for growth. The simplification and reset will enhance our ability to fund that growth with cash generated by our operations as well as through our enhanced access to lower cost capital. The economy is strong and oil prices are strengthening, so we should see our earnings increase and our unit value go up, which should set the stage for strong distribution growth going forward,” said Greehey.
Barron noted that the merger is expected to provide many benefits to current Partnership unitholders and, upon exchange of their NSH units for Partnership common units at closing of the merger, current NSH unitholders, including:
- lowering the Partnership’s long-term cost of capital through the permanent elimination of the incentive distribution rights, allowing the Partnership to enhance its cash accretion from investments in organic growth projects and acquisitions;
- attracting a broader investor base to a single, larger entity;
- allowing the Partnership to maintain its competitive position when pursuing growth opportunities by increasing access to the equity markets, while simultaneously decreasing the need to access the equity markets;
- simplifying the Partnership’s structure, which reduces complexity and enhances transparency for investors;
-
reducing general and administrative costs by approximately
$1 million per year primarily from eliminating public company expenses associated with NSH; - maintaining the Partnership’s financial flexibility as the unit-for-unit exchange finances 100% of the purchase with the Partnership’s equity; and
- providing the Partnership’s unitholders the right to elect all of its directors.
The merger also provides NSH unitholders with:
- liquidity and less volatility by exchanging NSH units for Partnership common units;
- an opportunity to benefit from potential price appreciation and increased distributions through ownership of Partnership common units, which should benefit from the lower cost of capital associated with the permanent cancellation of the incentive distribution rights; and
-
a premium of 1.7% through the exchange of 0.55 of a Partnership common
unit for each NSH unit based on closing prices for both equity
securities on
February 7, 2018 .
The completion of the merger is subject to the approval of holders of at
least a majority of the outstanding NSH units and other closing
conditions, and is expected to occur during the second quarter of 2018.
The merger agreement may be terminated by either NSH or the Partnership
if the merger has not closed on or prior to
The terms of the merger agreement were unanimously approved by NSH’s Conflicts Committee and by the Partnership’s Nominating/Governance & Conflicts Committee, each comprised solely of independent directors, and were approved by both NSH’s board of directors and the Partnership’s board of directors (in each case with Mr. Greehey and Mr. Barron recusing themselves).
Financial advisors for this transaction were
Distribution Reset
Additionally, on
“A fundamental shift has occurred in the makeup of the investor base for
MLPs, which has tightened MLP equity markets and access to equity to
finance important capital projects needed to grow and increase long-term
unitholder value,” said Barron. “In addition to the difficulty in the
MLP sector, NuStar’s base business was significantly impacted last year
from the combination of a series of destructive hurricanes, unexpected
turnarounds at our customers’ refineries and a large, unanticipated
reliability project on our ammonia line. And recently, with the widely
reported economic strife in
“Simultaneously, we have witnessed a paradigm shift in market sentiment away from strong growth fueled by continuous equity issuances to a market sentiment that favors strong distribution coverage and rewards MLPs for low leverage, less dependency on the equity markets, and increased self-funding of capital projects. So given the headwinds in our base business, and the changed market sentiment, we buckled down and put together an actionable plan, just as we did in 2014 when the dramatic plunge in crude prices reverberated throughout the energy industry,” said Barron. “We undertook a thorough, systematic analysis of our best path forward, taking into account the new MLP market priorities and limitations and our current strengths and challenges.
“As we carefully considered all the alternatives, in every scenario, a distribution reset was a necessary part of the overall prescription to position us for the future,” said Barron. “Resetting NuStar Energy’s distribution will improve our coverage ratio immediately, and in the longer term, the reset will also serve to reduce both our leverage and our future needs to access the capital markets.
Earnings Results for Fourth Quarter 2017 for the Partnership In Line with Guidance
For the fourth quarter of 2017, the Partnership reported a net loss
applicable to common limited partners of
Distributable cash flow (DCF) available to common limited partners was
Earnings before interest, taxes, depreciation and amortization (EBITDA)
were
Absent certain fourth quarter 2016 adjustments pertaining to a non-cash
write-down on the carrying value of a term loan held by Axeon Specialty
Products in conjunction with its sale of the asphalt marketing business
that
“Our 4th quarter 2017 and full-year 2017 EBITDA results in our pipeline
and storage segments were higher quarter-over-quarter and year-over-year
when compared to 2016,” said Barron. “These higher results were largely
the result of contributions from our Permian crude system and our
“In the 4th quarter of 2017 and in
As previously announced on
Earnings Results for Fourth Quarter 2017 for NSH
NSH today announced fourth quarter 2017 net income of
As previously announced on
Final Comments
“As evidenced by these earnings results, the simplification and reset are needed to allow NuStar to compete with the growing number of our peers who have already made such structural adjustments,” said Barron.
“We are confident that the combination of the simplification and the reset will provide us with the financial strength and flexibility to compete for good projects and position us to increase unitholder value, as we have in the past, and for many years to come,” he concluded.
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 at https://edge.media-server.com/m6/p/yrns5949
or by logging on to either NuStar Energy L.P.’s website at www.nustarenergy.com
or
The discussion 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
About
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
Important Information For Investors And Unitholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval. The proposed merger and related transactions between
the Partnership and NSH will be submitted to the unitholders of NSH for
their consideration. The Partnership will file with the
The Partnership and its general partner, the directors and certain of
the executive officers of
Cautionary Statement Regarding Forward-Looking Statements
This press release includes, and the related conference call will
include, forward-looking statements regarding future events, such as the
Partnership’s future performance. All statements, other than statements
of historical fact, included herein that address activities, events or
developments that
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, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Service revenues | $ | 283,462 | $ | 268,438 | $ | 1,128,726 | $ | 1,083,165 | ||||||||||||
Product sales | 167,073 | 203,319 | 685,293 | 673,517 | ||||||||||||||||
Total revenues | 450,535 | 471,757 | 1,814,019 | 1,756,682 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of product sales | 161,236 | 191,917 | 651,599 | 633,653 | ||||||||||||||||
Operating expenses | 115,654 | 113,052 | 449,670 | 448,367 | ||||||||||||||||
General and administrative expenses | 29,038 | 25,418 | 112,240 | 98,817 | ||||||||||||||||
Depreciation and amortization expense | 70,589 | 55,997 | 264,232 | 216,736 | ||||||||||||||||
Total costs and expenses | 376,517 | 386,384 | 1,477,741 | 1,397,573 | ||||||||||||||||
Operating income | 74,018 | 85,373 | 336,278 | 359,109 | ||||||||||||||||
Interest expense, net | (45,801 | ) | (34,976 | ) | (173,083 | ) | (138,350 | ) | ||||||||||||
Other expense, net | (396 | ) | (58,773 | ) | (5,294 | ) | (58,783 | ) | ||||||||||||
Income (loss) before income tax expense | 27,821 | (8,376 | ) | 157,901 | 161,976 | |||||||||||||||
Income tax expense | 2,639 | 2,680 | 9,937 | 11,973 | ||||||||||||||||
Net income (loss) | $ | 25,182 | $ | (11,056 | ) | $ | 147,964 | $ | 150,003 | |||||||||||
Net (loss) income applicable to common limited partners | $ | (330 | ) | $ | (24,342 | ) | $ | 56,791 | $ | 99,068 | ||||||||||
Basic and diluted net (loss) income per common unit: | $ | — | $ | (0.31 | ) | $ | 0.64 | $ | 1.27 | |||||||||||
Basic weighted-average common units outstanding | 93,079,324 | 78,514,363 | 88,825,964 | 78,080,484 | ||||||||||||||||
Other Data (Note 1): | ||||||||||||||||||||
EBITDA | $ | 144,211 | $ | 82,597 | $ | 595,216 | $ | 517,062 | ||||||||||||
DCF available to common limited partners | $ | 41,672 | $ | 87,697 | $ | 257,855 | $ | 365,157 | ||||||||||||
December 31, | ||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Total debt | $ | 3,648,059 | $ | 3,068,364 | ||||||||||||||||
Partners’ equity | $ | 2,480,089 | $ | 1,611,617 | ||||||||||||||||
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, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Pipeline: | ||||||||||||||||||||
Refined products pipelines throughput (barrels/day) | 494,354 | 546,878 | 516,736 | 535,946 | ||||||||||||||||
Crude oil pipelines throughput (barrels/day) | 682,511 | 374,170 | 583,323 | 392,181 | ||||||||||||||||
Total throughput (barrels/day) | 1,176,865 | 921,048 | 1,100,059 | 928,127 | ||||||||||||||||
Throughput revenues | $ | 130,882 | $ | 122,721 | $ | 516,288 | $ | 485,650 | ||||||||||||
Operating expenses | 41,698 | 37,364 | 156,432 | 147,858 | ||||||||||||||||
Depreciation and amortization expense | 36,404 | 23,858 | 128,061 | 89,554 | ||||||||||||||||
Segment operating income | $ | 52,780 | $ | 61,499 | $ | 231,795 | $ | 248,238 | ||||||||||||
Storage: | ||||||||||||||||||||
Throughput (barrels/day) | 353,617 | 789,369 | 325,194 | 789,065 | ||||||||||||||||
Throughput terminal revenues | $ | 21,995 | $ | 29,279 | $ | 85,927 | $ | 117,586 | ||||||||||||
Storage terminal revenues | 130,897 | 118,723 | 531,026 | 492,456 | ||||||||||||||||
Total revenues | 152,892 | 148,002 | 616,953 | 610,042 | ||||||||||||||||
Operating expenses | 70,516 | 69,695 | 270,041 | 276,578 | ||||||||||||||||
Depreciation and amortization expense | 32,068 | 30,002 | 127,473 | 118,663 | ||||||||||||||||
Segment operating income | $ | 50,308 | $ | 48,305 | $ | 219,439 | $ | 214,801 | ||||||||||||
Fuels Marketing: | ||||||||||||||||||||
Product sales and other revenue | $ | 168,801 | $ | 205,435 | $ | 692,884 | $ | 681,934 | ||||||||||||
Cost of product sales | 163,122 | 194,650 | 660,844 | 645,355 | ||||||||||||||||
Gross margin | 5,679 | 10,785 | 32,040 | 36,579 | ||||||||||||||||
Operating expenses | 3,593 | 7,661 | 26,057 | 33,173 | ||||||||||||||||
Segment operating income | $ | 2,086 | $ | 3,124 | $ | 5,983 | $ | 3,406 | ||||||||||||
Consolidation and Intersegment Eliminations: | ||||||||||||||||||||
Revenues | $ | (2,040 | ) | $ | (4,401 | ) | $ | (12,106 | ) | $ | (20,944 | ) | ||||||||
Cost of product sales | (1,886 | ) | (2,733 | ) | (9,245 | ) | (11,702 | ) | ||||||||||||
Operating expenses | (153 | ) | (1,668 | ) | (2,860 | ) | (9,242 | ) | ||||||||||||
Total | $ | (1 | ) | $ | — | $ | (1 | ) | $ | — | ||||||||||
Consolidated Information: | ||||||||||||||||||||
Revenues | $ | 450,535 | $ | 471,757 | $ | 1,814,019 | $ | 1,756,682 | ||||||||||||
Cost of product sales | 161,236 | 191,917 | 651,599 | 633,653 | ||||||||||||||||
Operating expenses | 115,654 | 113,052 | 449,670 | 448,367 | ||||||||||||||||
Depreciation and amortization expense | 68,472 | 53,860 | 255,534 | 208,217 | ||||||||||||||||
Segment operating income | 105,173 | 112,928 | 457,216 | 466,445 | ||||||||||||||||
General and administrative expenses | 29,038 | 25,418 | 112,240 | 98,817 | ||||||||||||||||
Other depreciation and amortization expense | 2,117 | 2,137 | 8,698 | 8,519 | ||||||||||||||||
Consolidated operating income | $ | 74,018 | $ | 85,373 | $ | 336,278 | $ | 359,109 | ||||||||||||
NuStar Energy L.P. and Subsidiaries |
Notes:
1.
Our board of directors and management use EBITDA and/or DCF when assessing the following: (i) the performance of our assets, (ii) the viability of potential projects, (iii) our ability to fund distributions, (iv) our ability to fund capital expenditures and (v) our ability to service debt. In addition, our board of directors uses a distribution coverage ratio, which is calculated based on DCF, as one of the factors in its determination of the company-wide bonus and the vesting of performance units awarded to management. DCF is a widely accepted financial indicator used by the master limited partnership (MLP) investment community to compare partnership performance. DCF is used by the MLP investment community, in part, because the value of a partnership unit is partially based on its yield, and its yield is based on the cash distributions a partnership can pay its unitholders.
None of these financial measures are 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 GAAP. The following is a reconciliation of EBITDA, DCF and distribution coverage ratio:
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Net income (loss) | $ | 25,182 | $ | (11,056 | ) | $ | 147,964 | $ | 150,003 | |||||||||||
Interest expense, net | 45,801 | 34,976 | 173,083 | 138,350 | ||||||||||||||||
Income tax expense | 2,639 | 2,680 | 9,937 | 11,973 | ||||||||||||||||
Depreciation and amortization expense | 70,589 | 55,997 | 264,232 | 216,736 | ||||||||||||||||
EBITDA | 144,211 | 82,597 | 595,216 | 517,062 | ||||||||||||||||
Interest expense, net | (45,801 | ) | (34,976 | ) | (173,083 | ) | (138,350 | ) | ||||||||||||
Reliability capital expenditures | (27,297 | ) | (12,321 | ) | (57,497 | ) | (38,155 | ) | ||||||||||||
Income tax expense | (2,639 | ) | (2,680 | ) | (9,937 | ) | (11,973 | ) | ||||||||||||
Mark-to-market impact of hedge transactions (a) | (138 | ) | 3,825 | (2,790 | ) | 10,317 | ||||||||||||||
Unit-based compensation (b) | 26 | 2,120 | 5,354 | 5,619 | ||||||||||||||||
Preferred unit distributions | (13,532 | ) | (1,925 | ) | (40,448 | ) | (1,925 | ) | ||||||||||||
Other items (c) | 80 | 63,943 | (4,039 | ) | 73,846 | |||||||||||||||
DCF | $ | 54,910 | $ | 100,583 | $ | 312,776 | $ | 416,441 | ||||||||||||
Less DCF available to general partner | 13,238 | 12,886 | 54,921 | 51,284 | ||||||||||||||||
DCF available to common limited partners | $ | 41,672 | $ | 87,697 | $ | 257,855 | $ | 365,157 | ||||||||||||
Distributions applicable to common limited partners | $ | 102,029 | $ | 86,085 | $ | 407,681 | $ | 342,598 | ||||||||||||
Distribution coverage ratio (d) | 0.41x | 1.02x | 0.63x | 1.07x | ||||||||||||||||
(a) | DCF 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 when the contracts are settled. | |
(b) | In connection with the employee transfer from NuStar GP, LLC on March 1, 2016, we assumed obligations related to awards issued under a long-term incentive plan, and we intend to satisfy the vestings of equity-based awards with the issuance of our common units. As such, the expenses related to these awards are considered non-cash and added back to DCF. Certain awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF. | |
(c) | Other items primarily consist of adjustments for throughput deficiency payments and construction reimbursements for all periods presented and a $58.7 million non-cash impairment charge on the Axeon term loan in the fourth quarter of 2016. | |
(d) | Distribution coverage ratio is calculated by dividing DCF available to common limited partners by distributions applicable to common limited partners. | |
NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (Unaudited, Thousands of Dollars, Except Per Unit Data) |
|||||||||||||||
Notes (continued): |
|||||||||||||||
The following is a reconciliation of net income and net income per unit to adjusted net income applicable to limited partners and adjusted net income per unit: |
|||||||||||||||
Three Months Ended
December 31, 2016 |
Year Ended December 31, 2016 | ||||||||||||||
Net (loss) income / net (loss) income per unit |
$ | (11,056 | ) | $ | (0.31 | ) | $ | 150,003 | $ | 1.27 | |||||
Loss on Axeon Term Loan | 58,655 | 0.73 | 58,655 | 0.73 | |||||||||||
Adjusted net income | 47,599 | 208,658 | |||||||||||||
GP interest and incentive | (11,806 | ) | (47,486 | ) | |||||||||||
Distributions to preferred limited partners | (1,925 | ) | (1,925 | ) | |||||||||||
Distribution equivalent rights to restricted units | (728 | ) | (2,697 | ) | |||||||||||
Adjusted net income applicable to common limited
partners / adjusted net income per common unit |
$ | 33,140 | $ | 0.42 | $ | 156,550 | $ | 2.00 | |||||||
The following is a reconciliation of EBITDA to adjusted EBITDA:
Three Months Ended
December 31, 2016 |
Year Ended
December 31, 2016 |
||||||||
EBITDA | $ | 82,597 | $ | 517,062 | |||||
Loss on Axeon Term Loan | 58,655 | 58,655 | |||||||
Adjusted EBITDA | $ | 141,252 | $ | 575,717 | |||||
The following is a reconciliation of projected net income to projected EBITDA:
Year Ended December 31, 2017 | |||
Projected net income | $ 140,000 - 170,000 | ||
Projected interest expense, net | 170,000 - 175,000 | ||
Projected income tax expense | 5,000 - 10,000 | ||
Projected depreciation and amortization expense | 260,000 - 270,000 | ||
Projected EBITDA | $ 575,000 - 625,000 | ||
NuStar GP Holdings, LLC and Subsidiaries Consolidated Financial Information (Unaudited, Thousands of Dollars, Except Unit and Per Unit Data) |
||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||
Equity in earnings of NuStar Energy L.P. | $ | 10,304 | $ | 6,671 | $ | 51,556 | $ | 56,096 | ||||||||||||
General and administrative expenses | (713 | ) | (669 | ) | (3,298 | ) | (3,046 | ) | ||||||||||||
Other income, net | 339 | 266 | 41,942 | 3,021 | ||||||||||||||||
Interest expense, net | (453 | ) | (280 | ) | (1,587 | ) | (1,069 | ) | ||||||||||||
Income before income tax (expense) benefit | 9,477 | 5,988 | 88,613 | 55,002 | ||||||||||||||||
Income tax (expense) benefit | (2,035 | ) | 11 | (1,838 | ) | 66 | ||||||||||||||
Net income | $ | 7,442 | $ | 5,999 | $ | 86,775 | $ | 55,068 | ||||||||||||
Net income per unit | $ | 0.17 | $ | 0.14 | $ | 2.01 | $ | 1.28 | ||||||||||||
Weighted average number of common units outstanding | 42,961,594 | 42,936,397 | 42,954,230 | 42,932,320 | ||||||||||||||||
Equity in Earnings of NuStar Energy L.P.: | ||||||||||||||||||||
General partner interest | $ | 14 | $ | (480 | ) | $ | 1,237 | $ | 2,091 | |||||||||||
General partner incentive distribution | 10,933 | 10,907 | 45,669 | 43,407 | ||||||||||||||||
General partner’s interest in earnings and incentive
distributions of NuStar Energy L.P. |
10,947 | 10,427 | 46,906 | 45,498 | ||||||||||||||||
Limited partner interest in earnings of NuStar
Energy L.P. |
78 | (3,035 | ) | 7,534 | 13,482 | |||||||||||||||
Amortization of step-up in basis related to NuStar Energy
L.P.’s assets and liabilities |
(721 | ) | (721 | ) | (2,884 | ) | (2,884 | ) | ||||||||||||
Equity in earnings of NuStar Energy L.P. | $ | 10,304 | $ | 6,671 | $ | 51,556 | $ | 56,096 | ||||||||||||
Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities | 9,797 | 6,162 | 47,793 | 49,751 | ||||||||||||||||
Net cash provided by investing activities | 13,955 | 17,273 | 34,016 | 40,286 | ||||||||||||||||
Net cash used in financing activities | (23,548 | ) | (23,588 | ) | (81,594 | ) | (89,864 | ) | ||||||||||||
Distributable Cash Flow (Note 1): | ||||||||||||||||||||
Cash distributions from NuStar Energy L.P. associated with: | ||||||||||||||||||||
General partner interest | $ | 2,305 | $ | 1,979 | $ | 9,252 | $ | 7,877 | ||||||||||||
General partner incentive distribution | 10,933 | 10,907 | 45,669 | 43,407 | ||||||||||||||||
Limited partner interest – common units | 11,185 | 11,185 | 44,740 | 44,699 | ||||||||||||||||
Total cash distributions expected from NuStar Energy L.P. | 24,423 | 24,071 | 99,661 | 95,983 | ||||||||||||||||
Adjustments: | ||||||||||||||||||||
General and administrative expenses | (713 | ) | (669 | ) | (3,298 | ) | (3,046 | ) | ||||||||||||
Income tax (expense) benefit | (2,035 | ) | 11 | (1,838 | ) | 66 | ||||||||||||||
Interest expense, net | (453 | ) | (280 | ) | (1,587 | ) | (1,069 | ) | ||||||||||||
Unit-based compensation | $ | 183 | $ | 159 | $ | (207 | ) | $ | 494 | |||||||||||
DCF | $ | 21,405 | $ | 23,292 | $ | 92,731 | $ | 92,428 | ||||||||||||
Total distribution to unitholders | $ | 23,423 | $ | 23,408 | $ | 93,649 | $ | 93,601 | ||||||||||||
NuStar GP Holdings, LLC and Subsidiaries |
Note 1:
DCF is not intended to represent cash flows from operations, and is not presented as an alternative to net income. DCF should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with U.S. generally accepted accounting principles. The following is a reconciliation of net income to DCF and net cash provided by operating activities:
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Net income | $ | 7,442 | $ | 5,999 | $ | 86,775 | $ | 55,068 | ||||||||||||
Less equity in earnings of NuStar Energy L.P. | (10,304 | ) | (6,671 | ) | (51,556 | ) | (56,096 | ) | ||||||||||||
Plus cash distributions expected from NuStar Energy L.P. | 24,423 | 24,071 | 99,661 | 95,983 | ||||||||||||||||
Gain related to NuStar Energy L.P.’s issuance of common
limited partner units |
(339 | ) | (266 | ) | (41,942 | ) | (2,408 | ) | ||||||||||||
Unit-based compensation items (a) | 183 | 159 | 643 | (78 | ) | |||||||||||||||
DCF | 21,405 | 23,292 | 93,581 | 92,469 | ||||||||||||||||
Less cash distributions expected from NuStar Energy L.P. | (24,423 | ) | (24,071 | ) | (99,661 | ) | (95,983 | ) | ||||||||||||
Distributions of equity in earnings of NuStar Energy L.P. | 10,304 | 6,671 | 51,556 | 56,096 | ||||||||||||||||
Changes in current assets and liabilities | 378 | 196 | 92 | (3,336 | ) | |||||||||||||||
Changes in noncurrent assets and liabilities
and other items |
2,133 | 74 | 2,225 | 505 | ||||||||||||||||
Net cash provided by operating activities | $ | 9,797 | $ | 6,162 | $ | 47,793 | $ | 49,751 | ||||||||||||
(a) | We intend to satisfy the vestings of equity-based awards with the issuance of our units. As such, the expenses related to these awards are considered non-cash and added back to DCF. These awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF. Also included in this item are gains and losses resulting from the satisfaction of certain long-term incentive awards prior to the employee transfer on March 1, 2016. | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180208005429/en/
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 and Chief Administrative Officer,
Corporate
Communications: 210-918-2314
website: http://www.nustarenergy.com