News Release
NuStar Energy Reports Increased EPU, EBITDA & Total DCF Results in Third Quarter of 2013
Meets Analysts’ Consensus Expectations
In Advanced Discussions to Exit Asphalt Joint Venture
Company Plans to Proceed with Phase 2 of
Idled 12” Pipeline between
Based on 2014 and 2015 Projections, Company Currently Plans to Maintain Distribution
The third quarter 2012 results included
“Our results show we’re on track with our strategic re-direction of the
company focusing on our more stable pipeline and storage segments,” said
Commenting on the storage segment, Anastasio said, “EBITDA in our
storage segment nearly doubled between 2006 and 2012 growing from
Anastasio then commented on the company’s fuels marketing segment by
saying, “Weak demand for bunkers and increased competition in the
Anticipated Exit from Asphalt Joint Venture
NuStar is currently in advanced discussions with its asphalt joint
venture partner, Lindsay Goldberg, to finalize an agreement that allows
NuStar to exit the asphalt joint venture. The agreement should also
allow NuStar to materially reduce the
Success of Open Season Leads to Eagle Ford Expansion
Early in October, NuStar announced it had received enough binding
commitments from shippers to move forward with the first phase of the
partnership’s
In addition, NuStar has decided to proceed with the second phase of this
project, which will add approximately 65,000 barrels per day of
incremental throughput capacity to the South Texas Crude Oil Pipeline
System as early as the first quarter of 2015. It is expected to generate
incremental annual EBITDA of up to
In the 2nd quarter of 2014, prior to the completion of Phase 1, NuStar
plans to complete the construction of a new private dock at its Corpus
Reactivation of Idled 12” Pipeline
NuStar has begun work on a project for its 12-inch pipeline between
“We are very excited to place this idled pipeline back into service,” said Anastasio. “This line has the capacity to move approximately 110,000 barrels per day so we expect to ship additional NGL volumes over and above the long-term anchor shipment commitment we are announcing today.”
Internal Growth Project Update
In August, NuStar completed a pipeline project for
Earnings Guidance
“Fourth quarter 2013 EBITDA results for all three of our segments should be higher than last year’s fourth quarter,” said Anastasio. “The internal growth projects and the new bunker fuel supply agreement mentioned above should improve the segment’s fourth quarter results.”
Commenting on guidance for full year 2013, Anastasio said, “Our pipeline
segment EBITDA should be
Looking ahead to 2014, Anastasio commented, “Increased crude oil
throughputs in the
“Based on our projections, we expect to fully cover our distribution in
2014. As previously announced on
With regard to capital spending projections Anastasio went on to say,
“We plan to spend
Third Quarter Earnings Conference Call Details
A conference call with management is scheduled for
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Statement of Income Data (Note 1): | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Service revenues | $ | 245,577 | $ | 225,068 | $ | 706,493 | $ | 646,444 | |||||||||||||
Product sales | 534,433 | 1,368,688 | 1,977,423 | 4,324,465 | |||||||||||||||||
Total revenues | 780,010 | 1,593,756 | 2,683,916 | 4,970,909 | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||
Cost of product sales | 527,217 | 1,329,377 | 1,928,237 | 4,211,966 | |||||||||||||||||
Operating expenses | 120,491 | 142,037 | 353,137 | 401,648 | |||||||||||||||||
General and administrative expenses | 18,831 | 24,953 | 65,978 | 75,254 | |||||||||||||||||
Depreciation and amortization expense | 47,597 | 38,037 | 137,185 | 125,538 | |||||||||||||||||
Asset impairment loss | — | — | — | 249,646 | |||||||||||||||||
Goodwill impairment loss | — | — | — | 22,132 | |||||||||||||||||
Gain on legal settlement | — | — | — | (28,738 | ) | ||||||||||||||||
Total costs and expenses | 714,136 | 1,534,404 | 2,484,537 | 5,057,446 | |||||||||||||||||
Operating income (loss) | 65,874 | 59,352 | 199,379 | (86,537 | ) | ||||||||||||||||
Equity in (loss) earnings of joint ventures | (5,358 | ) | (951 | ) | (26,629 | ) | 3,816 | ||||||||||||||
Interest expense, net | (31,078 | ) | (23,894 | ) | (93,601 | ) | (68,118 | ) | |||||||||||||
Interest income from related party | 1,828 | — | 4,560 | — | |||||||||||||||||
Other income (expense), net |
1,407 | (19,943 | ) | 3,978 | (21,392 | ) | |||||||||||||||
Income (loss) from continuing operations before income tax expense |
32,673 | 14,564 | 87,687 | (172,231 | ) | ||||||||||||||||
Income tax (benefit) expense | (563 | ) | 599 | 6,147 | 20,318 | ||||||||||||||||
Income (loss) from continuing operations | 33,236 | 13,965 | 81,540 | (192,549 | ) | ||||||||||||||||
(Loss) income from discontinued operations, net of tax | — | (9,623 | ) | 9,069 | (23,665 | ) | |||||||||||||||
Net income (loss) | $ | 33,236 | $ | 4,342 | $ | 90,609 | $ | (216,214 | ) | ||||||||||||
Net income (loss) applicable to limited partners | $ | 21,924 | $ | (6,503 | ) | $ | 56,811 | $ | (242,113 | ) | |||||||||||
Net income (loss) per unit applicable to limited partners | |||||||||||||||||||||
Continuing operations | $ | 0.28 | $ | 0.04 | $ | 0.61 | $ | (3.07 | ) | ||||||||||||
Discontinued operations | — | (0.13 | ) | 0.12 | (0.33 | ) | |||||||||||||||
Total | $ | 0.28 | $ | (0.09 | ) | $ | 0.73 | $ | (3.40 | ) | |||||||||||
Weighted-average limited partner units outstanding | 77,886,078 | 72,383,578 | 77,886,078 | 71,302,538 | |||||||||||||||||
EBITDA from continuing operations (Note 2) | $ | 109,520 | $ | 76,495 | $ | 313,913 | $ | 21,425 | |||||||||||||
DCF from continuing operations (Note 2) | $ | 79,865 | $ | 75,753 | $ | 215,023 | $ | 181,529 | |||||||||||||
September 30, |
December 31, |
||||||||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Debt, including current portion (a) | $ | 2,473,678 | $ | 2,036,406 | $ | 2,411,004 | |||||||||||||||
Partners’ equity (b) | 2,380,979 | 2,672,099 | 2,584,995 | ||||||||||||||||||
Debt-to-capitalization ratio (a) / ((a)+(b)) | 51.0 | % | 43.2 | % | 48.3 | % | |||||||||||||||
NuStar Energy L.P. and Subsidiaries | |||||||||||||||||||||
Consolidated Financial Information - Continued | |||||||||||||||||||||
(Unaudited, Thousands of Dollars, Except Barrel Data) | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Storage: | |||||||||||||||||||||
Throughput (barrels/day) | 832,412 | 780,560 | 772,383 | 755,893 | |||||||||||||||||
Throughput revenues | $ | 27,937 | $ | 23,222 | $ | 76,924 | $ | 67,679 | |||||||||||||
Storage lease revenues | 112,579 | 125,708 | 353,026 | 379,473 | |||||||||||||||||
Total revenues | 140,516 | 148,930 | 429,950 | 447,152 | |||||||||||||||||
Operating expenses | 74,641 | 75,210 | 219,320 | 214,605 | |||||||||||||||||
Depreciation and amortization expense | 27,658 | 23,298 | 79,498 | 69,725 | |||||||||||||||||
Asset impairment loss | — | — | — | 2,126 | |||||||||||||||||
Segment operating income | $ | 38,217 | $ | 50,422 | $ | 131,132 | $ | 160,696 | |||||||||||||
Pipeline: | |||||||||||||||||||||
Refined products pipelines throughput (barrels/day) | 501,511 | 521,255 | 477,601 | 490,775 | |||||||||||||||||
Crude oil pipelines throughput (barrels/day) | 382,539 | 357,064 | 361,642 | 326,454 | |||||||||||||||||
Total throughput (barrels/day) | 884,050 | 878,319 | 839,243 | 817,229 | |||||||||||||||||
Throughput revenues | $ | 111,508 | $ | 92,570 | $ | 301,761 | $ | 244,938 | |||||||||||||
Operating expenses | 36,089 | 37,621 | 102,596 | 95,212 | |||||||||||||||||
Depreciation and amortization expense | 17,401 | 13,085 | 50,039 | 39,086 | |||||||||||||||||
Segment operating income | $ | 58,018 | $ | 41,864 | $ | 149,126 | $ | 110,640 | |||||||||||||
Fuels Marketing: | |||||||||||||||||||||
Product sales | $ | 534,919 | $ | 1,371,935 | $ | 1,978,531 | $ | 4,334,361 | |||||||||||||
Cost of product sales | 531,481 | 1,336,642 | 1,944,415 | 4,231,551 | |||||||||||||||||
Gross margin | 3,438 | 35,293 | 34,116 | 102,810 | |||||||||||||||||
Operating expenses | 12,510 | 41,795 | 41,336 | 128,001 | |||||||||||||||||
Depreciation and amortization expense | 7 | 15 | 20 | 11,235 | |||||||||||||||||
Asset and goodwill impairment loss | — | — | — | 266,357 | |||||||||||||||||
Segment operating loss | $ | (9,079 | ) | $ | (6,517 | ) | $ | (7,240 | ) | $ | (302,783 | ) | |||||||||
Consolidation and Intersegment Eliminations: | |||||||||||||||||||||
Revenues | $ | (6,933 | ) | $ | (19,679 | ) | $ | (26,326 | ) | $ | (55,542 | ) | |||||||||
Cost of product sales | (4,264 | ) | (7,265 | ) | (16,178 | ) | (19,585 | ) | |||||||||||||
Operating expenses | (2,749 | ) | (12,589 | ) | (10,115 | ) | (36,170 | ) | |||||||||||||
Total | $ | 80 | $ | 175 | $ | (33 | ) | $ | 213 | ||||||||||||
Consolidated Information: | |||||||||||||||||||||
Revenues | $ | 780,010 | $ | 1,593,756 | $ | 2,683,916 | $ | 4,970,909 | |||||||||||||
Cost of product sales | 527,217 | 1,329,377 | 1,928,237 | 4,211,966 | |||||||||||||||||
Operating expenses | 120,491 | 142,037 | 353,137 | 401,648 | |||||||||||||||||
Depreciation and amortization expense | 45,066 | 36,398 | 129,557 | 120,046 | |||||||||||||||||
Asset and goodwill impairment loss | — | — | — | 268,483 | |||||||||||||||||
Segment operating income (loss) | 87,236 | 85,944 | 272,985 | (31,234 | ) | ||||||||||||||||
General and administrative expenses | 18,831 | 24,953 | 65,978 | 75,254 | |||||||||||||||||
Other depreciation and amortization expense | 2,531 | 1,639 | 7,628 | 5,492 | |||||||||||||||||
Other asset impairment loss | — | — | — | 3,295 | |||||||||||||||||
Gain on legal settlement | — | — | — | (28,738 | ) | ||||||||||||||||
Consolidated operating income (loss) | $ | 65,874 | $ | 59,352 | $ | 199,379 | $ | (86,537 | ) | ||||||||||||
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Per Unit Data)
Notes:
(1) The results of operations for the
(2)
The following is a reconciliation of income (loss) from continuing operations to EBITDA from continuing operations and DCF from continuing operations:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Income (loss) from continuing operations | $ | 33,236 | $ | 13,965 | $ | 81,540 | $ | (192,549 | ) | ||||||||||||
Plus interest expense, net and interest income from related party |
29,250 | 23,894 | 89,041 | 68,118 | |||||||||||||||||
Plus income tax (benefit) expense | (563 | ) | 599 | 6,147 | 20,318 | ||||||||||||||||
Plus depreciation and amortization expense | 47,597 | 38,037 | 137,185 | 125,538 | |||||||||||||||||
EBITDA from continuing operations | 109,520 | 76,495 | 313,913 | 21,425 | |||||||||||||||||
Equity in loss (earnings) of joint ventures | 5,358 | 951 | 26,629 | (3,816 | ) | ||||||||||||||||
Interest expense, net and interest income from related party |
(29,250 | ) | (23,894 | ) | (89,041 | ) | (68,118 | ) | |||||||||||||
Reliability capital expenditures | (12,227 | ) | (8,520 | ) | (29,694 | ) | (18,392 | ) | |||||||||||||
Income tax benefit (expense) | 563 | (599 | ) | (6,147 | ) | (20,318 | ) | ||||||||||||||
Distributions from joint ventures | 1,135 | 3,098 | 5,787 | 6,364 | |||||||||||||||||
Other items (a) | 2,457 | 21,579 | (4,043 | ) | 274,677 | ||||||||||||||||
Mark-to-market impact on hedge transactions (b) | 2,309 | 6,643 | (2,381 | ) | (10,293 | ) | |||||||||||||||
DCF from continuing operations | $ | 79,865 | $ | 75,753 | $ | 215,023 | $ | 181,529 | |||||||||||||
Less DCF from continuing operations available to noncontrolling interest | (110 | ) | 30 | (290 | ) | 44 | |||||||||||||||
Less DCF from continuing operations available to general partner | 12,766 | 12,766 | 38,298 | 35,962 | |||||||||||||||||
DCF from continuing operations available to limited partners | $ | 67,209 | $ | 62,957 | $ | 177,015 | $ | 145,523 | |||||||||||||
DCF from continuing operations per limited partner unit | $ | 0.86 | $ | 0.87 | $ | 2.27 | $ | 2.04 | |||||||||||||
(a) Other items for the three months ended
(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.
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