News Release
NuStar Energy Covers Distribution in the Fourth Quarter and for the Full-Year 2015
Quarterly Distribution Remains at
Highest Annual Distribution Coverage Since 2009
2015 EBITDA and DCF Highest in Partnership’s History
Fourth quarter 2015 distributable cash flow (DCF) from continuing
operations available to limited partners was
“2015 was another great year for NuStar, despite challenging industry
fundamentals,” said
“Key contributions from our Linden terminal acquisition, increased
storage renewal rates at many of our terminal locations, higher
utilization across our terminal system and strong
Barron went on to say, “DCF from continuing operations available to limited partners covers the distribution to the limited partners by 1.05 times for the fourth quarter of 2015 and by 1.11 times for the full-year 2015, our highest annual distribution coverage since 2009.”
The partnership reported fourth quarter net income applicable to limited
partners of
Absent a gain related to the
The partnership also announced that its board of directors has declared
a fourth quarter 2015 distribution of
2016 Earnings Guidance
“Our overall expectations for 2016 are essentially unchanged from what
we conveyed to you previously, but we have adjusted our EBITDA
expectations for our storage and pipeline segments. We now expect our
storage segment 2016 EBITDA to be
“Pipeline segment 2016 EBITDA is now expected to be
Barron went on to say, “Our 2016 capital spending projections remain
unchanged. We have budgeted to spend
Barron concluded by saying, “Based on these projections we expect to once again cover our current distribution in 2016.”
Fourth Quarter 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.
The presentation 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
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
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding
future events, such as the partnership’s future performance. All
forward-looking statements are based on the partnership’s beliefs as
well as assumptions made by and information currently available to the
partnership. These statements reflect the partnership’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.’s and
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, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Statement of Income Data: | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Service revenues | $ | 281,025 | $ | 270,895 | $ | 1,114,153 | $ | 1,026,446 | |||||||||||||
Product sales | 183,894 | 410,843 | 969,887 | 2,048,672 | |||||||||||||||||
Total revenues | 464,919 | 681,738 | 2,084,040 | 3,075,118 | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||
Cost of product sales | 169,500 | 389,020 | 907,574 | 1,967,528 | |||||||||||||||||
Operating expenses | 117,612 | 135,359 | 473,031 | 472,925 | |||||||||||||||||
General and administrative expenses | 27,096 | 27,070 | 102,521 | 96,056 | |||||||||||||||||
Depreciation and amortization expense | 52,687 | 48,943 | 210,210 | 191,708 | |||||||||||||||||
Total costs and expenses | 366,895 | 600,392 | 1,693,336 | 2,728,217 | |||||||||||||||||
Operating income | 98,024 | 81,346 | 390,704 | 346,901 | |||||||||||||||||
Equity in earnings of joint ventures | — | 3,059 | — | 4,796 | |||||||||||||||||
Interest expense, net | (33,559 | ) | (31,735 | ) | (131,868 | ) | (131,226 | ) | |||||||||||||
Other (expense) income, net | (70 | ) | 2,683 | 61,822 | 4,499 | ||||||||||||||||
Income from continuing operations before income tax expense |
64,395 | 55,353 | 320,658 | 224,970 | |||||||||||||||||
Income tax expense | 4,915 | 484 | 14,712 | 10,801 | |||||||||||||||||
Income from continuing operations | 59,480 | 54,869 | 305,946 | 214,169 | |||||||||||||||||
(Loss) income from discontinued operations, net of tax | — | (1,475 | ) | 774 | (3,791 | ) | |||||||||||||||
Net income | $ | 59,480 | $ | 53,394 | $ | 306,720 | $ | 210,378 | |||||||||||||
Net income applicable to limited partners | $ | 47,485 | $ | 41,522 | $ | 257,366 | $ | 163,339 | |||||||||||||
Net income (loss) per unit applicable to limited partners: | |||||||||||||||||||||
Continuing operations | $ | 0.61 | $ | 0.55 | $ | 3.29 | $ | 2.14 | |||||||||||||
Discontinued operations | — | (0.01 | ) | 0.01 | (0.04 | ) | |||||||||||||||
Total | $ | 0.61 | $ | 0.54 | $ | 3.30 | $ | 2.10 | |||||||||||||
Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | 77,886,078 | 77,886,078 | |||||||||||||||||
EBITDA from continuing operations (Note 1) | $ | 150,641 | $ | 136,031 | $ | 662,736 | $ | 547,904 | |||||||||||||
DCF from continuing operations (Note 1) | $ | 102,393 | $ | 108,173 | $ | 428,971 | $ | 405,890 | |||||||||||||
December 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total debt | $ | 3,163,349 | $ | 2,826,452 | |||||||||||||||||
Partners’ equity | 1,609,844 | 1,716,210 | |||||||||||||||||||
Consolidated debt coverage ratio (Note 2) |
4.5 |
x |
4.0 |
x |
|||||||||||||||||
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, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Pipeline: | |||||||||||||||||||||
Refined products pipelines throughput (barrels/day) | 551,246 | 533,521 | 522,146 | 510,737 | |||||||||||||||||
Crude oil pipelines throughput (barrels/day) | 435,007 | 490,969 | 471,632 | 437,757 | |||||||||||||||||
Total throughput (barrels/day) | 986,253 | 1,024,490 | 993,778 | 948,494 | |||||||||||||||||
Throughput revenues | $ | 130,492 | $ | 130,812 | $ | 508,522 | $ | 477,030 | |||||||||||||
Operating expenses | 40,081 | 44,421 | 153,222 | 154,106 | |||||||||||||||||
Depreciation and amortization expense | 22,058 | 20,036 | 84,951 | 77,691 | |||||||||||||||||
Segment operating income | $ | 68,353 | $ | 66,355 | $ | 270,349 | $ | 245,233 | |||||||||||||
Storage: | |||||||||||||||||||||
Throughput (barrels/day) | 888,033 | 918,929 | 899,606 | 887,607 | |||||||||||||||||
Throughput revenues | $ | 31,762 | $ | 31,867 | $ | 130,127 | $ | 123,051 | |||||||||||||
Storage lease revenues | 123,067 | 111,142 | 494,781 | 441,455 | |||||||||||||||||
Total revenues | 154,829 | 143,009 | 624,908 | 564,506 | |||||||||||||||||
Operating expenses | 70,185 | 74,952 | 290,322 | 277,554 | |||||||||||||||||
Depreciation and amortization expense | 28,541 | 26,368 | 116,768 | 103,848 | |||||||||||||||||
Segment operating income | $ | 56,103 | $ | 41,689 | $ | 217,818 | $ | 183,104 | |||||||||||||
Fuels Marketing: | |||||||||||||||||||||
Product sales and other revenue | $ | 185,497 | $ | 414,205 | $ | 976,216 | $ | 2,060,017 | |||||||||||||
Cost of product sales | 172,820 | 392,734 | 922,906 | 1,983,339 | |||||||||||||||||
Gross margin | 12,677 | 21,471 | 53,310 | 76,678 | |||||||||||||||||
Operating expenses | 9,926 | 18,563 | 39,803 | 51,857 | |||||||||||||||||
Depreciation and amortization expense | — | — | — | 16 | |||||||||||||||||
Segment operating income | $ | 2,751 | $ | 2,908 | $ | 13,507 | $ | 24,805 | |||||||||||||
Consolidation and Intersegment Eliminations: | |||||||||||||||||||||
Revenues | $ | (5,899 | ) | $ | (6,288 | ) | $ | (25,606 | ) | $ | (26,435 | ) | |||||||||
Cost of product sales | (3,320 | ) | (3,714 | ) | (15,332 | ) | (15,811 | ) | |||||||||||||
Operating expenses | (2,580 | ) | (2,577 | ) | (10,316 | ) | (10,592 | ) | |||||||||||||
Total | $ | 1 | $ | 3 | $ | 42 | $ | (32 | ) | ||||||||||||
Consolidated Information: | |||||||||||||||||||||
Revenues | $ | 464,919 | $ | 681,738 | $ | 2,084,040 | $ | 3,075,118 | |||||||||||||
Cost of product sales | 169,500 | 389,020 | 907,574 | 1,967,528 | |||||||||||||||||
Operating expenses | 117,612 | 135,359 | 473,031 | 472,925 | |||||||||||||||||
Depreciation and amortization expense | 50,599 | 46,404 | 201,719 | 181,555 | |||||||||||||||||
Segment operating income | 127,208 | 110,955 | 501,716 | 453,110 | |||||||||||||||||
General and administrative expenses | 27,096 | 27,070 | 102,521 | 96,056 | |||||||||||||||||
Other depreciation and amortization expense | 2,088 | 2,539 | 8,491 | 10,153 | |||||||||||||||||
Consolidated operating income | $ | 98,024 | $ | 81,346 | $ | 390,704 | $ | 346,901 | |||||||||||||
NuStar Energy L.P. and Subsidiaries |
||
Consolidated Financial Information - Continued |
||
(Unaudited, Thousands of Dollars, Except Per Unit Data) |
||
Notes: |
||
(1) |
NuStar Energy L.P. utilizes financial measures such as earnings before interest, taxes, depreciation and amortization (EBITDA), distributable cash flow (DCF), adjusted net income and adjusted net income per unit (collectively, financial measures), which are not defined in U.S. generally accepted accounting principles (GAAP). 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 financial measures provide investors an enhanced perspective of the operating performance of the partnership’s assets and/or the cash that the business is generating. None of these financial measures are presented as an alternative to net income or income from continuing operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP. For purposes of segment reporting, we do not allocate general and administrative expenses to our reported operating segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the segment reconciliations exclude any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. |
|
The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and DCF from continuing operations: |
||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Income from continuing operations | $ | 59,480 | $ | 54,869 | $ | 305,946 | $ | 214,169 | |||||||||||||
Plus interest expense, net | 33,559 | 31,735 | 131,868 | 131,226 | |||||||||||||||||
Plus income tax expense | 4,915 | 484 | 14,712 | 10,801 | |||||||||||||||||
Plus depreciation and amortization expense | 52,687 | 48,943 | 210,210 | 191,708 | |||||||||||||||||
EBITDA from continuing operations | 150,641 | 136,031 | 662,736 | 547,904 | |||||||||||||||||
Equity in earnings of joint ventures | — | (3,059 | ) | — | (4,796 | ) | |||||||||||||||
Interest expense, net | (33,559 | ) | (31,735 | ) | (131,868 | ) | (131,226 | ) | |||||||||||||
Reliability capital expenditures | (17,936 | ) | (10,373 | ) | (40,002 | ) | (28,635 | ) | |||||||||||||
Income tax expense | (4,915 | ) | (484 | ) | (14,712 | ) | (10,801 | ) | |||||||||||||
Distributions from joint ventures | — | 1,708 | 2,500 | 7,587 | |||||||||||||||||
Other items (a) | 9,282 | 11,686 | (44,032 | ) | 19,732 | ||||||||||||||||
Mark-to-market impact on hedge transactions (b) | (1,120 | ) | 4,399 | (5,651 | ) | 6,125 | |||||||||||||||
DCF from continuing operations | $ | 102,393 | $ | 108,173 | $ | 428,971 | $ | 405,890 | |||||||||||||
Less DCF from continuing operations available to general partner |
12,766 | 12,766 | 51,064 | 51,064 | |||||||||||||||||
DCF from continuing operations available to limited partners |
$ | 89,627 | $ | 95,407 | $ | 377,907 | $ | 354,826 | |||||||||||||
DCF from continuing operations per limited partner unit | $ | 1.15 | $ | 1.23 | $ | 4.85 | $ | 4.56 | |||||||||||||
(a) | Other items mainly consist of (i) a ($56.3 million) non-cash gain and insurance proceeds of $7.8 million mainly received in the fourth quarter of 2015, associated with the Linden terminal acquisition on January 2, 2015; (ii) a lower of cost or market adjustment of $3.8 million for the three months and year ended December 31, 2014 and (iii) the net change in deferred revenue associated with throughput deficiency payments and construction reimbursements for all periods presented. | |
(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. | |
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:
Year Ended December 31, 2015 | ||||||||||
Net income / net income per unit | $ | 306,720 | $ | 3.30 | ||||||
Gain on Linden terminal acquisition | (56,277 | ) | (0.71 | ) | ||||||
Adjusted net income | 250,443 | |||||||||
GP interest and incentive | (48,228 | ) | ||||||||
Adjusted net income applicable to limited partners / adjusted net income per unit | $ | 202,215 | $ | 2.59 | ||||||
The following is a reconciliation of EBITDA from continuing operations to adjusted EBITDA from continuing operations:
Year Ended |
|||||
EBITDA from continuing operations | $ | 662,736 | |||
Gain on Linden terminal acquisition | (56,277 | ) | |||
Adjusted EBITDA from continuing operations | $ | 606,459 | |||
The following are reconciliations of projected operating income to projected EBITDA for our reported segments:
Year Ended December 31, 2016 | |||||||||
Pipeline | Storage | Fuels Marketing | |||||||
Projected operating income | $ 250,000 - 265,000 | $ 195,000 - 210,000 | $ 15,000 - 35,000 | ||||||
Plus projected depreciation and amortization expense | 85,000 - 90,000 | 115,000 - 120,000 | — | ||||||
Projected EBITDA | $ 335,000 - 355,000 | $ 310,000 - 330,000 | $ 15,000 - 35,000 | ||||||
(2) The consolidated debt coverage ratio is calculated as consolidated
debt to consolidated EBITDA, each as defined in our
View source version on businesswire.com: http://www.businesswire.com/news/home/20160129005274/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,
Corporate Communications: 210-918-2314
Web site: http://www.nustarenergy.com