News Release
NuStar Energy L.P. Reports Increased EPU, EBITDA and DCF in the Third Quarter of 2015
Distribution Coverage Ratio 1.05 times for the Quarter
Storage Lease Revenues Rise 17%
Pipeline Segment Throughput Volumes Continue to Grow
Third quarter 2015 earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations were
The partnership reported third quarter 2015 net income applicable to
limited partners of
Absent a gain related to our
As previously announced on
“Higher storage utilization and positive renewals at several of our
terminals, as well as the added benefit from our Linden terminal
acquisition, contributed to a 17% increase in storage lease revenues for
the quarter,” said
Barron went on to say, “Due to the continued strength of our core, fee-based operations, we achieved a healthy distribution coverage ratio of 1.05 times, our sixth consecutive quarter above 1.0 times, and we remain on track to cover the distribution for the full-year.”
Earnings Guidance
Barron continued, “We haven’t changed our overall view of 2015 from what
we conveyed to you in the past, but we have adjusted our expectations
for each segment. We now expect our pipeline segment EBITDA to be
“We expect our 2015 strategic capital spending, which includes internal
growth and acquisition spending, to be
Looking ahead to 2016, Barron commented, “We expect increased
throughputs on our refined product pipelines to be largely offset by
lower projected Eagle Ford crude oil system volumes. As a result, our
pipeline segment’s 2016 EBITDA should be comparable to slightly higher
than 2015. We expect 2016 storage segment EBITDA to decrease
“With regard to capital spending projections for 2016, we plan to spend
Barron concluded by saying, “Based on our current projections, we expect to cover our distribution again for the full-year 2016.”
Third Quarter 2015 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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Service revenues | $ | 288,574 | $ | 266,651 | $ | 833,128 | $ | 755,551 | ||||||||||||
Product sales | 204,992 | 527,771 | 785,993 | 1,637,829 | ||||||||||||||||
Total revenues | 493,566 | 794,422 | 1,619,121 | 2,393,380 | ||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of product sales | 193,958 | 509,794 | 738,074 | 1,578,508 | ||||||||||||||||
Operating expenses | 122,634 | 115,964 | 355,419 | 337,566 | ||||||||||||||||
General and administrative expenses | 23,679 | 24,967 | 75,425 | 68,986 | ||||||||||||||||
Depreciation and amortization expense | 52,301 | 48,599 | 157,523 | 142,765 | ||||||||||||||||
Total costs and expenses | 392,572 | 699,324 | 1,326,441 | 2,127,825 | ||||||||||||||||
Operating income | 100,994 | 95,098 | 292,680 | 265,555 | ||||||||||||||||
Equity in earnings of joint ventures | — | 2,749 | — | 1,737 | ||||||||||||||||
Interest expense, net | (33,448 | ) | (33,007 | ) | (98,309 | ) | (100,546 | ) | ||||||||||||
Interest income from related party | — | — | — | 1,055 | ||||||||||||||||
Other income (expense), net | 1,776 | (1,388 | ) | 61,892 | 1,816 | |||||||||||||||
Income from continuing operations before income tax expense | 69,322 | 63,452 | 256,263 | 169,617 | ||||||||||||||||
Income tax expense | 4,306 | 4,335 | 9,797 | 10,317 | ||||||||||||||||
Income from continuing operations | 65,016 | 59,117 | 246,466 | 159,300 | ||||||||||||||||
Income (loss) from discontinued operations, net of tax | — | 2,831 | 774 | (2,316 | ) | |||||||||||||||
Net income | $ | 65,016 | $ | 61,948 | $ | 247,240 | $ | 156,984 | ||||||||||||
Net income applicable to limited partners | $ | 52,911 | $ | 50,074 | $ | 209,881 | $ | 121,817 | ||||||||||||
Net income (loss) per unit applicable to limited partners: | ||||||||||||||||||||
Continuing operations | $ | 0.68 | $ | 0.61 | $ | 2.68 | $ | 1.59 | ||||||||||||
Discontinued operations | — | 0.03 | 0.01 | (0.03 | ) | |||||||||||||||
Total | $ | 0.68 | $ | 0.64 | $ | 2.69 | $ | 1.56 | ||||||||||||
Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | 77,886,078 | 77,886,078 | ||||||||||||||||
EBITDA from continuing operations (Note 1) | $ | 155,071 | $ | 145,058 | $ | 512,095 | $ | 411,873 | ||||||||||||
DCF from continuing operations (Note 1) | $ | 102,126 | $ | 100,684 | $ | 326,578 | $ | 297,717 | ||||||||||||
September 30, | December 31, | |||||||||||||||||||
2015 | 2014 | 2014 | ||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Total debt | $ | 3,151,359 | $ | 2,752,951 | $ | 2,826,452 | ||||||||||||||
Partners’ equity | $ | 1,653,900 | $ | 1,768,645 | $ | 1,716,210 | ||||||||||||||
Consolidated debt coverage ratio (Note 2) | 4.4x | 4.0x | 4.0x |
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, | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Pipeline: | ||||||||||||||||||||
Refined products pipelines throughput (barrels/day) | 531,034 | 514,361 | 512,340 | 503,059 | ||||||||||||||||
Crude oil pipelines throughput (barrels/day) | 477,537 | 471,698 | 483,974 | 419,824 | ||||||||||||||||
Total throughput (barrels/day) | 1,008,571 | 986,059 | 996,314 | 922,883 | ||||||||||||||||
Throughput revenues | $ | 131,395 | $ | 125,461 | $ | 378,030 | $ | 346,218 | ||||||||||||
Operating expenses | 41,199 | 39,996 | 113,141 | 109,685 | ||||||||||||||||
Depreciation and amortization expense | 21,660 | 19,813 | 62,893 | 57,655 | ||||||||||||||||
Segment operating income | $ | 68,536 | $ | 65,652 | $ | 201,996 | $ | 178,878 | ||||||||||||
Storage: | ||||||||||||||||||||
Throughput (barrels/day) | 872,877 | 914,599 | 903,506 | 877,052 | ||||||||||||||||
Throughput revenues | $ | 32,051 | $ | 32,498 | $ | 98,365 | $ | 91,184 | ||||||||||||
Storage lease revenues | 130,052 | 111,447 | 371,714 | 330,313 | ||||||||||||||||
Total revenues | 162,103 | 143,945 | 470,079 | 421,497 | ||||||||||||||||
Operating expenses | 73,505 | 68,244 | 220,137 | 202,602 | ||||||||||||||||
Depreciation and amortization expense | 28,612 | 26,300 | 88,227 | 77,480 | ||||||||||||||||
Segment operating income | $ | 59,986 | $ | 49,401 | $ | 161,715 | $ | 141,415 | ||||||||||||
Fuels Marketing: | ||||||||||||||||||||
Product sales and other revenue | $ | 206,696 | $ | 531,190 | $ | 790,719 | $ | 1,645,812 | ||||||||||||
Cost of product sales | 198,006 | 513,300 | 750,086 | 1,590,605 | ||||||||||||||||
Gross margin | 8,690 | 17,890 | 40,633 | 55,207 | ||||||||||||||||
Operating expenses | 10,509 | 10,367 | 29,877 | 33,294 | ||||||||||||||||
Depreciation and amortization expense | — | 5 | — | 16 | ||||||||||||||||
Segment operating (loss) income | $ | (1,819 | ) | $ | 7,518 | $ | 10,756 | $ | 21,897 | |||||||||||
Consolidation and Intersegment Eliminations: | ||||||||||||||||||||
Revenues | $ | (6,628 | ) | $ | (6,174 | ) | $ | (19,707 | ) | $ | (20,147 | ) | ||||||||
Cost of product sales | (4,048 | ) | (3,506 | ) | (12,012 | ) | (12,097 | ) | ||||||||||||
Operating expenses | (2,579 | ) | (2,643 | ) | (7,736 | ) | (8,015 | ) | ||||||||||||
Total | $ | (1 | ) | $ | (25 | ) | $ | 41 | $ | (35 | ) | |||||||||
Consolidated Information: | ||||||||||||||||||||
Revenues | $ | 493,566 | $ | 794,422 | $ | 1,619,121 | $ | 2,393,380 | ||||||||||||
Cost of product sales | 193,958 | 509,794 | 738,074 | 1,578,508 | ||||||||||||||||
Operating expenses | 122,634 | 115,964 | 355,419 | 337,566 | ||||||||||||||||
Depreciation and amortization expense | 50,272 | 46,118 | 151,120 | 135,151 | ||||||||||||||||
Segment operating income | 126,702 | 122,546 | 374,508 | 342,155 | ||||||||||||||||
General and administrative expenses | 23,679 | 24,967 | 75,425 | 68,986 | ||||||||||||||||
Other depreciation and amortization expense | 2,029 | 2,481 | 6,403 | 7,614 | ||||||||||||||||
Consolidated operating income | $ | 100,994 | $ | 95,098 | $ | 292,680 | $ | 265,555 | ||||||||||||
Consolidated
Financial Information - Continued
(Unaudited, Thousands of
Dollars, Except Per Unit Data)
Notes:
(1)
The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and DCF from continuing operations:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Income from continuing operations | $ | 65,016 | $ | 59,117 | $ | 246,466 | $ | 159,300 | ||||||||||||
Plus interest expense, net and interest income from related party |
33,448 | 33,007 | 98,309 | 99,491 | ||||||||||||||||
Plus income tax expense | 4,306 | 4,335 | 9,797 | 10,317 | ||||||||||||||||
Plus depreciation and amortization expense | 52,301 | 48,599 | 157,523 | 142,765 | ||||||||||||||||
EBITDA from continuing operations | 155,071 | 145,058 | 512,095 | 411,873 | ||||||||||||||||
Equity in earnings of joint ventures | — | (2,749 | ) | — | (1,737 | ) | ||||||||||||||
Interest expense, net and interest income from related party |
(33,448 | ) | (33,007 | ) | (98,309 | ) | (99,491 | ) | ||||||||||||
Reliability capital expenditures | (9,239 | ) | (6,264 | ) | (22,066 | ) | (18,262 | ) | ||||||||||||
Income tax expense | (4,306 | ) | (4,335 | ) | (9,797 | ) | (10,317 | ) | ||||||||||||
Distributions from joint ventures | — | 2,785 | 2,500 | 5,879 | ||||||||||||||||
Other items (a) | (1,100 | ) | 4,177 | (53,314 | ) | 8,046 | ||||||||||||||
Mark-to-market impact of hedge transactions (b) | (4,852 | ) | (4,981 | ) | (4,531 | ) | 1,726 | |||||||||||||
DCF from continuing operations | $ | 102,126 | $ | 100,684 | $ | 326,578 | $ | 297,717 | ||||||||||||
Less DCF from continuing operations available to general partner |
12,766 | 12,766 | 38,298 | 38,298 | ||||||||||||||||
DCF from continuing operations available to limited partners |
$ | 89,360 | $ | 87,918 | $ | 288,280 | $ | 259,419 | ||||||||||||
DCF from continuing operations per limited partner unit | $ | 1.15 | $ | 1.13 | $ | 3.70 | $ | 3.33 | ||||||||||||
(a) |
Other items consist of the net change in deferred revenue associated with throughput deficiency payments and construction reimbursements. For the nine months ended September 30, 2015, other items also include a $56.3 million non-cash gain associated with the Linden terminal acquisition. | |
(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. | |
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:
Nine Months Ended September 30, 2015 | ||||||||||
Net income / net income per unit | $ | 247,240 | $ | 2.69 | ||||||
Gain on Linden terminal acquisition | (56,277 | ) | (0.71 | ) | ||||||
Adjusted net income | 190,963 | |||||||||
GP interest and incentive | (36,233 | ) | ||||||||
Adjusted net income applicable to limited partners / adjusted net income per unit | $ | 154,730 | $ | 1.98 | ||||||
The following is a reconciliation of EBITDA from continuing operations to adjusted EBITDA from continuing operations:
Nine Months Ended September 30, 2015 |
|||||
EBITDA from continuing operations | $ | 512,095 | |||
Gain on Linden terminal acquisition | (56,277 | ) | |||
Adjusted EBITDA from continuing operations | $ | 455,818 | |||
The following is a reconciliation of projected incremental operating income to projected incremental EBITDA for the pipeline segment:
Year Ended December 31, 2015 | |||
Projected incremental operating income | $ 18,000 - 23,000 | ||
Plus projected incremental depreciation and amortization expense | 7,000 - 12,000 | ||
Projected incremental EBITDA | $ 25,000 - 35,000 | ||
The following is a reconciliation of projected incremental operating income to projected incremental EBITDA for the storage segment:
Year Ended December 31, | ||||||
2016 | 2015 | |||||
Projected incremental operating income | $ (17,000 - 41,000) | $ 30,000 - 35,000 | ||||
Plus projected incremental depreciation and amortization expense | 2,000 - 6,000 | 10,000 - 15,000 | ||||
Projected incremental EBITDA | $ (15,000 - 35,000) | $ 40,000 - 50,000 | ||||
The following is a reconciliation of projected operating income to projected EBITDA for the fuels marketing segment:
Year Ended December 31, | |||||
2016 | 2015 | ||||
Projected operating income | $ 15,000 - 35,000 | $ 10,000 - 20,000 | |||
Plus projected depreciation and amortization expense | — | — | |||
Projected EBITDA | $ 15,000 - 35,000 | $ 10,000 - 20,000 | |||
(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/20151103005660/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