News Release
NuStar Energy Reports Highest Quarterly Coverage Ratio Since 3rd Quarter 2011
4th Quarter 2013 EPU and EBITDA Negatively Impacted by Non-Cash Charges
Corpus Dock Expansion to be Completed Earlier than Expected
Plans to Close on Divestiture of Remaining 50% Interest in Asphalt
Joint Venture by end of
Oxy to Begin Transporting NGLs on Idled 12” Pipeline
“2013 was a major turning point for NuStar as we took steps to
significantly reduce our exposure to margin-based operations and
continued to invest in the growth of our more stable pipelines and
terminals business,” said
“We’re excited about several important initiatives being announced today
that are expected to help improve our earnings in 2014 and beyond. We
have made tremendous progress on the expansion of our
“We have made a lot of progress over the past couple of months, and we’re going to keep up the pace as everyone is focused on our goal of returning to one-to-one coverage of our distribution. Largely as a result of the improved adjusted EBITDA results in all three of our segments in 2013, NuStar’s fourth quarter distributable cash flow from continuing operations available to limited partners covered the distribution to the limited partners by 0.89 times, the highest quarterly coverage ratio since the third quarter of 2011. Based on our current projections, we expect to start exceeding a one-times coverage ratio in the second half of 2014 and for the full year 2014,” said Barron.
Fourth Quarter and Full Year Earnings Results
As a result of some of the non-cash charges described below, fourth
quarter earnings before interest, taxes, depreciation and amortization
(EBITDA) from continuing operations was negative
For the year ended
As previously announced on
“Absent the impact of several non-cash adjustments, our fourth quarter 2013 results in both our fee-based pipeline and storage segments were higher than last year’s fourth quarter,” said Barron. “The completion of several internal growth projects in these segments contributed to the improved fourth quarter results.”
“I am also happy to note that our fuels marketing segment results were higher than last year’s fourth quarter as well.”
Fourth Quarter and Full Year Adjustments
Fourth quarter 2013 results include
Full year 2013 results include
Internal Growth Project Update
In November, the company completed the construction of a second rail-car
offloading facility at its
The construction of a new private dock at NuStar’s Corpus Christi North
Beach terminal should be completed by the end of
Divestiture of 50% Interest in Asphalt Joint Venture
NuStar has entered into an agreement with an affiliate of
After the transaction is closed, a
Reactivation of
2014 Earnings Guidance
“First quarter 2014 EBITDA results for our pipeline and fuels marketing
segments should be higher than last year’s first quarter due to the
benefit from our Eagle Ford shale internal growth projects and improved
results in our bunkering operations,” said Barron. “However, our first
quarter storage segment results are expected to be lower than last year
primarily due to reduced LLS to WTI profit-sharing benefits at our
Commenting on guidance for the full year 2014, Barron said, “Our
pipeline segment EBITDA should be
With regard to capital spending projections for 2014, Barron went on to
say, “We plan to spend
Fourth 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 December 31, | Year Ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Statement of Income Data (Note 1): | ||||||||||||||||
Revenues: | ||||||||||||||||
Service revenues | $ | 237,216 | $ | 231,776 | $ | 938,138 | $ | 870,157 | ||||||||
Product sales | 548,171 | 751,114 | 2,525,594 | 5,075,579 | ||||||||||||
Total revenues | 785,387 | 982,890 | 3,463,732 | 5,945,736 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of product sales | 525,760 | 718,208 | 2,453,997 | 4,930,174 | ||||||||||||
Operating expenses | 112,463 | 136,859 | 454,396 | 526,145 | ||||||||||||
General and administrative expenses | 25,108 | 29,502 | 91,086 | 104,756 | ||||||||||||
Depreciation and amortization expense | 45,805 | 38,196 | 178,921 | 159,789 | ||||||||||||
Goodwill impairment loss | 304,453 | — | 304,453 | 22,132 | ||||||||||||
Asset impairment loss | — | — | — | 249,646 | ||||||||||||
Gain on legal settlement | — | — | — | (28,738 | ) | |||||||||||
Total costs and expenses | 1,013,589 | 922,765 | 3,482,853 | 5,963,904 | ||||||||||||
Operating (loss) income | (228,202 | ) | 60,125 | (19,121 | ) | (18,168 | ) | |||||||||
Equity in loss of joint ventures | (13,341 | ) | (13,194 | ) | (39,970 | ) | (9,378 | ) | ||||||||
Interest expense, net | (34,270 | ) | (22,605 | ) | (127,119 | ) | (90,535 | ) | ||||||||
Interest income from related party | 1,553 | 1,158 | 6,113 | 1,219 | ||||||||||||
Other income (expense), net | 3,424 | (3,297 | ) | 7,341 | (24,689 | ) | ||||||||||
(Loss) income from continuing operations before
income tax expense |
(270,836 | ) | 22,187 | (172,756 | ) | (141,551 | ) | |||||||||
Income tax expense | 4,666 | 3,295 | 12,753 | 24,450 | ||||||||||||
(Loss) income from continuing operations | (275,502 | ) | 18,892 | (185,509 | ) | (166,001 | ) | |||||||||
Loss from discontinued operations, net of tax | (99,778 | ) | (29,915 | ) | (99,162 | ) | (61,236 | ) | ||||||||
Net loss | $ | (375,280 | ) | $ | (11,023 | ) | $ | (284,671 | ) | $ | (227,237 | ) | ||||
Net loss applicable to limited partners | $ | (368,327 | ) | $ | (21,212 | ) | $ | (311,516 | ) | $ | (263,325 | ) | ||||
Net (loss) income per unit applicable to limited partners | ||||||||||||||||
Continuing operations | $ | (3.60 | ) | $ | 0.10 | $ | (2.89 | ) | $ | (2.79 | ) | |||||
Discontinued operations | (1.13 | ) | (0.37 | ) | (1.11 | ) | (0.82 | ) | ||||||||
Total | $ | (4.73 | ) | $ | (0.27 | ) | $ | (4.00 | ) | $ | (3.61 | ) | ||||
Weighted-average limited partner units outstanding | 77,886,078 | 77,886,078 | 77,886,078 | 72,957,417 | ||||||||||||
EBITDA from continuing operations (Note 2) | $ | (192,314 | ) | $ | 81,830 | $ | 127,171 | $ | 107,554 | |||||||
DCF from continuing operations (Note 2) | $ | 88,115 | $ | 73,314 | $ | 308,877 | $ | 259,488 | ||||||||
December 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Balance Sheet Data: | ||||||||||||||||
Debt, including current portion (a) | $ | 2,655,553 | $ | 2,411,004 | ||||||||||||
Partners’ equity (b) | 1,903,794 | 2,584,995 | ||||||||||||||
Debt-to-capitalization ratio (a) / ((a)+(b)) | 58.2 | % | 48.3 | % |
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, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Storage: | ||||||||||||||||
Throughput (barrels/day) | 807,414 | 794,335 | 781,213 | 765,556 | ||||||||||||
Throughput revenues | $ | 27,629 | $ | 27,933 | $ | 104,553 | $ | 95,612 | ||||||||
Storage lease revenues | 105,956 | 117,480 | 451,996 | 482,454 | ||||||||||||
Total revenues | 133,585 | 145,413 | 556,549 | 578,066 | ||||||||||||
Operating expenses | 71,596 | 86,638 | 279,712 | 288,881 | ||||||||||||
Depreciation and amortization expense | 24,439 | 22,437 | 99,868 | 88,217 | ||||||||||||
Goodwill and asset impairment loss | 304,453 | — | 304,453 | 2,126 | ||||||||||||
Segment operating (loss) income | $ | (266,903 | ) | $ | 36,338 | $ | (127,484 | ) | $ | 198,842 | ||||||
Pipeline: | ||||||||||||||||
Refined products pipelines throughput (barrels/day) | 514,975 | 520,796 | 487,021 | 498,321 | ||||||||||||
Crude oil pipelines throughput (barrels/day) | 377,937 | 402,813 | 365,749 | 345,648 | ||||||||||||
Total throughput (barrels/day) | 892,912 | 923,609 | 852,770 | 843,969 | ||||||||||||
Throughput revenues | $ | 109,768 | $ | 95,517 | $ | 411,529 | $ | 340,455 | ||||||||
Operating expenses | 31,769 | 33,775 | 134,365 | 128,987 | ||||||||||||
Depreciation and amortization expense | 18,832 | 13,792 | 68,871 | 52,878 | ||||||||||||
Segment operating income | $ | 59,167 | $ | 47,950 | $ | 208,293 | $ | 158,590 | ||||||||
Fuels Marketing: | ||||||||||||||||
Product sales | $ | 549,167 | $ | 752,022 | $ | 2,527,698 | $ | 5,086,383 | ||||||||
Cost of product sales | 530,197 | 725,549 | 2,474,612 | 4,957,100 | ||||||||||||
Gross margin | 18,970 | 26,473 | 53,086 | 129,283 | ||||||||||||
Operating expenses | 11,849 | 20,457 | 53,185 | 148,458 | ||||||||||||
Depreciation and amortization expense | 7 | 18 | 27 | 11,253 | ||||||||||||
Goodwill and asset impairment loss | — | — | — | 266,357 | ||||||||||||
Segment operating income (loss) | $ | 7,114 | $ | 5,998 | $ | (126 | ) | $ | (296,785 | ) | ||||||
Consolidation and Intersegment Eliminations: | ||||||||||||||||
Revenues | $ | (7,133 | ) | $ | (10,062 | ) | $ | (32,044 | ) | $ | (59,168 | ) | ||||
Cost of product sales | (4,437 | ) | (7,341 | ) | (20,615 | ) | (26,926 | ) | ||||||||
Operating expenses | (2,751 | ) | (4,011 | ) | (12,866 | ) | (40,181 | ) | ||||||||
Total | $ | 55 | $ | 1,290 | $ | 1,437 | $ | 7,939 | ||||||||
Consolidated Information: | ||||||||||||||||
Revenues | $ | 785,387 | $ | 982,890 | $ | 3,463,732 | $ | 5,945,736 | ||||||||
Cost of product sales | 525,760 | 718,208 | 2,453,997 | 4,930,174 | ||||||||||||
Operating expenses | 112,463 | 136,859 | 454,396 | 526,145 | ||||||||||||
Depreciation and amortization expense | 43,278 | 36,247 | 168,766 | 152,348 | ||||||||||||
Goodwill and asset impairment loss | 304,453 | — | 304,453 | 268,483 | ||||||||||||
Segment operating (loss) income | (200,567 | ) | 91,576 | 82,120 | 68,586 | |||||||||||
General and administrative expenses | 25,108 | 29,502 | 91,086 | 104,756 | ||||||||||||
Other depreciation and amortization expense | 2,527 | 1,949 | 10,155 | 7,441 | ||||||||||||
Other asset impairment loss | — | — | — | 3,295 | ||||||||||||
Gain on legal settlement | — | — | — | (28,738 | ) | |||||||||||
Consolidated operating (loss) income | $ | (228,202 | ) | $ | 60,125 | $ | (19,121 | ) | $ | (18,168 | ) | |||||
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Per Unit Data)
Notes:
(1) The results of operations for the following have been reported as
discontinued operations for all periods presented: (i) the
(2)
The following is a reconciliation of (loss) income from continuing operations to EBITDA from continuing operations and DCF from continuing operations:
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Loss) income from continuing operations | $ | (275,502 | ) | $ | 18,892 | $ | (185,509 | ) | $ | (166,001 | ) | |||||
Plus interest expense, net and interest income from related party |
32,717 | 21,447 | 121,006 | 89,316 | ||||||||||||
Plus income tax expense | 4,666 | 3,295 | 12,753 | 24,450 | ||||||||||||
Plus depreciation and amortization expense | 45,805 | 38,196 | 178,921 | 159,789 | ||||||||||||
EBITDA from continuing operations | (192,314 | ) | 81,830 | 127,171 | 107,554 | |||||||||||
Equity in loss of joint ventures | 13,341 | 13,194 | 39,970 | 9,378 | ||||||||||||
Interest expense, net and interest income from related party |
(32,717 | ) | (21,447 | ) | (121,006 | ) | (89,316 | ) | ||||||||
Reliability capital expenditures | (11,600 | ) | (14,554 | ) | (39,939 | ) | (32,012 | ) | ||||||||
Income tax expense | (4,666 | ) | (3,295 | ) | (12,753 | ) | (24,450 | ) | ||||||||
Distributions from joint ventures | 2,169 | — | 7,956 | 6,364 | ||||||||||||
Other items (a) | 315,718 | 13,304 | 311,675 | 287,981 | ||||||||||||
Mark-to-market impact on hedge transactions (b) | (1,816 | ) | 4,282 | (4,197 | ) | (6,011 | ) | |||||||||
DCF from continuing operations | $ | 88,115 | $ | 73,314 | $ | 308,877 | $ | 259,488 | ||||||||
Less DCF from continuing operations available to
general partner |
12,766 | 12,766 | 51,064 | 48,728 | ||||||||||||
DCF from continuing operations available to limited partners |
$ | 75,349 | $ | 60,548 | $ | 257,813 | $ | 210,760 | ||||||||
DCF from continuing operations per limited partner unit |
$ | 0.97 | $ | 0.78 | $ | 3.31 | $ | 2.89 | ||||||||
(a) Other items for the three months and year ended
Other items for the year 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