News Release
NuStar Energy Reports Increased Earnings Per Unit and Total Distributable Cash Flow in Second Quarter of 2013
Pipeline and Fuels Marketing Segment Results Improved
Company Recently Announced Binding Open Season in the
For the six months ended
The second quarter 2012 results included
The partnership also announced that its board of directors has declared
a second quarter 2013 distribution of
“NuStar’s second quarter results improved compared to the same quarter
last year primarily as a result of the company’s recent growth in the
Eagle Ford Shale region and the strategic redirection we undertook in
2012 and early 2013 to minimize our exposure to margin-based
operations,” said
Regarding the performance in the pipeline segment Anastasio said, “The
completion of several internal growth projects in the Eagle Ford Shale
region during the last half of 2012 and the
Anastasio then added, “Internal growth projects completed at our
Anastasio then commented on the company’s fuels marketing segment by saying, “Although our fuels marketing segment only represents about ten percent of our business, we were pleased to see it generate a small profit during the second quarter despite the continued weak demand for bunkers and increased competition in the Caribbean.”
Eagle Ford Shale Region Open Season
“Last week NuStar announced the launch of an Open Season to assess
shipper interest in committed space to transport Eagle Ford Shale crude
oil from several terminal locations on our South Texas Crude Oil
Pipeline System to our Corpus Christi North Beach facility,” said
Anastasio. “The Open Season has generated a lot of interest and is
scheduled to continue until
Describing the potential project associated with the Open Season, Anastasio said, “The proposed project would include pipeline capacity upgrades to segments of the South Texas Crude Oil Pipeline System and would be constructed in two phases. The first phase will add incremental throughput capacity of approximately 35,000 barrels per day and the second phase will add incremental throughput capacity of approximately 65,000 barrels per day, for a total aggregate incremental capacity of 100,000 barrels per day, of which 90,000 barrels per day will be available to committed shippers. The first phase should be available for service to committed shippers in the third quarter of 2014, while the second phase should be available during the first quarter of 2015.”
Internal Growth Project Update
“We continue to work on a pipeline project for
Full-Year 2013 Outlook
Commenting on the earnings outlook for 2013, Anastasio said, “We expect
the EBITDA results for our pipeline and fuels marketing segments to be
higher than last year, while our storage segment results should be
comparable to 2012. Results in our pipeline segment should continue to
benefit from our Eagle Ford Shale region internal growth pipeline
projects completed in 2012 and later in 2013 as well as from the crude
oil assets acquired from
Anastasio then said, “Based on these segment projections we expect our 2013 earnings per unit, distributable cash flow and our coverage ratio to be higher than 2012.”
With regard to capital spending projections Anastasio added, “NuStar
expects to spend
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 Data and Per Unit Data) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Statement of Income Data (Note 1): | |||||||||||||||||
Revenues: | |||||||||||||||||
Services revenues | $ | 233,633 | $ | 211,657 | $ | 460,916 | $ | 421,376 | |||||||||
Product sales | 670,563 | 1,556,091 | 1,442,990 | 2,955,777 | |||||||||||||
Total revenues | 904,196 | 1,767,748 | 1,903,906 | 3,377,153 | |||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of product sales | 648,766 | 1,528,059 | 1,401,020 | 2,882,589 | |||||||||||||
Operating expenses | 115,072 | 134,497 | 232,646 | 259,611 | |||||||||||||
General and administrative expenses | 19,653 | 23,134 | 47,147 | 50,301 | |||||||||||||
Depreciation and amortization expense | 46,662 | 43,926 | 89,588 | 87,501 | |||||||||||||
Asset impairment loss | - | 249,646 | - | 249,646 | |||||||||||||
Goodwill impairment loss | - | 22,132 | - | 22,132 | |||||||||||||
Gain on legal settlement | - | (28,738 | ) | - | (28,738 | ) | |||||||||||
Total costs and expenses | 830,153 | 1,972,656 | 1,770,401 | 3,523,042 | |||||||||||||
Operating income (loss) | 74,043 | (204,908 | ) | 133,505 | (145,889 | ) | |||||||||||
Equity in (loss) earnings of joint ventures | (10,128 | ) | 2,381 | (21,271 | ) | 4,767 | |||||||||||
Interest expense, net | (29,678 | ) | (22,847 | ) | (59,791 | ) | (44,224 | ) | |||||||||
Other income (expense), net | 2,203 | (2,816 | ) | 2,571 | (1,449 | ) | |||||||||||
Income (loss) from continuing operations before income tax expense |
36,440 | (228,190 | ) | 55,014 | (186,795 | ) | |||||||||||
Income tax expense | 4,174 | 16,276 | 6,710 | 19,719 | |||||||||||||
Income (loss) from continuing operations | 32,266 | (244,466 | ) | 48,304 | (206,514 | ) | |||||||||||
Income (loss) from discontinued operations | 703 | (2,344 | ) | 9,069 | (14,042 | ) | |||||||||||
Net income (loss) | $ | 32,969 | $ | (246,810 | ) | $ | 57,373 | $ | (220,556 | ) | |||||||
Net income (loss) applicable to limited partners | $ | 21,619 | $ | (251,618 | ) | $ | 34,887 | $ | (235,610 | ) | |||||||
Net income (loss) per unit applicable to limited partners | |||||||||||||||||
Continuing operations | $ | 0.27 | $ | (3.53 | ) | $ | 0.33 | $ | (3.14 | ) | |||||||
Discontinued operations | 0.01 | (0.03 | ) | 0.12 | (0.19 | ) | |||||||||||
Total | $ | 0.28 | $ | (3.56 | ) | $ | 0.45 | $ | (3.33 | ) | |||||||
Weighted average limited partner units outstanding | 77,886,078 | 70,756,078 | 77,886,078 | 70,756,078 | |||||||||||||
EBITDA from continuing operations (Note 2) | $ | 112,780 | $ | (161,417 | ) | $ | 204,393 | $ | (55,070 | ) | |||||||
Distributable cash flow from continuing operations (Note 2) | $ | 67,735 | $ | 43,102 | $ | 135,158 | $ | 105,776 | |||||||||
June 30, | June 30, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | |||||||||||||||
Balance Sheet Data: | |||||||||||||||||
Debt, including current portion (a) | $ | 2,500,948 | $ | 2,624,868 | $ | 2,411,004 | |||||||||||
Partners' equity (b) | 2,440,266 | 2,421,117 | 2,584,995 | ||||||||||||||
Debt-to-capitalization ratio (a) / ((a)+(b)) | 50.6 | % | 52.0 | % | 48.3 | % | |||||||||||
NuStar Energy L.P. and Subsidiaries | |||||||||||||||||
Consolidated Financial Information - Continued | |||||||||||||||||
(Unaudited, Thousands of Dollars, Except Barrel Data) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Segment Data: | |||||||||||||||||
Storage: | |||||||||||||||||
Throughput (barrels/day) | 813,345 | 747,774 | 741,872 | 743,425 | |||||||||||||
Throughput revenues | $ | 26,626 | $ | 22,193 | $ | 48,987 | $ | 44,457 | |||||||||
Storage lease revenues | 118,489 | 130,600 | 240,447 | 253,765 | |||||||||||||
Total revenues | 145,115 | 152,793 | 289,434 | 298,222 | |||||||||||||
Operating expenses | 75,969 | 73,413 | 144,679 | 139,395 | |||||||||||||
Depreciation and amortization expense | 27,409 | 23,127 | 51,840 | 46,427 | |||||||||||||
Asset impairment loss | - | 2,126 | - | 2,126 | |||||||||||||
Segment operating income | $ | 41,737 | $ | 54,127 | $ | 92,915 | $ | 110,274 | |||||||||
Pipeline: | |||||||||||||||||
Refined products pipelines throughput (barrels/day) | 459,663 | 459,163 | 465,446 | 475,367 | |||||||||||||
Crude oil pipelines throughput (barrels/day) | 350,850 | 291,880 | 351,021 | 310,980 | |||||||||||||
Total throughput (barrels/day) | 810,513 | 751,043 | 816,467 | 786,347 | |||||||||||||
Revenues |
$ | 96,976 | $ | 74,607 | $ | 190,253 | $ | 152,368 | |||||||||
Operating expenses | 29,101 | 30,027 | 66,507 | 57,591 | |||||||||||||
Depreciation and amortization expense | 16,648 | 13,020 | 32,638 | 26,001 | |||||||||||||
Segment operating income | $ | 51,227 | $ | 31,560 | $ | 91,108 | $ | 68,776 | |||||||||
Fuels marketing: | |||||||||||||||||
Product sales | $ | 670,604 | $ | 1,559,166 | $ | 1,443,612 | $ | 2,962,426 | |||||||||
Cost of product sales | 654,202 | 1,534,391 | 1,412,934 | 2,894,909 | |||||||||||||
Gross margin | 16,402 | 24,775 | 30,678 | 67,517 | |||||||||||||
Operating expenses | 12,964 | 43,551 | 28,826 | 86,206 | |||||||||||||
Depreciation and amortization expense | 6 | 5,740 | 13 | 11,220 | |||||||||||||
Asset and goodwill impairment loss | - | 266,357 | - | 266,357 | |||||||||||||
Segment operating income (loss) | $ | 3,432 | $ | (290,873 | ) | $ | 1,839 | $ | (296,266 | ) | |||||||
Consolidation and intersegment eliminations: | |||||||||||||||||
Revenues | $ | (8,499 | ) | $ | (18,818 | ) | $ | (19,393 | ) | $ | (35,863 | ) | |||||
Cost of product sales | (5,436 | ) | (6,332 | ) | (11,914 | ) | (12,320 | ) | |||||||||
Operating expenses | (2,962 | ) | (12,494 | ) | (7,366 | ) | (23,581 | ) | |||||||||
Total | $ | (101 | ) | $ | 8 | $ | (113 | ) | $ | 38 | |||||||
Consolidated Information: | |||||||||||||||||
Revenues | $ | 904,196 | $ | 1,767,748 | $ | 1,903,906 | $ | 3,377,153 | |||||||||
Cost of product sales | 648,766 | 1,528,059 | 1,401,020 | 2,882,589 | |||||||||||||
Operating expenses | 115,072 | 134,497 | 232,646 | 259,611 | |||||||||||||
Depreciation and amortization expense | 44,063 | 41,887 | 84,491 | 83,648 | |||||||||||||
Asset and goodwill impairment loss | - | 268,483 | - | 268,483 | |||||||||||||
Segment operating income (loss) | 96,295 | (205,178 | ) | 185,749 | (117,178 | ) | |||||||||||
General and administrative expenses |
19,653 | 23,134 | 47,147 | 50,301 | |||||||||||||
Other depreciation and amortization expense | 2,599 | 2,039 | 5,097 | 3,853 | |||||||||||||
Other asset impairment loss | - | 3,295 | - | 3,295 | |||||||||||||
Gain on legal settlement | - | (28,738 | ) | - | (28,738 | ) | |||||||||||
Consolidated operating income (loss) | $ | 74,043 | $ | (204,908 | ) | $ | 133,505 | $ | (145,889 | ) | |||||||
NuStar Energy L.P. and Subsidiaries |
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Consolidated Financial Information - Continued |
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(Unaudited, Thousands of Dollars, Except Per Unit Data) |
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Notes: |
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1. |
The results of operations for the San Antonio Refinery and related assets have been reported as discontinued operations for all periods presented. |
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2. |
NuStar Energy L.P. utilizes two financial measures, EBITDA from continuing operations and distributable cash flow from continuing operations, which are not defined in United States generally accepted accounting principles. 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 measures provide investors an enhanced perspective of the operating performance of the partnership's assets and the cash that the business is generating. Neither EBITDA from continuing operations nor distributable cash flow from continuing operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income from continuing operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles. |
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The following is a reconciliation of income from continuing operations to EBITDA from continuing operations and distributable cash flow from continuing operations: |
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Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Income (loss) from continuing operations | $ | 32,266 | $ | (244,466 | ) | $ | 48,304 | $ | (206,514 | ) | |||||||
Plus interest expense, net | 29,678 | 22,847 | 59,791 | 44,224 | |||||||||||||
Plus income tax expense | 4,174 | 16,276 | 6,710 | 19,719 | |||||||||||||
Plus depreciation and amortization expense | 46,662 | 43,926 | 89,588 |
87,501 |
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EBITDA from continuing operations | 112,780 | (161,417 | ) | 204,393 | (55,070 | ) | |||||||||||
Equity in loss (earnings) of joint ventures | 10,128 | (2,381 | ) | 21,271 | (4,767 | ) | |||||||||||
Interest expense, net | (29,678 | ) | (22,847 | ) | (59,791 | ) | (44,224 | ) | |||||||||
Reliability capital expenditures | (11,725 | ) | (5,244 | ) | (17,467 | ) | (9,872 | ) | |||||||||
Income tax expense | (4,174 | ) | (16,276 | ) | (6,710 | ) | (19,719 | ) | |||||||||
Distributions from joint ventures | - | 3,266 | 4,652 | 3,266 | |||||||||||||
Other non-cash items (a) | (6,500 | ) | 253,098 | (6,500 | ) | 253,098 | |||||||||||
Mark-to-market impact on hedge transactions (b) | (3,096 | ) | (5,097 | ) | (4,690 | ) | (16,936 | ) | |||||||||
Distributable cash flow from continuing operations | $ | 67,735 | $ | 43,102 | $ | 135,158 | $ | 105,776 | |||||||||
Less distributable cash flow from continuing operations attributable to noncontrolling interest |
(88 | ) | 12 | (180 | ) | 14 | |||||||||||
Less distributable cash flow from continuing operations available to general partner |
12,766 | 11,598 | 25,532 | 23,196 | |||||||||||||
Distributable cash flow from continuing operations available to limited partners |
$ | 55,057 | $ | 31,492 | $ | 109,806 | $ | 82,566 | |||||||||
Distributable cash flow from continuing operations per limited partner unit |
$ | 0.71 | $ | 0.45 | $ | 1.41 | $ | 1.17 | |||||||||
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(a) |
Other non-cash items for 2013 relate to the reduction of a contingent consideration recorded in association with an acquisition. The amount for 2012 primarily consists of $271.8 million of long-lived asset impairment charges mainly related to our asphalt operations, including fixed assets, goodwill and intangible assets. The 2012 impairment charges were partially offset by an $18.7 million gain, net of tax, resulting from a legal settlement. |
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(b) |
Distributable cash flow 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 distributable cash flow from continuing operaitons when the contracts are settled. |
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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