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NuStar Energy Reports Earnings Results For Fourth Quarter And Full Year 2012

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 NuStar GP Holdings, LLC’s 2011 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.

 
 
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)
               
Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  
 
Statement of Income Data (Note 1):
Revenues:
Services revenues $ 233,653 $ 220,980 $ 880,097 $ 834,809
Product sales   751,114     1,603,425     5,075,579     5,437,006  
Total revenues 984,767 1,824,405 5,955,676 6,271,815
 
Costs and expenses:
Cost of product sales 718,208 1,567,793 4,930,174 5,175,710
Operating expenses 141,116 138,035 542,764 524,654
General and administrative expenses 29,502 33,538 104,756 103,050
Depreciation and amortization expense 39,483 43,210 165,021 166,589
Asset impairment loss - - 249,646 -
Goodwill impairment loss - - 22,132 -
Gain on legal settlement   -     -     (28,738 )   -  
Total costs and expenses   928,309     1,782,576     5,985,755     5,970,003  
Operating income (loss) 56,458 41,829 (30,079 ) 301,812
Equity in (loss) earnings of joint ventures (13,194 ) 4,461 (9,378 ) 11,458
Interest expense, net (21,552 ) (20,339 ) (89,670 ) (81,727 )
Other (expense) income, net   (5,119 )   2,401     (26,511 )   (3,343 )
Income (loss) from continuing operations
before income tax expense 16,593 28,352 (155,638 ) 228,200
Income tax expense   2,176     3,568     22,494     16,713  
Income (loss) from continuing operations 14,417 24,784 (178,132 ) 211,487
(Loss) income from discontinued operations, net of income tax   (25,440 )   5,415     (49,105 )   10,114  
Net (loss) income $ (11,023 ) $ 30,199   $ (227,237 ) $ 221,601  
 
Net (loss) income applicable to limited partners $ (21,212 ) $ 19,782   $ (263,325 ) $ 180,714  
 
Net income (loss) per unit applicable to limited partners:
Continuing operations $ 0.05 $ 0.22 $ (2.95 ) $ 2.63
Discontinued operations   (0.32 )   0.08     (0.66 )   0.15  
Total $ (0.27 ) $ 0.30   $ (3.61 ) $ 2.78  
 
Weighted average limited partner units outstanding 77,886,078 66,226,386 72,957,417 65,018,301
 
EBITDA from continuing operations (Note 2) $ 77,628 $ 91,901 $ 99,053 $ 476,516
 
Distributable cash flow from continuing operations (Note 2) $ 69,500 $ 71,140 $ 251,029 $ 348,649
 
 
December 31,
  2012     2011  
Balance Sheet Data:
Debt, including current portion (a) $ 2,411,004 $ 2,293,030
Partners' equity (b) 2,584,995 2,864,335
Debt-to-capitalization ratio (a) / ((a)+(b)) 48.3 % 44.5 %
 
 
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Barrel Data)
               
Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  
 
Segment Data:
Storage:
Throughput (barrels/day) 794,335 735,521 765,556 693,269
Throughput revenues $ 27,933 $ 21,858 $ 95,612 $ 80,246
Storage lease revenues   120,557     126,705     500,030     486,525  
Total revenues 148,490 148,563 595,642 566,771
Operating expenses 90,895 72,409 305,500 285,639
Depreciation and amortization expense 23,724 23,081 93,449 87,737
Asset impairment loss   -     -     2,126     -  
Segment operating income $ 33,871   $ 53,073   $ 194,567   $ 193,395  
 
Transportation:
Refined products pipelines throughput (barrels/day) 520,796 528,818 498,321 514,261
Crude oil pipelines throughput (barrels/day)   402,813     355,627     345,648     317,427  
Total throughput (barrels/day) 923,609 884,445 843,969 831,688
Revenues $ 95,517 $ 85,043 $ 340,455 $ 311,514
Operating expenses 33,775 29,111 128,987 113,946
Depreciation and amortization expense   13,792     12,886     52,878     51,165  
Segment operating income $ 47,950   $ 43,046   $ 158,590   $ 146,403  
 
Asphalt and fuels marketing:
Product sales and other revenue $ 752,022 $ 1,607,320 $ 5,086,383 $ 5,455,659
Cost of product sales   725,549     1,573,702     4,957,100     5,205,574  
Gross margin 26,473 33,618 129,283 250,085
Operating expenses 20,457 47,091 148,458 157,282
Depreciation and amortization expense 18 5,416 11,253 20,949
Asset and goodwill impairment loss   -     -     266,357     -  
Segment operating income (loss) $ 5,998   $ (18,889 ) $ (296,785 ) $ 71,854  
 
Consolidation and intersegment eliminations:
Revenues $ (11,262 ) $ (16,521 ) $ (66,804 ) $ (62,129 )
Cost of product sales (7,341 ) (5,909 ) (26,926 ) (29,864 )
Operating expenses   (4,011 )   (10,576 )   (40,181 )   (32,213 )
Total $ 90   $ (36 ) $ 303   $ (52 )
 
Consolidated Information:
Revenues $ 984,767 $ 1,824,405 $ 5,955,676 $ 6,271,815
Cost of product sales 718,208 1,567,793 4,930,174 5,175,710
Operating expenses 141,116 138,035 542,764 524,654
Depreciation and amortization expense 37,534 41,383 157,580 159,851
Asset and goodwill impairment loss   -     -     268,483     -  
Segment operating income 87,909 77,194 56,675 411,600
General and administrative expenses (29,502 ) (33,538 ) (104,756 ) (103,050 )
Other depreciation and amortization expense (1,949 ) (1,827 ) (7,441 ) (6,738 )
Other asset impairment loss - - (3,295 ) -
Gain on legal settlement   -     -     28,738     -  
Consolidated operating income (loss) $ 56,458   $ 41,829   $ (30,079 ) $ 301,812  
 
 
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Per Unit Data)
   
Notes:
1. The results of operations for the San Antonio Refinery and related assets have been reported as discontinued operations for all periods presented.
 
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.
 
The following is a reconciliation of income (loss) from continuing operations to EBITDA from continuing operations and distributable cash flow from continuing operations:
               
Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  
 
Income (loss) from continuing operations $ 14,417 $ 24,784 $ (178,132 ) $ 211,487
Plus interest expense, net 21,552 20,339 89,670 81,727
Plus income tax expense 2,176 3,568 22,494 16,713
Plus depreciation and amortization expense   39,483     43,210     165,021     166,589  
EBITDA from continuing operations 77,628 91,901 99,053 476,516
 
Less equity in loss (earnings) of joint ventures 13,194 (4,461 ) 9,378 (11,458 )
Less interest expense, net (21,552 ) (20,339 ) (89,670 ) (81,727 )
Less reliability capital expenditures (15,180 ) (6,147 ) (33,572 ) (44,339 )
Less income tax expense (2,176 ) (3,568 ) (22,494 ) (16,713 )
Plus distributions from joint venture - 4,977 6,364 14,374
Plus other non-cash items (a) 13,304 - 287,981 5,093
Mark-to-market impact on hedge transactions (b) 4,282 8,777 (6,011 ) 3,653
Contingent loss adjustment   -     -     -     3,250  
Distributable cash flow from continuing operations 69,500 71,140 251,029 348,649
 
Distributable cash flow from continuing operations
attributable to noncontrolling interest (344 ) 53 (300 ) 441
Distributable cash flow from continuing operations
available to general partner   12,766     11,598     48,728     42,956  
Distributable cash flow from continuing operations
available to limited partners $ 57,078   $ 59,489   $ 202,601   $ 305,252  
 
Distributable cash flow from continuing operations
per limited partner unit $ 0.73 $ 0.90 $ 2.77 $ 4.70
(a)   Other non-cash items for the year ended December 31, 2012 consist of (i) $271.8 million of long-lived asset impairment charges mainly related to our asphalt operations, including fixed assets, goodwill and intangible assets, (ii) a $21.6 million loss associated with the sale of 50% of our asphalt operations on September 28, 2012, (iii) $13.3 million in costs written off due to cancelled capital projects and leasehold improvements associated with the termination of the lease of our previous corporate headquarters building and (iv) an $18.7 million gain, net of tax, resulting from a legal settlement.
 
(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 operations when the contracts are settled.




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