NuStar Energy L.P. (NS) - Get NuStar Energy L.P. Report announced that its Board of Directors declared a first quarter 2020 common unit distribution of $0.40 per unit, which is a 33 percent reduction from last quarter's distribution. This reduction is expected to preserve approximately $88 million per year to support NuStar's balance sheet. The first quarter common unit distribution will be paid on May 15, 2020 to holders of record as of May 11, 2020.
"The change in our distribution policy is the most recent of several actions we have taken to preserve cash and strengthen our balance sheet in light of the many challenges resulting from the COVID-19 pandemic. We have also entered into a $750 million loan facility to pay down our revolver, bolster our liquidity and address our near-term debt maturities and made significant cuts to our 2020 CAPEX and other controllable expenses to help us weather this challenging market," said Brad Barron, NuStar president and CEO.
In addition to this distribution policy change, NuStar previously announced significant cuts to capital spending and expenses, including a 45 percent reduction in its 2020 strategic capital program and a reduction of between $20 - $30 million of controllable expenses for the full year of 2020.
"Through these trying times, we have been focused on our primary goals: protecting our employees by making sure they stay safe, healthy and productive; protecting our communities by continuing to provide the critical energy frontline workers need to fight the pandemic effectively; and protecting our business by ensuring we have the financial flexibility to navigate through these difficult market conditions.
"While these are unprecedented times and in the short term we need to do everything possible to ensure that we have the liquidity to succeed in these difficult circumstances, we strongly believe that NuStar's `best-in-class,' diversified assets combine to create a very resilient company capable of weathering this storm and recovering quickly once the economy gets going again," said Barron. "Of course, this is only strengthened by our strong, creditworthy customers, along with the cash preservation measures we have implemented over the past few weeks.
"And, while forecasting in a volatile market is always difficult, we will offer our view on the full year, along with our first-quarter results, on our upcoming earnings call on May 5," Barron said.
NuStar today also announced that its Board of Directors declared a first quarter 2020 Series A preferred unit distribution of $0.53125 per unit, a Series B preferred unit distribution of $0.47657 per unit and a Series C preferred unit distribution of $0.56250 per unit. The preferred unit distributions will be paid on June 15, 2020 to holders of record as of June 1, 2020.
A conference call with management is scheduled for 9:30 a.m. CT on Tuesday, May 5, 2020. The company plans to discuss the first quarter 2020 earnings results, which will be released earlier that day. Investors interested in listening to the discussion may dial toll-free 844/889-7787, passcode 6337969. International callers may access the discussion by dialing 661/378-9931, passcode 6337969. The partnership intends to have a playback available following the discussion, which may be accessed by dialing toll-free 855/859-2056, passcode 6337969. International callers may access the playback by dialing 404/537-3406, passcode 6337969. The playback will be available until 10:59 p.m. CT on June 5, 2020.
Investors interested in listening to the live discussion or a replay via the internet may access the discussion directly at https://edge.media-server.com/mmc/p/up3ujir8 or by logging on to NuStar Energy L.P.'s website at www.nustarenergy.com.
NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 10,000 miles of pipeline and 74 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. The partnership's combined system has approximately 74 million barrels of storage capacity, and NuStar has operations in the United States, Canada and Mexico. For more information, visit NuStar Energy L.P.'s website at www.nustarenergy.com.
This press release includes forward-looking statements regarding future events, such as the partnership's future performance, plans, capital expenditures and expense reductions. 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 2019 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. Except as required by law, the partnership does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
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 United States trade or business. Accordingly, all of NuStar Energy L.P.'s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals and corporations, as applicable. Nominees, and not NuStar Energy L.P., are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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