NuStar Energy L.P. and NuStar GP Holdings, LLC Announce Earnings Results for First Quarter 2018 SAN ANTONIO
Merger and Simplification on Track to Close in Second Quarter 2018
Finalized Strategic Growth Projects to Supply Refined Products to
Mexico
Recently Closed on Immediately Accretive Pipeline and Terminal
Acquisition
For the first quarter of 2018, NuStar Energy L.P.’s (NYSE: NS) (the
“Partnership” or “NuStar” or “NS”) net income applicable to common
limited partners was $107 million, or $1.15 per unit, up 178% from $38
million, or $0.49 per unit for first quarter 2017, while earnings before
interest, taxes, depreciation and amortization (EBITDA) were $250
million, up 62% from $154 million for first quarter 2017.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180426005566/en/
During the first quarter of 2018, the partnership received hurricane
insurance proceeds of $87.5 million to fully cover the cost of repairing
the property damage at its St. Eustatius terminal during 2017. While a
gain of $79 million was reflected in the partnership’s first quarter net
income and EBITDA, NuStar stated that it is important to note that the
gain will only be recognized in distributable cash flow (DCF) available
to common limited partners as the proceeds are spent over the next
couple of years to repair damage caused from the hurricane.
The partnership announced first quarter 2018 Series A, Series B and
Series C preferred unit distributions of $0.53125 per unit, $0.47657 per
unit and $0.56250 per unit, respectively, that will be paid on June 15,
2018 to holders of record as of June 1, 2018. In addition, a first
quarter 2018 common unit distribution of $0.60 per unit will be paid on
May 14, 2018 to holders of record as of May 8, 2018.
“Excluding the effect of the associated gain related to hurricane
insurance proceeds, our strong first quarter results were primarily
driven by contributions from our Permian Crude System and increased
storage rates at some of our international storage facilities. In
addition, we experienced improved results in our Fuels Marketing segment
due to the streamlining efforts that we executed last year. Overall, the
strength of our business was demonstrated this quarter as results in all
three of our segments were up, quarter over quarter,” said Brad Barron,
President and Chief Executive Officer of NuStar Energy L.P. and NuStar
GP Holdings, LLC.
Barron continued, “During our most recent earnings call in early
February, we laid out a comprehensive, staged approach to best position
NuStar for long-term financial strength and sustainable growth, which
includes simplifying our structure, restoring our coverage, lowering our
leverage and minimizing our need to access the equity capital markets.
Since then, we have made substantial progress on our simplification. In
mid-March, we filed a Form S-4 preliminary proxy statement to seek
NuStar GP Holdings, LLC’s unitholder approval and issue NS units to
execute the simplification. We are in the process of responding to the
SEC’s comments to the Form S-4, and we expect to be positioned to
schedule the unitholder vote and close by the end of the second quarter.”
Strategic Growth Projects to Supply Refined
Products to Mexico
Barron also announced that NuStar will be expanding its existing
pipeline assets in South Texas, as well as its terminal in Nuevo Laredo,
Mexico, with projects to supply refined products to growing markets in
Mexico.
“For those of you who have followed NuStar over the years, you know
that, since Mexico’s energy reforms began, we have been excited about
the new opportunities those reforms presented for us,” Barron said.
“Since then, we have worked to position NuStar to take advantage of
these opportunities by utilizing our existing assets in South Texas and
Mexico to supply products to the Mexico market, and I’m happy to say we
have accomplished that.
“In support of this expansion, I am pleased to announce that we have
signed several long-term T&D contracts with strong, creditworthy
customers to support a series of healthy-return capital projects to
connect to third-party rail facilities in Corpus Christi, expand certain
South Texas products pipeline systems and expand our terminal in Nuevo
Laredo.
“We expect to benefit from incremental revenue from these projects,
starting as soon as late 2018, and we believe the Mexico market presents
significant opportunities for future growth. And, I am proud of our
team’s perseverance and creativity in developing these projects, which
we believe will establish NuStar as one of the primary logistics
providers for this burgeoning market,” said Barron.
Completed Purchase of Refined Products
Pipeline and Terminal from CHS Inc.
Barron also stated that in mid-April, NuStar closed on an immediately
accretive, $38 million acquisition of CHS’ Council Bluffs system,
consisting of a 227-mile pipeline and 18 storage tanks at a very
attractive multiple.
“This bolt-on system is supported by long-term throughput and storage
agreements and enhances our existing Central East System by increasing
our overall system flexibility and allowing expansion into new markets,
while at the same time enhancing our role as a key logistics provider to
CHS,” said Barron.
NuStar GP Holdings, LLC’s Earnings Results
for First Quarter 2018
NuStar GP Holdings, LLC (NYSE: NSH) (the “Company” or “NSH”) today
announced first quarter 2018 net income of $12 million, or $0.28 per
unit, and DCF available to unitholders of $6 million.
The company also announced a first quarter 2018 distribution of $0.33
per unit that will be paid on May 16, 2018 to holders of record as of
May 8, 2018. The NSH distribution was calculated assuming that NSH
unitholders are expected to receive 0.55 units of NS for each NSH unit
they own after the closing of the upcoming simplification transaction.
Conference Call Details
A conference call with management is scheduled for 10:00 a.m. CT today,
April 26, 2018, to discuss the financial and operational results for the
first quarter of 2018. The conference call may be accessed by dialing
toll-free 844/889-7787, reservation passcode 1271207. International
callers may access the conference call by dialing 661/378-9931,
reservation passcode 1271207. NSH and the Partnership intend to have a
playback available following the conference call, which may be accessed
by dialing toll-free 855/859-2056, reservation passcode 1271207.
International callers may access the playback by dialing 404/537-3406,
reservation passcode 1271207. The playback will be available until 1:00
p.m. CT on May 26, 2018.
Investors interested in listening to the live presentation or a replay
via the internet may access the presentation directly at https://edge.media-server.com/m6/p/omwra6td
or by logging on to either NuStar Energy L.P.’s website at www.nustarenergy.com
or NuStar GP Holdings, LLC’s website at www.nustargpholdings.com.
The discussion 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 NuStar Energy
L.P.’s website at www.nustarenergy.com
and NuStar GP Holdings, LLC’s website at www.nustargpholdings.com.
About NuStar Energy L.P. and NuStar GP
Holdings, LLC
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 more than 9,400
miles of pipeline and 81 terminal and storage facilities that store and
distribute crude oil, refined products and specialty liquids. The
partnership’s combined system has more than 96 million barrels of
storage capacity, and NuStar has operations in the United States,
Canada, Mexico, the Netherlands, including St. Eustatius in the
Caribbean, and the United Kingdom. For more information, visit NuStar
Energy L.P.’s website at www.nustarenergy.com.
NuStar GP Holdings, LLC is a publicly traded limited liability company
that owns the general partner interest, an approximate 11 percent common
limited partner interest and the incentive distribution rights in NuStar
Energy L.P. For more information, visit NuStar GP Holdings, LLC’s
website at www.nustargpholdings.com.
About CHS Inc.
CHS Inc. (www.chsinc.com)
is a leading global agribusiness owned by farmers, ranchers and
cooperatives across the United States. Diversified in energy, grains and
foods, CHS is committed to helping its customers, farmer-owners and
other stakeholders grow their businesses through its domestic and global
operations. CHS supplies energy, crop nutrients, grain marketing
services, animal feed, food and food ingredients, along with insurance,
financial and risk management services. The company operates petroleum
refineries/pipelines and manufactures, markets and distributes Cenex®
brand refined fuels, lubricants, propane and renewable energy products.
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.
Important Information For Investors And
Unitholders
On February 7, 2018, the Partnership, Riverwalk Logistics, L.P.,
NuStar GP, LLC, Marshall Merger Sub LLC, a wholly owned subsidiary of
the Partnership (Merger Sub), Riverwalk Holdings, LLC and NSH entered
into an Agreement and Plan of Merger pursuant to which Merger Sub will
merge with and into NSH with NSH being the surviving entity, such that
the Partnership will be the sole member of NSH following the merger. In
connection with the proposed merger, the Partnership has filed a
registration statement (Registration No. 333-223671), which includes a
preliminary prospectus of the Partnership and a preliminary proxy
statement of NSH and other materials, with the Securities and Exchange
Commission (the SEC). INVESTORS AND UNITHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS THAT HAVE BEEN OR WILL BE FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PARTNERSHIP, NSH
AND THE PROPOSED TRANSACTION. The information in this communication is
for informational purposes only and is neither an offer to purchase, nor
an offer to sell, subscribe for or buy any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to or
in connection with the proposed transactions or otherwise, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended, and otherwise
in accordance with applicable law. A definitive proxy
statement/prospectus will be sent to unitholders of NSH seeking their
approval of the proposed merger after the registration statement is
declared effective by the SEC. Investors and unitholders may obtain a
free copy of the proxy statement/prospectus and other documents (when
available) containing important information about the Partnership and
NSH through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by the Partnership will be
available free of charge on the Partnership’s website at www.nustarenergy.com
under the tab “Investors” or by contacting the Partnership’s investor
relations at investorrelations@nustarenergy.com.
Copies of the documents filed with the SEC by NSH will be available free
of charge on NSH’s website at www.nustargpholdings.com
under the tab “Investors” or by contacting NSH’s investor relations at investorrelations@nustarenergy.com.
The Partnership and its general partner, the directors and certain of
the executive officers of NuStar GP, LLC and NSH and its directors and
certain of its executive officers, may be deemed to be participants in
the solicitation of proxies from the unitholders of NSH in connection
with the proposed merger. Information about the directors and executive
officers of NuStar GP, LLC is set forth in the Partnership’s Annual
Report on Form 10-K for the year ended December 31, 2017 and subsequent
statements of changes in beneficial ownership on file with the SEC. Information
about the directors and executive officers of NSH is set forth in NSH’s
Annual Report on Form 10-K for the year ended December 31, 2017 and
subsequent statements of changes in beneficial ownership on file with
the SEC. These documents can be obtained free of charge from the sources
listed above. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials filed or to be filed
with the SEC.
Cautionary Statement Regarding
Forward-Looking Statements
This press release includes, and the related conference call will
include, forward-looking statements regarding future events, such as the
Partnership’s future performance. All statements, other than statements
of historical fact, included herein that address activities, events or
developments that the Partnership or NSH expects, believes or
anticipates will or may occur in the future, including anticipated
benefits and other aspects of the proposed merger, are forward-looking
statements. All forward-looking statements reflect the Partnership’s and
NSH’s current views with regard to future events and are subject to
various risks, uncertainties and assumptions that may cause actual
results to differ materially, including the possibility that the merger
will not be completed prior to the August 8, 2018 outside termination
date, the possibility that NSH will not obtain the required approvals by
its unitholders, the possibility that the anticipated benefits from the
proposed merger cannot be fully realized, the possibility that costs or
difficulties related to the proposed merger will be greater than
expected and other risk factors included in the reports filed with the
SEC by the Partnership or NSH. Many of the factors that will determine
the Partnership’s and NSH’s future results are beyond the ability of
management to control or predict. Readers should not place undue
reliance on forward-looking statements, which reflect management’s views
only as of the date hereof. The Partnership and NSH undertake no
obligation to revise or update any forward-looking statements, or to
make any other forward-looking statements, whether as a result of new
information, future events or otherwise.
|
|
|
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Statement of Income Data:
|
|
|
|
|
Revenues:
|
|
|
|
|
Service revenues
|
|
$
|
291,413
|
|
|
$
|
266,462
|
|
Product sales
|
|
184,468
|
|
|
220,968
|
|
Total revenues
|
|
475,881
|
|
|
487,430
|
|
Costs and expenses:
|
|
|
|
|
Cost of product sales
|
|
176,728
|
|
|
207,806
|
|
Operating expenses
|
|
108,884
|
|
|
101,026
|
|
General and administrative expenses
|
|
19,774
|
|
|
24,595
|
|
Depreciation and amortization expense
|
|
72,015
|
|
|
56,864
|
|
Total costs and expenses
|
|
377,401
|
|
|
390,291
|
|
Operating income
|
|
98,480
|
|
|
97,139
|
|
Interest expense, net
|
|
(47,772
|
)
|
|
(36,414
|
)
|
Other income, net
|
|
79,752
|
|
|
140
|
|
Income before income tax expense
|
|
130,460
|
|
|
60,865
|
|
Income tax expense
|
|
4,327
|
|
|
2,925
|
|
Net income
|
|
$
|
126,133
|
|
|
$
|
57,940
|
|
|
|
|
|
|
Net income applicable to common limited partners
|
|
$
|
107,064
|
|
|
$
|
38,452
|
|
Basic net income per common unit
|
|
$
|
1.15
|
|
|
$
|
0.49
|
|
Basic weighted-average common units outstanding
|
|
93,181,781
|
|
|
78,642,888
|
|
|
|
|
|
|
Other Data (Note 1):
|
|
|
|
|
EBITDA
|
|
$
|
250,247
|
|
|
$
|
154,143
|
|
DCF available to common limited partners
|
|
$
|
91,732
|
|
|
$
|
88,942
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2018
|
|
2017
|
|
2017
|
Balance Sheet Data:
|
|
|
|
|
|
|
Total debt
|
|
$
|
3,726,066
|
|
|
$
|
3,023,980
|
|
|
$
|
3,648,059
|
Partners’ equity
|
|
$
|
2,492,057
|
|
|
$
|
1,570,343
|
|
|
$
|
2,480,089
|
|
|
|
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Barrel Data)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Pipeline:
|
|
|
|
|
Refined products pipelines throughput (barrels/day)
|
|
531,894
|
|
|
514,016
|
|
Crude oil pipelines throughput (barrels/day):
|
|
791,294
|
|
|
408,809
|
|
Total throughput (barrels/day)
|
|
1,323,188
|
|
|
922,825
|
|
Throughput revenues
|
|
$
|
136,790
|
|
|
$
|
121,240
|
|
Operating expenses
|
|
42,341
|
|
|
33,074
|
|
Depreciation and amortization expense
|
|
36,655
|
|
|
23,138
|
|
Segment operating income
|
|
$
|
57,794
|
|
|
$
|
65,028
|
|
Storage:
|
|
|
|
|
Throughput (barrels/day)
|
|
343,933
|
|
|
315,010
|
|
Throughput terminal revenues
|
|
$
|
20,016
|
|
|
$
|
20,690
|
|
Storage terminal revenues
|
|
135,312
|
|
|
126,741
|
|
Total revenues
|
|
155,328
|
|
|
147,431
|
|
Operating expenses
|
|
65,825
|
|
|
62,139
|
|
Depreciation and amortization expense
|
|
33,242
|
|
|
31,533
|
|
Segment operating income
|
|
$
|
56,261
|
|
|
$
|
53,759
|
|
Fuels Marketing:
|
|
|
|
|
Product sales and other revenue
|
|
$
|
185,838
|
|
|
$
|
222,702
|
|
Cost of product sales
|
|
178,677
|
|
|
210,599
|
|
Gross margin
|
|
7,161
|
|
|
12,103
|
|
Operating expenses
|
|
841
|
|
|
6,963
|
|
Segment operating income
|
|
$
|
6,320
|
|
|
$
|
5,140
|
|
Consolidation and Intersegment Eliminations:
|
|
|
|
|
Revenues
|
|
$
|
(2,075
|
)
|
|
$
|
(3,943
|
)
|
Cost of product sales
|
|
(1,949
|
)
|
|
(2,793
|
)
|
Operating expenses
|
|
(123
|
)
|
|
(1,150
|
)
|
Total
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
Consolidated Information:
|
|
|
|
|
Revenues
|
|
$
|
475,881
|
|
|
$
|
487,430
|
|
Cost of product sales
|
|
176,728
|
|
|
207,806
|
|
Operating expenses
|
|
108,884
|
|
|
101,026
|
|
Depreciation and amortization expense
|
|
69,897
|
|
|
54,671
|
|
Segment operating income
|
|
120,372
|
|
|
123,927
|
|
General and administrative expenses
|
|
19,774
|
|
|
24,595
|
|
Other depreciation and amortization expense
|
|
2,118
|
|
|
2,193
|
|
Consolidated operating income
|
|
$
|
98,480
|
|
|
$
|
97,139
|
|
|
NuStar Energy L.P. and Subsidiaries
|
Consolidated Financial Information - Continued
|
(Unaudited, Thousands of Dollars, Except Ratio Data)
|
Note 1: NuStar Energy L.P. utilizes financial measures, such as
earnings before interest, taxes, depreciation and amortization (EBITDA),
distributable cash flow (DCF) and distribution coverage ratio, which are
not defined in U.S. generally accepted accounting principles (GAAP).
Management believes these financial measures provide useful information
to investors and other external users of our financial information
because (i) they provide additional information about the operating
performance of the partnership’s assets and the cash the business is
generating, (ii) investors and other external users of our financial
statements benefit from having access to the same financial measures
being utilized by management and our board of directors when making
financial, operational, compensation and planning decisions and (iii)
they highlight the impact of significant transactions.
Our board of directors and management use EBITDA and/or DCF when
assessing the following: (i) the performance of our assets, (ii) the
viability of potential projects, (iii) our ability to fund
distributions, (iv) our ability to fund capital expenditures and (v) our
ability to service debt. In addition, our board of directors uses a
distribution coverage ratio, which is calculated based on DCF, as one of
the factors in its determination of the company-wide bonus and the
vesting of performance units awarded to management. DCF is a widely
accepted financial indicator used by the master limited partnership
(MLP) investment community to compare partnership performance. DCF is
used by the MLP investment community, in part, because the value of a
partnership unit is partially based on its yield, and its yield is based
on the cash distributions a partnership can pay its unitholders.
None of these financial measures are presented as an alternative to net
income. They should not be considered in isolation or as substitutes for
a measure of performance prepared in accordance with GAAP. The following
is a reconciliation of EBITDA, DCF and distribution coverage ratio:
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Net income
|
|
$
|
126,133
|
|
|
$
|
57,940
|
|
Interest expense, net
|
|
47,772
|
|
|
36,414
|
|
Income tax expense
|
|
4,327
|
|
|
2,925
|
|
Depreciation and amortization expense
|
|
72,015
|
|
|
56,864
|
|
EBITDA
|
|
250,247
|
|
|
154,143
|
|
Interest expense, net
|
|
(47,772
|
)
|
|
(36,414
|
)
|
Reliability capital expenditures
|
|
(19,882
|
)
|
|
(5,022
|
)
|
Income tax expense
|
|
(4,327
|
)
|
|
(2,925
|
)
|
Mark-to-market impact of hedge transactions (a)
|
|
206
|
|
|
(2,586
|
)
|
Unit-based compensation (b)
|
|
1,337
|
|
|
2,088
|
|
Preferred unit distributions
|
|
(15,990
|
)
|
|
(4,813
|
)
|
Insurance gain adjustment (c)
|
|
(66,362
|
)
|
|
—
|
|
Other items (d)
|
|
(4,584
|
)
|
|
(274
|
)
|
DCF
|
|
$
|
92,873
|
|
|
$
|
104,197
|
|
Less DCF available to general partner
|
|
1,141
|
|
|
15,255
|
|
DCF available to common limited partners
|
|
$
|
91,732
|
|
|
$
|
88,942
|
|
|
|
|
|
|
Distributions applicable to common limited partners
|
|
$
|
55,916
|
|
|
$
|
101,913
|
|
Distribution coverage ratio (e)
|
|
1.64x
|
|
0.87x
|
(a)
|
DCF 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 when the contracts are settled.
|
(b)
|
We intend to satisfy the vestings of equity-based awards with the
issuance of our common units. As such, the expenses related to these
awards are considered non-cash and added back to DCF. Certain awards
include distribution equivalent rights (DERs). Payments made in
connection with DERs are deducted from DCF.
|
(c)
|
DCF excludes a portion of the insurance gain, which will be added to
DCF in future periods to offset reliability capital expenditures as
they are incurred for hurricane repairs at our St. Eustatius
terminal.
|
(d)
|
Other items primarily consist of a commercial settlement and noncash
compensation.
|
(e)
|
Distribution coverage ratio is calculated by dividing DCF available
to common limited partners by distributions applicable to common
limited partners.
|
|
|
|
NuStar GP Holdings, LLC and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Statement of Income Data:
|
|
|
|
|
Equity in earnings of NuStar Energy L.P.
|
|
$
|
13,315
|
|
|
$
|
18,112
|
|
|
|
|
|
|
General and administrative expenses
|
|
(888
|
)
|
|
(828
|
)
|
Interest expense, net
|
|
(486
|
)
|
|
(292
|
)
|
|
|
|
|
|
Income before income tax expense
|
|
11,941
|
|
|
16,992
|
|
Income tax expense
|
|
(2
|
)
|
|
—
|
|
Net income
|
|
$
|
11,939
|
|
|
$
|
16,992
|
|
|
|
|
|
|
Net income per unit
|
|
$
|
0.28
|
|
|
$
|
0.39
|
|
Weighted average number of common units outstanding
|
|
42,955,799
|
|
|
42,951,749
|
|
|
|
|
|
|
Equity in Earnings of NuStar Energy L.P.:
|
|
|
|
|
General partner interest
|
|
$
|
2,203
|
|
|
$
|
804
|
|
General partner incentive distribution
|
|
—
|
|
|
12,912
|
|
General partner’s interest in earnings and incentive distributions
of NuStar Energy L.P.
|
|
2,203
|
|
|
13,716
|
|
Limited partner interest in earnings of NuStar Energy L.P.
|
|
11,833
|
|
|
5,117
|
|
Amortization of step-up in basis related to NuStar Energy L.P.’s
assets and liabilities
|
|
(721
|
)
|
|
(721
|
)
|
Equity in earnings of NuStar Energy L.P.
|
|
$
|
13,315
|
|
|
$
|
18,112
|
|
|
|
|
|
|
Cash Flow Data:
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
12,076
|
|
|
$
|
16,875
|
|
Net cash provided by investing activities
|
|
$
|
11,109
|
|
|
$
|
5,965
|
|
Net cash used in financing activities
|
|
$
|
(23,366
|
)
|
|
$
|
(22,459
|
)
|
|
|
|
|
|
Distributable Cash Flow (Note 1):
|
|
|
|
|
Cash distributions from NuStar Energy L.P. associated with:
|
|
|
|
|
General partner interest
|
|
$
|
1,141
|
|
|
$
|
2,343
|
|
General partner incentive distribution
|
|
—
|
|
|
12,912
|
|
Limited partner interest – common units
|
|
6,129
|
|
|
11,185
|
|
Total cash distributions expected from NuStar Energy L.P.
|
|
7,270
|
|
|
26,440
|
|
Adjustments:
|
|
|
|
|
General and administrative expenses
|
|
(888
|
)
|
|
(828
|
)
|
Income tax expense
|
|
(2
|
)
|
|
—
|
|
Interest expense, net
|
|
(486
|
)
|
|
(292
|
)
|
Unit-based compensation items
|
|
160
|
|
|
152
|
|
DCF
|
|
$
|
6,054
|
|
|
$
|
25,472
|
|
|
|
|
|
|
Total distribution to unitholders
|
|
$
|
14,162
|
|
|
$
|
23,409
|
|
|
NuStar GP Holdings, LLC and Subsidiaries
|
Consolidated Financial Information - Continued
|
(Unaudited, Thousands of Dollars)
|
Note 1: NuStar GP Holdings, LLC utilizes distributable cash
flow (DCF) as a financial measure, although it is not defined in
U.S. generally accepted accounting principles. Management believes
DCF provides useful information to investors and other external
users of our financial information because (i) DCF provides
additional information about the cash the business is generating
and (ii) investors and other external users of our financial
statements benefit from having access to the same financial
measure being utilized by management and our board of directors
when making financial and planning decisions. Our board of
directors and management use DCF when assessing our ability to
fund distributions and our ability to service debt. DCF is a
widely accepted financial indicator used by our industry’s
investment community to compare company performance. DCF is used
by our industry’s investment community, in part, because the value
of our company’s units is partially based on its yield, and its
yield is based on the cash distributions a company can pay its
unitholders.
|
|
DCF is not intended to represent cash flows from operations, and is
not presented as an alternative to net income. DCF should not be
considered in isolation or as a substitute for a measure of
performance prepared in accordance with U.S. generally accepted
accounting principles. The following is a reconciliation of net
income to DCF and net cash provided by operating activities:
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Net income
|
|
$
|
11,939
|
|
|
$
|
16,992
|
|
Less equity in earnings of NuStar Energy L.P.
|
|
(13,315
|
)
|
|
(18,112
|
)
|
Plus cash distributions expected from NuStar Energy L.P.
|
|
7,270
|
|
|
26,440
|
|
Unit-based compensation items (a)
|
|
160
|
|
|
152
|
|
DCF
|
|
6,054
|
|
|
25,472
|
|
Less cash distributions expected from NuStar Energy L.P.
|
|
(7,270
|
)
|
|
(26,440
|
)
|
Distributions of equity in earnings of NuStar Energy L.P.
|
|
13,315
|
|
|
18,112
|
|
Changes in current assets and liabilities
|
|
(147
|
)
|
|
(362
|
)
|
Changes in noncurrent assets and liabilities and other items
|
|
124
|
|
|
93
|
|
Net cash provided by operating activities
|
|
$
|
12,076
|
|
|
$
|
16,875
|
|
(a)
|
|
We intend to satisfy the vestings of equity-based awards with the
issuance of our units. As such, the expenses related to these awards
are considered non-cash and added back to DCF. These awards include
distribution equivalent rights (DERs). Payments made in connection
with DERs are deducted from DCF.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180426005566/en/ Copyright Business Wire 2018
Source: Business Wire
(April 26, 2018 - 6:45 AM EDT)
News by QuoteMedia
www.quotemedia.com
|