News Release
NuStar Energy Reports Earnings Results for Second Quarter of 2012
Non-cash Charges and Loss in Asphalt and Fuels Marketing Segment
Negatively Affect Results but Quarterly Distribution Stands at
Storage and Transportation Segment Second Quarter and Year to Date Results Higher than Last Year
Expect to Close Asphalt Joint Venture Transaction in the Third Quarter
The company reported a second quarter net loss applicable to limited
partners of
For the six months ended
The partnership also announced that its board of directors has declared
a second quarter 2012 distribution of
“We have several transactions and internal growth projects in the works
that we’re confident will improve our earnings going forward," said
Anastasio went on to say, “The asphalt joint venture that we are forming
with
“We also have completed several high-return growth projects in our storage and transportation segments, and we have many more in various stages of development that are expected to contribute significantly to our earnings going forward. All of these initiatives should position the company well for the coming years.”
Second Quarter Adjustments
The second quarter 2012 results included
The second quarter 2011 results included
Segment Results
“Our storage and transportation segments continue to benefit from
several internal growth projects completed in 2011 and the first half of
2012,” said Anastasio. “As a result, EBITDA in both our storage and
transportation segments were higher than last year’s second quarter and
last year’s six month period ending
Anastasio added, “In our Asphalt and Fuels Marketing segment, continued
weak demand, low gross margins and the non-cash asset impairment charge
caused the results for our asphalt operations to be negative in the
second quarter and significantly lower than the results for last year’s
six-month period ending
Earnings Outlook for the Remainder of 2012
In the last half of 2012 the company expects to benefit from the
“We just completed another pipeline project in the
In regard to the full-year outlook for NuStar Energy L.P.’s business
segments Anastasio commented, “We expect EBITDA in both our storage and
transportation segments to be higher than last year. Storage segment
EBITDA is expected to be
Anastasio then stated, “Lower earnings in our asphalt operations as well as our fuels marketing operations should cause EBITDA in our asphalt and fuels marketing segment to be significantly lower than last year.”
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, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Statement of Income Data: | ||||||||||||||||
Revenues: | ||||||||||||||||
Services revenues | $ | 208,582 | $ | 199,615 | $ | 414,727 | $ | 398,008 | ||||||||
Product sales | 1,693,323 | 1,389,569 | 3,222,870 | 2,425,792 | ||||||||||||
Total revenues | 1,901,905 | 1,589,184 | 3,637,597 | 2,823,800 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of product sales | 1,661,189 | 1,269,448 | 3,151,026 | 2,261,815 | ||||||||||||
Operating expenses | 135,263 | 134,626 | 260,929 | 254,865 | ||||||||||||
General and administrative expenses | 23,135 | 26,119 | 50,322 | 52,102 | ||||||||||||
Depreciation and amortization expense | 45,576 | 41,640 | 90,257 | 81,936 | ||||||||||||
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 | 2,108,203 | 1,471,833 | 3,795,574 | 2,650,718 | ||||||||||||
Operating (loss) income | (206,298 | ) | 117,351 | (157,977 | ) | 173,082 | ||||||||||
Equity in earnings of joint venture | 2,381 | 2,010 | 4,767 | 4,398 | ||||||||||||
Interest expense, net | (23,820 | ) | (20,622 | ) | (46,170 | ) | (41,079 | ) | ||||||||
Other expense, net | (2,812 | ) | (967 | ) | (1,444 | ) | (6,466 | ) | ||||||||
(Loss) income before income tax expense | (230,549 | ) | 97,772 | (200,824 | ) | 129,935 | ||||||||||
Income tax expense | 16,261 | 5,167 | 19,732 | 8,814 | ||||||||||||
Net (loss) income | $ | (246,810 | ) | $ | 92,605 | $ | (220,556 | ) | $ | 121,121 | ||||||
Net (loss) income applicable to limited partners | $ | (251,618 | ) | $ | 81,784 | $ | (235,610 | ) | $ | 101,149 | ||||||
Net (loss) income per unit applicable to limited partners | $ | (3.56 | ) | $ | 1.27 | $ | (3.33 | ) | $ | 1.57 | ||||||
Weighted average limited partner units outstanding | 70,756,078 | 64,610,549 | 70,756,078 | 64,610,549 | ||||||||||||
EBITDA (Note 1) | $ | (161,153 | ) | $ | 160,034 | $ | (64,397 | ) | $ | 252,950 | ||||||
Distributable cash flow (Note 1) | $ | 28,520 | $ | 130,175 | $ | 82,800 | $ | 185,554 | ||||||||
June 30, | June 30, | December 31, | ||||||||||||||
2012 | 2011 | 2011 | ||||||||||||||
Balance Sheet Data: | ||||||||||||||||
Debt, including current portion (a) | $ | 2,624,868 | $ | 2,442,244 | $ | 2,293,030 | ||||||||||
Partners' equity (b) | 2,421,117 | 2,658,966 | 2,864,335 | |||||||||||||
Debt-to-capitalization ratio (a) / ((a)+(b)) | 52.0 | % | 47.9 | % | 44.5 | % | ||||||||||
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, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Segment Data: | |||||||||||||||||
Storage: | |||||||||||||||||
Throughput (barrels/day) | 747,774 | 693,781 | 743,425 | 657,384 | |||||||||||||
Throughput revenues | $ | 22,193 | $ | 19,597 | $ | 44,457 | $ | 36,645 | |||||||||
Storage lease revenues | 130,600 | 119,947 | 253,765 | 239,674 | |||||||||||||
Total revenues | 152,793 | 139,544 | 298,222 | 276,319 | |||||||||||||
Operating expenses | 73,413 | 74,895 | 139,395 | 141,844 | |||||||||||||
Depreciation and amortization expense | 23,127 | 21,801 | 46,427 | 42,931 | |||||||||||||
Asset impairment loss | 2,126 | - | 2,126 | - | |||||||||||||
Segment operating income | $ | 54,127 | $ | 42,848 | $ | 110,274 | $ | 91,544 | |||||||||
Transportation: | |||||||||||||||||
Refined products pipelines throughput (barrels/day) | 459,163 | 501,948 | 475,367 | 502,277 | |||||||||||||
Crude oil pipelines throughput (barrels/day) | 275,019 | 282,006 | 289,354 | 296,356 | |||||||||||||
Total throughput (barrels/day) | 734,182 | 783,954 | 764,721 | 798,633 | |||||||||||||
Revenues | $ | 75,618 | $ | 71,562 | $ | 153,379 | $ | 144,572 | |||||||||
Operating expenses | 30,476 | 28,679 | 58,296 | 54,585 | |||||||||||||
Depreciation and amortization expense | 13,272 | 12,720 | 26,262 | 25,427 | |||||||||||||
Segment operating income | $ | 31,870 | $ | 30,163 | $ | 68,821 | $ | 64,560 | |||||||||
Asphalt and fuels marketing: | |||||||||||||||||
Product sales | $ | 1,693,501 | $ | 1,390,318 | $ | 3,223,177 | $ | 2,430,386 | |||||||||
Cost of product sales | 1,668,677 | 1,274,966 | 3,164,600 | 2,276,039 | |||||||||||||
Gross margin | 24,824 | 115,352 | 58,577 | 154,347 | |||||||||||||
Operating expenses | 43,868 | 37,664 | 86,819 | 71,644 | |||||||||||||
Depreciation and amortization expense | 7,138 | 5,535 | 13,715 | 10,432 | |||||||||||||
Asset and goodwill impairment loss | 266,357 | - | 266,357 | - | |||||||||||||
Segment operating (loss) income | $ | (292,539 | ) | $ | 72,153 | $ | (308,314 | ) | $ | 72,271 | |||||||
Consolidation and intersegment eliminations: | |||||||||||||||||
Revenues | $ | (20,007 | ) | $ | (12,240 | ) | $ | (37,181 | ) | $ | (27,477 | ) | |||||
Cost of product sales | (7,488 | ) | (5,518 | ) | (13,574 | ) | (14,224 | ) | |||||||||
Operating expenses | (12,494 | ) | (6,612 | ) | (23,581 | ) | (13,208 | ) | |||||||||
Total | $ | (25 | ) | $ | (110 | ) | $ | (26 | ) | $ | (45 | ) | |||||
Consolidated Information: | |||||||||||||||||
Revenues | $ | 1,901,905 | $ | 1,589,184 | $ | 3,637,597 | $ | 2,823,800 | |||||||||
Cost of product sales | 1,661,189 | 1,269,448 | 3,151,026 | 2,261,815 | |||||||||||||
Operating expenses | 135,263 | 134,626 | 260,929 | 254,865 | |||||||||||||
Depreciation and amortization expense | 43,537 | 40,056 | 86,404 | 78,790 | |||||||||||||
Asset and goodwill impairment loss | 268,483 | - | 268,483 | - | |||||||||||||
Segment operating (loss) income | (206,567 | ) | 145,054 | (129,245 | ) | 228,330 | |||||||||||
General and administrative expenses |
(23,135 |
) |
(26,119 |
) |
(50,322 |
) |
(52,102 |
) |
|||||||||
Other depreciation and amortization expense |
(2,039 |
) |
(1,584 |
) |
(3,853 |
) |
(3,146 |
) |
|||||||||
Other asset impairment loss |
(3,295 |
) |
- |
(3,295 |
) |
- | |||||||||||
Gain on legal settlement |
28,738 |
|
- |
28,738 |
|
- | |||||||||||
Consolidated operating (loss) income | $ | (206,298 | ) | $ | 117,351 | $ | (157,977 | ) | $ | 173,082 | |||||||
NuStar Energy L.P. and Subsidiaries |
Consolidated Financial Information - Continued |
(Unaudited, Thousands of Dollars, Except Per Unit Data) |
Notes: | |||
1. | NuStar Energy L.P. utilizes two financial measures, EBITDA and distributable cash flow, 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 nor distributable cash flow are intended to represent cash flows for the period, nor are they 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 United States generally accepted accounting principles. | ||
The following is a reconciliation of net income to EBITDA and distributable cash flow: |
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Net income | $ | (246,810 | ) | $ | 92,605 | $ | (220,556 | ) | $ | 121,121 | ||||||||||||
Plus interest expense, net | 23,820 | 20,622 | 46,170 | 41,079 | ||||||||||||||||||
Plus income tax expense | 16,261 | 5,167 | 19,732 | 8,814 | ||||||||||||||||||
Plus depreciation and amortization expense | 45,576 | 41,640 | 90,257 | 81,936 | ||||||||||||||||||
EBITDA | (161,153 | ) | 160,034 | (64,397 | ) | 252,950 | ||||||||||||||||
Less equity in earnings of joint ventures | (2,381 | ) | (2,010 | ) | (4,767 | ) | (4,398 | ) | ||||||||||||||
Less interest expense, net | (23,820 | ) | (20,622 | ) | (46,170 | ) | (41,079 | ) | ||||||||||||||
Less reliability capital expenditures | (8,105 | ) | (18,145 | ) | (15,004 | ) | (26,153 | ) | ||||||||||||||
Less income tax expense | (16,261 | ) | (5,167 | ) | (19,732 | ) | (8,814 | ) | ||||||||||||||
Plus distributions from joint venture | 3,266 | 3,806 | 3,266 | 6,729 | ||||||||||||||||||
Plus other non-cash items (a) | 253,098 | 5,093 | 253,098 | 5,093 | ||||||||||||||||||
Mark-to-market impact on hedge transactions (b) | (16,124 | ) | 7,186 | (23,494 | ) | 1,226 | ||||||||||||||||
Distributable cash flow | $ | 28,520 | $ | 130,175 | $ | 82,800 | $ | 185,554 | ||||||||||||||
EBITDA | $ | (161,153 | ) | $ | 160,034 | $ | (64,397 | ) | $ | 252,950 | ||||||||||||
EBITDA attributable to noncontrolling interest | 7 | 164 | (13 | ) | 286 | |||||||||||||||||
EBITDA attributable to NuStar Energy L.P. | $ | (161,160 | ) | $ | 159,870 | $ | (64,384 | ) | $ | 252,664 | ||||||||||||
Distributable cash flow | $ | 28,520 | $ | 130,175 | $ | 82,800 | $ | 185,554 | ||||||||||||||
Distributable cash flow attributable to noncontrolling interest | 12 | 190 | 14 | 301 | ||||||||||||||||||
Distributable cash flow attributable to NuStar Energy L.P. | $ | 28,508 | $ | 129,985 | $ | 82,786 | $ | 185,253 | ||||||||||||||
General partner's interest in distributable cash flow | 11,598 | 10,590 | 23,196 | 20,750 | ||||||||||||||||||
Limited partners' interest in distributable cash flow | $ | 16,910 | $ | 119,395 | $ | 59,590 | $ | 164,503 | ||||||||||||||
Distributable cash flow per limited partner unit | $ | 0.24 | $ | 1.85 | $ | 0.84 | $ | 2.55 | ||||||||||||||
(a) | Other non-cash items for the three and six months ended June 30, 2012 primarily consist of long-lived asset impairment charges related to our asphalt operations, including fixed assets, goodwill and intangible assets. These impairment charges were partially offset by a gain resulting from a legal settlement. | |||
(b) | Distributable cash flow 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 when the contracts are settled. |
Source:
NuStar Energy, L.P., San Antonio
Investors, Chris Russell, Vice
President
Investor Relations: 210-918-3507
or
Media, Mary
Rose Brown, Senior Vice President,
Corporate Communications:
210-918-2314
Web site: http://www.nustarenergy.com