Attached files
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| 8-K - FORM 8-K - NuStar Energy L.P. | d8k.htm |
Exhibit 99.1
NuStar Energy L.P. Reports Record Fourth Quarter 2010
Distributable Cash Flow and EBITDA
2010 Full Year Results Top Consensus Estimates
Internal Growth Projects Expected to Lead to Improved Results in 2011
SAN ANTONIO, January 31, 2011 – NuStar Energy L.P. (NYSE: NS) today announced its highest ever fourth quarter distributable cash flow available to limited partners of $66.7 million, or $1.03 per unit, compared to 2009 fourth quarter distributable cash flow of $57.0 million, or $0.99 per unit. For the year ended December 31, 2010, distributable cash flow available to limited partners was $280.7 million, or $4.43 per unit, compared to $311.4 million, or $5.66 per unit in 2009.
Fourth quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were $113.6 million, also the highest ever for the fourth quarter, and exceeded fourth quarter 2009 EBITDA of $91.9 million. For the year ended December 31, 2010, EBITDA was $482.8 million compared to $460.5 million in 2009.
NuStar Energy L.P. reported fourth quarter net income applicable to limited partners of $41.9 million, or $0.65 per unit, compared to $28.8 million, or $0.50 per unit, earned in the fourth quarter of 2009. For the year ended December 31, 2010, net income applicable to limited partners was $200.9 million, or $3.19 per unit, compared to $191.7 million, or $3.47 per unit in 2009.
The partnership also announced that its board of directors has declared a fourth quarter 2010 distribution of $1.075 per unit. The fourth quarter 2010 distribution will be paid on February 14, 2011, to holders of record as of February 8, 2011. For 2010, NuStar Energy L.P. declared a distribution of $4.28 per unit, which was $0.035 per unit or approximately 1% higher than the $4.245 per unit distribution declared in 2009. Distributable cash flow available to limited partners covers the distribution to the limited partners by 0.96 times for the fourth quarter of 2010 and 1.04 times for the year ended December 31, 2010.
“Our record fourth quarter 2010 distributable cash flow and EBITDA were primarily the result of strong performances in our storage segment and asphalt and fuels marketing segments,” said Curt Anastasio, Chief Executive Officer and President of NuStar Energy L.P. and NuStar GP Holdings, LLC. “Increased storage rates at some of our terminal facilities in the storage segment and strong results in our asphalt, heavy fuels and bunker fuels operations within the asphalt and fuels marketing segment contributed to our record fourth quarter.”
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“In addition, all three of our business segments generated higher operating income and EBITDA for the year ended December 31, 2010 when compared to 2009,” said Anastasio. “Increased throughputs, excluding the effect of the second quarter 2009 sale of the Ardmore-Wynnewood pipeline in Oklahoma and the Trans-Texas pipeline, and higher-year-over year pipeline tariffs contributed to improved transportation segment results. Storage segment results benefited from the completion of some internal growth projects, increased storage rates at some of our terminal facilities and the May 2010 Mobile County, Alabama storage terminal acquisition.”
Anastasio added, “Increasing our marketing presence in our heavy fuels and bunker fuels operations contributed to improved 2010 results in the asphalt and fuels marketing segment. Revenue enhancement initiatives implemented by asphalt refining and marketing operations personnel also contributed to the segment’s improved performance.”
First Quarter 2011 Outlook
“For the first quarter of 2011, we are projecting total EBITDA to be in the range of $80 to $100 million. Our storage segment EBITDA is expected to be $5 to $10 million higher than last year’s first quarter due primarily to the incremental EBITDA generated by the May 2010 Mobile County, Alabama storage terminal acquisition and the internal growth project completed at our St. Eustatius terminal facility in 2010. EBITDA in our transportation and asphalt and fuels marketing segments should be comparable to the first quarter of 2010,” said Anastasio.
Full-Year 2011 Outlook
Commenting on the full-year outlook for the fee-based storage and transportation business segments, Anastasio said, “We expect incremental EBITDA in our storage segment to be $30 to $40 million higher than 2010. EBITDA from internal growth projects completed at our St. James, LA and St. Eustatius terminal facilities in 2010 and 2011 should be the major contributors to the increases in storage segment EBITDA. We expect EBITDA in our transportation segment to be $5 to $10 million lower due to reduced throughputs caused by the refinery turnaround activity of our customers and changing market conditions.”
In regard to the margin-based asphalt and fuels marketing segment, Anastasio added, “We expect slightly improving asphalt margins in 2011 as well as improved earnings in our fuels marketing operations to cause EBITDA in this segment to be higher than the $111 million of EBITDA earned in 2010.”
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A conference call with management is scheduled for 3:00 p.m. ET (2:00 p.m. CT) today, January 31, 2011, to discuss the financial and operational results for the fourth quarter of 2010. Investors interested in listening to the presentation may call 800/622-7620, passcode 33425793. International callers may access the presentation by dialing 706/645-0327, passcode 33425793. The company intends to have a playback available following the presentation, which may be accessed by calling 800/642-1687, passcode 33425793. A live broadcast of the conference call will also be available on the company’s Web site at www.nustarenergy.com.
NuStar Energy L.P. is a publicly traded, limited partnership based in San Antonio, with 8,417 miles of pipeline; 88 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids; and two asphalt refineries with a combined throughput capacity of 104,000 barrels per day. The partnership’s combined system has over 93 million barrels of storage capacity. One of the largest asphalt refiners and marketers in the U.S. and the second largest independent liquids terminal operator in the nation, NuStar has operations in the United States, Canada, Mexico, the Netherlands and the United Kingdom. For more information, visit NuStar Energy L.P.’s Web site at www.nustarenergy.com.
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 United States trade or business. Accordingly, all of NuStar’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, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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 2009 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.
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NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)
| Three Months Ended December 31, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Statement of Income Data: |
||||||||||||||||
| Revenues: |
||||||||||||||||
| Services revenues |
$ | 205,542 | $ | 196,216 | $ | 791,314 | $ | 745,349 | ||||||||
| Product sales |
988,670 | 786,562 | 3,611,747 | 3,110,522 | ||||||||||||
| Total revenues |
1,194,212 | 982,778 | 4,403,061 | 3,855,871 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Cost of product sales |
927,678 | 744,663 | 3,350,429 | 2,883,187 | ||||||||||||
| Operating expenses |
123,004 | 126,875 | 486,032 | 458,892 | ||||||||||||
| General and administrative expenses |
33,917 | 27,204 | 110,241 | 94,733 | ||||||||||||
| Depreciation and amortization expense |
39,149 | 37,420 | 153,802 | 145,743 | ||||||||||||
| Total costs and expenses |
1,123,748 | 936,162 | 4,100,504 | 3,582,555 | ||||||||||||
| Operating income |
70,464 | 46,616 | 302,557 | 273,316 | ||||||||||||
| Equity in earnings of joint venture |
2,929 | 1,917 | 10,500 | 9,615 | ||||||||||||
| Interest expense, net |
(20,221 | ) | (18,858 | ) | (78,280 | ) | (79,384 | ) | ||||||||
| Other income, net |
1,052 | 5,976 | 15,934 | 31,859 | ||||||||||||
| Income before income tax expense (benefit) |
54,224 | 35,651 | 250,711 | 235,406 | ||||||||||||
| Income tax expense (benefit) |
2,689 | (1,694 | ) | 11,741 | 10,531 | |||||||||||
| Net income |
$ | 51,535 | $ | 37,345 | $ | 238,970 | $ | 224,875 | ||||||||
| Net income applicable to limited partners |
$ | 41,936 | $ | 28,800 | $ | 200,886 | $ | 191,665 | ||||||||
| Net income per unit applicable to limited partners: |
$ | 0.65 | $ | 0.50 | $ | 3.19 | $ | 3.47 | ||||||||
| Weighted average limited partner units outstanding |
64,610,549 | 57,523,049 | 62,946,987 | 55,232,467 | ||||||||||||
| EBITDA (Note 1) |
$ | 113,594 | $ | 91,929 | $ | 482,793 | $ | 460,533 | ||||||||
| Distributable cash flow (Note 1) |
$ | 76,854 | $ | 66,218 | $ | 320,226 | $ | 345,510 | ||||||||
| December 31, 2010 |
December 31, 2009 |
|||||||||||||||
| Balance Sheet Data: |
||||||||||||||||
| Debt, including current portion (a) |
$ | 2,137,080 | $ | 1,849,763 | ||||||||||||
| Partners’ equity (b) |
2,702,700 | 2,484,968 | ||||||||||||||
| Debt-to-capitalization ratio (a) / ((a)+(b)) |
44.2 | % | 42.7 | % | ||||||||||||
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Barrel Data)
| Three Months Ended December 31, |
Year
Ended December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Segment Data: |
||||||||||||||||
| Storage: |
||||||||||||||||
| Throughput (barrels/day) |
677,736 | 667,655 | 669,435 | 667,169 | ||||||||||||
| Throughput revenues |
$ | 19,520 | $ | 18,705 | $ | 75,605 | $ | 78,353 | ||||||||
| Storage lease revenues |
113,740 | 108,519 | 444,233 | 409,219 | ||||||||||||
| Total revenues |
133,260 | 127,224 | 519,838 | 487,572 | ||||||||||||
| Operating expenses |
65,634 | 68,645 | 263,820 | 245,439 | ||||||||||||
| Depreciation and amortization expense |
20,067 | 18,416 | 77,071 | 70,888 | ||||||||||||
| Segment operating income |
$ | 47,559 | $ | 40,163 | $ | 178,947 | $ | 171,245 | ||||||||
| Transportation: |
||||||||||||||||
| Refined products pipelines throughput (barrels/day) |
531,626 | 566,694 | 529,946 | 573,778 | ||||||||||||
| Crude oil pipelines throughput (barrels/day) |
342,417 | 357,392 | 371,726 | 351,888 | ||||||||||||
| Total throughput (barrels/day) |
874,043 | 924,086 | 901,672 | 925,666 | ||||||||||||
| Revenues |
$ | 83,255 | $ | 80,919 | $ | 316,072 | $ | 302,070 | ||||||||
| Operating expenses |
28,100 | 28,817 | 116,884 | 111,673 | ||||||||||||
| Depreciation and amortization expense |
12,588 | 12,627 | 50,617 | 50,528 | ||||||||||||
| Segment operating income |
$ | 42,567 | $ | 39,475 | $ | 148,571 | $ | 139,869 | ||||||||
| Asphalt and fuels marketing: |
||||||||||||||||
| Product sales |
$ | 989,896 | $ | 786,562 | $ | 3,615,890 | $ | 3,110,522 | ||||||||
| Cost of product sales |
933,151 | 749,007 | 3,371,854 | 2,899,457 | ||||||||||||
| Gross margin |
56,745 | 37,555 | 244,036 | 211,065 | ||||||||||||
| Operating expenses |
35,994 | 37,297 | 132,918 | 130,973 | ||||||||||||
| Depreciation and amortization expense |
5,003 | 4,927 | 20,257 | 19,463 | ||||||||||||
| Segment operating income |
$ | 15,748 | $ | (4,669 | ) | $ | 90,861 | $ | 60,629 | |||||||
| Consolidation and intersegment eliminations: |
||||||||||||||||
| Revenues |
$ | (12,199 | ) | $ | (11,927 | ) | $ | (48,739 | ) | $ | (44,293 | ) | ||||
| Cost of product sales |
(5,473 | ) | (4,344 | ) | (21,425 | ) | (16,270 | ) | ||||||||
| Operating expenses |
(6,724 | ) | (7,884 | ) | (27,590 | ) | (29,193 | ) | ||||||||
| Total |
$ | (2 | ) | $ | 301 | $ | 276 | $ | 1,170 | |||||||
| Consolidated Information: |
||||||||||||||||
| Revenues |
$ | 1,194,212 | $ | 982,778 | $ | 4,403,061 | $ | 3,855,871 | ||||||||
| Cost of product sales |
927,678 | 744,663 | 3,350,429 | 2,883,187 | ||||||||||||
| Operating expenses |
123,004 | 126,875 | 486,032 | 458,892 | ||||||||||||
| Depreciation and amortization expense |
37,658 | 35,970 | 147,945 | 140,879 | ||||||||||||
| Segment operating income |
105,872 | 75,270 | 418,655 | 372,913 | ||||||||||||
| General and administrative expenses |
33,917 | 27,204 | 110,241 | 94,733 | ||||||||||||
| Other depreciation and amortization expense |
1,491 | 1,450 | 5,857 | 4,864 | ||||||||||||
| Consolidated operating income |
$ | 70,464 | $ | 46,616 | $ | 302,557 | $ | 273,316 | ||||||||
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 December 31, |
Year Ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income |
$ | 51,535 | $ | 37,345 | $ | 238,970 | $ | 224,875 | ||||||||
| Plus interest expense, net |
20,221 | 18,858 | 78,280 | 79,384 | ||||||||||||
| Plus income tax expense (benefit) |
2,689 | (1,694 | ) | 11,741 | 10,531 | |||||||||||
| Plus depreciation and amortization expense |
39,149 | 37,420 | 153,802 | 145,743 | ||||||||||||
| EBITDA |
113,594 | 91,929 | 482,793 | 460,533 | ||||||||||||
| Less equity earnings from joint ventures |
(2,929 | ) | (1,917 | ) | (10,500 | ) | (9,615 | ) | ||||||||
| Less interest expense, net |
(20,221 | ) | (18,858 | ) | (78,280 | ) | (79,384 | ) | ||||||||
| Less reliability capital expenditures |
(15,704 | ) | (12,248 | ) | (54,031 | ) | (45,163 | ) | ||||||||
| Less income tax (expense) benefit |
(2,689 | ) | 1,694 | (11,741 | ) | (10,531 | ) | |||||||||
| Plus distributions from joint venture |
2,125 | 2,950 | 9,625 | 9,700 | ||||||||||||
| Mark-to-market impact on hedge transactions (a) |
2,678 | 2,668 | (17,640 | ) | 19,970 | |||||||||||
| Distributable cash flow |
76,854 | 66,218 | 320,226 | 345,510 | ||||||||||||
| General partner’s interest in distributable cash flow |
(10,160 | ) | (9,266 | ) | (39,531 | ) | (34,142 | ) | ||||||||
| Limited partners’ interest in distributable cash flow |
$ | 66,694 | $ | 56,952 | $ | 280,695 | $ | 311,368 | ||||||||
| Distributable cash flow per limited partner unit |
$ | 1.03 | $ | 0.99 | $ | 4.43 | $ | 5.66 | ||||||||
| (a) | Distributable cash flow excludes the impact of unrealized mark-to-market gains and losses which arise from valuing certain derivative contracts that hedge a portion of our inventory but do not qualify for hedge accounting treatment. The gain or loss associated with these contracts is realized in distributable cash flow when the contracts are settled. |