News Column

NuStar Energy Covers Quarterly Distribution for the First Time Since the Third Quarter of 2011

August 15, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- NuStar Energy L.P. (NYSE: NS) announced second quarter 2014 distributable cash flow from continuing operations available to limited partners of $93.6 million, or $1.20 per unit, compared to 2013 second quarter distributable cash flow from continuing operations available to limited partners of $56.8 million, or $0.73 per unit. For the six months ended June 30, 2014, distributable cash flow from continuing operations available to limited partners was $171.5 million, or $2.20 per unit, compared to $113.9 million, or $1.46 per unit for the six months ended June 30, 2013.

Second quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $140.1 million compared to second quarter 2013 EBITDA of $114.3 million. For the six months ended June 30, 2014, EBITDA was $266.8 million, compared to $208.5 million for the six months ended June 30, 2013.

The partnership reported second quarter net income applicable to limited partners of $43.6 million, or $0.56 per unit, compared to $21.6 million, or $0.28 per unit, earned in the second quarter of 2013. For the six months ended June 30, 2014, net income applicable to limited partners was $71.7 million, or $0.92 per unit, compared to net income applicable to limited partners of $34.9 million, or $0.45 per unit, for the six months ended June 30, 2013.

The partnership also announced that its board of directors has declared a second quarter 2014 distribution of $1.095 per unit. The second quarter 2014 distribution will be paid on August 11, 2014, to holders of record as of August 6, 2014. Distributable cash flow from continuing operations available to limited partners covers the distribution to the limited partners by 1.10 times for the second quarter of 2014 and by 1.00 times for the six months ended June 30, 2014.

"All three of our operating segments continued to perform well in the second quarter," said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC. "In May, we completed Phase 1 of our South Texas Crude Oil Pipeline expansion and set a new single-vessel loading record at our Corpus Christi North Beach Terminal, when we loaded over 750,000 barrels. These were significant milestones for us and contributed to improved results in both our pipeline and storage segments."

Barron went on to say, "Our coverage ratio in the second quarter was our highest since the third quarter of 2011 and was better than we initially projected. Higher than expected throughput volumes in both our pipeline and storage segments, as well as the deferral of some maintenance expenses and reliability capital spending to the back half of 2014 helped drive the coverage ratio to 1.10 times." Internal Growth Project Update Phase 2 of the South Texas Crude Oil Pipeline expansion is expected to come on line during the first quarter of 2015 and will allow for increased throughputs of up to 65,000 barrels per day. NuStar's 12-inch pipeline between Mont Belvieu and Corpus Christi, Texas began generating distributable cash flow in the second quarter and is expected to be in full NGL service in the second quarter of 2015, at which time it is expected to generate an incremental $23 million in annual EBITDA, based on committed volumes. 2014 Earnings Guidance "NuStar's third quarter EPU and EBITDA results as well as our coverage ratio should exceed last year's third quarter results. Similar to the second quarter, third quarter EBITDA results in our pipeline, storage and fuels marketing segments are all expected to be higher than last year's third quarter," said Barron.

"In regard to full year 2014 guidance, we still expect our pipeline segment EBITDA to be $40 to $60 million higher than 2013 and our storage segment adjusted EBITDA to be comparable to 2013. However, we now expect our fuels marketing segment to generate EBITDA in the range of $20 to $30 million. Based on these projections, we expect to cover our distributions for the full year 2014," Barron said.

Barron went on to say, "Our 2014 internal growth spending projections have been reduced slightly to reflect the deferral of spending on some of our key growth projects into 2015. Spending is now expected to be in the range of $330 to $350 million, the majority of which will be spent on projects in our pipeline segment." Second Quarter 2014 Earnings Conference Call Details A conference call with management is scheduled for 9:00 a.m. CT today, July 25, 2014, to discuss the financial and operational results for the second quarter of 2014. Investors interested in listening to the presentation may call 800/622-7620, passcode 63499232. International callers may access the presentation by dialing 706/645-0327, passcode 63499232. The company intends to have a playback available following the presentation, which may be accessed by calling 800/585-8367, passcode 63499232. International callers may access the playback by calling 404/537-3406, passcode 63499232.

Investors interested in listening to the live presentation or a replay via the internet may access the presentation directly by clicking here or by logging on to NuStar Energy L.P.'s Web site 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 8,643 miles of pipeline and 84 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. The partnership's combined system has approximately 92 million barrels of storage capacity, and NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, the United Kingdom and Turkey. For more information, visit NuStar Energy L.P.'s Web site at www.nustarenergy.com.

Keywords for this news article include: Marketing, Advertising, Energy Companies, NuStar Energy L.P.

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Source: Energy Weekly News


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