x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
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Delaware
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74-2956831
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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19003 IH-10 West
San Antonio, Texas
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78257
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Item 1.
|
|
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Item 2.
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Item 3.
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Item 4.
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Item 6.
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Item 1.
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Financial Statements
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March 31,
2017 |
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December 31,
2016 |
||||
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(Unaudited)
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|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
27,205
|
|
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$
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35,942
|
|
Accounts receivable, net of allowance for doubtful accounts of $7,760
and $7,756 as of March 31, 2017 and December 31, 2016, respectively
|
166,842
|
|
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170,293
|
|
||
Receivable from related party
|
80
|
|
|
317
|
|
||
Inventories
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37,107
|
|
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37,945
|
|
||
Other current assets
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22,432
|
|
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132,686
|
|
||
Total current assets
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253,666
|
|
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377,183
|
|
||
Property, plant and equipment, at cost
|
5,490,005
|
|
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5,435,278
|
|
||
Accumulated depreciation and amortization
|
(1,766,737
|
)
|
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(1,712,995
|
)
|
||
Property, plant and equipment, net
|
3,723,268
|
|
|
3,722,283
|
|
||
Intangible assets, net
|
119,860
|
|
|
127,083
|
|
||
Goodwill
|
696,637
|
|
|
696,637
|
|
||
Deferred income tax asset
|
1,743
|
|
|
2,051
|
|
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Other long-term assets, net
|
100,242
|
|
|
105,308
|
|
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Total assets
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$
|
4,895,416
|
|
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$
|
5,030,545
|
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Liabilities and Partners’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
98,477
|
|
|
$
|
118,686
|
|
Short-term debt
|
72,000
|
|
|
54,000
|
|
||
Accrued interest payable
|
27,715
|
|
|
34,030
|
|
||
Accrued liabilities
|
39,513
|
|
|
60,485
|
|
||
Taxes other than income tax
|
12,909
|
|
|
15,685
|
|
||
Income tax payable
|
3,878
|
|
|
6,510
|
|
||
Total current liabilities
|
254,492
|
|
|
289,396
|
|
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Long-term debt
|
2,951,980
|
|
|
3,014,364
|
|
||
Deferred income tax liability
|
22,445
|
|
|
22,204
|
|
||
Other long-term liabilities
|
96,156
|
|
|
92,964
|
|
||
Commitments and contingencies (Note 4)
|
|
|
|
||||
Partners’ equity:
|
|
|
|
||||
Series A preferred limited partners (9,060,000 preferred units outstanding as of March 31, 2017 and December 31, 2016)
|
218,307
|
|
|
218,400
|
|
||
Common limited partners (78,655,818 and 78,616,228 common units outstanding
as of March 31, 2017 and December 31, 2016, respectively)
|
1,409,875
|
|
|
1,455,642
|
|
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General partner
|
32,575
|
|
|
31,752
|
|
||
Accumulated other comprehensive loss
|
(90,414
|
)
|
|
(94,177
|
)
|
||
Total partners’ equity
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1,570,343
|
|
|
1,611,617
|
|
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Total liabilities and partners’ equity
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$
|
4,895,416
|
|
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$
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5,030,545
|
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Three Months Ended March 31,
|
||||||
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2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Service revenues
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$
|
266,462
|
|
|
$
|
266,566
|
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Product sales
|
220,968
|
|
|
139,137
|
|
||
Total revenues
|
487,430
|
|
|
405,703
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of product sales
|
207,806
|
|
|
128,990
|
|
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Operating expenses:
|
|
|
|
||||
Third parties
|
101,026
|
|
|
83,540
|
|
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Related party
|
—
|
|
|
21,681
|
|
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Total operating expenses
|
101,026
|
|
|
105,221
|
|
||
General and administrative expenses:
|
|
|
|
||||
Third parties
|
24,595
|
|
|
13,365
|
|
||
Related party
|
—
|
|
|
10,420
|
|
||
Total general and administrative expenses
|
24,595
|
|
|
23,785
|
|
||
Depreciation and amortization expense
|
56,864
|
|
|
53,142
|
|
||
Total costs and expenses
|
390,291
|
|
|
311,138
|
|
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Operating income
|
97,139
|
|
|
94,565
|
|
||
Interest expense, net
|
(36,414
|
)
|
|
(34,123
|
)
|
||
Other income (expense), net
|
140
|
|
|
(171
|
)
|
||
Income before income tax expense
|
60,865
|
|
|
60,271
|
|
||
Income tax expense
|
2,925
|
|
|
2,870
|
|
||
Net income
|
$
|
57,940
|
|
|
$
|
57,401
|
|
|
|
|
|
||||
Basic and diluted net income per common unit (Note 10)
|
$
|
0.49
|
|
|
$
|
0.57
|
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Basic weighted-average common units outstanding
|
78,642,888
|
|
|
77,886,078
|
|
||
Diluted weighted-average common units outstanding
|
78,642,888
|
|
|
77,956,824
|
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||
|
|
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|
||||
Comprehensive income
|
$
|
61,703
|
|
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$
|
42,623
|
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Three Months Ended March 31,
|
||||||
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2017
|
|
2016
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net income
|
$
|
57,940
|
|
|
$
|
57,401
|
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
56,864
|
|
|
53,142
|
|
||
Unit-based compensation expense
|
2,790
|
|
|
1,086
|
|
||
Amortization of debt related items
|
1,568
|
|
|
2,017
|
|
||
(Gain) loss from sale or disposition of assets
|
(48
|
)
|
|
4
|
|
||
Deferred income tax expense
|
291
|
|
|
456
|
|
||
Changes in current assets and current liabilities (Note 11)
|
(39,142
|
)
|
|
(12,490
|
)
|
||
Other, net
|
3,717
|
|
|
111
|
|
||
Net cash provided by operating activities
|
83,980
|
|
|
101,727
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(45,732
|
)
|
|
(46,176
|
)
|
||
Change in accounts payable related to capital expenditures
|
(6,820
|
)
|
|
(12,663
|
)
|
||
Proceeds from sale or disposition of assets
|
1,859
|
|
|
—
|
|
||
Proceeds from Axeon term loan
|
110,000
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
59,307
|
|
|
(58,839
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Proceeds from long-term debt borrowings
|
144,266
|
|
|
168,089
|
|
||
Proceeds from short-term debt borrowings
|
266,000
|
|
|
134,000
|
|
||
Long-term debt repayments
|
(207,194
|
)
|
|
(93,709
|
)
|
||
Short-term debt repayments
|
(248,000
|
)
|
|
(137,000
|
)
|
||
Distributions to preferred unitholders
|
(5,883
|
)
|
|
—
|
|
||
Distributions to common unitholders and general partner
|
(99,021
|
)
|
|
(98,051
|
)
|
||
Decrease in cash book overdrafts
|
(283
|
)
|
|
(8,799
|
)
|
||
Other, net
|
(1,935
|
)
|
|
(5
|
)
|
||
Net cash used in financing activities
|
(152,050
|
)
|
|
(35,475
|
)
|
||
Effect of foreign exchange rate changes on cash
|
26
|
|
|
4,642
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(8,737
|
)
|
|
12,055
|
|
||
Cash and cash equivalents as of the beginning of the period
|
35,942
|
|
|
118,862
|
|
||
Cash and cash equivalents as of the end of the period
|
$
|
27,205
|
|
|
$
|
130,917
|
|
|
March 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
4,706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,706
|
|
Commodity derivatives
|
—
|
|
|
510
|
|
|
—
|
|
|
510
|
|
||||
Other long-term assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
1,440
|
|
|
—
|
|
|
1,440
|
|
||||
Total
|
$
|
4,706
|
|
|
$
|
1,950
|
|
|
$
|
—
|
|
|
$
|
6,656
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
(3,953
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,953
|
)
|
Commodity derivatives
|
(686
|
)
|
|
(510
|
)
|
|
—
|
|
|
(1,196
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
(2,719
|
)
|
|
—
|
|
|
(2,719
|
)
|
||||
Total
|
$
|
(4,639
|
)
|
|
$
|
(3,229
|
)
|
|
$
|
—
|
|
|
$
|
(7,868
|
)
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
1,551
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,551
|
|
Commodity derivatives
|
—
|
|
|
155
|
|
|
—
|
|
|
155
|
|
||||
Other long-term assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
1,314
|
|
|
—
|
|
|
1,314
|
|
||||
Total
|
$
|
1,551
|
|
|
$
|
1,469
|
|
|
$
|
—
|
|
|
$
|
3,020
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
(1,577
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,577
|
)
|
Commodity derivatives
|
(4,887
|
)
|
|
(165
|
)
|
|
—
|
|
|
(5,052
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Guarantee liability
|
—
|
|
|
—
|
|
|
(1,230
|
)
|
|
(1,230
|
)
|
||||
Interest rate swaps
|
—
|
|
|
(2,632
|
)
|
|
—
|
|
|
(2,632
|
)
|
||||
Total
|
$
|
(6,464
|
)
|
|
$
|
(2,797
|
)
|
|
$
|
(1,230
|
)
|
|
$
|
(10,491
|
)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
|
Long-term Debt
|
|
Long-term Debt
|
|
Axeon Term Loan
|
||||||
|
(Thousands of Dollars)
|
||||||||||
Fair value
|
$
|
3,015,609
|
|
|
$
|
3,084,762
|
|
|
$
|
110,000
|
|
Carrying amount
|
$
|
2,951,980
|
|
|
$
|
3,014,364
|
|
|
$
|
110,000
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
Balance Sheet Location
|
|
March 31,
2017 |
|
December 31,
2016 |
|
March 31,
2017 |
|
December 31,
2016 |
||||||||
|
|
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as
Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Other long-term assets, net
|
|
$
|
1,440
|
|
|
$
|
1,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts
|
Accrued liabilities
|
|
—
|
|
|
144
|
|
|
(852
|
)
|
|
(3,566
|
)
|
||||
Interest rate swaps
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
(2,719
|
)
|
|
(2,632
|
)
|
||||
Total
|
|
|
1,440
|
|
|
1,458
|
|
|
(3,571
|
)
|
|
(6,198
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated
as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Other current assets
|
|
786
|
|
|
265
|
|
|
(276
|
)
|
|
(110
|
)
|
||||
Commodity contracts
|
Accrued liabilities
|
|
510
|
|
|
9,128
|
|
|
(854
|
)
|
|
(10,758
|
)
|
||||
Total
|
|
|
1,296
|
|
|
9,393
|
|
|
(1,130
|
)
|
|
(10,868
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
|
$
|
2,736
|
|
|
$
|
10,851
|
|
|
$
|
(4,701
|
)
|
|
$
|
(17,066
|
)
|
Commodity Contracts
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
(Thousands of Dollars)
|
||||||
Net amounts of assets presented in the consolidated balance sheets
|
|
$
|
510
|
|
|
$
|
155
|
|
Net amounts of liabilities presented in the consolidated balance sheets
|
|
$
|
(1,196
|
)
|
|
$
|
(5,052
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Derivatives Designated as Fair Value Hedging Instruments:
|
|
|
|
||||
Gain (loss) recognized in income on derivative
|
$
|
2,097
|
|
|
$
|
(1,012
|
)
|
(Loss) gain recognized in income on hedged item
|
(1,834
|
)
|
|
2,866
|
|
||
Gain recognized in income for ineffective portion
|
263
|
|
|
1,854
|
|
||
|
|
|
|
||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
||||
(Loss) gain recognized in income on derivative
|
$
|
(138
|
)
|
|
$
|
720
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Derivatives Designated as Cash Flow Hedging Instruments:
|
|
|
|
||||
Income (loss) recognized in other comprehensive income on derivative (effective portion)
|
$
|
39
|
|
|
$
|
(29,978
|
)
|
Loss reclassified from AOCI into interest expense, net (effective portion)
|
$
|
(1,799
|
)
|
|
$
|
(2,222
|
)
|
|
Three Months Ended March 31,
|
||
|
2016
|
||
|
(Thousands of Dollars)
|
||
Operating expenses
|
$
|
21,681
|
|
General and administrative expenses
|
$
|
10,420
|
|
|
Pension Plans
|
|
Other Postretirement
Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
For the three months ended March 31:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
2,239
|
|
|
$
|
1,926
|
|
|
$
|
113
|
|
|
$
|
105
|
|
Interest cost
|
1,127
|
|
|
1,006
|
|
|
108
|
|
|
100
|
|
||||
Expected return on assets
|
(1,603
|
)
|
|
(1,352
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(515
|
)
|
|
(517
|
)
|
|
(286
|
)
|
|
(286
|
)
|
||||
Amortization of net loss
|
371
|
|
|
273
|
|
|
48
|
|
|
45
|
|
||||
Net periodic benefit cost (income)
|
$
|
1,619
|
|
|
$
|
1,336
|
|
|
$
|
(17
|
)
|
|
$
|
(36
|
)
|
Balance as of December 31, 2016
|
$
|
1,611,617
|
|
Net income
|
57,940
|
|
|
Unit-based compensation expense
|
950
|
|
|
Other comprehensive income
|
3,763
|
|
|
Distributions to partners
|
(103,834
|
)
|
|
Other
|
(93
|
)
|
|
Balance as of March 31, 2017
|
$
|
1,570,343
|
|
|
Foreign
Currency
Translation
|
|
Cash Flow
Hedges
|
|
Pension and
Other
Postretirement
Benefits
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Balance as of January 1, 2017
|
$
|
(69,069
|
)
|
|
$
|
(22,258
|
)
|
|
$
|
(2,850
|
)
|
|
$
|
(94,177
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before
reclassification adjustments
|
2,307
|
|
|
39
|
|
|
—
|
|
|
2,346
|
|
||||
Net gain on pension costs reclassified into operating
expense
|
—
|
|
|
—
|
|
|
(286
|
)
|
|
(286
|
)
|
||||
Net gain on pension costs reclassified into general and
administrative expense
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
(96
|
)
|
||||
Net loss on cash flow hedges reclassified into interest
expense, net
|
—
|
|
|
1,799
|
|
|
—
|
|
|
1,799
|
|
||||
Other comprehensive income (loss)
|
2,307
|
|
|
1,838
|
|
|
(382
|
)
|
|
3,763
|
|
||||
Balance as of March 31, 2017
|
$
|
(66,762
|
)
|
|
$
|
(20,420
|
)
|
|
$
|
(3,232
|
)
|
|
$
|
(90,414
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars, Except Percentage Data)
|
||||||
Net income attributable to NuStar Energy L.P.
|
$
|
57,940
|
|
|
$
|
57,401
|
|
Less preferred limited partner interest
|
4,813
|
|
|
—
|
|
||
Less general partner incentive distribution
|
12,912
|
|
|
10,805
|
|
||
Net income after general partner incentive distribution and preferred limited partner interest
|
40,215
|
|
|
46,596
|
|
||
General partner interest allocation
|
2
|
%
|
|
2
|
%
|
||
General partner interest allocation of net income
|
804
|
|
|
932
|
|
||
General partner incentive distribution
|
12,912
|
|
|
10,805
|
|
||
Net income applicable to general partner
|
$
|
13,716
|
|
|
$
|
11,737
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||
General partner interest
|
$
|
2,343
|
|
|
$
|
1,961
|
|
General partner incentive distribution
|
12,912
|
|
|
10,805
|
|
||
Total general partner distribution
|
15,255
|
|
|
12,766
|
|
||
Common limited partners’ distribution
|
101,913
|
|
|
85,285
|
|
||
Total cash distributions
|
$
|
117,168
|
|
|
$
|
98,051
|
|
|
|
|
|
||||
Cash distributions per unit applicable to common limited partners
|
$
|
1.095
|
|
|
$
|
1.095
|
|
Quarter Ended
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
March 31, 2017 (a)
|
|
$
|
1.095
|
|
|
$
|
117,168
|
|
|
May 8, 2017
|
|
May 12, 2017
|
December 31, 2016
|
|
$
|
1.095
|
|
|
$
|
98,971
|
|
|
February 8, 2017
|
|
February 13, 2017
|
(a)
|
The distribution was announced on
April 24, 2017
.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars,
Except Unit and Per Unit Data)
|
||||||
Net income attributable to NuStar Energy L.P.
|
$
|
57,940
|
|
|
$
|
57,401
|
|
Less: Distributions to general partner (including incentive
distribution rights)
|
15,255
|
|
|
12,766
|
|
||
Less: Distributions to common limited partners
|
101,913
|
|
|
85,285
|
|
||
Less: Distributions to preferred limited partners
|
4,813
|
|
|
—
|
|
||
Less: Distribution equivalent rights to restricted units
|
715
|
|
|
713
|
|
||
Distributions in excess of earnings
|
$
|
(64,756
|
)
|
|
$
|
(41,363
|
)
|
|
|
|
|
||||
Net income attributable to common units:
|
|
|
|
||||
Distributions to common limited partners
|
$
|
101,913
|
|
|
$
|
85,285
|
|
Allocation of distributions in excess of earnings
|
(63,461
|
)
|
|
(40,535
|
)
|
||
Total
|
$
|
38,452
|
|
|
$
|
44,750
|
|
|
|
|
|
||||
Basic weighted-average common units outstanding
|
78,642,888
|
|
|
77,886,078
|
|
||
|
|
|
|
||||
Diluted common units outstanding:
|
|
|
|
||||
Basic weighted-average common units outstanding
|
78,642,888
|
|
|
77,886,078
|
|
||
Effect of dilutive potential common units
|
—
|
|
|
70,746
|
|
||
Diluted weighted-average common units outstanding
|
78,642,888
|
|
|
77,956,824
|
|
||
|
|
|
|
||||
Basic and diluted net income per common unit
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Decrease (increase) in current assets:
|
|
|
|
||||
Accounts receivable
|
$
|
3,544
|
|
|
$
|
11,706
|
|
Receivable from related party
|
237
|
|
|
—
|
|
||
Inventories
|
1,658
|
|
|
(2,398
|
)
|
||
Other current assets
|
307
|
|
|
5,613
|
|
||
Increase (decrease) in current liabilities:
|
|
|
|
||||
Accounts payable
|
(12,154
|
)
|
|
(3,370
|
)
|
||
Payable to related party, net
|
—
|
|
|
(1,575
|
)
|
||
Accrued interest payable
|
(6,301
|
)
|
|
(6,389
|
)
|
||
Accrued liabilities
|
(21,006
|
)
|
|
(16,859
|
)
|
||
Taxes other than income tax
|
(2,752
|
)
|
|
593
|
|
||
Income tax payable
|
(2,675
|
)
|
|
189
|
|
||
Changes in current assets and current liabilities
|
$
|
(39,142
|
)
|
|
$
|
(12,490
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Cash paid for interest, net of amount capitalized
|
$
|
42,146
|
|
|
$
|
41,079
|
|
Cash paid for income taxes, net of tax refunds received
|
$
|
4,828
|
|
|
$
|
2,742
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Revenues:
|
|
|
|
||||
Pipeline
|
$
|
121,240
|
|
|
$
|
118,873
|
|
Storage:
|
|
|
|
||||
Third parties
|
143,488
|
|
|
146,384
|
|
||
Intersegment
|
3,943
|
|
|
6,015
|
|
||
Total storage
|
147,431
|
|
|
152,399
|
|
||
Fuels marketing
|
222,702
|
|
|
140,446
|
|
||
Consolidation and intersegment eliminations
|
(3,943
|
)
|
|
(6,015
|
)
|
||
Total revenues
|
$
|
487,430
|
|
|
$
|
405,703
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
||||
Pipeline
|
$
|
65,028
|
|
|
$
|
64,265
|
|
Storage
|
53,759
|
|
|
57,013
|
|
||
Fuels marketing
|
5,140
|
|
|
(773
|
)
|
||
Total segment operating income
|
123,927
|
|
|
120,505
|
|
||
General and administrative expenses
|
24,595
|
|
|
23,785
|
|
||
Other depreciation and amortization expense
|
2,193
|
|
|
2,155
|
|
||
Total operating income
|
$
|
97,139
|
|
|
$
|
94,565
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(Thousands of Dollars)
|
||||||
Pipeline
|
$
|
2,001,563
|
|
|
$
|
2,024,633
|
|
Storage
|
2,534,367
|
|
|
2,522,586
|
|
||
Fuels marketing
|
166,702
|
|
|
168,347
|
|
||
Total segment assets
|
4,702,632
|
|
|
4,715,566
|
|
||
Other partnership assets
|
192,784
|
|
|
314,979
|
|
||
Total consolidated assets
|
$
|
4,895,416
|
|
|
$
|
5,030,545
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
746
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
26,453
|
|
|
$
|
—
|
|
|
$
|
27,205
|
|
Receivables, net
|
—
|
|
|
45
|
|
|
—
|
|
|
166,877
|
|
|
—
|
|
|
166,922
|
|
||||||
Inventories
|
—
|
|
|
1,958
|
|
|
4,307
|
|
|
30,842
|
|
|
—
|
|
|
37,107
|
|
||||||
Other current assets
|
175
|
|
|
8,813
|
|
|
4,776
|
|
|
8,668
|
|
|
—
|
|
|
22,432
|
|
||||||
Intercompany receivable
|
—
|
|
|
1,342,164
|
|
|
—
|
|
|
55,969
|
|
|
(1,398,133
|
)
|
|
—
|
|
||||||
Total current assets
|
921
|
|
|
1,352,986
|
|
|
9,083
|
|
|
288,809
|
|
|
(1,398,133
|
)
|
|
253,666
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,919,752
|
|
|
582,944
|
|
|
1,220,572
|
|
|
—
|
|
|
3,723,268
|
|
||||||
Intangible assets, net
|
—
|
|
|
65,598
|
|
|
—
|
|
|
54,262
|
|
|
—
|
|
|
119,860
|
|
||||||
Goodwill
|
—
|
|
|
149,453
|
|
|
170,652
|
|
|
376,532
|
|
|
—
|
|
|
696,637
|
|
||||||
Investment in wholly owned
subsidiaries
|
1,918,278
|
|
|
35,888
|
|
|
1,247,932
|
|
|
869,545
|
|
|
(4,071,643
|
)
|
|
—
|
|
||||||
Deferred income tax asset
|
—
|
|
|
—
|
|
|
—
|
|
|
1,743
|
|
|
—
|
|
|
1,743
|
|
||||||
Other long-term assets, net
|
1,165
|
|
|
62,050
|
|
|
28,318
|
|
|
8,709
|
|
|
—
|
|
|
100,242
|
|
||||||
Total assets
|
$
|
1,920,364
|
|
|
$
|
3,585,727
|
|
|
$
|
2,038,929
|
|
|
$
|
2,820,172
|
|
|
$
|
(5,469,776
|
)
|
|
$
|
4,895,416
|
|
Liabilities and Partners’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payables
|
$
|
926
|
|
|
$
|
16,615
|
|
|
$
|
1,965
|
|
|
$
|
78,971
|
|
|
$
|
—
|
|
|
$
|
98,477
|
|
Short-term debt
|
—
|
|
|
72,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,000
|
|
||||||
Accrued interest payable
|
—
|
|
|
27,692
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
27,715
|
|
||||||
Accrued liabilities
|
777
|
|
|
6,722
|
|
|
12,370
|
|
|
19,644
|
|
|
—
|
|
|
39,513
|
|
||||||
Taxes other than income tax
|
—
|
|
|
4,259
|
|
|
4,555
|
|
|
4,095
|
|
|
—
|
|
|
12,909
|
|
||||||
Income tax payable
|
—
|
|
|
1,656
|
|
|
7
|
|
|
2,215
|
|
|
—
|
|
|
3,878
|
|
||||||
Intercompany payable
|
257,904
|
|
|
—
|
|
|
1,140,229
|
|
|
—
|
|
|
(1,398,133
|
)
|
|
—
|
|
||||||
Total current liabilities
|
259,607
|
|
|
128,944
|
|
|
1,159,126
|
|
|
104,948
|
|
|
(1,398,133
|
)
|
|
254,492
|
|
||||||
Long-term debt
|
—
|
|
|
2,891,290
|
|
|
—
|
|
|
60,690
|
|
|
—
|
|
|
2,951,980
|
|
||||||
Deferred income tax liability
|
—
|
|
|
1,861
|
|
|
13
|
|
|
20,571
|
|
|
—
|
|
|
22,445
|
|
||||||
Other long-term liabilities
|
—
|
|
|
35,139
|
|
|
10,261
|
|
|
50,756
|
|
|
—
|
|
|
96,156
|
|
||||||
Total partners’ equity
|
1,660,757
|
|
|
528,493
|
|
|
869,529
|
|
|
2,583,207
|
|
|
(4,071,643
|
)
|
|
1,570,343
|
|
||||||
Total liabilities and
partners’ equity
|
$
|
1,920,364
|
|
|
$
|
3,585,727
|
|
|
$
|
2,038,929
|
|
|
$
|
2,820,172
|
|
|
$
|
(5,469,776
|
)
|
|
$
|
4,895,416
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
870
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
35,067
|
|
|
$
|
—
|
|
|
$
|
35,942
|
|
Receivables, net
|
—
|
|
|
3,040
|
|
|
—
|
|
|
167,570
|
|
|
—
|
|
|
170,610
|
|
||||||
Inventories
|
—
|
|
|
2,216
|
|
|
2,005
|
|
|
33,724
|
|
|
—
|
|
|
37,945
|
|
||||||
Other current assets
|
61
|
|
|
120,350
|
|
|
1,829
|
|
|
10,446
|
|
|
—
|
|
|
132,686
|
|
||||||
Intercompany receivable
|
—
|
|
|
1,308,415
|
|
|
—
|
|
|
57,785
|
|
|
(1,366,200
|
)
|
|
—
|
|
||||||
Total current assets
|
931
|
|
|
1,434,026
|
|
|
3,834
|
|
|
304,592
|
|
|
(1,366,200
|
)
|
|
377,183
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,935,172
|
|
|
589,139
|
|
|
1,197,972
|
|
|
—
|
|
|
3,722,283
|
|
||||||
Intangible assets, net
|
—
|
|
|
71,033
|
|
|
—
|
|
|
56,050
|
|
|
—
|
|
|
127,083
|
|
||||||
Goodwill
|
—
|
|
|
149,453
|
|
|
170,652
|
|
|
376,532
|
|
|
—
|
|
|
696,637
|
|
||||||
Investment in wholly owned
subsidiaries
|
1,964,736
|
|
|
34,778
|
|
|
1,221,717
|
|
|
874,649
|
|
|
(4,095,880
|
)
|
|
—
|
|
||||||
Deferred income tax asset
|
—
|
|
|
—
|
|
|
—
|
|
|
2,051
|
|
|
—
|
|
|
2,051
|
|
||||||
Other long-term assets, net
|
1,255
|
|
|
63,586
|
|
|
28,587
|
|
|
11,880
|
|
|
—
|
|
|
105,308
|
|
||||||
Total assets
|
$
|
1,966,922
|
|
|
$
|
3,688,048
|
|
|
$
|
2,013,929
|
|
|
$
|
2,823,726
|
|
|
$
|
(5,462,080
|
)
|
|
$
|
5,030,545
|
|
Liabilities and Partners’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payables
|
$
|
2,436
|
|
|
$
|
24,272
|
|
|
$
|
7,124
|
|
|
$
|
84,854
|
|
|
$
|
—
|
|
|
$
|
118,686
|
|
Short-term debt
|
—
|
|
|
54,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,000
|
|
||||||
Accrued interest payable
|
—
|
|
|
34,008
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
34,030
|
|
||||||
Accrued liabilities
|
1,070
|
|
|
7,118
|
|
|
10,766
|
|
|
41,531
|
|
|
—
|
|
|
60,485
|
|
||||||
Taxes other than income tax
|
125
|
|
|
6,854
|
|
|
3,253
|
|
|
5,453
|
|
|
—
|
|
|
15,685
|
|
||||||
Income tax payable
|
—
|
|
|
1,326
|
|
|
5
|
|
|
5,179
|
|
|
—
|
|
|
6,510
|
|
||||||
Intercompany payable
|
257,497
|
|
|
—
|
|
|
1,108,703
|
|
|
—
|
|
|
(1,366,200
|
)
|
|
—
|
|
||||||
Total current liabilities
|
261,128
|
|
|
127,578
|
|
|
1,129,851
|
|
|
137,039
|
|
|
(1,366,200
|
)
|
|
289,396
|
|
||||||
Long-term debt
|
—
|
|
|
2,956,338
|
|
|
—
|
|
|
58,026
|
|
|
—
|
|
|
3,014,364
|
|
||||||
Deferred income tax liability
|
—
|
|
|
1,862
|
|
|
13
|
|
|
20,329
|
|
|
—
|
|
|
22,204
|
|
||||||
Other long-term liabilities
|
—
|
|
|
34,358
|
|
|
9,436
|
|
|
49,170
|
|
|
—
|
|
|
92,964
|
|
||||||
Total partners’ equity
|
1,705,794
|
|
|
567,912
|
|
|
874,629
|
|
|
2,559,162
|
|
|
(4,095,880
|
)
|
|
1,611,617
|
|
||||||
Total liabilities and
partners’ equity
|
$
|
1,966,922
|
|
|
$
|
3,688,048
|
|
|
$
|
2,013,929
|
|
|
$
|
2,823,726
|
|
|
$
|
(5,462,080
|
)
|
|
$
|
5,030,545
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
123,629
|
|
|
$
|
52,241
|
|
|
$
|
311,847
|
|
|
$
|
(287
|
)
|
|
$
|
487,430
|
|
Costs and expenses
|
509
|
|
|
76,322
|
|
|
29,806
|
|
|
283,941
|
|
|
(287
|
)
|
|
390,291
|
|
||||||
Operating (loss) income
|
(509
|
)
|
|
47,307
|
|
|
22,435
|
|
|
27,906
|
|
|
—
|
|
|
97,139
|
|
||||||
Equity in earnings of subsidiaries
|
58,445
|
|
|
1,110
|
|
|
26,215
|
|
|
47,353
|
|
|
(133,123
|
)
|
|
—
|
|
||||||
Interest income (expense), net
|
4
|
|
|
(36,914
|
)
|
|
(1,304
|
)
|
|
1,800
|
|
|
—
|
|
|
(36,414
|
)
|
||||||
Other income, net
|
—
|
|
|
21
|
|
|
6
|
|
|
113
|
|
|
—
|
|
|
140
|
|
||||||
Income before income tax
expense
|
57,940
|
|
|
11,524
|
|
|
47,352
|
|
|
77,172
|
|
|
(133,123
|
)
|
|
60,865
|
|
||||||
Income tax expense
|
—
|
|
|
331
|
|
|
1
|
|
|
2,593
|
|
|
—
|
|
|
2,925
|
|
||||||
Net income
|
$
|
57,940
|
|
|
$
|
11,193
|
|
|
$
|
47,351
|
|
|
$
|
74,579
|
|
|
$
|
(133,123
|
)
|
|
$
|
57,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
$
|
57,940
|
|
|
$
|
13,031
|
|
|
$
|
47,351
|
|
|
$
|
76,504
|
|
|
$
|
(133,123
|
)
|
|
$
|
61,703
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
126,578
|
|
|
$
|
47,985
|
|
|
$
|
231,476
|
|
|
$
|
(336
|
)
|
|
$
|
405,703
|
|
Costs and expenses
|
518
|
|
|
68,891
|
|
|
31,015
|
|
|
211,050
|
|
|
(336
|
)
|
|
311,138
|
|
||||||
Operating (loss) income
|
(518
|
)
|
|
57,687
|
|
|
16,970
|
|
|
20,426
|
|
|
—
|
|
|
94,565
|
|
||||||
Equity in earnings (loss) of
subsidiaries
|
57,922
|
|
|
(3,115
|
)
|
|
25,283
|
|
|
43,743
|
|
|
(123,833
|
)
|
|
—
|
|
||||||
Interest (expense) income, net
|
—
|
|
|
(39,632
|
)
|
|
1,508
|
|
|
8,352
|
|
|
(4,351
|
)
|
|
(34,123
|
)
|
||||||
Other income (expense), net
|
—
|
|
|
1
|
|
|
(17
|
)
|
|
(155
|
)
|
|
—
|
|
|
(171
|
)
|
||||||
Income before income tax
expense
|
57,404
|
|
|
14,941
|
|
|
43,744
|
|
|
72,366
|
|
|
(128,184
|
)
|
|
60,271
|
|
||||||
Income tax expense
|
3
|
|
|
346
|
|
|
2
|
|
|
2,519
|
|
|
—
|
|
|
2,870
|
|
||||||
Net income
|
$
|
57,401
|
|
|
$
|
14,595
|
|
|
$
|
43,742
|
|
|
$
|
69,847
|
|
|
$
|
(128,184
|
)
|
|
$
|
57,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income (loss)
|
$
|
57,401
|
|
|
$
|
(13,161
|
)
|
|
$
|
43,742
|
|
|
$
|
82,825
|
|
|
$
|
(128,184
|
)
|
|
$
|
42,623
|
|
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash provided by operating
activities
|
$
|
103,517
|
|
|
$
|
35,964
|
|
|
$
|
23,855
|
|
|
$
|
78,004
|
|
|
$
|
(157,360
|
)
|
|
$
|
83,980
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(7,671
|
)
|
|
(1,761
|
)
|
|
(36,300
|
)
|
|
—
|
|
|
(45,732
|
)
|
||||||
Change in accounts payable
related to capital expenditures
|
—
|
|
|
(4,908
|
)
|
|
(1,103
|
)
|
|
(809
|
)
|
|
—
|
|
|
(6,820
|
)
|
||||||
Proceeds from sale or disposition
of assets
|
—
|
|
|
1,833
|
|
|
6
|
|
|
20
|
|
|
—
|
|
|
1,859
|
|
||||||
Proceeds from Axeon term loan
|
—
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,000
|
|
||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
99,254
|
|
|
(2,858
|
)
|
|
(37,089
|
)
|
|
—
|
|
|
59,307
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt borrowings
|
—
|
|
|
404,166
|
|
|
—
|
|
|
6,100
|
|
|
—
|
|
|
410,266
|
|
||||||
Debt repayments
|
—
|
|
|
(451,694
|
)
|
|
—
|
|
|
(3,500
|
)
|
|
—
|
|
|
(455,194
|
)
|
||||||
Distributions to preferred unitholders
|
(5,883
|
)
|
|
(2,941
|
)
|
|
(2,941
|
)
|
|
(2,942
|
)
|
|
8,824
|
|
|
(5,883
|
)
|
||||||
Distributions to common unitholders and general partner
|
(99,021
|
)
|
|
(49,511
|
)
|
|
(49,511
|
)
|
|
(49,514
|
)
|
|
148,536
|
|
|
(99,021
|
)
|
||||||
Net intercompany activity
|
3,196
|
|
|
(34,952
|
)
|
|
31,455
|
|
|
301
|
|
|
—
|
|
|
—
|
|
||||||
Decrease in cash book overdrafts
|
—
|
|
|
(283
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(283
|
)
|
||||||
Other, net
|
(1,933
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,935
|
)
|
||||||
Net cash used in financing activities
|
(103,641
|
)
|
|
(135,217
|
)
|
|
(20,997
|
)
|
|
(49,555
|
)
|
|
157,360
|
|
|
(152,050
|
)
|
||||||
Effect of foreign exchange rate
changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||||
Net (decrease) increase in cash
and cash equivalents
|
(124
|
)
|
|
1
|
|
|
—
|
|
|
(8,614
|
)
|
|
—
|
|
|
(8,737
|
)
|
||||||
Cash and cash equivalents as of the
beginning of the period
|
870
|
|
|
5
|
|
|
—
|
|
|
35,067
|
|
|
—
|
|
|
35,942
|
|
||||||
Cash and cash equivalents as of the
end of the period
|
$
|
746
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
26,453
|
|
|
$
|
—
|
|
|
$
|
27,205
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash provided by operating
activities
|
$
|
97,539
|
|
|
$
|
7,958
|
|
|
$
|
18,028
|
|
|
$
|
129,635
|
|
|
$
|
(151,433
|
)
|
|
$
|
101,727
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(28,899
|
)
|
|
(5,442
|
)
|
|
(11,835
|
)
|
|
—
|
|
|
(46,176
|
)
|
||||||
Change in accounts payable
related to capital expenditures
|
—
|
|
|
(7,637
|
)
|
|
(74
|
)
|
|
(4,952
|
)
|
|
—
|
|
|
(12,663
|
)
|
||||||
Net cash used in investing activities
|
—
|
|
|
(36,536
|
)
|
|
(5,516
|
)
|
|
(16,787
|
)
|
|
—
|
|
|
(58,839
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt borrowings
|
—
|
|
|
296,089
|
|
|
—
|
|
|
6,000
|
|
|
—
|
|
|
302,089
|
|
||||||
Debt repayments
|
—
|
|
|
(219,709
|
)
|
|
—
|
|
|
(11,000
|
)
|
|
—
|
|
|
(230,709
|
)
|
||||||
Distributions to common unitholders and general partner
|
(98,051
|
)
|
|
(49,026
|
)
|
|
(49,025
|
)
|
|
(49,031
|
)
|
|
147,082
|
|
|
(98,051
|
)
|
||||||
Net intercompany activity
|
507
|
|
|
2,998
|
|
|
36,513
|
|
|
(44,369
|
)
|
|
4,351
|
|
|
—
|
|
||||||
Other, net
|
(1
|
)
|
|
(1,774
|
)
|
|
—
|
|
|
(7,029
|
)
|
|
—
|
|
|
(8,804
|
)
|
||||||
Net cash (used in) provided by
financing activities
|
(97,545
|
)
|
|
28,578
|
|
|
(12,512
|
)
|
|
(105,429
|
)
|
|
151,433
|
|
|
(35,475
|
)
|
||||||
Effect of foreign exchange rate
changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
4,642
|
|
|
—
|
|
|
4,642
|
|
||||||
Net (decrease) increase in cash and
cash equivalents
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
12,061
|
|
|
—
|
|
|
12,055
|
|
||||||
Cash and cash equivalents as of the
beginning of the period
|
885
|
|
|
4
|
|
|
—
|
|
|
117,973
|
|
|
—
|
|
|
118,862
|
|
||||||
Cash and cash equivalents as of the
end of the period
|
$
|
879
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
130,034
|
|
|
$
|
—
|
|
|
$
|
130,917
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview
|
•
|
Results of Operations
|
•
|
Trends and Outlook
|
•
|
Liquidity and Capital Resources
|
•
|
Related Party Transactions
|
•
|
Critical Accounting Policies
|
•
|
New Accounting Pronouncements
|
•
|
company-specific factors, such as facility integrity issues and maintenance requirements that impact the throughput rates of our assets;
|
•
|
seasonal factors that affect the demand for products transported by and/or stored in our assets and the demand for products we sell;
|
•
|
industry factors, such as changes in the prices of petroleum products that affect demand and operations of our competitors;
|
•
|
economic factors, such as commodity price volatility that impact our fuels marketing segment; and
|
•
|
factors that impact the operations served by our pipeline and storage assets, such as utilization rates and maintenance turnaround schedules of our refining company customers and drilling activity by our crude oil production customers.
|
|
Three Months Ended March 31,
|
|
Change
|
||||||||
|
2017
|
|
2016
|
|
|||||||
Statement of Income Data:
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Service revenues
|
$
|
266,462
|
|
|
$
|
266,566
|
|
|
$
|
(104
|
)
|
Product sales
|
220,968
|
|
|
139,137
|
|
|
81,831
|
|
|||
Total revenues
|
487,430
|
|
|
405,703
|
|
|
81,727
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of product sales
|
207,806
|
|
|
128,990
|
|
|
78,816
|
|
|||
Operating expenses
|
101,026
|
|
|
105,221
|
|
|
(4,195
|
)
|
|||
General and administrative expenses
|
24,595
|
|
|
23,785
|
|
|
810
|
|
|||
Depreciation and amortization expense
|
56,864
|
|
|
53,142
|
|
|
3,722
|
|
|||
Total costs and expenses
|
390,291
|
|
|
311,138
|
|
|
79,153
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
97,139
|
|
|
94,565
|
|
|
2,574
|
|
|||
Interest expense, net
|
(36,414
|
)
|
|
(34,123
|
)
|
|
(2,291
|
)
|
|||
Other income (expense), net
|
140
|
|
|
(171
|
)
|
|
311
|
|
|||
Income before income tax expense
|
60,865
|
|
|
60,271
|
|
|
594
|
|
|||
Income tax expense
|
2,925
|
|
|
2,870
|
|
|
55
|
|
|||
Net income
|
$
|
57,940
|
|
|
$
|
57,401
|
|
|
$
|
539
|
|
Basic and diluted net income per common unit
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
$
|
(0.08
|
)
|
Basic weighted-average common units outstanding
|
78,642,888
|
|
|
77,886,078
|
|
|
756,810
|
|
|
Three Months Ended March 31,
|
|
Change
|
||||||||
|
2017
|
|
2016
|
|
|||||||
Pipeline:
|
|
|
|
|
|
||||||
Refined products pipelines throughput (barrels/day)
|
514,016
|
|
|
521,272
|
|
|
(7,256
|
)
|
|||
Crude oil pipelines throughput (barrels/day)
|
408,809
|
|
|
411,109
|
|
|
(2,300
|
)
|
|||
Total throughput (barrels/day)
|
922,825
|
|
|
932,381
|
|
|
(9,556
|
)
|
|||
Throughput revenues
|
$
|
121,240
|
|
|
$
|
118,873
|
|
|
$
|
2,367
|
|
Operating expenses
|
33,074
|
|
|
33,004
|
|
|
70
|
|
|||
Depreciation and amortization expense
|
23,138
|
|
|
21,604
|
|
|
1,534
|
|
|||
Segment operating income
|
$
|
65,028
|
|
|
$
|
64,265
|
|
|
$
|
763
|
|
Storage:
|
|
|
|
|
|
||||||
Throughput (barrels/day)
|
315,010
|
|
|
828,327
|
|
|
(513,317
|
)
|
|||
Throughput terminal revenues
|
$
|
20,690
|
|
|
$
|
29,400
|
|
|
$
|
(8,710
|
)
|
Storage terminal revenues
|
126,741
|
|
|
122,999
|
|
|
3,742
|
|
|||
Total revenues
|
147,431
|
|
|
152,399
|
|
|
(4,968
|
)
|
|||
Operating expenses
|
62,139
|
|
|
66,003
|
|
|
(3,864
|
)
|
|||
Depreciation and amortization expense
|
31,533
|
|
|
29,383
|
|
|
2,150
|
|
|||
Segment operating income
|
$
|
53,759
|
|
|
$
|
57,013
|
|
|
$
|
(3,254
|
)
|
Fuels Marketing:
|
|
|
|
|
|
||||||
Product sales and other revenue
|
$
|
222,702
|
|
|
$
|
140,446
|
|
|
$
|
82,256
|
|
Cost of product sales
|
210,599
|
|
|
132,581
|
|
|
78,018
|
|
|||
Gross margin
|
12,103
|
|
|
7,865
|
|
|
4,238
|
|
|||
Operating expenses
|
6,963
|
|
|
8,638
|
|
|
(1,675
|
)
|
|||
Segment operating income (loss)
|
$
|
5,140
|
|
|
$
|
(773
|
)
|
|
$
|
5,913
|
|
Consolidation and Intersegment Eliminations:
|
|
|
|
|
|
||||||
Revenues
|
$
|
(3,943
|
)
|
|
$
|
(6,015
|
)
|
|
$
|
2,072
|
|
Cost of product sales
|
(2,793
|
)
|
|
(3,591
|
)
|
|
798
|
|
|||
Operating expenses
|
(1,150
|
)
|
|
(2,424
|
)
|
|
1,274
|
|
|||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Consolidated Information:
|
|
|
|
|
|
||||||
Revenues
|
$
|
487,430
|
|
|
$
|
405,703
|
|
|
$
|
81,727
|
|
Cost of product sales
|
207,806
|
|
|
128,990
|
|
|
78,816
|
|
|||
Operating expenses
|
101,026
|
|
|
105,221
|
|
|
(4,195
|
)
|
|||
Depreciation and amortization expense
|
54,671
|
|
|
50,987
|
|
|
3,684
|
|
|||
Segment operating income
|
123,927
|
|
|
120,505
|
|
|
3,422
|
|
|||
General and administrative expenses
|
24,595
|
|
|
23,785
|
|
|
810
|
|
|||
Other depreciation and amortization expense
|
2,193
|
|
|
2,155
|
|
|
38
|
|
|||
Consolidated operating income
|
$
|
97,139
|
|
|
$
|
94,565
|
|
|
$
|
2,574
|
|
•
|
a decrease of $2.4 million in compensation expenses, mainly resulting from lower employee benefit costs;
|
•
|
a decrease of $1.9 million in reimbursable expenses, mainly at our Texas City terminals, consistent with the decrease in reimbursable revenues at Texas City; and
|
•
|
a decrease of $1.2 million in expenses for contractors and other outside services mainly as a result of reduced unit train activity at our St. James terminal.
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
83,980
|
|
|
$
|
101,727
|
|
Investing activities
|
59,307
|
|
|
(58,839
|
)
|
||
Financing activities
|
(152,050
|
)
|
|
(35,475
|
)
|
||
Effect of foreign exchange rate changes on cash
|
26
|
|
|
4,642
|
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(8,737
|
)
|
|
$
|
12,055
|
|
•
|
$365.4 million
in revenue bonds pursuant to the Gulf Opportunity Zone Act of 2005 (the GoZone Bonds), with
$42.4 million
remaining in the trust as of
March 31, 2017
, supported by $370.2 million in letters of credit;
|
•
|
a $125.0 million receivables financing agreement between NuStar Energy, NuStar Finance LLC and third-party lenders (the Receivables Financing Agreement), with the amount available for borrowing based on the availability of eligible receivables and other customary factors and conditions; and
|
•
|
two short-term line of credit agreements with an uncommitted borrowing capacity of up to $85.0 million, with
$72.0 million
of borrowings outstanding as of
March 31, 2017
.
|
•
|
strategic capital expenditures, such as those to expand or upgrade the operating capacity, increase efficiency or increase the earnings potential of existing assets, whether through construction or acquisition, as well as certain capital expenditures related to support functions; and
|
•
|
reliability capital expenditures, such as those required to maintain the existing operating capacity of existing assets or extend their useful lives, as well as those required to maintain equipment reliability and safety.
|
|
Strategic Capital
Expenditures
|
|
Reliability Capital
Expenditures
|
|
Total
|
||||||
|
(Thousands of Dollars)
|
||||||||||
For the three months ended March 31:
|
|
|
|
|
|
||||||
2017
|
$
|
40,710
|
|
|
$
|
5,022
|
|
|
$
|
45,732
|
|
2016
|
$
|
40,159
|
|
|
$
|
6,017
|
|
|
$
|
46,176
|
|
|
|
|
|
|
|
||||||
Expected for the year ended December 31, 2017 (a)
|
$ 380,000 - 420,000
|
|
|
$ 35,000 - 55,000
|
|
|
$ 415,000 - 475,000
|
|
(a)
|
Excludes capital expenditures related to the Navigator Acquisition.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||
General partner interest
|
$
|
2,343
|
|
|
$
|
1,961
|
|
General partner incentive distribution
|
12,912
|
|
|
10,805
|
|
||
Total general partner distribution
|
15,255
|
|
|
12,766
|
|
||
Common limited partners’ distribution
|
101,913
|
|
|
85,285
|
|
||
Total cash distributions
|
$
|
117,168
|
|
|
$
|
98,051
|
|
|
|
|
|
||||
Cash distributions per unit applicable to common limited partners
|
$
|
1.095
|
|
|
$
|
1.095
|
|
Quarter Ended
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
March 31, 2017 (a)
|
|
$
|
1.095
|
|
|
$
|
117,168
|
|
|
May 8, 2017
|
|
May 12, 2017
|
December 31, 2016
|
|
$
|
1.095
|
|
|
$
|
98,971
|
|
|
February 8, 2017
|
|
February 13, 2017
|
(a)
|
The distribution was announced on
April 24, 2017
.
|
•
|
Revolving credit agreement due October 29, 2019, with
$774.6 million
of borrowings outstanding as of
March 31, 2017
;
|
•
|
7.65% senior notes due April 15, 2018 with a face value of $350.0 million; 4.80% senior notes due September 1, 2020 with a face value of $450.0 million; 6.75% senior notes due February 1, 2021 with a face value of $300.0 million; 4.75% senior notes due February 1, 2022 with a face value of $250.0 million; and 7.625% subordinated notes due January 15, 2043 with a face value of $402.5 million;
|
•
|
$365.4 million in GoZone Bonds due from 2038 to 2041;
|
•
|
Line of credit agreements with
$72.0 million
of borrowings outstanding as of
March 31, 2017
; and
|
•
|
Receivables Financing Agreement due June 15, 2018, with
$61.0 million
of borrowings outstanding as of
March 31, 2017
.
|
|
Standard & Poor’s
Ratings Services
|
|
Moody’s Investor
Service Inc.
|
|
Fitch, Inc.
|
|
|
|
|
|
|
Ratings
|
BB+
|
|
Ba1
|
|
BB
|
Outlook
|
Stable
|
|
Ratings Under Review
|
|
Stable
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
March 31, 2017
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
|
(Thousands of Dollars, Except Interest Rates)
|
||||||||||||||||||||||||||||||
Long-term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed-rate
|
$
|
—
|
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
450,000
|
|
|
$
|
300,000
|
|
|
$
|
652,500
|
|
|
$
|
1,752,500
|
|
|
$
|
1,813,864
|
|
Weighted-average
interest rate
|
—
|
|
|
8.2
|
%
|
|
—
|
|
|
4.8
|
%
|
|
6.8
|
%
|
|
6.5
|
%
|
|
6.4
|
%
|
|
|
|||||||||
Variable-rate
|
$
|
—
|
|
|
$
|
61,000
|
|
|
$
|
774,644
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
365,440
|
|
|
$
|
1,201,084
|
|
|
$
|
1,201,745
|
|
Weighted-average
interest rate
|
—
|
|
|
1.8
|
%
|
|
2.6
|
%
|
|
—
|
|
|
—
|
|
|
0.9
|
%
|
|
2.1
|
%
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
|
(Thousands of Dollars, Except Interest Rates)
|
||||||||||||||||||||||||||||||
Long-term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed-rate
|
$
|
—
|
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
450,000
|
|
|
$
|
300,000
|
|
|
$
|
652,500
|
|
|
$
|
1,752,500
|
|
|
$
|
1,821,261
|
|
Weighted-average
interest rate
|
—
|
|
|
8.2
|
%
|
|
—
|
|
|
4.8
|
%
|
|
6.8
|
%
|
|
6.5
|
%
|
|
6.4
|
%
|
|
|
|||||||||
Variable-rate
|
$
|
—
|
|
|
$
|
58,400
|
|
|
$
|
838,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
365,440
|
|
|
$
|
1,262,832
|
|
|
$
|
1,263,501
|
|
Weighted-average
interest rate
|
—
|
|
|
1.6
|
%
|
|
2.5
|
%
|
|
—
|
|
|
—
|
|
|
0.7
|
%
|
|
1.9
|
%
|
|
|
Notional Amount
|
|
|
|
Weighted-Average Fixed Rate
|
|
Fair Value
|
||||||||||||||||
March 31, 2017
|
|
December 31, 2016
|
|
Period of Hedge
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||
(Thousands of Dollars)
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||||||||||||||
$
|
350,000
|
|
|
$
|
350,000
|
|
|
04/2018 - 04/2028
|
|
2.6
|
%
|
|
2.6
|
%
|
|
$
|
(1,504
|
)
|
|
$
|
(1,333
|
)
|
250,000
|
|
|
250,000
|
|
|
09/2020 - 09/2030
|
|
2.8
|
%
|
|
2.8
|
%
|
|
225
|
|
|
15
|
|
||||
$
|
600,000
|
|
|
$
|
600,000
|
|
|
|
|
2.7
|
%
|
|
2.7
|
%
|
|
$
|
(1,279
|
)
|
|
$
|
(1,318
|
)
|
|
March 31, 2017
|
|||||||||||||
|
Contract
Volumes
|
|
Weighted Average
|
|
Fair Value of
Current
Asset (Liability)
|
|||||||||
Pay Price
|
|
Receive Price
|
|
|||||||||||
|
(Thousands
of Barrels)
|
|
|
|
|
|
(Thousands of
Dollars)
|
|||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|||||||
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
63
|
|
|
N/A
|
|
|
$
|
63.77
|
|
|
$
|
(149
|
)
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
285
|
|
|
N/A
|
|
|
$
|
41.55
|
|
|
$
|
(704
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Economic Hedges and Other Derivatives:
|
|
|
|
|
|
|
|
|||||||
Futures – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
87
|
|
|
$
|
64.12
|
|
|
N/A
|
|
|
$
|
175
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
85
|
|
|
N/A
|
|
|
$
|
64.07
|
|
|
$
|
(175
|
)
|
|
Swaps – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
204
|
|
|
$
|
42.38
|
|
|
N/A
|
|
|
$
|
335
|
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
104
|
|
|
N/A
|
|
|
$
|
42.40
|
|
|
$
|
(168
|
)
|
|
Forward purchase contracts:
|
|
|
|
|
|
|
|
|||||||
(crude oil)
|
300
|
|
|
$
|
49.43
|
|
|
N/A
|
|
|
$
|
629
|
|
|
Forward sales contracts:
|
|
|
|
|
|
|
|
|||||||
(crude oil)
|
300
|
|
|
N/A
|
|
|
$
|
49.43
|
|
|
$
|
(627
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Total fair value of open positions exposed to
commodity price risk
|
|
|
|
|
|
|
$
|
(684
|
)
|
|
December 31, 2016
|
|||||||||||||
|
Contract
Volumes
|
|
Weighted Average
|
|
Fair Value of
Current
Asset (Liability)
|
|||||||||
Pay Price
|
|
Receive Price
|
|
|||||||||||
|
(Thousands
of Barrels)
|
|
|
|
|
|
(Thousands of
Dollars)
|
|||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|||||||
Futures – long:
|
|
|
|
|
|
|
|
|||||||
(crude oil and refined products)
|
47
|
|
|
$
|
55.53
|
|
|
N/A
|
|
|
$
|
2
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(crude oil and refined products)
|
107
|
|
|
N/A
|
|
|
$
|
58.79
|
|
|
$
|
(243
|
)
|
|
Swaps – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
84
|
|
|
$
|
45.99
|
|
|
N/A
|
|
|
$
|
141
|
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
573
|
|
|
N/A
|
|
|
$
|
41.87
|
|
|
$
|
(3,322
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Economic Hedges and Other Derivatives:
|
|
|
|
|
|
|
|
|||||||
Futures – long:
|
|
|
|
|
|
|
|
|||||||
(crude oil and refined products)
|
18
|
|
|
$
|
72.06
|
|
|
N/A
|
|
|
$
|
10
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(crude oil and refined products)
|
9
|
|
|
N/A
|
|
|
$
|
71.88
|
|
|
$
|
(7
|
)
|
|
Swaps – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
869
|
|
|
$
|
42.20
|
|
|
N/A
|
|
|
$
|
4,737
|
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
874
|
|
|
N/A
|
|
|
$
|
41.40
|
|
|
$
|
(5,459
|
)
|
|
Forward purchase contracts:
|
|
|
|
|
|
|
|
|||||||
(crude oil)
|
310
|
|
|
$
|
52.78
|
|
|
N/A
|
|
|
$
|
499
|
|
|
Forward sales contracts:
|
|
|
|
|
|
|
|
|||||||
(crude oil)
|
310
|
|
|
N/A
|
|
|
$
|
52.76
|
|
|
$
|
(507
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Total fair value of open positions exposed to
commodity price risk
|
|
|
|
|
|
|
$
|
(4,149
|
)
|
Item 4.
|
Controls and Procedures
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal control over financial reporting.
|
Item 6.
|
Exhibits
|
By:
|
|
/s/ Bradley C. Barron
|
|
|
Bradley C. Barron
|
|
|
President and Chief Executive Officer
|
|
|
May 9, 2017
|
|
|
|
By:
|
|
/s/ Thomas R. Shoaf
|
|
|
Thomas R. Shoaf
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
May 9, 2017
|
|
|
|
By:
|
|
/s/ Jorge A. del Alamo
|
|
|
Jorge A. del Alamo
|
|
|
Senior Vice President and Controller
|
|
|
May 9, 2017
|
1.
|
Grant of Performance Units
. The Compensation Committee of the Board of Directors of the Company (the “
Committee
”) hereby grants, pursuant to Section 6.4 of the Plan, to Participant the number of
Performance Units under the Plan communicated to the Participant by the Participant’s manager, which represents the target number of Performance Units subject to this Agreement, which grant is subject to the terms and conditions of this Agreement and the Plan. A “
Performance Unit
” is an unfunded, unsecured contractual right (commonly referred to as a “phantom unit”) which, upon vesting, entitles Participant to receive a Unit of NuStar Energy L.P. No DERs are granted in connection with this Award of Performance Units.
|
2.
|
Performance Period
. Except as provided below with respect to a Change of Control, the performance period for any Performance Units eligible to vest on any given Normal Vesting Date (as defined below) shall be the calendar year ending on the December 31 immediately preceding such Normal Vesting Date (each, a “
Performance Period
” and specifically, with respect to each of the 2017, 2018 and 2019 calendar years, the “
Year 1 Performance Period
,” the “
Year 2 Performance Period
,” and the “
Year 3 Performance Period,
” respectively).
|
3.
|
Vesting and Settlement
.
|
A.
|
Vesting
. Except as otherwise provided in this Agreement, the Performance Units granted hereunder shall vest, subject to Section 4, over a period of three years in equal, one-third increments (provided, however, that if such increments would otherwise result in a fractional Performance Unit with respect to the applicable Annual Tranche, such fractional Performance Unit shall be rounded to the nearest whole number) (each increment, an “
Annual Tranche
” and specifically, with respect to the applicable Performance Period for each of the 2017, 2018 and 2019 calendar years, the “
Year 1 Annual Tranche
,” the “
Year 2 Annual Tranche
,” and the “
Year 3 Annual Tranche,
” respectively). Except as otherwise provided in this Agreement, the applicable portion, if any, of the Year 1 Annual Tranche, the Year 2 Annual Tranche and the Year 3 Annual Tranche shall vest on the respective dates that the Committee certifies the attainment of the Performance Goals applicable to this Award (“
Performance Measures
”) for the applicable Performance Period in accordance with Section 4 following completion of
|
B.
|
Settlement
. Except as provided otherwise in Section 6, any Performance Units that vest pursuant to this Agreement shall be settled as soon as reasonably practical after the applicable Normal Vesting Date and in all events no later than March 15 of the calendar year following the end of the applicable Performance Period. This Agreement and the Award evidenced hereby are intended to comply with or otherwise be exempt from, and shall be administered consistently in all respects with, Section 409A of the Code and the regulations promulgated thereunder. If necessary in order to attempt to ensure such compliance, this Agreement may be reformed, to the extent possible, unilaterally by the Company consistent with guidance issued by the Internal Revenue Service. Participant agrees that the Units to which Participant will be entitled in connection with the vesting, if any, of each Performance Unit may be in uncertificated form and recorded with the Company’s or its Affiliates’ service provider.
|
4.
|
Performance Measures
.
|
A.
|
Performance Unit Vesting for the Year 1 Performance Period
.
The Year 1 Annual Tranche shall vest based on the distribution coverage ratio achieved
by
NuStar Energy L.P. (“
DCR
”) during the Year 1 Performance Period as follows:
|
Level
|
DCR
|
Percentage of Year 1 Annual Tranche Vesting
(Year 1 Performance Multiplier)
|
Below Threshold
|
Below 1.00 : 1
|
0%
|
Threshold
|
1.00 : 1
|
90%
|
Target
|
1.01 : 1
|
100%
|
Exceeds Target
|
1.05 : 1
|
150%
|
Maximum
|
1.10 : 1
|
200%
|
B.
|
Performance Unit Vesting for Year 2 and Year 3
. The Committee will designate the Performance Measures that will apply for the Year 2 Performance Period and the Year 3 Performance Period (the “
Year 2 Performance Measures
” and the “
Year 3
Performance Measures
,” respectively) in the first quarter of the applicable calendar year based on the Company’s approved budget for such applicable year. Within the Committee’s discretion, the Year 2 Performance Measures and the Year 3 Performance Measures may result in the vesting of greater than 100% (up to 200%) of the Year 2 Annual Tranche and the Year 3 Annual Tranche, respectively. The Year 2 Performance Measures and the Year 3 Performance Measures shall be applied to the Year 2 Annual Tranche and the Year 3 Annual Tranche, respectively, to determine the Performance Units that vest with respect to the applicable Performance Period. Notwithstanding the foregoing, the Committee has full discretion to vest between 0% and 200% of the applicable Annual Tranche, regardless of the level of Performance Measures achieved by NuStar Energy L.P. for that year.
|
5.
|
Termination of Employment
.
|
A.
|
Voluntary Termination and Termination for Cause.
Except for a Change of Control, if Participant’s employment is voluntarily terminated by Participant (other than through Participant’s death), or is terminated by the Company or an Affiliate for Cause, any Annual Tranche for a Performance Period not completed as of the date of termination shall be automatically forfeited for no consideration; provided, however, that a Participant who remains continuously employed with the Company or an Affiliate from the Grant Date through the last day of a Performance Period will be entitled to the Performance Units for such completed Performance Period in accordance with Section 4, whether or not Participant remains employed by the Company or an Affiliate until the Normal Vesting Date applicable to the completed Performance Period.
|
B.
|
Death, Disability and Termination by the Company Other Than for Cause
. Except for a Change of Control, if Participant experiences a Disability (as defined below) or if Participant’s employment with the Company or an Affiliate is terminated by the Company or an Affiliate other than for Cause (at a time when Participant is otherwise willing and able to continue providing services) or as a result of Participant’s death (each, a “
Triggering Event
”), and the then-current Performance Period will be completed in fewer than 30 days after such Triggering Event, the Annual Tranche applicable to the then-current Performance Period shall vest and be settled in accordance with Sections 3 and 4 as if Participant had remained employed through the last day of the Performance Period. Any Performance Units that fail to vest for the then-current Performance Period after the application of the previous sentence, including any Performance Units for any Performance Periods that would otherwise have commenced following the Triggering Date, shall be automatically and immediately forfeited for no consideration. Any Performance Units that vest pursuant to this Section 5B shall be settled as soon as administratively practicable after the applicable Normal Vesting Date and in all events no later than March 15 of the calendar year following the end of the calendar year in
|
6.
|
Change of Control
. Upon a Change of Control, with respect to then-outstanding Performance Units, all applicable Performance Goals will be deemed achieved at maximum levels and all such Performance Units shall automatically vest in full. Any Performance Units that vest pursuant to this Section 6 shall be settled as soon as administratively practicable after the Change of Control and in all events no later than March 15 of the calendar year following the end of the calendar year in which the Change of Control occurs.
|
7.
|
Withholding
. The Company or one of its Affiliates will withhold any taxes due from Participant’s grant as the Company or an applicable Affiliate determines is required by law, which, in the sole discretion of the Committee, may include withholding a number of Performance Units or the Units issuable thereunder otherwise payable to Participant.
|
8.
|
Acceptance and Acknowledgement
. Participant hereby accepts and agrees to be bound by all of the terms, provisions, conditions and limitations of the Plan and any subsequent amendment or amendments thereto, as if it had been set forth verbatim in this Award. Participant shall be deemed to have timely accepted this Agreement and the terms hereof if Participant has not explicitly rejected this Agreement in writing to the Company within sixty (60) days after the Grant Date. Participant hereby acknowledges receipt of a copy of the Plan, this Agreement and Appendix A. Participant has read and understands the terms and provisions thereof, and accepts the Performance Units subject to all of the terms and conditions of the Plan and this Agreement. Participant acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Performance Units or disposition of the underlying Units and that Participant has been advised to consult a tax advisor prior to such vesting, settlement or disposition.
|
9.
|
Plan and Appendix Incorporated by Reference
. The Plan and Appendix A are incorporated into this Agreement by this reference and are made a part hereof for all purposes; provided, however, that, in the event of a conflict between the Plan and this Agreement or between the Plan and Appendix A, the Plan shall control.
|
10.
|
Restrictions
. This Agreement and Participant’s interest in the Performance Units granted by this Agreement are of a personal nature and, except as expressly provided in this Agreement or the Plan, Participant’s rights with respect thereto may not be sold, mortgaged, pledged, assigned, alienated, transferred, conveyed or otherwise disposed of or encumbered in any manner by Participant. Any such attempted sale, mortgage, pledge, assignment, alienation, transfer, conveyance, disposition or encumbrance shall be void, and the Company and its Affiliates shall not be bound thereby.
|
1.
|
No Guarantee of Tax Consequences
. None of the Board, the Company or any Affiliate of any of the foregoing makes any commitment or guarantee that any federal, state, local or other tax treatment will (or will not) apply or be available to Participant (or to any person claiming through or on behalf of Participant) or assumes any liability or responsibility with respect to taxes and penalties and interest thereon arising hereunder with respect to Participant (or to any person claiming through or on behalf of Participant).
|
2.
|
Successors and Assigns
. The Company and NuStar Services Company LLC may assign any of their respective rights under this Agreement. This Agreement shall be binding and inure to the benefit of the successors and assigns of the Company and NuStar Services Company LLC. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant and Participant’s beneficiaries, executors, administrators and the person(s) to whom the Performance Units may be transferred by will or the laws of descent or distribution.
|
3.
|
Governing Law
. The validity, construction and effect of this Agreement shall be determined by the laws of the State of Delaware without regard to conflict of laws principles.
|
4.
|
No Rights as Unitholder
. Neither Participant nor any person claiming by, through or under Participant with respect to the Performance Units shall have any rights as a unitholder of NuStar Energy L.P. (including, without limitation, voting rights) unless and until the Performance Units vest and are settled by the issuance of Units.
|
5.
|
Amendment
. The Committee has the right to amend, alter, suspend, discontinue or cancel this Agreement and/or the Performance Units; provided, that no such amendment shall adversely affect Participant’s material rights under this Agreement without Participant’s consent.
|
6.
|
No Right to Continued Service
. Neither the Plan nor this Agreement shall confer upon Participant any right to be retained in any position, as an Employee or Director of the Company or any Affiliate thereof. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company or any Affiliate thereof to terminate Participant’s service at any time, with or without Cause.
|
7.
|
Notices
. Any notice required to be delivered to the Company or NuStar Services Company LLC under this Agreement shall be in writing and addressed to the Secretary of the Company at the Company
’
s principal offices. Any notice required to be delivered to Participant under this Agreement shall be in writing and addressed to Participant at Participant’s address as then shown in the records of the Company. Any party hereto may designate another address in writing (or by such other method approved by the Company) from time to time.
|
8.
|
Interpretation
. Any dispute regarding the interpretation of this Agreement shall be submitted by such party to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the parties hereto.
|
9.
|
Severability
. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
|
By:
|
Riverwalk Logistics, L.P., its General Partner
|
Subsidiary
|
Jurisdiction of Organization
|
Restricted/
Unrestricted/Material
|
Ownership Percentage
|
Bicen Development Corporation N.V.
|
Netherlands
|
Restricted
|
100%
|
Cooperatie NuStar Holdings U.A.
|
Netherlands
|
Restricted
|
100%
|
LegacyStar Services, LLC
|
Delaware
|
Restricted
|
100%
|
NS Security Services, LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Burgos, LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Caribe Terminals, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Eastham Limited
|
England
|
Restricted
|
100%
|
NuStar Energy Services, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Finance LLC
|
Delaware
|
Restricted
|
100%
|
NuStar GP, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Grangemouth Limited
|
England
|
Restricted
|
100%
|
NuStar Holdings B.V.
|
Netherlands
|
Restricted
|
100%
|
NuStar Internacional, S de R.L. de C.V.
|
Mexico
|
Restricted
|
100%
|
NuStar Logistics, L.P.
|
Delaware
|
Restricted – Material
|
100%
|
NuStar Pipeline Company, LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Pipeline Holding Company, LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Pipeline Operating Partnership L.P.
|
Delaware
|
Restricted – Material
|
100%
|
NuStar Pipeline Partners L.P.
|
Delaware
|
Restricted
|
100%
|
NuStar Refining, LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Services Company LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Supply & Trading LLC
|
Delaware
|
Restricted
|
100%
|
NuStar Terminals Antilles N.V.
|
Curacao
|
Restricted
|
100%
|
NuStar Terminals B.V.
|
Netherlands
|
Restricted
|
100%
|
NuStar Terminals Canada Co.
|
Canada
|
Restricted
|
100%
|
NuStar Terminals Canada Holdings Co.
|
Canada
|
Restricted
|
100%
|
NuStar Terminals Canada Partnership
|
Canada
|
Restricted
|
100%
|
NuStar Terminals Corporation N.V.
|
Curacao
|
Restricted
|
100%
|
NuStar Terminals Delaware, Inc.
|
Delaware
|
Restricted
|
100%
|
Subsidiary
|
Jurisdiction of Organization
|
Restricted/
Unrestricted/Material
|
Ownership Percentage
|
NuStar Terminals International N.V.
|
Curacao
|
Restricted
|
100%
|
NuStar Terminals Limited
|
England
|
Restricted
|
100%
|
NuStar Terminals Marine Services N.V.
|
Netherlands
|
Restricted
|
100%
|
NuStar Terminals New Jersey, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Terminals N.V.
|
Netherlands
|
Restricted – Material
|
100%
|
NuStar Terminals Operations Partnership L.P.
|
Delaware
|
Restricted
|
100%
|
NuStar Terminals Partners TX L.P.
|
Delaware
|
Restricted
|
100%
|
NuStar Terminals Services, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Terminals Texas, Inc.
|
Delaware
|
Restricted
|
100%
|
NuStar Texas Holdings, Inc.
|
Delaware
|
Restricted
|
100%
|
Petroburgos, S. de R.L. de C.V.
|
Mexico
|
Restricted
|
100%
|
Point Tupper Marine Services Co.
|
Canada
|
Restricted
|
100%
|
Saba Company N.V.
|
Netherlands
|
Restricted
|
100%
|
Seven Seas Steamship Company (Sint
Eustatius) N.V.
|
Netherlands
|
Restricted
|
100%
|
Shore Terminals LLC
|
Delaware
|
Restricted
|
100%
|
ST Linden Terminal, LLC
|
Delaware
|
Restricted
|
100%
|
Star Creek Ranch, LLC
|
Delaware
|
Restricted
|
100%
|
|
Three Months
|
|
|
||||||||||||||||||||
|
Ended
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
March 31,
|
|
Years Ended December 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations before provision for income taxes and income from equity investees
|
$
|
60,865
|
|
|
$
|
161,976
|
|
|
$
|
320,658
|
|
|
$
|
220,174
|
|
|
$
|
(132,786
|
)
|
|
$
|
(132,173
|
)
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges
|
40,097
|
|
|
154,085
|
|
|
150,661
|
|
|
153,236
|
|
|
149,090
|
|
|
122,286
|
|
||||||
Amortization of capitalized interest
|
448
|
|
|
1,722
|
|
|
1,573
|
|
|
1,385
|
|
|
1,216
|
|
|
1,012
|
|
||||||
Distributions from joint ventures
|
—
|
|
|
—
|
|
|
2,500
|
|
|
7,587
|
|
|
7,956
|
|
|
6,364
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest capitalized
|
(645
|
)
|
|
(3,414
|
)
|
|
(5,549
|
)
|
|
(5,667
|
)
|
|
(4,501
|
)
|
|
(7,737
|
)
|
||||||
Total earnings
|
$
|
100,765
|
|
|
$
|
314,369
|
|
|
$
|
469,843
|
|
|
$
|
376,715
|
|
|
$
|
20,975
|
|
|
$
|
(10,248
|
)
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
$
|
36,414
|
|
|
$
|
138,350
|
|
|
$
|
131,868
|
|
|
$
|
132,281
|
|
|
$
|
127,119
|
|
|
$
|
90,535
|
|
Interest capitalized
|
645
|
|
|
3,414
|
|
|
5,549
|
|
|
5,667
|
|
|
4,501
|
|
|
7,737
|
|
||||||
Rental expense interest factor (a)
|
3,038
|
|
|
12,321
|
|
|
13,244
|
|
|
15,288
|
|
|
17,470
|
|
|
24,014
|
|
||||||
Total fixed charges
|
$
|
40,097
|
|
|
$
|
154,085
|
|
|
$
|
150,661
|
|
|
$
|
153,236
|
|
|
$
|
149,090
|
|
|
$
|
122,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred unit distributions (b)
|
$
|
4,813
|
|
|
$
|
1,925
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total fixed charges plus preferred unit distributions (b)
|
$
|
44,910
|
|
|
$
|
156,010
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to fixed charges
|
2.5x
|
|
|
2.0x
|
|
|
3.1x
|
|
|
2.5x
|
|
|
(c)
|
|
|
(d)
|
|
||||||
Ratio of earnings to fixed charges plus preferred unit distributions (b)
|
2.2x
|
|
|
2.0x
|
|
|
|
|
|
|
|
|
|
(a)
|
The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.
|
(b)
|
For the years ended December 31, 2015, 2014, 2013 and 2012, we had no preferred units outstanding.
|
(c)
|
For the year ended December 31, 2013, earnings were insufficient to cover fixed charges by $128.1 million. The deficiency included a goodwill impairment loss of $304.5 million related to the Statia terminals reporting unit.
|
(d)
|
For the year ended December 31, 2012, earnings were insufficient to cover fixed charges by $132.5 million. The deficiency included the effect of $271.8 million of impairment losses mainly resulting from the write-down of the carrying value of our long-lived assets related to our asphalt operations, including fixed assets, goodwill, intangible assets and other long-term assets.
|
/s/ Bradley C. Barron
|
Bradley C. Barron
|
President and Chief Executive Officer
|
/s/ Thomas R. Shoaf
|
Thomas R. Shoaf
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Bradley C. Barron
|
Bradley C. Barron
|
President and Chief Executive Officer
|
May 9, 2017
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Thomas R. Shoaf
|
Thomas R. Shoaf
|
Executive Vice President and Chief Financial Officer
|
May 9, 2017
|