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 September 30, 2018
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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
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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
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
24,579
|
|
|
$
|
24,292
|
|
Accounts receivable, net of allowance for doubtful accounts of $9,499
and $9,948 as of September 30, 2018 and December 31, 2017, respectively
|
164,768
|
|
|
176,570
|
|
||
Receivable from related party
|
—
|
|
|
205
|
|
||
Inventories
|
24,761
|
|
|
26,857
|
|
||
Other current assets
|
62,766
|
|
|
22,508
|
|
||
Total current assets
|
276,874
|
|
|
250,432
|
|
||
Property, plant and equipment, at cost
|
6,601,221
|
|
|
6,243,481
|
|
||
Accumulated depreciation and amortization
|
(2,116,373
|
)
|
|
(1,942,548
|
)
|
||
Property, plant and equipment, net
|
4,484,848
|
|
|
4,300,933
|
|
||
Intangible assets, net
|
745,912
|
|
|
784,479
|
|
||
Goodwill
|
1,094,661
|
|
|
1,097,475
|
|
||
Deferred income tax asset
|
—
|
|
|
233
|
|
||
Other long-term assets, net
|
118,663
|
|
|
101,681
|
|
||
Total assets
|
$
|
6,720,958
|
|
|
$
|
6,535,233
|
|
Liabilities, Mezzanine Equity and Partners’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
154,212
|
|
|
$
|
145,932
|
|
Short-term debt
|
10,500
|
|
|
35,000
|
|
||
Current portion of long-term debt
|
—
|
|
|
349,990
|
|
||
Accrued interest payable
|
30,845
|
|
|
40,449
|
|
||
Accrued liabilities
|
97,298
|
|
|
61,578
|
|
||
Taxes other than income tax
|
19,695
|
|
|
14,385
|
|
||
Income tax payable
|
4,576
|
|
|
4,172
|
|
||
Total current liabilities
|
317,126
|
|
|
651,506
|
|
||
Long-term debt, less current portion
|
3,376,852
|
|
|
3,263,069
|
|
||
Deferred income tax liability
|
23,343
|
|
|
22,272
|
|
||
Other long-term liabilities
|
96,911
|
|
|
118,297
|
|
||
Total liabilities
|
3,814,232
|
|
|
4,055,144
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 6)
|
|
|
|
||||
|
|
|
|
||||
Series D preferred limited partners (23,246,650 preferred units outstanding as of
September 30, 2018) (Note 11)
|
559,844
|
|
|
—
|
|
||
|
|
|
|
||||
Partners’ equity (Note 12):
|
|
|
|
||||
Preferred limited partners (9,060,000 Series A preferred units, 15,400,000 Series B preferred units and 6,900,000 Series C preferred units outstanding as of September 30, 2018 and December 31, 2017)
|
756,303
|
|
|
756,603
|
|
||
Common limited partners (107,043,594 and 93,176,683 common units outstanding
as of September 30, 2018 and December 31, 2017, respectively)
|
1,652,302
|
|
|
1,770,587
|
|
||
General partner
|
—
|
|
|
37,826
|
|
||
Accumulated other comprehensive loss
|
(61,723
|
)
|
|
(84,927
|
)
|
||
Total partners’ equity
|
2,346,882
|
|
|
2,480,089
|
|
||
Total liabilities, mezzanine equity and partners’ equity
|
$
|
6,720,958
|
|
|
$
|
6,535,233
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Service revenues
|
$
|
314,512
|
|
|
$
|
295,102
|
|
|
$
|
908,056
|
|
|
$
|
845,264
|
|
Product sales
|
175,851
|
|
|
145,464
|
|
|
544,392
|
|
|
518,220
|
|
||||
Total revenues
|
490,363
|
|
|
440,566
|
|
|
1,452,448
|
|
|
1,363,484
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Costs associated with service revenues:
|
|
|
|
|
|
|
|
||||||||
Operating expenses (excluding depreciation and amortization expense)
|
124,451
|
|
|
116,590
|
|
|
365,007
|
|
|
334,016
|
|
||||
Depreciation and amortization expense
|
73,424
|
|
|
66,989
|
|
|
216,934
|
|
|
187,062
|
|
||||
Total costs associated with service revenues
|
197,875
|
|
|
183,579
|
|
|
581,941
|
|
|
521,078
|
|
||||
Cost of product sales
|
167,118
|
|
|
138,078
|
|
|
514,695
|
|
|
490,363
|
|
||||
General and administrative expenses (excluding depreciation and amortization expense)
|
27,817
|
|
|
25,003
|
|
|
75,572
|
|
|
83,202
|
|
||||
Other depreciation and amortization expense
|
2,276
|
|
|
2,189
|
|
|
6,645
|
|
|
6,581
|
|
||||
Total costs and expenses
|
395,086
|
|
|
348,849
|
|
|
1,178,853
|
|
|
1,101,224
|
|
||||
Operating income
|
95,277
|
|
|
91,717
|
|
|
273,595
|
|
|
262,260
|
|
||||
Interest expense, net
|
(44,825
|
)
|
|
(45,256
|
)
|
|
(141,533
|
)
|
|
(127,282
|
)
|
||||
Other income (expense), net
|
920
|
|
|
(5,126
|
)
|
|
82,084
|
|
|
(4,898
|
)
|
||||
Income before income tax expense
|
51,372
|
|
|
41,335
|
|
|
214,146
|
|
|
130,080
|
|
||||
Income tax expense
|
3,236
|
|
|
2,743
|
|
|
10,478
|
|
|
7,298
|
|
||||
Net income
|
$
|
48,136
|
|
|
$
|
38,592
|
|
|
$
|
203,668
|
|
|
$
|
122,782
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income per common unit (Note 14)
|
$
|
(3.49
|
)
|
|
$
|
0.15
|
|
|
$
|
(2.50
|
)
|
|
$
|
0.65
|
|
Basic weighted-average common units outstanding
|
104,264,796
|
|
|
93,031,320
|
|
|
96,920,202
|
|
|
87,392,597
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
53,037
|
|
|
$
|
44,482
|
|
|
$
|
226,872
|
|
|
$
|
133,566
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net income
|
$
|
203,668
|
|
|
$
|
122,782
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
223,579
|
|
|
193,643
|
|
||
Unit-based compensation expense
|
8,689
|
|
|
7,437
|
|
||
Amortization of debt related items
|
5,926
|
|
|
4,677
|
|
||
(Gain) loss from sale or disposition of assets
|
(1,264
|
)
|
|
4,920
|
|
||
Gain from insurance recoveries
|
(78,756
|
)
|
|
—
|
|
||
Deferred income tax expense (benefit)
|
1,340
|
|
|
(106
|
)
|
||
Changes in current assets and current liabilities (Note 15)
|
31,243
|
|
|
(17,671
|
)
|
||
(Increase) decrease in other long-term assets
|
(2,324
|
)
|
|
1,233
|
|
||
Decrease in other long-term liabilities
|
(28,171
|
)
|
|
(4,752
|
)
|
||
Other, net
|
(610
|
)
|
|
(1,148
|
)
|
||
Net cash provided by operating activities
|
363,320
|
|
|
311,015
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(338,440
|
)
|
|
(220,617
|
)
|
||
Change in accounts payable related to capital expenditures
|
(18,630
|
)
|
|
13,272
|
|
||
Proceeds from sale or disposition of assets
|
2,220
|
|
|
2,023
|
|
||
Proceeds from Axeon term loan
|
—
|
|
|
110,000
|
|
||
Proceeds from insurance recoveries
|
78,419
|
|
|
—
|
|
||
Acquisitions
|
(37,502
|
)
|
|
(1,461,719
|
)
|
||
Investment in other long-term assets
|
(3,280
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(317,213
|
)
|
|
(1,557,041
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Proceeds from long-term debt borrowings
|
985,453
|
|
|
1,223,204
|
|
||
Proceeds from short-term debt borrowings
|
538,500
|
|
|
748,000
|
|
||
Proceeds from note offering, net of issuance costs
|
—
|
|
|
543,313
|
|
||
Long-term debt repayments
|
(1,215,498
|
)
|
|
(1,204,739
|
)
|
||
Short-term debt repayments
|
(563,000
|
)
|
|
(734,000
|
)
|
||
Proceeds from issuance of Series D preferred units
|
590,000
|
|
|
—
|
|
||
Payment of issuance costs for Series D preferred units
|
(34,187
|
)
|
|
—
|
|
||
Proceeds from issuance of other preferred units, net of issuance costs
|
—
|
|
|
371,802
|
|
||
Proceeds from issuance of common units, net of issuance costs
|
10,000
|
|
|
643,858
|
|
||
Contributions from general partner
|
204
|
|
|
13,597
|
|
||
Distributions to preferred unitholders
|
(60,247
|
)
|
|
(26,681
|
)
|
||
Distributions to common unitholders and general partner
|
(236,549
|
)
|
|
(331,222
|
)
|
||
Cash consideration for Merger (Note 2)
|
(61,271
|
)
|
|
—
|
|
||
Proceeds from termination of interest rate swaps
|
8,048
|
|
|
—
|
|
||
(Decrease) increase in cash book overdrafts
|
(27
|
)
|
|
1,564
|
|
||
Other, net
|
(6,527
|
)
|
|
(6,634
|
)
|
||
Net cash (used in) provided by financing activities
|
(45,101
|
)
|
|
1,242,062
|
|
||
Effect of foreign exchange rate changes on cash
|
(719
|
)
|
|
1,637
|
|
||
Net increase (decrease) in cash and cash equivalents
|
287
|
|
|
(2,327
|
)
|
||
Cash and cash equivalents as of the beginning of the period
|
24,292
|
|
|
35,942
|
|
||
Cash and cash equivalents as of the end of the period
|
$
|
24,579
|
|
|
$
|
33,615
|
|
Consideration transferred:
|
|
|
||
Fair value of incremental NS common units issued
|
|
$
|
335,106
|
|
NSH debt and net current liabilities assumed
|
|
52,075
|
|
|
Transaction costs, including accrued costs
|
|
15,897
|
|
|
Total consideration
|
|
403,078
|
|
|
|
|
|
||
Carrying value of general partner interest
|
|
25,999
|
|
|
Loss to common unitholders attributable to the Merger
|
|
$
|
(377,079
|
)
|
|
|
|
||
For the three months ended September 30, 2018:
|
|
|
||
Basic weighted-average common units outstanding
|
|
104,264,796
|
|
|
Loss per common unit attributable to the Merger
|
|
$
|
(3.62
|
)
|
|
Purchase Price Allocation
|
||
|
(Thousands of Dollars)
|
||
Accounts receivable
|
$
|
4,747
|
|
Other current assets
|
2,359
|
|
|
Property, plant and equipment, net
|
376,690
|
|
|
Intangible assets (a)
|
700,000
|
|
|
Goodwill (b)
|
398,024
|
|
|
Other long-term assets, net
|
2,199
|
|
|
Current liabilities
|
(22,300
|
)
|
|
Purchase price allocation, net of cash acquired
|
$
|
1,461,719
|
|
(a)
|
Intangible assets, which consist of customer contracts and relationships, are amortized on a straight-line basis over a period of
20 years
.
|
(b)
|
The goodwill acquired represents the expected benefit from entering new geographic areas and the anticipated opportunities to generate future cash flows from the assets acquired and potential future projects.
|
•
|
we completed the Navigator Acquisition on January 1, 2017;
|
•
|
we issued approximately
14.4 million
common units;
|
•
|
we received a contribution from our general partner of
$13.6 million
to maintain the
2%
general partner economic interest it owned at that time;
|
•
|
we issued
15.4 million
Series B Preferred Units;
|
•
|
we issued
$550.0 million
of
5.625%
senior notes;
|
•
|
additional depreciation and amortization that would have been incurred assuming the fair value adjustments to property, plant and equipment and intangible assets reflected in the purchase price allocation above; and
|
•
|
we satisfied Navigator’s outstanding obligations under its revolving credit agreement.
|
|
Nine Months Ended September 30, 2017
|
||
|
(Thousands of Dollars, Except Per Unit Data)
|
||
Revenues
|
$
|
1,377,883
|
|
Net income
|
$
|
102,251
|
|
Basic net income per common unit
|
$
|
0.31
|
|
|
September 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other long-term assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
8,031
|
|
|
$
|
—
|
|
|
$
|
8,031
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
(276
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(276
|
)
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
3,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,890
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
(1,534
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,534
|
)
|
Commodity derivatives
|
(878
|
)
|
|
—
|
|
|
—
|
|
|
(878
|
)
|
||||
Interest rate swaps
|
—
|
|
|
(5,394
|
)
|
|
—
|
|
|
(5,394
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
(4,594
|
)
|
|
—
|
|
|
(4,594
|
)
|
||||
Total liabilities
|
$
|
(2,412
|
)
|
|
$
|
(9,988
|
)
|
|
$
|
—
|
|
|
$
|
(12,400
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(Thousands of Dollars)
|
||||||
Fair value
|
$
|
3,409,199
|
|
|
$
|
3,677,622
|
|
Carrying amount
|
$
|
3,376,852
|
|
|
$
|
3,613,059
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
Balance Sheet Location
|
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30,
2018 |
|
December 31,
2017 |
||||||||
|
|
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as
Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Other long-term assets, net
|
|
$
|
8,031
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts
|
Accrued liabilities
|
|
28
|
|
|
—
|
|
|
(296
|
)
|
|
(112
|
)
|
||||
Interest rate swaps
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,394
|
)
|
||||
Interest rate swaps
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,594
|
)
|
||||
Total
|
|
|
8,059
|
|
|
—
|
|
|
(296
|
)
|
|
(10,100
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated
as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Accrued liabilities
|
|
5
|
|
|
742
|
|
|
(13
|
)
|
|
(1,508
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
|
$
|
8,064
|
|
|
$
|
742
|
|
|
$
|
(309
|
)
|
|
$
|
(11,608
|
)
|
Commodity Contracts
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
(Thousands of Dollars)
|
||||||
Net amounts of liabilities presented in the consolidated balance sheets
|
|
$
|
(276
|
)
|
|
$
|
(878
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
(Loss) gain recognized in income on derivative
|
$
|
(294
|
)
|
|
$
|
(1,134
|
)
|
|
$
|
(1,597
|
)
|
|
$
|
1,327
|
|
(Loss) gain recognized in income on hedged item
|
(221
|
)
|
|
1,111
|
|
|
997
|
|
|
(1,036
|
)
|
||||
(Loss) gain recognized in income for ineffective portion
|
$
|
(515
|
)
|
|
$
|
(23
|
)
|
|
$
|
(600
|
)
|
|
$
|
291
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
Loss recognized in income on derivative
|
$
|
(209
|
)
|
|
$
|
(132
|
)
|
|
$
|
(439
|
)
|
|
$
|
(218
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income on derivative (effective portion)
|
$
|
3,540
|
|
|
$
|
(2,064
|
)
|
|
$
|
26,067
|
|
|
$
|
(10,005
|
)
|
Loss reclassified from AOCI into interest expense, net (effective portion)
|
$
|
(1,719
|
)
|
|
$
|
(1,584
|
)
|
|
$
|
(4,271
|
)
|
|
$
|
(5,112
|
)
|
|
Pension Plans
|
|
Other Postretirement Benefit Plans
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
For the three months ended September 30:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
2,405
|
|
|
$
|
2,239
|
|
|
$
|
126
|
|
|
$
|
115
|
|
Interest cost
|
1,206
|
|
|
1,127
|
|
|
107
|
|
|
107
|
|
||||
Expected return on assets
|
(1,854
|
)
|
|
(1,603
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(515
|
)
|
|
(515
|
)
|
|
(286
|
)
|
|
(286
|
)
|
||||
Amortization of net loss
|
544
|
|
|
371
|
|
|
53
|
|
|
47
|
|
||||
Net periodic benefit cost (income)
|
$
|
1,786
|
|
|
$
|
1,619
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
|
|
|
|
|
|
|
||||||||
For the nine months ended September 30:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
7,216
|
|
|
$
|
6,717
|
|
|
$
|
378
|
|
|
$
|
341
|
|
Interest cost
|
3,618
|
|
|
3,381
|
|
|
322
|
|
|
323
|
|
||||
Expected return on assets
|
(5,563
|
)
|
|
(4,808
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1,543
|
)
|
|
(1,546
|
)
|
|
(859
|
)
|
|
(858
|
)
|
||||
Amortization of net loss
|
1,631
|
|
|
1,113
|
|
|
160
|
|
|
143
|
|
||||
Net periodic benefit cost (income)
|
$
|
5,359
|
|
|
$
|
4,857
|
|
|
$
|
1
|
|
|
$
|
(51
|
)
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
|
(Thousands of Dollars)
|
||||||
Beginning balance
|
$
|
370,711
|
|
|
$
|
—
|
|
Net income
|
13,848
|
|
|
14,060
|
|
||
Distributions to partners
|
(13,848
|
)
|
|
(14,060
|
)
|
||
Issuance of units
|
185,102
|
|
|
555,813
|
|
||
Series D Preferred Unit accretion
|
4,031
|
|
|
4,031
|
|
||
Ending balance
|
$
|
559,844
|
|
|
$
|
559,844
|
|
Balance as of January 1, 2018
|
$
|
2,480,089
|
|
Net income
|
189,608
|
|
|
Unit-based compensation
|
6,559
|
|
|
Other comprehensive income
|
23,204
|
|
|
Distributions to partners
|
(284,605
|
)
|
|
Issuance of common units, including contribution from general partner
|
10,204
|
|
|
Adjustments related to the Merger (refer to Note 2 for discussion)
|
(67,972
|
)
|
|
Series D Preferred Unit accretion (refer to Note 11 for discussion)
|
(4,031
|
)
|
|
Other
|
(6,174
|
)
|
|
Balance as of September 30, 2018
|
$
|
2,346,882
|
|
|
|
Percentage of Distribution
|
||
Quarterly Distribution Amount per Common Unit
|
|
Common
Unitholders
|
|
General Partner
Including Incentive Distributions
|
Up to $0.60
|
|
98%
|
|
2%
|
Above $0.60 up to $0.66
|
|
90%
|
|
10%
|
Above $0.66
|
|
75%
|
|
25%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||||||||||
General partner interest
|
$
|
—
|
|
|
$
|
2,302
|
|
|
$
|
1,141
|
|
|
$
|
6,947
|
|
General partner incentive distribution
|
—
|
|
|
10,912
|
|
|
—
|
|
|
34,736
|
|
||||
Total general partner distribution
|
—
|
|
|
13,214
|
|
|
1,141
|
|
|
41,683
|
|
||||
Common limited partners’ distribution
|
64,248
|
|
|
101,870
|
|
|
184,369
|
|
|
305,652
|
|
||||
Total cash distributions
|
$
|
64,248
|
|
|
$
|
115,084
|
|
|
$
|
185,510
|
|
|
$
|
347,335
|
|
|
|
|
|
|
|
|
|
||||||||
Cash distributions per unit applicable to common limited partners
|
$
|
0.60
|
|
|
$
|
1.095
|
|
|
$
|
1.800
|
|
|
$
|
3.285
|
|
Quarter Ended
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
September 30, 2018
|
|
$
|
0.600
|
|
|
$
|
64,248
|
|
|
November 8, 2018
|
|
November 14, 2018
|
June 30, 2018
|
|
$
|
0.600
|
|
|
$
|
64,205
|
|
|
August 7, 2018
|
|
August 13, 2018
|
March 31, 2018
|
|
$
|
0.600
|
|
|
$
|
57,057
|
|
|
May 8, 2018
|
|
May 14, 2018
|
December 31, 2017
|
|
$
|
1.095
|
|
|
$
|
115,267
|
|
|
February 8, 2018
|
|
February 13, 2018
|
Period
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
Series A Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 - December 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 - September 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 - June 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 - March 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series B Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 - December 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 - September 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 - June 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 - March 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series C Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 to December 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 to September 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 to June 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
June 1, 2018
|
|
June 15, 2018
|
November 30, 2017 - March 14, 2018
|
|
$
|
0.65625
|
|
|
$
|
4,528
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
Foreign
Currency
Translation
|
|
Cash Flow
Hedges
|
|
Pension and
Other
Postretirement
Benefits
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Balance as of January 1, 2018
|
$
|
(51,603
|
)
|
|
$
|
(24,304
|
)
|
|
$
|
(9,020
|
)
|
|
$
|
(84,927
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income before reclassification adjustments
|
(6,536
|
)
|
|
26,067
|
|
|
—
|
|
|
19,531
|
|
||||
Net gain on pension costs reclassified into other income, net
|
—
|
|
|
—
|
|
|
(611
|
)
|
|
(611
|
)
|
||||
Net loss on cash flow hedges reclassified into interest
expense, net
|
—
|
|
|
4,271
|
|
|
—
|
|
|
4,271
|
|
||||
Other
|
60
|
|
|
—
|
|
|
(47
|
)
|
|
13
|
|
||||
Other comprehensive (loss) income
|
(6,476
|
)
|
|
30,338
|
|
|
(658
|
)
|
|
23,204
|
|
||||
Balance as of September 30, 2018
|
$
|
(58,079
|
)
|
|
$
|
6,034
|
|
|
$
|
(9,678
|
)
|
|
$
|
(61,723
|
)
|
|
As Reported
|
|
Without Adoption of ASC Topic 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||||||
For the three months ended September 30, 2018:
|
|
|
|
|
|
||||||
Revenues
|
$
|
490,363
|
|
|
$
|
490,799
|
|
|
$
|
(436
|
)
|
Operating income
|
$
|
95,277
|
|
|
$
|
95,713
|
|
|
$
|
(436
|
)
|
Net income
|
$
|
48,136
|
|
|
$
|
48,572
|
|
|
$
|
(436
|
)
|
Basic net loss per common unit
|
$
|
(3.49
|
)
|
|
$
|
(3.49
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
For the nine months ended September 30, 2018:
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,452,448
|
|
|
$
|
1,457,231
|
|
|
$
|
(4,783
|
)
|
Operating income
|
$
|
273,595
|
|
|
$
|
278,378
|
|
|
$
|
(4,783
|
)
|
Net income
|
$
|
203,668
|
|
|
$
|
208,451
|
|
|
$
|
(4,783
|
)
|
Basic net loss per common unit
|
$
|
(2.50
|
)
|
|
$
|
(2.45
|
)
|
|
$
|
(0.05
|
)
|
|
Contract Assets
|
|
Contract Liabilities
|
||||
|
(Thousands of Dollars)
|
||||||
Balance as of January 1, 2018
|
$
|
2,127
|
|
|
$
|
(60,464
|
)
|
|
|
|
|
||||
Additions
|
1,086
|
|
|
(64,492
|
)
|
||
Transfer to accounts receivable
|
(2,576
|
)
|
|
—
|
|
||
Transfer to revenues
|
—
|
|
|
42,417
|
|
||
Total activity
|
(1,490
|
)
|
|
(22,075
|
)
|
||
|
|
|
|
||||
Balance as of September 30, 2018
|
637
|
|
|
(82,539
|
)
|
||
Less current portion
|
227
|
|
|
(45,456
|
)
|
||
Noncurrent portion
|
$
|
410
|
|
|
$
|
(37,083
|
)
|
2018 (remaining)
|
|
$
|
126,787
|
|
2019
|
|
411,841
|
|
|
2020
|
|
255,824
|
|
|
2021
|
|
171,557
|
|
|
2022
|
|
130,517
|
|
|
Thereafter
|
|
434,274
|
|
|
Total
|
|
$
|
1,530,800
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Pipeline segment:
|
|
|
|
|
|
|
|
||||||||
Crude oil pipelines (excluding lessor revenues)
|
$
|
67,543
|
|
|
$
|
53,490
|
|
|
$
|
181,487
|
|
|
$
|
137,276
|
|
Refined products and ammonia pipelines
|
95,300
|
|
|
83,936
|
|
|
268,368
|
|
|
248,130
|
|
||||
Total pipeline segment revenues from contracts with customers
|
162,843
|
|
|
137,426
|
|
|
449,855
|
|
|
385,406
|
|
||||
Lessor revenues
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
||||
Total pipeline segment revenues
|
162,843
|
|
|
137,426
|
|
|
449,909
|
|
|
385,406
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Storage segment:
|
|
|
|
|
|
|
|
||||||||
Throughput terminals
|
21,143
|
|
|
21,120
|
|
|
61,300
|
|
|
63,932
|
|
||||
Storage terminals (excluding lessor revenues)
|
123,024
|
|
|
127,169
|
|
|
375,721
|
|
|
370,784
|
|
||||
Total storage segment revenues from contracts with customers
|
144,167
|
|
|
148,289
|
|
|
437,021
|
|
|
434,716
|
|
||||
Lessor revenues
|
9,963
|
|
|
9,782
|
|
|
29,887
|
|
|
29,345
|
|
||||
Total storage segment revenues
|
154,130
|
|
|
158,071
|
|
|
466,908
|
|
|
464,061
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fuels marketing segment revenues from contracts with customers
|
175,109
|
|
|
147,463
|
|
|
541,430
|
|
|
524,083
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidation and intersegment eliminations
|
(1,719
|
)
|
|
(2,394
|
)
|
|
(5,799
|
)
|
|
(10,066
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
490,363
|
|
|
$
|
440,566
|
|
|
$
|
1,452,448
|
|
|
$
|
1,363,484
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Thousands of Dollars)
|
||||||
Decrease (increase) in current assets:
|
|
|
|
||||
Accounts receivable
|
$
|
11,530
|
|
|
$
|
24,538
|
|
Receivable from related party
|
160
|
|
|
236
|
|
||
Inventories
|
2,079
|
|
|
15,497
|
|
||
Other current assets
|
(953
|
)
|
|
1,176
|
|
||
Increase (decrease) in current liabilities:
|
|
|
|
||||
Accounts payable
|
18,082
|
|
|
(52,910
|
)
|
||
Accrued interest payable
|
(9,700
|
)
|
|
7,829
|
|
||
Accrued liabilities
|
4,830
|
|
|
(10,702
|
)
|
||
Taxes other than income tax
|
4,809
|
|
|
279
|
|
||
Income tax payable
|
406
|
|
|
(3,614
|
)
|
||
Changes in current assets and current liabilities
|
$
|
31,243
|
|
|
$
|
(17,671
|
)
|
•
|
current assets and current liabilities acquired during the period;
|
•
|
the change in the amount accrued for capital expenditures;
|
•
|
the effect of foreign currency translation; and
|
•
|
changes in the fair values of our interest rate swap agreements.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Thousands of Dollars)
|
||||||
Cash paid for interest, net of amount capitalized
|
$
|
145,089
|
|
|
$
|
112,335
|
|
Cash paid for income taxes, net of tax refunds received
|
$
|
8,490
|
|
|
$
|
10,090
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Pipeline
|
$
|
162,843
|
|
|
$
|
137,426
|
|
|
$
|
449,909
|
|
|
$
|
385,406
|
|
Storage:
|
|
|
|
|
|
|
|
||||||||
Third parties
|
152,411
|
|
|
155,677
|
|
|
461,109
|
|
|
453,995
|
|
||||
Intersegment
|
1,719
|
|
|
2,394
|
|
|
5,799
|
|
|
10,066
|
|
||||
Total storage
|
154,130
|
|
|
158,071
|
|
|
466,908
|
|
|
464,061
|
|
||||
Fuels marketing
|
175,109
|
|
|
147,463
|
|
|
541,430
|
|
|
524,083
|
|
||||
Consolidation and intersegment eliminations
|
(1,719
|
)
|
|
(2,394
|
)
|
|
(5,799
|
)
|
|
(10,066
|
)
|
||||
Total revenues
|
$
|
490,363
|
|
|
$
|
440,566
|
|
|
$
|
1,452,448
|
|
|
$
|
1,363,484
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Pipeline
|
$
|
77,021
|
|
|
$
|
61,119
|
|
|
$
|
197,794
|
|
|
$
|
179,015
|
|
Storage
|
46,459
|
|
|
59,323
|
|
|
146,904
|
|
|
169,131
|
|
||||
Fuels marketing
|
1,890
|
|
|
(1,532
|
)
|
|
11,114
|
|
|
3,897
|
|
||||
Consolidation and intersegment eliminations
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total segment operating income
|
125,370
|
|
|
118,909
|
|
|
355,812
|
|
|
352,043
|
|
||||
General and administrative expenses
|
27,817
|
|
|
25,003
|
|
|
75,572
|
|
|
83,202
|
|
||||
Other depreciation and amortization expense
|
2,276
|
|
|
2,189
|
|
|
6,645
|
|
|
6,581
|
|
||||
Total operating income
|
$
|
95,277
|
|
|
$
|
91,717
|
|
|
$
|
273,595
|
|
|
$
|
262,260
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(Thousands of Dollars)
|
||||||
Pipeline
|
$
|
3,606,413
|
|
|
$
|
3,492,417
|
|
Storage
|
2,787,886
|
|
|
2,735,563
|
|
||
Fuels marketing
|
132,497
|
|
|
118,746
|
|
||
Total segment assets
|
6,526,796
|
|
|
6,346,726
|
|
||
Other partnership assets
|
194,162
|
|
|
188,507
|
|
||
Total consolidated assets
|
$
|
6,720,958
|
|
|
$
|
6,535,233
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
1,164
|
|
|
$
|
4,238
|
|
|
$
|
—
|
|
|
$
|
19,177
|
|
|
$
|
—
|
|
|
$
|
24,579
|
|
Receivables, net
|
—
|
|
|
82
|
|
|
—
|
|
|
164,686
|
|
|
—
|
|
|
164,768
|
|
||||||
Inventories
|
—
|
|
|
1,875
|
|
|
6,822
|
|
|
16,064
|
|
|
—
|
|
|
24,761
|
|
||||||
Other current assets
|
122
|
|
|
16,961
|
|
|
1,284
|
|
|
44,399
|
|
|
—
|
|
|
62,766
|
|
||||||
Intercompany receivable
|
187,967
|
|
|
2,726,465
|
|
|
—
|
|
|
—
|
|
|
(2,914,432
|
)
|
|
—
|
|
||||||
Total current assets
|
189,253
|
|
|
2,749,621
|
|
|
8,106
|
|
|
244,326
|
|
|
(2,914,432
|
)
|
|
276,874
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,846,330
|
|
|
619,284
|
|
|
2,019,234
|
|
|
—
|
|
|
4,484,848
|
|
||||||
Intangible assets, net
|
—
|
|
|
51,463
|
|
|
—
|
|
|
694,449
|
|
|
—
|
|
|
745,912
|
|
||||||
Goodwill
|
—
|
|
|
149,453
|
|
|
170,652
|
|
|
774,556
|
|
|
—
|
|
|
1,094,661
|
|
||||||
Investment in wholly owned
subsidiaries
|
2,793,521
|
|
|
29,961
|
|
|
1,450,865
|
|
|
849,825
|
|
|
(5,124,172
|
)
|
|
—
|
|
||||||
Other long-term assets, net
|
303
|
|
|
77,144
|
|
|
26,861
|
|
|
14,355
|
|
|
—
|
|
|
118,663
|
|
||||||
Total assets
|
$
|
2,983,077
|
|
|
$
|
4,903,972
|
|
|
$
|
2,275,768
|
|
|
$
|
4,596,745
|
|
|
$
|
(8,038,604
|
)
|
|
$
|
6,720,958
|
|
Liabilities, Mezzanine Equity and Partners’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
13,636
|
|
|
$
|
26,423
|
|
|
$
|
5,935
|
|
|
$
|
108,218
|
|
|
$
|
—
|
|
|
$
|
154,212
|
|
Short-term debt
|
—
|
|
|
10,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,500
|
|
||||||
Accrued interest payable
|
—
|
|
|
30,785
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
30,845
|
|
||||||
Accrued liabilities
|
929
|
|
|
16,608
|
|
|
7,971
|
|
|
71,790
|
|
|
—
|
|
|
97,298
|
|
||||||
Taxes other than income tax
|
63
|
|
|
7,152
|
|
|
5,893
|
|
|
6,587
|
|
|
—
|
|
|
19,695
|
|
||||||
Income tax payable
|
—
|
|
|
364
|
|
|
—
|
|
|
4,212
|
|
|
—
|
|
|
4,576
|
|
||||||
Intercompany payable
|
—
|
|
|
—
|
|
|
1,393,208
|
|
|
1,521,224
|
|
|
(2,914,432
|
)
|
|
—
|
|
||||||
Total current liabilities
|
14,628
|
|
|
91,832
|
|
|
1,413,007
|
|
|
1,712,091
|
|
|
(2,914,432
|
)
|
|
317,126
|
|
||||||
Long-term debt, less current portion
|
—
|
|
|
3,313,528
|
|
|
—
|
|
|
63,324
|
|
|
—
|
|
|
3,376,852
|
|
||||||
Deferred income tax liability
|
—
|
|
|
1,262
|
|
|
12
|
|
|
22,069
|
|
|
—
|
|
|
23,343
|
|
||||||
Other long-term liabilities
|
—
|
|
|
45,099
|
|
|
13,124
|
|
|
38,688
|
|
|
—
|
|
|
96,911
|
|
||||||
Series D preferred units
|
559,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
559,844
|
|
||||||
Total partners’ equity
|
2,408,605
|
|
|
1,452,251
|
|
|
849,625
|
|
|
2,760,573
|
|
|
(5,124,172
|
)
|
|
2,346,882
|
|
||||||
Total liabilities, mezzanine equity and partners’ equity
|
$
|
2,983,077
|
|
|
$
|
4,903,972
|
|
|
$
|
2,275,768
|
|
|
$
|
4,596,745
|
|
|
$
|
(8,038,604
|
)
|
|
$
|
6,720,958
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
885
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
23,378
|
|
|
$
|
—
|
|
|
$
|
24,292
|
|
Receivables, net
|
—
|
|
|
280
|
|
|
—
|
|
|
176,495
|
|
|
—
|
|
|
176,775
|
|
||||||
Inventories
|
—
|
|
|
1,686
|
|
|
8,611
|
|
|
16,560
|
|
|
—
|
|
|
26,857
|
|
||||||
Other current assets
|
61
|
|
|
11,412
|
|
|
4,191
|
|
|
6,844
|
|
|
—
|
|
|
22,508
|
|
||||||
Intercompany receivable
|
—
|
|
|
3,112,164
|
|
|
—
|
|
|
—
|
|
|
(3,112,164
|
)
|
|
—
|
|
||||||
Total current assets
|
946
|
|
|
3,125,571
|
|
|
12,802
|
|
|
223,277
|
|
|
(3,112,164
|
)
|
|
250,432
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,893,720
|
|
|
591,070
|
|
|
1,816,143
|
|
|
—
|
|
|
4,300,933
|
|
||||||
Intangible assets, net
|
—
|
|
|
58,530
|
|
|
—
|
|
|
725,949
|
|
|
—
|
|
|
784,479
|
|
||||||
Goodwill
|
—
|
|
|
149,453
|
|
|
170,652
|
|
|
777,370
|
|
|
—
|
|
|
1,097,475
|
|
||||||
Investment in wholly owned
subsidiaries
|
2,891,371
|
|
|
24,162
|
|
|
1,301,717
|
|
|
790,882
|
|
|
(5,008,132
|
)
|
|
—
|
|
||||||
Deferred income tax asset
|
—
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|
—
|
|
|
233
|
|
||||||
Other long-term assets, net
|
303
|
|
|
65,684
|
|
|
27,493
|
|
|
8,201
|
|
|
—
|
|
|
101,681
|
|
||||||
Total assets
|
$
|
2,892,620
|
|
|
$
|
5,317,120
|
|
|
$
|
2,103,734
|
|
|
$
|
4,342,055
|
|
|
$
|
(8,120,296
|
)
|
|
$
|
6,535,233
|
|
Liabilities and Partners’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
4,078
|
|
|
$
|
27,642
|
|
|
$
|
13,160
|
|
|
$
|
101,052
|
|
|
$
|
—
|
|
|
$
|
145,932
|
|
Short-term debt
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,000
|
|
||||||
Current portion of long-term debt
|
—
|
|
|
349,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
349,990
|
|
||||||
Accrued interest payable
|
—
|
|
|
40,402
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
40,449
|
|
||||||
Accrued liabilities
|
1,105
|
|
|
17,628
|
|
|
9,450
|
|
|
33,395
|
|
|
—
|
|
|
61,578
|
|
||||||
Taxes other than income tax
|
125
|
|
|
7,110
|
|
|
3,794
|
|
|
3,356
|
|
|
—
|
|
|
14,385
|
|
||||||
Income tax payable
|
—
|
|
|
732
|
|
|
4
|
|
|
3,436
|
|
|
—
|
|
|
4,172
|
|
||||||
Intercompany payable
|
322,296
|
|
|
—
|
|
|
1,277,691
|
|
|
1,512,177
|
|
|
(3,112,164
|
)
|
|
—
|
|
||||||
Total current liabilities
|
327,604
|
|
|
478,504
|
|
|
1,304,099
|
|
|
1,653,463
|
|
|
(3,112,164
|
)
|
|
651,506
|
|
||||||
Long-term debt, less current portion
|
—
|
|
|
3,201,220
|
|
|
—
|
|
|
61,849
|
|
|
—
|
|
|
3,263,069
|
|
||||||
Deferred income tax liability
|
—
|
|
|
1,262
|
|
|
12
|
|
|
20,998
|
|
|
—
|
|
|
22,272
|
|
||||||
Other long-term liabilities
|
—
|
|
|
58,806
|
|
|
8,861
|
|
|
50,630
|
|
|
—
|
|
|
118,297
|
|
||||||
Total partners’ equity
|
2,565,016
|
|
|
1,577,328
|
|
|
790,762
|
|
|
2,555,115
|
|
|
(5,008,132
|
)
|
|
2,480,089
|
|
||||||
Total liabilities and
partners’ equity
|
$
|
2,892,620
|
|
|
$
|
5,317,120
|
|
|
$
|
2,103,734
|
|
|
$
|
4,342,055
|
|
|
$
|
(8,120,296
|
)
|
|
$
|
6,535,233
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
127,165
|
|
|
$
|
62,981
|
|
|
$
|
300,323
|
|
|
$
|
(106
|
)
|
|
$
|
490,363
|
|
Costs and expenses
|
600
|
|
|
76,932
|
|
|
40,497
|
|
|
277,163
|
|
|
(106
|
)
|
|
395,086
|
|
||||||
Operating (loss) income
|
(600
|
)
|
|
50,233
|
|
|
22,484
|
|
|
23,160
|
|
|
—
|
|
|
95,277
|
|
||||||
Equity in earnings of subsidiaries
|
48,668
|
|
|
9,405
|
|
|
13,884
|
|
|
34,607
|
|
|
(106,564
|
)
|
|
—
|
|
||||||
Interest income (expense), net
|
68
|
|
|
(45,532
|
)
|
|
(1,882
|
)
|
|
2,521
|
|
|
—
|
|
|
(44,825
|
)
|
||||||
Other income, net
|
—
|
|
|
468
|
|
|
119
|
|
|
333
|
|
|
—
|
|
|
920
|
|
||||||
Income before income tax
expense
|
48,136
|
|
|
14,574
|
|
|
34,605
|
|
|
60,621
|
|
|
(106,564
|
)
|
|
51,372
|
|
||||||
Income tax expense
|
—
|
|
|
82
|
|
|
—
|
|
|
3,154
|
|
|
—
|
|
|
3,236
|
|
||||||
Net income
|
$
|
48,136
|
|
|
$
|
14,492
|
|
|
$
|
34,605
|
|
|
$
|
57,467
|
|
|
$
|
(106,564
|
)
|
|
$
|
48,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
$
|
48,136
|
|
|
$
|
19,751
|
|
|
$
|
34,605
|
|
|
$
|
57,109
|
|
|
$
|
(106,564
|
)
|
|
$
|
53,037
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
127,980
|
|
|
$
|
58,871
|
|
|
$
|
253,854
|
|
|
$
|
(139
|
)
|
|
$
|
440,566
|
|
Costs and expenses
|
332
|
|
|
77,668
|
|
|
38,709
|
|
|
232,279
|
|
|
(139
|
)
|
|
348,849
|
|
||||||
Operating (loss) income
|
(332
|
)
|
|
50,312
|
|
|
20,162
|
|
|
21,575
|
|
|
—
|
|
|
91,717
|
|
||||||
Equity in earnings (loss) of subsidiaries
|
38,896
|
|
|
(4,558
|
)
|
|
20,809
|
|
|
39,508
|
|
|
(94,655
|
)
|
|
—
|
|
||||||
Interest income (expense), net
|
28
|
|
|
(46,247
|
)
|
|
(1,455
|
)
|
|
2,418
|
|
|
—
|
|
|
(45,256
|
)
|
||||||
Other income (expense), net
|
—
|
|
|
57
|
|
|
(8
|
)
|
|
(5,175
|
)
|
|
—
|
|
|
(5,126
|
)
|
||||||
Income (loss) before income tax expense
|
38,592
|
|
|
(436
|
)
|
|
39,508
|
|
|
58,326
|
|
|
(94,655
|
)
|
|
41,335
|
|
||||||
Income tax expense
|
—
|
|
|
115
|
|
|
1
|
|
|
2,627
|
|
|
—
|
|
|
2,743
|
|
||||||
Net income (loss)
|
$
|
38,592
|
|
|
$
|
(551
|
)
|
|
$
|
39,507
|
|
|
$
|
55,699
|
|
|
$
|
(94,655
|
)
|
|
$
|
38,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income (loss)
|
$
|
38,592
|
|
|
$
|
(1,031
|
)
|
|
$
|
39,507
|
|
|
$
|
62,069
|
|
|
$
|
(94,655
|
)
|
|
$
|
44,482
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
364,721
|
|
|
$
|
185,760
|
|
|
$
|
902,422
|
|
|
$
|
(455
|
)
|
|
$
|
1,452,448
|
|
Costs and expenses
|
1,750
|
|
|
235,936
|
|
|
118,002
|
|
|
823,620
|
|
|
(455
|
)
|
|
1,178,853
|
|
||||||
Operating (loss) income
|
(1,750
|
)
|
|
128,785
|
|
|
67,758
|
|
|
78,802
|
|
|
—
|
|
|
273,595
|
|
||||||
Equity in earnings of subsidiaries
|
205,281
|
|
|
8,848
|
|
|
149,032
|
|
|
211,919
|
|
|
(575,080
|
)
|
|
—
|
|
||||||
Interest income (expense), net
|
137
|
|
|
(145,915
|
)
|
|
(5,177
|
)
|
|
9,422
|
|
|
—
|
|
|
(141,533
|
)
|
||||||
Other income, net
|
—
|
|
|
2,792
|
|
|
307
|
|
|
78,985
|
|
|
—
|
|
|
82,084
|
|
||||||
Income (loss) before income tax expense
|
203,668
|
|
|
(5,490
|
)
|
|
211,920
|
|
|
379,128
|
|
|
(575,080
|
)
|
|
214,146
|
|
||||||
Income tax expense
|
—
|
|
|
313
|
|
|
1
|
|
|
10,164
|
|
|
—
|
|
|
10,478
|
|
||||||
Net income (loss)
|
$
|
203,668
|
|
|
$
|
(5,803
|
)
|
|
$
|
211,919
|
|
|
$
|
368,964
|
|
|
$
|
(575,080
|
)
|
|
$
|
203,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income
|
$
|
203,668
|
|
|
$
|
24,535
|
|
|
$
|
211,919
|
|
|
$
|
361,830
|
|
|
$
|
(575,080
|
)
|
|
$
|
226,872
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
380,504
|
|
|
$
|
161,689
|
|
|
$
|
822,064
|
|
|
$
|
(773
|
)
|
|
$
|
1,363,484
|
|
Costs and expenses
|
1,327
|
|
|
237,086
|
|
|
106,296
|
|
|
757,288
|
|
|
(773
|
)
|
|
1,101,224
|
|
||||||
Operating (loss) income
|
(1,327
|
)
|
|
143,418
|
|
|
55,393
|
|
|
64,776
|
|
|
—
|
|
|
262,260
|
|
||||||
Equity in earnings (loss) of
subsidiaries |
124,073
|
|
|
(10,625
|
)
|
|
69,770
|
|
|
121,002
|
|
|
(304,220
|
)
|
|
—
|
|
||||||
Interest income (expense), net
|
36
|
|
|
(129,551
|
)
|
|
(4,160
|
)
|
|
6,393
|
|
|
—
|
|
|
(127,282
|
)
|
||||||
Other income (expense), net
|
—
|
|
|
140
|
|
|
1
|
|
|
(5,039
|
)
|
|
—
|
|
|
(4,898
|
)
|
||||||
Income before income tax expense
|
122,782
|
|
|
3,382
|
|
|
121,004
|
|
|
187,132
|
|
|
(304,220
|
)
|
|
130,080
|
|
||||||
Income tax expense
|
—
|
|
|
81
|
|
|
3
|
|
|
7,214
|
|
|
—
|
|
|
7,298
|
|
||||||
Net income
|
$
|
122,782
|
|
|
$
|
3,301
|
|
|
$
|
121,001
|
|
|
$
|
179,918
|
|
|
$
|
(304,220
|
)
|
|
$
|
122,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive income (loss)
|
$
|
122,782
|
|
|
$
|
(1,592
|
)
|
|
$
|
121,001
|
|
|
$
|
195,595
|
|
|
$
|
(304,220
|
)
|
|
$
|
133,566
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash provided by operating
activities
|
$
|
296,475
|
|
|
$
|
60,254
|
|
|
$
|
90,482
|
|
|
$
|
361,320
|
|
|
$
|
(445,211
|
)
|
|
$
|
363,320
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(32,270
|
)
|
|
(14,002
|
)
|
|
(292,168
|
)
|
|
—
|
|
|
(338,440
|
)
|
||||||
Change in accounts payable related to capital expenditures
|
—
|
|
|
2,063
|
|
|
(6,209
|
)
|
|
(14,484
|
)
|
|
—
|
|
|
(18,630
|
)
|
||||||
Proceeds from sale or disposition
of assets
|
—
|
|
|
1,464
|
|
|
20
|
|
|
736
|
|
|
—
|
|
|
2,220
|
|
||||||
Proceeds from insurance recoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
78,419
|
|
|
—
|
|
|
78,419
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
(37,502
|
)
|
|
—
|
|
|
—
|
|
|
(37,502
|
)
|
||||||
Investment in other long-term
assets |
—
|
|
|
—
|
|
|
—
|
|
|
(3,280
|
)
|
|
—
|
|
|
(3,280
|
)
|
||||||
Net cash used in investing activities
|
—
|
|
|
(28,743
|
)
|
|
(57,693
|
)
|
|
(230,777
|
)
|
|
—
|
|
|
(317,213
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt borrowings
|
—
|
|
|
1,498,853
|
|
|
—
|
|
|
25,100
|
|
|
—
|
|
|
1,523,953
|
|
||||||
Debt repayments
|
—
|
|
|
(1,754,798
|
)
|
|
—
|
|
|
(23,700
|
)
|
|
—
|
|
|
(1,778,498
|
)
|
||||||
Issuance of Series D preferred units
|
590,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
590,000
|
|
||||||
Payment of issuance costs for Series D preferred units
|
(34,187
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,187
|
)
|
||||||
Issuance of common units
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
||||||
General partner contribution
|
204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204
|
|
||||||
Distributions to preferred unitholders
|
(60,249
|
)
|
|
(30,123
|
)
|
|
(30,124
|
)
|
|
(30,123
|
)
|
|
90,372
|
|
|
(60,247
|
)
|
||||||
Distributions to common unitholders and general partner
|
(236,549
|
)
|
|
(118,275
|
)
|
|
(118,274
|
)
|
|
(118,290
|
)
|
|
354,839
|
|
|
(236,549
|
)
|
||||||
Cash consideration for Merger (Note 2)
|
(61,411
|
)
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
(61,271
|
)
|
||||||
Proceeds from termination of
interest rate swaps
|
—
|
|
|
8,048
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,048
|
|
||||||
Net intercompany activity
|
(501,574
|
)
|
|
373,055
|
|
|
115,609
|
|
|
12,910
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
(2,430
|
)
|
|
(4,062
|
)
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
|
(6,554
|
)
|
||||||
Net cash used in financing activities
|
(296,196
|
)
|
|
(27,302
|
)
|
|
(32,789
|
)
|
|
(134,025
|
)
|
|
445,211
|
|
|
(45,101
|
)
|
||||||
Effect of foreign exchange rate changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
(719
|
)
|
|
—
|
|
|
(719
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
279
|
|
|
4,209
|
|
|
—
|
|
|
(4,201
|
)
|
|
—
|
|
|
287
|
|
||||||
Cash and cash equivalents as of the
beginning of the period
|
885
|
|
|
29
|
|
|
—
|
|
|
23,378
|
|
|
—
|
|
|
24,292
|
|
||||||
Cash and cash equivalents as of the
end of the period
|
$
|
1,164
|
|
|
$
|
4,238
|
|
|
$
|
—
|
|
|
$
|
19,177
|
|
|
$
|
—
|
|
|
$
|
24,579
|
|
|
NuStar
Energy
|
|
NuStar
Logistics
|
|
NuPOP
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash provided by operating
activities
|
$
|
355,864
|
|
|
$
|
128,395
|
|
|
$
|
72,711
|
|
|
$
|
290,917
|
|
|
$
|
(536,872
|
)
|
|
$
|
311,015
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(34,964
|
)
|
|
(18,138
|
)
|
|
(167,515
|
)
|
|
—
|
|
|
(220,617
|
)
|
||||||
Change in accounts payable
related to capital expenditures
|
—
|
|
|
(1,223
|
)
|
|
4,445
|
|
|
10,050
|
|
|
—
|
|
|
13,272
|
|
||||||
Proceeds from sale or disposition
of assets
|
—
|
|
|
1,947
|
|
|
17
|
|
|
59
|
|
|
—
|
|
|
2,023
|
|
||||||
Investment in subsidiaries
|
(1,262,000
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
1,262,126
|
|
|
—
|
|
||||||
Proceeds from Axeon term loan
|
—
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,000
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,461,719
|
)
|
|
—
|
|
|
(1,461,719
|
)
|
||||||
Net cash (used in) provided by investing activities
|
(1,262,000
|
)
|
|
75,760
|
|
|
(13,676
|
)
|
|
(1,619,251
|
)
|
|
1,262,126
|
|
|
(1,557,041
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt borrowings
|
—
|
|
|
1,901,504
|
|
|
—
|
|
|
69,700
|
|
|
—
|
|
|
1,971,204
|
|
||||||
Debt repayments
|
—
|
|
|
(1,856,739
|
)
|
|
—
|
|
|
(82,000
|
)
|
|
—
|
|
|
(1,938,739
|
)
|
||||||
Note offering, net of issuance costs
|
—
|
|
|
543,313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
543,313
|
|
||||||
Issuance of other preferred units, net of issuance costs
|
371,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
371,802
|
|
||||||
Issuance of common units, net of
issuance costs
|
643,858
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
643,858
|
|
||||||
General partner contribution
|
13,597
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,597
|
|
||||||
Distributions to preferred unitholders
|
(26,681
|
)
|
|
(13,340
|
)
|
|
(13,341
|
)
|
|
(13,342
|
)
|
|
40,023
|
|
|
(26,681
|
)
|
||||||
Distributions to common unitholders and general partner
|
(331,222
|
)
|
|
(165,611
|
)
|
|
(165,611
|
)
|
|
(165,627
|
)
|
|
496,849
|
|
|
(331,222
|
)
|
||||||
Contributions from affiliates
|
—
|
|
|
1,262,000
|
|
|
—
|
|
|
126
|
|
|
(1,262,126
|
)
|
|
—
|
|
||||||
Net intercompany activity
|
238,172
|
|
|
(1,873,773
|
)
|
|
119,917
|
|
|
1,515,684
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
(3,366
|
)
|
|
(1,486
|
)
|
|
—
|
|
|
(218
|
)
|
|
—
|
|
|
(5,070
|
)
|
||||||
Net cash provided by (used) in financing activities
|
906,160
|
|
|
(204,132
|
)
|
|
(59,035
|
)
|
|
1,324,323
|
|
|
(725,254
|
)
|
|
1,242,062
|
|
||||||
Effect of foreign exchange rate
changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
1,637
|
|
|
—
|
|
|
1,637
|
|
||||||
Net increase (decrease) in cash and
cash equivalents
|
24
|
|
|
23
|
|
|
—
|
|
|
(2,374
|
)
|
|
—
|
|
|
(2,327
|
)
|
||||||
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
|
$
|
894
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
32,693
|
|
|
$
|
—
|
|
|
$
|
33,615
|
|
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 the 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 September 30,
|
|
Change
|
||||||||
|
2018
|
|
2017
|
|
|||||||
Statement of Income Data:
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Service revenues
|
$
|
314,512
|
|
|
$
|
295,102
|
|
|
$
|
19,410
|
|
Product sales
|
175,851
|
|
|
145,464
|
|
|
30,387
|
|
|||
Total revenues
|
490,363
|
|
|
440,566
|
|
|
49,797
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Costs associated with service revenues
|
197,875
|
|
|
183,579
|
|
|
14,296
|
|
|||
Cost of product sales
|
167,118
|
|
|
138,078
|
|
|
29,040
|
|
|||
General and administrative expenses
|
27,817
|
|
|
25,003
|
|
|
2,814
|
|
|||
Other depreciation and amortization expense
|
2,276
|
|
|
2,189
|
|
|
87
|
|
|||
Total costs and expenses
|
395,086
|
|
|
348,849
|
|
|
46,237
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
95,277
|
|
|
91,717
|
|
|
3,560
|
|
|||
Interest expense, net
|
(44,825
|
)
|
|
(45,256
|
)
|
|
431
|
|
|||
Other income (expense), net
|
920
|
|
|
(5,126
|
)
|
|
6,046
|
|
|||
Income before income tax expense
|
51,372
|
|
|
41,335
|
|
|
10,037
|
|
|||
Income tax expense
|
3,236
|
|
|
2,743
|
|
|
493
|
|
|||
Net income
|
$
|
48,136
|
|
|
$
|
38,592
|
|
|
$
|
9,544
|
|
Basic net (loss) income per common unit
|
$
|
(3.49
|
)
|
|
$
|
0.15
|
|
|
$
|
(3.64
|
)
|
|
Three Months Ended September 30,
|
|
Change
|
||||||||
|
2018
|
|
2017
|
|
|||||||
Pipeline:
|
|
|
|
|
|
||||||
Refined products and ammonia pipelines throughput (barrels/day)
|
567,320
|
|
|
527,148
|
|
|
40,172
|
|
|||
Crude oil pipelines throughput (barrels/day)
|
914,450
|
|
|
679,721
|
|
|
234,729
|
|
|||
Total throughput (barrels/day)
|
1,481,770
|
|
|
1,206,869
|
|
|
274,901
|
|
|||
Throughput revenues
|
$
|
162,843
|
|
|
$
|
137,426
|
|
|
$
|
25,417
|
|
Operating expenses
|
47,032
|
|
|
41,463
|
|
|
5,569
|
|
|||
Depreciation and amortization expense
|
38,790
|
|
|
34,844
|
|
|
3,946
|
|
|||
Segment operating income
|
$
|
77,021
|
|
|
$
|
61,119
|
|
|
$
|
15,902
|
|
Storage:
|
|
|
|
|
|
||||||
Throughput (barrels/day)
|
335,118
|
|
|
294,544
|
|
|
40,574
|
|
|||
Throughput terminal revenues
|
$
|
21,143
|
|
|
$
|
21,120
|
|
|
$
|
23
|
|
Storage terminal revenues
|
132,987
|
|
|
136,951
|
|
|
(3,964
|
)
|
|||
Total revenues
|
154,130
|
|
|
158,071
|
|
|
(3,941
|
)
|
|||
Operating expenses
|
73,037
|
|
|
66,603
|
|
|
6,434
|
|
|||
Depreciation and amortization expense
|
34,634
|
|
|
32,145
|
|
|
2,489
|
|
|||
Segment operating income
|
$
|
46,459
|
|
|
$
|
59,323
|
|
|
$
|
(12,864
|
)
|
Fuels Marketing:
|
|
|
|
|
|
||||||
Product sales and other revenue
|
$
|
175,109
|
|
|
$
|
147,463
|
|
|
$
|
27,646
|
|
Cost of product sales
|
168,710
|
|
|
140,110
|
|
|
28,600
|
|
|||
Gross margin
|
6,399
|
|
|
7,353
|
|
|
(954
|
)
|
|||
Operating expenses
|
4,509
|
|
|
8,885
|
|
|
(4,376
|
)
|
|||
Segment operating income (loss)
|
$
|
1,890
|
|
|
$
|
(1,532
|
)
|
|
$
|
3,422
|
|
Consolidation and Intersegment Eliminations:
|
|
|
|
|
|
||||||
Revenues
|
$
|
(1,719
|
)
|
|
$
|
(2,394
|
)
|
|
$
|
675
|
|
Cost of product sales
|
(1,592
|
)
|
|
(2,032
|
)
|
|
440
|
|
|||
Operating expenses
|
(127
|
)
|
|
(361
|
)
|
|
234
|
|
|||
Total
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Consolidated Information:
|
|
|
|
|
|
||||||
Revenues
|
$
|
490,363
|
|
|
$
|
440,566
|
|
|
$
|
49,797
|
|
Costs associated with service revenues:
|
|
|
|
|
|
||||||
Operating expenses
|
124,451
|
|
|
116,590
|
|
|
7,861
|
|
|||
Depreciation and amortization expense
|
73,424
|
|
|
66,989
|
|
|
6,435
|
|
|||
Total costs associated with service revenues
|
197,875
|
|
|
183,579
|
|
|
14,296
|
|
|||
Cost of product sales
|
167,118
|
|
|
138,078
|
|
|
29,040
|
|
|||
Segment operating income
|
125,370
|
|
|
118,909
|
|
|
6,461
|
|
|||
General and administrative expenses
|
27,817
|
|
|
25,003
|
|
|
2,814
|
|
|||
Other depreciation and amortization expense
|
2,276
|
|
|
2,189
|
|
|
87
|
|
|||
Consolidated operating income
|
$
|
95,277
|
|
|
$
|
91,717
|
|
|
$
|
3,560
|
|
•
|
an increase in revenues of $17.1 million and an increase in throughputs of 187,512 barrels per day resulting from increased customer production supplying our Permian Crude System;
|
•
|
an increase in revenues of $5.5 million on the East Pipeline and an increase in throughputs of 18,020 barrels per day due to the Council Bluffs Acquisition and an increase in long-haul deliveries, which result in higher average tariffs; and
|
•
|
an increase in revenues of $4.4 million and an increase in throughputs of 23,852 barrels per day on our McKee Crude and Refined Product Systems due to higher throughputs on pipeline segments with higher average tariffs, as well as increased demand in markets served by the McKee systems.
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||
|
2018
|
|
2017
|
|
|||||||
Statement of Income Data:
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Service revenues
|
$
|
908,056
|
|
|
$
|
845,264
|
|
|
$
|
62,792
|
|
Product sales
|
544,392
|
|
|
518,220
|
|
|
26,172
|
|
|||
Total revenues
|
1,452,448
|
|
|
1,363,484
|
|
|
88,964
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Costs associated with service revenues
|
581,941
|
|
|
521,078
|
|
|
60,863
|
|
|||
Cost of product sales
|
514,695
|
|
|
490,363
|
|
|
24,332
|
|
|||
General and administrative expenses
|
75,572
|
|
|
83,202
|
|
|
(7,630
|
)
|
|||
Other depreciation and amortization expense
|
6,645
|
|
|
6,581
|
|
|
64
|
|
|||
Total costs and expenses
|
1,178,853
|
|
|
1,101,224
|
|
|
77,629
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
273,595
|
|
|
262,260
|
|
|
11,335
|
|
|||
Interest expense, net
|
(141,533
|
)
|
|
(127,282
|
)
|
|
(14,251
|
)
|
|||
Other income (expense), net
|
82,084
|
|
|
(4,898
|
)
|
|
86,982
|
|
|||
Income before income tax expense
|
214,146
|
|
|
130,080
|
|
|
84,066
|
|
|||
Income tax expense
|
10,478
|
|
|
7,298
|
|
|
3,180
|
|
|||
Net income
|
$
|
203,668
|
|
|
$
|
122,782
|
|
|
$
|
80,886
|
|
Basic net (loss) income per common unit
|
$
|
(2.50
|
)
|
|
$
|
0.65
|
|
|
$
|
(3.15
|
)
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||
|
2018
|
|
2017
|
|
|||||||
Pipeline:
|
|
|
|
|
|
||||||
Refined products and ammonia pipelines throughput (barrels/day)
|
555,113
|
|
|
524,277
|
|
|
30,836
|
|
|||
Crude oil pipelines throughput (barrels/day)
|
848,892
|
|
|
549,898
|
|
|
298,994
|
|
|||
Total throughput (barrels/day)
|
1,404,005
|
|
|
1,074,175
|
|
|
329,830
|
|
|||
Throughput revenues
|
$
|
449,909
|
|
|
$
|
385,406
|
|
|
$
|
64,503
|
|
Operating expenses
|
138,079
|
|
|
114,734
|
|
|
23,345
|
|
|||
Depreciation and amortization expense
|
114,036
|
|
|
91,657
|
|
|
22,379
|
|
|||
Segment operating income
|
$
|
197,794
|
|
|
$
|
179,015
|
|
|
$
|
18,779
|
|
Storage:
|
|
|
|
|
|
||||||
Throughput (barrels/day)
|
336,957
|
|
|
315,616
|
|
|
21,341
|
|
|||
Throughput terminal revenues
|
$
|
61,300
|
|
|
$
|
63,932
|
|
|
$
|
(2,632
|
)
|
Storage terminal revenues
|
405,608
|
|
|
400,129
|
|
|
5,479
|
|
|||
Total revenues
|
466,908
|
|
|
464,061
|
|
|
2,847
|
|
|||
Operating expenses
|
217,106
|
|
|
199,525
|
|
|
17,581
|
|
|||
Depreciation and amortization expense
|
102,898
|
|
|
95,405
|
|
|
7,493
|
|
|||
Segment operating income
|
$
|
146,904
|
|
|
$
|
169,131
|
|
|
$
|
(22,227
|
)
|
Fuels Marketing:
|
|
|
|
|
|
||||||
Product sales and other revenue
|
$
|
541,430
|
|
|
$
|
524,083
|
|
|
$
|
17,347
|
|
Cost of product sales
|
520,111
|
|
|
497,722
|
|
|
22,389
|
|
|||
Gross margin
|
21,319
|
|
|
26,361
|
|
|
(5,042
|
)
|
|||
Operating expenses
|
10,205
|
|
|
22,464
|
|
|
(12,259
|
)
|
|||
Segment operating income
|
$
|
11,114
|
|
|
$
|
3,897
|
|
|
$
|
7,217
|
|
Consolidation and Intersegment Eliminations:
|
|
|
|
|
|
||||||
Revenues
|
$
|
(5,799
|
)
|
|
$
|
(10,066
|
)
|
|
$
|
4,267
|
|
Cost of product sales
|
(5,416
|
)
|
|
(7,359
|
)
|
|
1,943
|
|
|||
Operating expenses
|
(383
|
)
|
|
(2,707
|
)
|
|
2,324
|
|
|||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Consolidated Information:
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,452,448
|
|
|
$
|
1,363,484
|
|
|
$
|
88,964
|
|
Costs associated with service revenues:
|
|
|
|
|
|
||||||
Operating expenses
|
365,007
|
|
|
334,016
|
|
|
30,991
|
|
|||
Depreciation and amortization expense
|
216,934
|
|
|
187,062
|
|
|
29,872
|
|
|||
Total costs associated with service revenues
|
581,941
|
|
|
521,078
|
|
|
60,863
|
|
|||
Cost of product sales
|
514,695
|
|
|
490,363
|
|
|
24,332
|
|
|||
Segment operating income
|
355,812
|
|
|
352,043
|
|
|
3,769
|
|
|||
General and administrative expenses
|
75,572
|
|
|
83,202
|
|
|
(7,630
|
)
|
|||
Other depreciation and amortization expense
|
6,645
|
|
|
6,581
|
|
|
64
|
|
|||
Consolidated operating income
|
$
|
273,595
|
|
|
$
|
262,260
|
|
|
$
|
11,335
|
|
•
|
an increase in revenues of $51.9 million and an increase in throughputs of 267,687 barrels per day resulting from increased customer production supplying our Permian Crude System and owning and operating the system for the entire period in 2018;
|
•
|
an increase in revenues of $10.6 million and an increase in throughputs of 11,768 barrels per day, mainly due to a turnaround at the refinery served by our North Pipeline in the second quarter of 2017;
|
•
|
an increase in revenues of $8.1 million and an increase in throughputs of 9,918 barrels per day on our East Pipeline due to higher diesel throughputs, an increase in long-haul deliveries resulting in higher average tariffs and the Council Bluffs Acquisition; and
|
•
|
an increase in revenues of $3.9 million and an increase in throughputs of 15,289 barrels per day on our McKee Crude and Refined Product Systems due to higher throughputs on pipeline segments with higher average tariffs, as well as increased demand in markets served by the McKee Systems.
|
•
|
a decrease in revenues of $5.3 million, despite an increase in throughputs of 28,460 barrels per day, on our Eagle Ford System, mainly due to new contracts with lower rates;
|
•
|
a decrease in revenues of $3.4 million and a decrease in throughputs of 2,608 barrels per day on our Ardmore System, mainly due to a customer’s refinery turnaround in the third quarter of 2018, as well as an increase in short-haul deliveries, which result in lower average tariffs; and
|
•
|
a decrease in revenues of $2.3 million and a decrease in throughputs of 2,547 barrels per day on the Ammonia pipeline as a result of weather conditions in the first quarter of 2018 that hindered agricultural application and operational issues at plants served by the pipeline.
|
•
|
an increase of $8.7 million at our North East terminals, mainly due to an adjustment to revenues resulting from a change in the term of a contract at our Linden terminal. Please refer to Note 13 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion;
|
•
|
an increase of $6.8 million at our West Coast Terminals, mainly due to completed projects and rate escalations and higher throughput and associated handling fees; and
|
•
|
an increase of $0.8 million at our international terminals, mainly due to the effect of foreign exchange rates and higher reimbursable revenues, partially offset by a decrease in storage revenues and throughput and associated handling fees.
|
•
|
an increase in salaries and wages of $6.8 million and an increase of $4.5 million in maintenance and regulatory expenses, both spread across various regions;
|
•
|
an increase in reimbursable expenses of $3.8 million at various terminals, primarily due to tank cleaning and consistent with the increase in reimbursable revenues;
|
•
|
an increase of $3.6 million in rent expense, primarily at our St. Eustatius terminal due to additional marine vessel costs; and
|
•
|
an increase in power costs of $1.6 million, mainly at St. Eustatius.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Thousands of Dollars)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
363,320
|
|
|
$
|
311,015
|
|
Investing activities
|
(317,213
|
)
|
|
(1,557,041
|
)
|
||
Financing activities
|
(45,101
|
)
|
|
1,242,062
|
|
||
Effect of foreign exchange rate changes on cash
|
(719
|
)
|
|
1,637
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
287
|
|
|
$
|
(2,327
|
)
|
•
|
$365.4 million
in revenue bonds pursuant to the Gulf Opportunity Zone Act of 2005 (the GoZone Bonds), with
$42.8 million
remaining in trust as of
September 30, 2018
, supported by
$370.2 million
in letters of credit; and
|
•
|
one short-term line of credit agreement with an uncommitted borrowing capacity of up to
$35.0 million
, with
$10.5 million
of borrowings outstanding as of
September 30, 2018
.
|
•
|
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 current operating capacity of existing assets or extend their useful lives, as well as those required to maintain equipment reliability and safety.
|
|
Strategic
|
|
|
|
|
||||||||||
|
Acquisitions and Investments in Other Long-Term Assets
|
|
Capital Expenditures
|
|
Reliability Capital
Expenditures
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
For the nine months ended September 30:
|
|
|
|
|
|
|
|
||||||||
2018
|
$
|
40,782
|
|
|
$
|
279,377
|
|
|
$
|
59,063
|
|
|
$
|
379,222
|
|
2017
|
$
|
1,461,719
|
|
|
$
|
190,417
|
|
|
$
|
30,200
|
|
|
$
|
1,682,336
|
|
|
|
|
|
|
|
|
|
||||||||
Expected for the year ended December 31, 2018
|
$
|
44,799
|
|
|
$ 400,000 - 430,000
|
|
|
$ 80,000 - 90,000
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||||||||||
General partner interest
|
$
|
—
|
|
|
$
|
2,302
|
|
|
$
|
1,141
|
|
|
$
|
6,947
|
|
General partner incentive distribution
|
—
|
|
|
10,912
|
|
|
—
|
|
|
34,736
|
|
||||
Total general partner distribution
|
—
|
|
|
13,214
|
|
|
1,141
|
|
|
41,683
|
|
||||
Common limited partners’ distribution
|
64,248
|
|
|
101,870
|
|
|
184,369
|
|
|
305,652
|
|
||||
Total cash distributions
|
$
|
64,248
|
|
|
$
|
115,084
|
|
|
$
|
185,510
|
|
|
$
|
347,335
|
|
|
|
|
|
|
|
|
|
||||||||
Cash distributions per unit applicable to common limited partners
|
$
|
0.60
|
|
|
$
|
1.095
|
|
|
$
|
1.800
|
|
|
$
|
3.285
|
|
Quarter Ended
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
September 30, 2018
|
|
$
|
0.600
|
|
|
$
|
64,248
|
|
|
November 8, 2018
|
|
November 14, 2018
|
June 30, 2018
|
|
$
|
0.600
|
|
|
$
|
64,205
|
|
|
August 7, 2018
|
|
August 13, 2018
|
March 31, 2018
|
|
$
|
0.600
|
|
|
$
|
57,057
|
|
|
May 8, 2018
|
|
May 14, 2018
|
December 31, 2017
|
|
$
|
1.095
|
|
|
$
|
115,267
|
|
|
February 8, 2018
|
|
February 13, 2018
|
Period
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
Series A Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 - December 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 - September 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 - June 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 - March 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series B Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 - December 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 - September 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 - June 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 - March 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series C Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 to December 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
December 3, 2018
|
|
December 17, 2018
|
June 15, 2018 to September 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 to June 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
June 1, 2018
|
|
June 15, 2018
|
November 30, 2017 - March 14, 2018
|
|
$
|
0.65625
|
|
|
$
|
4,528
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series D Preferred Units:
|
|
|
|
|
|
|
|
|
||||
September 15, 2018 to December 14, 2018
|
|
$
|
0.61900
|
|
|
$
|
14,390
|
|
|
December 3, 2018
|
|
December 17, 2018
|
July 13, 2018 to September 14, 2018 (a)
|
|
$
|
0.43100
|
|
|
$
|
3,227
|
|
|
September 4, 2018
|
|
September 17, 2018
|
June 29, 2018 to September 14, 2018 (b)
|
|
$
|
0.52500
|
|
|
$
|
8,274
|
|
|
September 4, 2018
|
|
September 17, 2018
|
(a)
|
Second issuance of 7,486,209 units.
|
(b)
|
First issuance of 15,760,441 units.
|
•
|
Revolving Credit Agreement due
October 29, 2020
, with
$1.0 billion
of borrowings outstanding as of
September 30, 2018
;
|
•
|
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;
5.625%
senior notes due
April 28, 2027
with a face value of $550.0 million; and subordinated notes due January 15, 2043 with a face value of $402.5 million and a floating interest rate;
|
•
|
$365.4 million in GoZone Bonds due from 2038 to 2041;
|
•
|
Line of credit agreement with
$10.5 million
of borrowings outstanding as of
September 30, 2018
; and
|
•
|
Receivables Financing Agreement due September 20, 2020, with
$63.7 million
of borrowings outstanding as of
September 30, 2018
.
|
|
S&P
Global Ratings
|
|
Moody’s Investor
Service Inc.
|
|
Fitch, Inc.
|
|
|
|
|
|
|
Ratings
|
BB
|
|
Ba2
|
|
BB
|
Outlook
|
Negative
|
|
Negative
|
|
Negative
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
September 30, 2018
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
|
(Thousands of Dollars, Except Interest Rates)
|
||||||||||||||||||||||||||||||
Long-term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed-rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
450,000
|
|
|
$
|
300,000
|
|
|
$
|
250,000
|
|
|
$
|
550,000
|
|
|
$
|
1,550,000
|
|
|
$
|
1,565,009
|
|
Weighted-average rate
|
—
|
|
|
—
|
|
|
4.8
|
%
|
|
6.8
|
%
|
|
4.8
|
%
|
|
5.6
|
%
|
|
5.5
|
%
|
|
|
|||||||||
Variable-rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,071,093
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
767,940
|
|
|
$
|
1,839,033
|
|
|
$
|
1,844,190
|
|
Weighted-average rate
|
—
|
|
|
—
|
|
|
3.9
|
%
|
|
—
|
|
|
—
|
|
|
5.5
|
%
|
|
4.6
|
%
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
Expected Maturity Dates
|
|
|
|
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
There-
after
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
|
(Thousands of Dollars, Except Interest Rates)
|
||||||||||||||||||||||||||||||
Long-term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed-rate
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
450,000
|
|
|
$
|
300,000
|
|
|
$
|
250,000
|
|
|
$
|
952,500
|
|
|
$
|
2,302,500
|
|
|
$
|
2,355,535
|
|
Weighted-average rate
|
8.4
|
%
|
|
—
|
|
|
4.8
|
%
|
|
6.8
|
%
|
|
4.8
|
%
|
|
6.5
|
%
|
|
6.3
|
%
|
|
|
|||||||||
Variable-rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
955,611
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
365,440
|
|
|
$
|
1,321,051
|
|
|
$
|
1,322,087
|
|
Weighted-average rate
|
—
|
|
|
—
|
|
|
3.1
|
%
|
|
—
|
|
|
—
|
|
|
1.7
|
%
|
|
2.7
|
%
|
|
|
Notional Amount
|
|
|
|
Weighted-Average Fixed Rate
|
|
Fair Value
|
|||||||||||||
September 30, 2018
|
|
December 31, 2017
|
|
Period of Hedge
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
(Thousands of Dollars)
|
|
|
|
|
|
(Thousands of Dollars)
|
|||||||||||||
$
|
—
|
|
|
$
|
350,000
|
|
|
04/2018 - 04/2028
|
|
2.6
|
%
|
|
$
|
—
|
|
|
$
|
(5,394
|
)
|
250,000
|
|
|
250,000
|
|
|
09/2020 - 09/2030
|
|
2.8
|
%
|
|
8,031
|
|
|
(4,594
|
)
|
||||
$
|
250,000
|
|
|
$
|
600,000
|
|
|
|
|
|
|
$
|
8,031
|
|
|
$
|
(9,988
|
)
|
|
September 30, 2018
|
|||||||||||||
|
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:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
6
|
|
|
$
|
96.86
|
|
|
N/A
|
|
|
$
|
11
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
29
|
|
|
N/A
|
|
|
$
|
97.26
|
|
|
$
|
(41
|
)
|
|
Swaps – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
10
|
|
|
$
|
68.30
|
|
|
N/A
|
|
|
$
|
17
|
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
95
|
|
|
N/A
|
|
|
$
|
67.27
|
|
|
$
|
(255
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Economic Hedges and Other Derivatives:
|
|
|
|
|
|
|
|
|||||||
Futures – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
3
|
|
|
$
|
96.88
|
|
|
N/A
|
|
|
$
|
5
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
7
|
|
|
N/A
|
|
|
$
|
97.48
|
|
|
$
|
(8
|
)
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
3
|
|
|
N/A
|
|
|
$
|
68.30
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Total fair value of open positions exposed to
commodity price risk
|
|
|
|
|
|
|
$
|
(276
|
)
|
|
December 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 – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
2
|
|
|
$
|
86.88
|
|
|
N/A
|
|
|
$
|
—
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
5
|
|
|
N/A
|
|
|
$
|
85.59
|
|
|
$
|
(6
|
)
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
149
|
|
|
N/A
|
|
|
$
|
55.79
|
|
|
$
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Economic Hedges and Other Derivatives:
|
|
|
|
|
|
|
|
|||||||
Futures – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
10
|
|
|
$
|
86.13
|
|
|
N/A
|
|
|
$
|
7
|
|
|
Futures – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
14
|
|
|
N/A
|
|
|
$
|
85.76
|
|
|
$
|
(16
|
)
|
|
Swaps – long:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
196
|
|
|
$
|
55.05
|
|
|
N/A
|
|
|
$
|
264
|
|
|
Swaps – short:
|
|
|
|
|
|
|
|
|||||||
(refined products)
|
199
|
|
|
N/A
|
|
|
$
|
53.76
|
|
|
$
|
(525
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Total fair value of open positions exposed to
commodity price risk
|
|
|
|
|
|
|
$
|
(382
|
)
|
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
|
|
|
November 6, 2018
|
|
|
|
By:
|
|
/s/ Thomas R. Shoaf
|
|
|
Thomas R. Shoaf
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
November 6, 2018
|
|
|
|
By:
|
|
/s/ Jorge A. del Alamo
|
|
|
Jorge A. del Alamo
|
|
|
Senior Vice President and Controller
|
|
|
November 6, 2018
|
NUSTAR SERVICES COMPANY LLC
|
|
By: /s/ Tom Shoaf
|
Tom Shoaf,
|
Executive Vice President and Chief Financial Officer, and Chairman - Benefit Plans Administrative Committee
|
NUSTAR SERVICES COMPANY LLC
|
|
By: /s/ Tom Shoaf
|
Tom Shoaf,
|
Executive Vice President and Chief Financial Officer, and Chairman - Benefit Plans Administrative Committee
|
1.
|
Grant
. The Compensation Committee of the Board of Directors of NuStar GP (the “
Committee
”) hereby grants to Participant the number of Phantom Units under the Plan communicated to the Participant by the Participant’s manager. A “
Phantom Unit
” is an unfunded, unsecured contractual right which, upon vesting, entitles Participant to receive an unrestricted common unit (a “
Unit
”) of NuStar Energy L.P. (the “
Partnership
”). For purposes of this Agreement, “Phantom Units” are referred to as “
Restricted Units
.”
|
2.
|
Vesting
.
The Restricted Units granted hereunder are subject to the following Restricted Periods and will vest in the following increments:
|
20% of the Award shall vest on the first anniversary of Grant Date;
|
20% of the Award shall vest on the second anniversary of Grant Date;
|
20% of the Award shall vest on the third anniversary of Grant Date;
|
20% of the Award shall vest on the fourth anniversary of Grant Date; and
|
20% of the Award shall vest on the fifth anniversary of Grant Date.
|
|
3.
|
Distribution Equivalent Rights
. Restricted Units are granted hereunder in tandem with an equal number of distribution equivalent rights (“
DERs
”). A DER is a right to receive an amount in cash from the Partnership or its designee equal to the distributions made by the Partnership with respect to a Unit during the period that begins on the Grant Date and ends upon vesting of the tandem Restricted Unit or its forfeiture pursuant to this Agreement or the Plan.
|
4.
|
Settlement
. The issuance of Units under this Award shall be made on or as soon as reasonably practical following the applicable date of vesting, but in any event no later than the 60th day following the applicable date of vesting. Distributions with respect to DERs will be paid to Participant in cash as soon as reasonably practical following the date distributions are paid with respect to Units during the period such DERs are outstanding, but in all events no later than 60 days following the date related amounts are declared with respect to Units. Upon vesting or forfeiture of a Restricted Unit, the related DER shall automatically and immediately terminate for no consideration, except that unpaid distributions with respect to DERs relating to distributions paid on Units prior to the date of such settlement shall be paid no later than the 60th day following the date such pre-vesting/forfeiture distributions are declared with respect to Units. 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 unrestricted Units to which Participant will be entitled in connection with the vesting of Restricted Units may be issued in uncertificated form and recorded with the Company’s or its Affiliates’ service provider.
|
5.
|
Acceleration Events
.
|
a.
|
Notwithstanding the foregoing or anything in Section 6(e)(ix) of the Plan to the contrary, if Participant becomes Disabled (as defined below) while employed by the Company or its Affiliates or Participant’s employment is terminated because of Participant’s death (such Disability or death, an “
Acceleration Event
”), then:
|
b.
|
The Award shall vest in full upon a Change of Control in accordance with Section 6(e)(vii) of the Plan, provided that in any circumstance or transaction in which compensation payable pursuant to this Agreement would be subject to the income tax under Section 409A of the Code if the definition of “Change of Control” as set forth in the Plan were to apply, but would not be so subject if the term “Change of Control” were defined therein to mean a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5), then “Change of Control” means, but only to the extent necessary to prevent such compensation from becoming subject to the income tax under Section 409A of the Code, a transaction or circumstance that satisfies the requirements of both (1) a Change of Control as defined in the Plan, and (2) a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5).
|
c.
|
With respect to Section 6(e)(ix) of the Plan, the vesting of Restricted Units shall accelerate only upon Participant’s death or Disability and only to the extent as determined in accordance with Section 5(a) of this Agreement.
|
6.
|
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 Restricted Units or the Units issuable thereunder otherwise payable to Participant.
|
7.
|
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 Restricted Units and DERs subject to all of the terms and conditions of the Plan and this Agreement. Participant acknowledges that there may be adverse tax consequences upon payment of DERs and/or the vesting or settlement of the Restricted 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.
|
8.
|
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.
|
9.
|
Restrictions
. This Agreement and Participant’s interest in the Restricted Units and the DERs 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 board of directors of NuStar GP, 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.
|
Section 409A of the Code
. This Agreement is intended to either comply with or be exempt from Section 409A of the Code, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. For purposes of Section 409A of the Code, each payment or amount due under this Agreement shall be considered a separate payment, and Participant’s entitlement to a series of payments under this Agreement shall be treated as an entitlement to a series of separate payments. Notwithstanding any other provision of the Plan or this Agreement to the contrary, if Participant is a “specified employee” under Section 409A of the Code, except to the extent permitted thereunder, no benefit or payment that is not otherwise exempt from Section 409A of the Code (after taking into account all applicable exceptions thereunder, including to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made to Participant under this Agreement on account of Participant’s “separation from service,” as defined in Section 409A of the Code, until the later of the date prescribed for payment in this Agreement and the first (1st) day of the seventh (7th) calendar month that begins after the date of Participant’s separation from service (or, if earlier, the date of death of Participant). Any amount that is otherwise payable within the delay period described in the immediately preceding sentence will be aggregated and paid in a lump sum without interest.
|
3.
|
Successors and Assigns
. The Company or any of its Affiliates may assign any of its 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 Restricted Units and/or DERs may be transferred by will or the laws of descent or distribution.
|
4.
|
Governing Law
. The validity, construction and effect of this Agreement shall be determined by the laws of the State of Texas without regard to conflict of laws principles.
|
5.
|
No Rights as Unitholder
. Neither Participant nor any person claiming by, through or under Participant with respect to the Restricted Units or DERs shall have any rights as a unitholder of the Partnership (including, without limitation, voting rights) unless and until the Restricted Units vest and are settled by the issuance of Units.
|
6.
|
Amendment
. The Committee has the right to amend, alter, suspend, discontinue or cancel this Agreement, the Restricted Units and/or DERs; provided, that no such amendment shall adversely affect Participant’s material rights under this Agreement without Participant’s consent.
|
7.
|
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.
|
8.
|
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 or any Affiliate thereof 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.
|
9.
|
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.
|
10.
|
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.
|
11.
|
Recovery Policy
. This Award (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Units underlying the Award) shall be subject to the provisions of any compensation recovery policy implemented by, as applicable, the Company or any Affiliate thereof, including, without limitation, any recovery policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such recovery policy.
|
1.
|
Grant
. The Compensation Committee of the Board of Directors of NuStar GP (the “
Committee
”) hereby grants to Participant
[insert #]
Phantom Units under the Plan. A “
Phantom Unit
” is an unfunded, unsecured contractual right which, upon vesting, entitles Participant to receive an unrestricted common unit (a “
Unit
”) of NuStar Energy L.P. (the “
Partnership
”). For purposes of this Agreement, “Phantom Units” are referred to as “
Restricted Units
.”
|
2.
|
Vesting
. The Restricted Units granted hereunder are subject to the following Restricted Periods and will vest in the following increments:
|
33-1/3% of the Award shall vest on the first anniversary of Grant Date;
|
33-1/3% of the Award shall vest on the second anniversary of Grant Date; and
|
33-1/3% of the Award shall vest on the third anniversary of Grant Date.
|
3.
|
Distribution Equivalent Rights
. Restricted Units are granted hereunder in tandem with an equal number of distribution equivalent rights (“
DERs
”). A DER is a right to receive an amount in cash from the Partnership or its designee equal to the distributions made by the Partnership with respect to a Unit during the period that begins on the Grant Date and ends upon vesting of the tandem Restricted Unit or its forfeiture pursuant to this Agreement or the Plan.
|
4.
|
Settlement
. The issuance of Units under this Award shall be made on or as soon as reasonably practical following the applicable date of vesting, but in any event no later than the 60th day following the applicable date of vesting. Distributions with respect to DERs will be paid to Participant in cash as soon as reasonably practical following the date distributions are paid with respect to Units during the period such DERs are outstanding, but in all events no later than 60 days following the date related amounts are declared with respect to Units. Upon vesting or forfeiture of a Restricted Unit, the related DER shall automatically and immediately terminate for no consideration, except that unpaid distributions with respect to DERs relating to distributions paid on Units prior to the date of such settlement shall be paid no later than the 60th day following the date such pre-vesting/forfeiture distributions are declared with respect to Units. 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 unrestricted Units to which Participant will be entitled in connection with the vesting of Restricted Units may be issued in uncertificated form and recorded with the Company’s or its Affiliates’ service provider.
|
5.
|
Acceleration Events
.
|
a.
|
Notwithstanding the foregoing or anything in Section 6(e)(ix) of the Plan to the contrary, if Participant becomes Disabled (as defined below) while providing services to the Company or its Affiliates or Participant’s service is terminated because of Participant’s death (such Disability or death, an “
Acceleration Event
”), then:
|
c.
|
With respect to Section 6(e)(ix) of the Plan, the vesting of Restricted Units shall accelerate only upon Participant’s death or Disability and only to the extent as determined in accordance with Section 5(a) of this Agreement.
|
6.
|
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 Restricted Units or the Units issuable thereunder otherwise payable to Participant.
|
7.
|
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 Restricted Units and DERs subject to all of the terms and conditions of the Plan
|
8.
|
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.
|
9.
|
Restrictions
. This Agreement and Participant’s interest in the Restricted Units and the DERs 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 board of directors of NuStar GP, 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.
|
Section 409A of the Code
. This Agreement is intended to either comply with or be exempt from Section 409A of the Code, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. For purposes of Section 409A of the Code, each payment or amount due under this Agreement shall be considered a separate payment, and Participant’s entitlement to a series of payments under this Agreement shall be treated as an entitlement to a series of separate payments. Notwithstanding any other provision of the Plan or this Agreement to the contrary, if Participant is a “specified employee” under Section 409A of the Code, except to the extent permitted thereunder, no benefit or payment that is not otherwise exempt from Section 409A of the Code (after taking into account all applicable exceptions thereunder, including to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made to Participant under this Agreement on account of Participant’s “separation from service,” as defined in Section 409A of the Code, until the later of the date prescribed for payment in this Agreement and the first (1st) day of the seventh (7th) calendar month that begins after the date of Participant’s separation from service (or, if earlier, the date of death of Participant). Any amount that is otherwise payable within the delay period described in the immediately preceding sentence will be aggregated and paid in a lump sum without interest.
|
3.
|
Successors and Assigns
. The Company or any of its Affiliates may assign any of its 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 Restricted Units and/or DERs may be transferred by will or the laws of descent or distribution.
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4.
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Governing Law
. The validity, construction and effect of this Agreement shall be determined by the laws of the State of Texas without regard to conflict of laws principles.
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5.
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No Rights as Unitholder
. Neither Participant nor any person claiming by, through or under Participant with respect to the Restricted Units or DERs shall have any rights as a unitholder of the Partnership (including, without limitation, voting rights) unless and until the Restricted Units vest and are settled by the issuance of Units.
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6.
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Amendment
. The Committee has the right to amend, alter, suspend, discontinue or cancel this Agreement, the Restricted Units and/or DERs; provided, that no such amendment shall adversely affect Participant’s material rights under this Agreement without Participant’s consent.
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7.
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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.
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8.
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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 or any Affiliate thereof 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.
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9.
|
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.
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10.
|
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.
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11.
|
Recovery Policy
. This Award (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Units underlying the Award) shall be subject to the provisions of any compensation recovery policy implemented by, as applicable, the Company or any Affiliate thereof, including, without limitation, any recovery policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such recovery policy.
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1.
|
Grant of Restricted Units
. The Compensation Committee of the Board of Directors of the Company (the “
Committee
”) hereby grants to Participant
[insert #]
Restricted Units under the Plan. A “
Restricted 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.
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2.
|
Vesting
. The Restricted Units granted hereunder are subject to the following Restricted Periods and will vest in the following increments:
|
33-1/3% of the Award shall vest on the first anniversary of Grant Date;
|
33-1/3% of the Award shall vest on the second anniversary of Grant Date; and
|
33-1/3% of the Award shall vest on the third anniversary of Grant Date.
|
3.
|
Distribution Equivalent Rights
. Restricted Units are granted hereunder in tandem with an equal number of distribution equivalent rights (“
DERs
”). A DER is a right to receive an amount in cash from the Company or its designee equal to the distributions made by NuStar Energy L.P. with respect to a Unit during the period that begins on the Grant Date and ends upon vesting of the tandem Restricted Unit or its forfeiture pursuant to this Agreement or the Plan.
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4.
|
Settlement
. The issuance of Units under this Award shall be made on or as soon as reasonably practical following the applicable date of vesting, but in any event no later than the 60th day following the applicable date of vesting. Distributions with respect to DERs will be paid to Participant in cash as soon as reasonably practical following the date distributions are paid with respect to Units during the period such DERs are outstanding, but in all events no later than 60 days following the date related amounts are declared with respect to Units. Upon vesting or forfeiture of a Restricted Unit, the related DER shall automatically and immediately terminate for no consideration, except that unpaid distributions with respect to DERs relating to distributions paid on Units prior to the date of such settlement shall be paid no later than the 60th day following the date such pre-vesting/forfeiture distributions are declared with respect to Units. 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 unrestricted Units to which Participant will be entitled in connection with the vesting of Restricted Units may be issued in uncertificated form and recorded with the Company’s or its Affiliates’ service provider.
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5.
|
Acceleration Events
.
|
a.
|
Notwithstanding the foregoing, if Participant becomes Disabled (as defined below) while providing services to the Company or its Affiliates or Participant’s service is terminated because of Participant’s death (such Disability or death, an “
Acceleration Event
”), then:
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6.
|
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 Restricted Units or the Units issuable thereunder otherwise payable to Participant.
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7.
|
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 Restricted Units and DERs subject to all of the terms and conditions of the Plan and this Agreement. Participant acknowledges that there may be adverse tax consequences upon payment of DERs and/or the vesting or settlement of the Restricted 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.
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8.
|
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.
|
9.
|
Restrictions
. This Agreement and Participant’s interest in the Restricted Units and the DERs 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 Restricted Units and/or DERs 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 Restricted Units or DERs shall have any rights as a unitholder of NuStar Energy L.P. (including, without limitation, voting rights) unless and until the Restricted 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, the Restricted Units and/or DERs; 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.
|
/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
|
November 6, 2018
|
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
|
November 6, 2018
|