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NuStar GP Holdings, LLC Reports Third Quarter 2013 Results

SAN ANTONIO--(BUSINESS WIRE)--Nov. 12, 2013--

NuStar GP Holdings, LLC (NYSE: NSH) today announced that distributable cash flow available to unitholders for the third quarter of 2013 was $22.6 million, or $0.53 per unit, compared to $23.4 million, or $0.55 per unit, for the third quarter of 2012.

The company reported third quarter net income of $12.0 million, or $0.29 per unit, compared to net income of $19.2 million, or $0.45 per unit, in the third quarter of 2012. The third quarter 2012 results included $10.7 million, or $0.25 per unit, of a non-cash gain resulting from NuStar Energy L.P.’s issuance of limited partner units in September 2012. Excluding this gain, third quarter 2012 adjusted net income would have been $8.5 million, or $0.20 per unit.

As previously announced on October 31, 2013, the third quarter 2013 distribution of $0.545 per unit will be paid on November 19, 2013 to holders of record as of November 11, 2013.

“NuStar GP Holdings, LLC’s results should improve in the fourth quarter of 2013 and into 2014 as NuStar Energy L.P. continues to complete internal growth projects, primarily in the Eagle Ford Shale region,” said Curt Anastasio, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.

A conference call with management is scheduled for 10:00 a.m. ET (9:00 a.m. CT) today, November 12, 2013, to discuss the financial results for the third quarter of 2013. Investors interested in listening to the presentation may call 800/622-7620, passcode 77504322. International callers may access the presentation by dialing 706/645-0327, passcode 77504322. The company intends to have a playback available following the presentation, which may be accessed by calling 800/585-8367, passcode 77504322. International callers may access the playback by calling 404/537-3406, passcode 77504322. A live broadcast of the conference call will also be available on the company’s Web site at www.nustargpholdings.com.

NuStar GP Holdings, LLC is a publicly traded limited liability company that owns the two percent general partner interest, a 13.0 percent limited partner interest and the incentive distribution rights in NuStar Energy L.P., one of the largest independent liquids terminal and pipeline operators in the nation. NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, the United Kingdom and Turkey. For more information, visit NuStar GP Holdings, LLC’s Web site at www.nustargpholdings.com.

This release serves as qualified notice to nominees under Treasury Regulation Sections 1.1446-4(b)(4) and (d). Please note that 100% of NuStar’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of NuStar’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals and corporations, as applicable. Nominees, and not NuStar, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding future events. All forward-looking statements are based on the company’s beliefs as well as assumptions made by and information currently available to the company. These statements reflect the company’s current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in NuStar Energy L.P. and NuStar GP Holdings, LLC’s 2012 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.

       

NuStar GP Holdings, LLC

Condensed Financial Information

(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)

 
Three Months Ended September 30, Nine Months Ended September 30,
2013   2012 2013   2012
Statement of Income Data:
Equity in earnings (loss) of NuStar Energy L.P. $ 13,462 $ 9,185 $ 39,023 $ (11,471 )
 
General and administrative expenses (941 ) (654 ) (2,359 ) (2,306 )
Other (expense) income, net (9 ) 10,702 90 10,808
Interest expense, net (191 ) (158 ) (534 ) (442 )
 
Income (loss) before income tax (expense) benefit 12,321 19,075 36,220 (3,411 )
Income tax (expense) benefit (286 ) 90   (551 ) 414  
Net income (loss) $ 12,035   $ 19,165   $ 35,669   $ (2,997 )
 
Basic and diluted net income (loss) per unit $ 0.29   $ 0.45   $ 0.84   $ (0.07 )
 
Equity in Earnings (Loss) of NuStar Energy L.P.:
General partner interest $ 452 $ (128 ) $ 1,174 $ (4,928 )
General partner incentive distribution 10,805   10,805   32,415   30,437  

General partner’s interest in earnings (loss) and incentive distributions of NuStar Energy L.P.

11,257 10,677 33,589 25,509

Limited partner interest in earnings (loss) of NuStar Energy L.P.

2,926 (771 ) 7,597 (34,817 )

Amortization of step-up in basis related to NuStar Energy L.P.’s assets and liabilities

(721 ) (721 ) (2,163 ) (2,163 )
Equity in earnings (loss) of NuStar Energy L.P. $ 13,462   $ 9,185   $ 39,023   $ (11,471 )
 
Distributable Cash Flow (Note 1):
Cash distributions from NuStar Energy L.P. associated with:
General partner interest $ 1,961 $ 1,961 $ 5,883 $ 5,525
General partner incentive distribution 10,805 10,805 32,415 30,437
Limited partner interest – common units 11,268   11,374   33,820   33,808  
Total cash distributions expected from NuStar Energy L.P. 24,034 24,140 72,118 69,770
Deduct expenses of NuStar GP Holdings, LLC:
General and administrative expenses (941 ) (654 ) (2,359 ) (2,306 )
Income tax (expense) benefit (286 ) 90 (551 ) 414
Interest expense, net (191 ) (158 ) (534 ) (442 )

DCF

$ 22,616   $ 23,418   $ 68,674   $ 67,436  
 
Weighted average number of common units outstanding 42,624,518 42,575,563 42,616,256 42,575,183
 

DCF per unit (Note 1)

$ 0.53 $ 0.55 1.61 1.58
 

 

Cash distributions to be paid to the unitholders of NuStar GP Holdings, LLC:

Distribution per unit $ 0.545 $ 0.545 $ 1.635 $ 1.565
 
Total distribution $ 23,231 $ 23,204 $ 69,689 $ 66,637
   

NuStar GP Holdings, LLC

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Per Unit Data)

 

Notes:

(1)

NuStar GP Holdings, LLC utilizes financial measures, distributable cash flow (DCF) and DCF per unit, which are not defined in U.S. generally accepted accounting principles. Management uses these financial measures because they are widely accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the ability to make a minimum quarterly distribution. DCF and DCF per unit are not intended to represent cash flows from operations for the period, nor are they presented as an alternative to net income. They should not be considered in isolation or as a substitute for a measure of performance in accordance with U.S. generally accepted accounting principles

 

 

The following is a reconciliation of net income (loss) to DCF and net cash provided by operating activities:

       
Three Months Ended September 30, Nine Months Ended September 30,
2013   2012 2013   2012
Net income (loss) $ 12,035 $ 19,165 $ 35,669 $ (2,997 )
Less equity in (earnings) loss of NuStar Energy L.P. (13,462 ) (9,185 ) (39,023 ) 11,471
Plus cash distributions expected from NuStar Energy L.P. 24,034 24,140 72,118 69,770
Other (income) expense, net 9   (10,702 ) (90 ) (10,808 )

DCF

22,616 23,418 68,674 67,436
Less cash distributions expected from NuStar Energy L.P. (24,034 ) (24,140 ) (72,118 ) (69,770 )
Distributions of equity in earnings of NuStar Energy L.P. 13,462 39,023
Net effect of changes in operating accounts (7,842 ) 10,198   (7,782 ) 7,606  
Net cash provided by operating activities $ 4,202   $ 9,476   $ 27,797   $ 5,272  

Source: NuStar GP Holdings, LLC

NuStar Energy, L.P., San Antonio
Investors, Chris Russell, Treasurer and Vice President Investor Relations
Investor Relations: 210-918-3507
or
Media, Mary Rose Brown, Executive Vice President,
Corporate Communications: 210-918-2314
Web site: http://www.nustarenergy.com

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