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NuStar GP Holdings, LLC Reports Earnings for the Third Quarter of 2015

SAN ANTONIO--(BUSINESS WIRE)--Nov. 3, 2015-- NuStar GP Holdings, LLC (NYSE: NSH) today announced that third quarter 2015 distributable cash flow (DCF) available to unitholders was $22.8 million, or $0.53 per unit, compared to $23.7 million, or $0.55 per unit, for the third quarter of 2014. For the nine months ended September 30, 2015, DCF available to unitholders was $68.6 million, or $1.60 per unit, compared to $69.7 million, or $1.63 per unit for the nine months ended September 30, 2014.

Net income for the third quarter of 2015 was $16.9 million, or $0.39 per unit, compared to $17.6 million, or $0.41 per unit, for the third quarter of 2014. For the nine months ended September 30, 2015, net income was $59.2 million, or $1.38 per unit, compared to $47.1 million, or $1.10 per unit for the nine months ended September 30, 2014.

For the nine months ended September 30, 2015, NuStar Energy L.P. reported net income applicable to limited partners of $209.9 million, or $2.69 per unit. Absent the gain related to NuStar Energy L.P.’s January 2, 2015 acquisition of the remaining 50% ownership in the Linden terminal, NuStar Energy L.P.’s adjusted net income applicable to limited partners for the nine months ended September 30, 2015 would have been $154.7 million, or $1.98 per unit, and NuStar GP Holdings, LLC’s adjusted net income for the nine months ended September 30, 2015 would have been $50.9 million, or $1.19 per unit.

As previously announced on October 30, 2015, NuStar GP Holdings, LLC’s third quarter 2015 distribution of $0.545 per unit will be paid on November 17, 2015 to holders of record as of November 9, 2015.

“The continued strength of NuStar Energy L.P.’s core, fee-based operations had a positive impact on NuStar GP Holdings, LLC’s third quarter results,” said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.

A conference call with management is scheduled for 2:00 p.m. CT today, November 3, 2015, to discuss the financial results for the third quarter of 2015. Investors interested in listening to the presentation may call 800/622-7620, passcode 51999749. International callers may access the presentation by dialing 706/645-0327, passcode 51999749. The company intends to have a playback available following the presentation, which may be accessed by calling 800/585-8367, passcode 51999749. International callers may access the playback by calling 404/537-3406, passcode 51999749. The playback will be available until 10:59 p.m. CT on November 30, 2015.

Investors interested in listening to the live presentation or a replay via the internet may access the presentation directly by clicking here or by logging on to NuStar GP Holdings, LLC’s Web site at www.nustargpholdings.com.

The presentation will disclose certain non-GAAP financial measures. Reconciliations of certain of these non-GAAP financial measures to U.S. GAAP may be found in this press release, with additional reconciliations located on the Financials page of the Investors section of NuStar GP Holdings, LLC’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, and the United Kingdom. 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 GP Holdings, LLC’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of NuStar GP Holdings, LLC’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 GP Holdings, LLC, 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, such as the future performance of NuStar Energy L.P. and NuStar GP Holdings, LLC. 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.’s and NuStar GP Holdings, LLC’s 2014 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements.

 
 
 
 
 

NuStar GP Holdings, LLC and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)

 
 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

2015   2014 2015   2014
Statement of Income Data:
Equity in earnings of NuStar Energy L.P. $ 18,194 $ 17,770 $ 62,284 $ 48,899
 
General and administrative expenses (825 ) (877 ) (2,697 ) (2,629 )
Other (expense) income, net (3 ) 354 536 567
Interest expense, net (234 ) (216 ) (661 ) (669 )
 
Income before income tax (expense) benefit 17,132 17,031 59,462 46,168
Income tax (expense) benefit (215 ) 608   (213 ) 885  
Net income $ 16,917   $ 17,639   $ 59,249   $ 47,053  
 
Basic and diluted net income per unit $ 0.39   $ 0.41   $ 1.38   $ 1.10  
 
Equity in Earnings of NuStar Energy L.P.:
General partner interest $ 1,084 $ 1,025 $ 4,297 $ 2,498
General partner incentive distribution 10,805   10,805   32,415   32,415  
General partner’s interest in earnings and incentive distributions of NuStar Energy L.P. 11,889 11,830 36,712 34,913
Limited partner interest in earnings of NuStar Energy L.P. 7,026 6,661 27,735 16,149
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 of NuStar Energy L.P. $ 18,194   $ 17,770   $ 62,284   $ 48,899  
 
Distributable Cash Flow (Note 1):
Cash distributions from NuStar Energy L.P. associated with:
General partner interest $ 1,961 $ 1,961 $ 5,883 $ 5,883
General partner incentive distribution 10,805 10,805 32,415 32,415
Limited partner interest – common units 11,318   11,380   33,846   33,814  
Total cash distributions expected from NuStar Energy L.P. 24,084 24,146 72,144 72,112
Deduct expenses of NuStar GP Holdings, LLC:
General and administrative expenses (825 ) (877 ) (2,697 ) (2,629 )
Income tax (expense) benefit (215 ) 608 (213 ) 885
Interest expense, net (234 ) (216 ) (661 ) (669 )
DCF $ 22,810   $ 23,661   $ 68,573   $ 69,699  
 
Weighted average number of common units outstanding 42,913,969 42,702,185 42,913,675 42,672,383
 
DCF per unit (Note 1) $ 0.53 $ 0.55 $ 1.60 $ 1.63
 
Cash distributions to be paid to the unitholders of

NuStar GP Holdings, LLC:

Distribution per unit $ 0.545 $ 0.545 $ 1.635 $ 1.635
 
Total distribution $ 23,388 $ 23,351 $ 70,164 $ 69,849
 
 
 
 
 

NuStar GP Holdings, LLC and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Per Unit Data)

Notes:

(1) NuStar GP Holdings, LLC and NuStar Energy L.P. utilize financial measures, such as distributable cash flow (DCF) and adjusted net income and adjusted net income per unit (collectively, financial measures), 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 financial measures provide investors an enhanced perspective of the performance of the company’s assets and/or the cash the business is generating. None of these financial measures are 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 to DCF and net cash provided by operating activities:

 

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

2015     2014 2015     2014
Net income $ 16,917 $ 17,639 $ 59,249 $ 47,053
Less equity in earnings of NuStar Energy L.P. (18,194 ) (17,770 ) (62,284 ) (48,899 )
Plus cash distributions expected from NuStar Energy L.P. 24,084 24,146 72,144 72,112
Other expense (income), net 3   (354 ) (536 ) (567 )
DCF 22,810 23,661 68,573 69,699
Less cash distributions expected from NuStar Energy L.P. (24,084 ) (24,146 ) (72,144 ) (72,112 )
Distributions of equity in earnings of NuStar Energy L.P. 18,194 17,770 62,284 48,899
Net effect of changes in operating accounts 5,132   7,889   3,677   9,636  
Net cash provided by operating activities $ 22,052   $ 25,174   $ 62,390   $ 56,122  
 
 

The following is a reconciliation of net income and net income per unit to adjusted net income and adjusted net income per unit for NuStar GP Holdings, LLC:

   

Nine Months Ended

September 30, 2015

Net income/ net income per unit $ 59,249   $ 1.38
Adjustment to equity in earnings of NuStar Energy L.P. (8,390 ) (0.19 )
Adjusted net income/ adjusted net income per unit $ 50,859   $ 1.19  
 
 

The following is a reconciliation of net income and net income per unit to adjusted net income applicable to limited partners and adjusted net income per unit for NuStar Energy L.P.:

   

Nine Months Ended

September 30, 2015

Net income / net income per unit $ 247,240   $ 2.69
Gain on Linden Acquisition (56,277 ) (0.71 )
Adjusted net income 190,963
GP interest and incentive (36,233 )  
Adjusted net income applicable to limited partners/ adjusted net income per unit $ 154,730   $ 1.98  
 
 
 

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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