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NuStar GP Holdings, LLC Reports Increased EPU for the Full-Year 2015

SAN ANTONIO--(BUSINESS WIRE)--Jan. 29, 2016-- NuStar GP Holdings, LLC (NYSE: NSH) today announced fourth quarter 2015 net income of $13.0 million, or $0.30 per unit, compared to a net income of $14.4 million, or $0.34 per unit, in the fourth quarter of 2014. For the year ended December 31, 2015, the company reported net income of $72.2 million, or $1.68 per unit, compared to net income of $61.4 million, or $1.44 per unit, in 2014.

The company reported distributable cash flow (DCF) available to unitholders for the fourth quarter of 2015 was $22.4 million, or $0.52 per unit, compared to $23.8 million, or $0.56 per unit, for the fourth quarter of 2014. For the year ended December 31, 2015, DCF available to unitholders was $91.0 million, or $2.12 per unit, compared to $93.5 million, or $2.19 per unit, in 2014.

For the year ended December 31, 2015, NuStar Energy L.P. reported net income applicable to limited partners of $257.4 million, or $3.30 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 year ended December 31, 2015 would have been $202.2 million, or $2.59 per unit, and NuStar GP Holdings, LLC’s adjusted net income for the year ended December 31, 2015 would have been $63.8 million, or $1.49 per unit.

With respect to the quarterly distribution to unitholders for the fourth quarter of 2015, NuStar GP Holdings, LLC announced that its board of directors has declared a distribution of $0.545 per unit. The fourth quarter 2015 distribution will be paid on February 16, 2016 to holders of record as of February 8, 2016.

“NuStar GP Holdings, LLC’s full-year 2015 results were supported by NuStar Energy L.P.’s solid performance and stable distribution during the year,” 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 9:00 a.m. CT today, January 29, 2016, to discuss the financial results for the fourth quarter of 2015. Investors interested in listening to the presentation may call 800/622-7620, passcode 22232103. International callers may access the presentation by dialing 706/645-0327, passcode 22232103. The company intends to have a playback available following the presentation, which may be accessed by calling 800/585-8367, passcode 22232103. International callers may access the playback by calling 404/537-3406, passcode 22232103. The playback will be available until 10:59 p.m. CT on February 29, 2016.

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 12.9 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 December 31, Year Ended December 31,
2015   2014 2015   2014
Statement of Income Data:
Equity in earnings of NuStar Energy L.P. $ 17,389 $ 16,481 $ 79,673 $ 65,380
 
General and administrative expenses (641 ) (767 ) (3,338 ) (3,396 )
Other expense, net (2,869 ) (2,025 ) (2,333 ) (1,458 )
Interest expense, net   (232 )   (216 )   (893 )   (885 )
 
Income before income tax (expense) benefit 13,647 13,473 73,109 59,641
Income tax (expense) benefit   (688 )   901     (901 )   1,786  
Net income $ 12,959   $ 14,374   $ 72,208   $ 61,427  
 
Basic and diluted net income per unit $ 0.30   $ 0.34   $ 1.68   $ 1.44  
 
Equity in Earnings of NuStar Energy L.P.:
General partner interest $ 973 $ 854 $ 5,270 $ 3,352
General partner incentive distribution   10,805     10,805     43,220     43,220  

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

11,778 11,659 48,490 46,572

Limited partner interest in earnings of NuStar Energy L.P.

6,332 5,543 34,067 21,692

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

  (721 )   (721 )   (2,884 )   (2,884 )
Equity in earnings of NuStar Energy L.P. $ 17,389   $ 16,481   $ 79,673   $ 65,380  
 
Distributable Cash Flow (Note 1):
Cash distributions from NuStar Energy L.P. associated with:
General partner interest $ 1,961 $ 1,961 $ 7,844 $ 7,844
General partner incentive distribution 10,805 10,805 43,220 43,220
Limited partner interest – common units   11,227     11,160     45,073     44,974  
Total cash distributions expected from NuStar Energy L.P. 23,993 23,926 96,137 96,038
Deduct expenses of NuStar GP Holdings, LLC:
General and administrative expenses (641 ) (767 ) (3,338 ) (3,396 )
Income tax (expense) benefit (688 ) 901 (901 ) 1,786
Interest expense, net   (232 )   (216 )   (893 )   (885 )
DCF $ 22,432   $ 23,844   $ 91,005   $ 93,543  
 
Weighted average number of common units outstanding 42,916,143 42,858,190 42,914,297 42,719,217
 
DCF per unit $ 0.52 $ 0.56 $ 2.12 $ 2.19
 

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

Distribution per unit $ 0.545 $ 0.545 $ 2.180 $ 2.180
 
Total distribution $ 23,397 $ 23,403 $ 93,561 $ 93,252
 
 

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, 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 December 31,   Year Ended December 31,
2015   2014 2015   2014
Net income $ 12,959 $ 14,374 $ 72,208 $ 61,427
Less equity in earnings of NuStar Energy L.P. (17,389 ) (16,481 ) (79,673 ) (65,380 )
Plus cash distributions expected from NuStar Energy L.P. 23,993 23,926 96,137 96,038
Other expense, net   2,869     2,025     2,333     1,458  
DCF 22,432 23,844 91,005 93,543
Less cash distributions expected from NuStar Energy L.P. (23,993 ) (23,926 ) (96,137 ) (96,038 )
Distributions of equity in earnings of NuStar Energy L.P. 17,389 16,481 79,673 65,380
Net effect of changes in operating accounts   (2,319 )   (13,728 )   1,358     (4,092 )
Net cash provided by operating activities $ 13,509   $ 2,671   $ 75,899   $ 58,793  
 

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:

   

Year Ended
December 31, 2015

Net income/ net income per unit $ 72,208   $ 1.68
Adjustment to equity in earnings of NuStar Energy L.P.   (8,390 )   (0.19 )
Adjusted net income/ adjusted net income per unit $ 63,818   $ 1.49  
 

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.:

    Year Ended
December 31, 2015
Net income / net income per unit $ 306,720   $ 3.30
Gain on Linden Acquisition   (56,277 )   (0.71 )
Adjusted net income 250,443
GP interest and incentive   (48,228 )  
Adjusted net income applicable to limited partners/ adjusted net income per unit $ 202,215   $ 2.59  

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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