News Release

Printer Friendly Version View printer-friendly version
<< Back
NuStar GP Holdings, LLC Reports Earnings Results for the Second Quarter of 2017

SAN ANTONIO--(BUSINESS WIRE)--Jul. 28, 2017-- NuStar GP Holdings, LLC (NYSE: NSH) today announced second quarter 2017 net income of $51.3 million, or $1.19 per unit. Distributable cash flow (DCF) available to unitholders for the second quarter of 2017 was $23.3 million.

With respect to the quarterly distribution to unitholders for the second quarter of 2017, NuStar GP Holdings, LLC announced that its board of directors has declared a distribution of $0.545 per unit. The second quarter 2017 distribution will be paid on August 15, 2017 to holders of record as of August 7, 2017.

“NuStar GP Holdings, LLC’s second quarter 2017 net income was positively impacted by NuStar Energy L.P.’s common equity offering in April, to finance a portion of NuStar Energy L.P.’s May 4, 2017 acquisition of Navigator Energy Services, LLC. This equity offering resulted in a non-cash gain of $41.6 million related to the increase in value of NuStar GP Holdings, LLC’s proportionate share of NuStar Energy L.P.’s capital,” said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.

Barron then added, “To demonstrate our strong support for NuStar Energy L.P.’s acquisition of Navigator, NuStar GP Holdings, LLC agreed to temporarily forgo the Incentive Distribution Rights, or IDRs, to which it would otherwise be entitled for any NuStar Energy L.P. common equity that will be issued from the date the acquisition agreement was signed and through the 10 quarters thereafter, which begins with the distribution for the second quarter of 2017. The waiver is capped at $22 million.”

Barron went on to say, “In the future NuStar GP Holdings, LLC should benefit from NuStar Energy L.P.’s acquisition of Navigator Energy Services, LLC. This acquisition provides NuStar Energy L.P. with a platform for future distribution growth, which in the long run should also translate into distribution growth for NuStar GP Holdings, LLC as well.”

A conference call with management is scheduled for 9:00 a.m. CT today, July 28, 2017, to discuss the financial and operational results for the second quarter of 2017. Investors interested in listening to the discussion may dial toll-free 844/889-7787, passcode 48213974. International callers may access the discussion by dialing 661/378-9931, passcode 48213974. The company intends to have a playback available following the discussion, which may be accessed by dialing toll-free 855/859-2056, passcode 48213974. International callers may access the playback by dialing 404/537-3406, passcode 48213974. The playback will be available until 12:00 p.m. CT on August 27, 2017.

Investors interested in listening to the live discussion or a replay via the internet may access the discussion directly at http://edge.media-server.com/m/p/kcc929bt or by logging on to NuStar GP Holdings, LLC’s website at www.nustargpholdings.com.

The discussion 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 website at www.nustargpholdings.com.

NuStar GP Holdings, LLC is a publicly traded limited liability company that owns the general partner interest, an approximate 11 percent common 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 website 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, and/or the related conference call will include, 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 2016 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 June 30, Six Months Ended June 30,
2017   2016 2017   2016
Statement of Income Data:
Equity in earnings of NuStar Energy L.P. $ 10,963 $ 16,280 $ 29,075 $ 33,295
 
General and administrative expenses (855 ) (841 ) (1,683 ) (1,673 )
Other income, net 41,603 41,603 613
Interest expense, net (394 ) (267 ) (686 ) (513 )
 
Income before income tax (expense) benefit 51,317 15,172 68,309 31,722
Income tax (expense) benefit (6 ) (99 ) (6 ) 27  
Net income $ 51,311   $ 15,073   $ 68,303   $ 31,749  
 
Net income per unit $ 1.19 $ 0.35 $ 1.58 $ 0.74
Weighted average number of common units outstanding 42,951,749 42,931,059 42,951,749 42,930,804
 
Equity in Earnings of NuStar Energy L.P.:
General partner interest $ 108 $ 834 $ 912 $ 1,766
General partner incentive distribution 10,912   10,805   23,824   21,610  
General partner’s interest in earnings and incentive distributions of NuStar Energy L.P. 11,020 11,639 24,736 23,376
Limited partner interest in earnings of NuStar Energy L.P. 664 5,362 5,781 11,361
Amortization of step-up in basis related to NuStar Energy L.P.’s assets and liabilities (721 ) (721 ) (1,442 ) (1,442 )
Equity in earnings of NuStar Energy L.P. $ 10,963   $ 16,280   $ 29,075   $ 33,295  
 
Cash Flow Data:
Net cash provided by operating activities $ 9,951 $ 12,967 $ 26,826 $ 27,350
Net cash provided by investing activities $ 1,874 $ 7,670 $ 7,839 $ 15,766
Net cash used in financing activities $

(12,126

)

$ (23,438 ) $ (34,585 ) $ (42,835 )
 
Distributable Cash Flow (Note 1):
Cash distributions from NuStar Energy L.P. associated with:
General partner interest $ 2,302 $ 1,961 $ 4,645 $ 3,922
General partner incentive distribution 10,912 10,805 23,824 21,610
Limited partner interest – common units 11,185   11,185   22,370   22,329  
Total cash distributions expected from NuStar Energy L.P. 24,399 23,951 50,839 47,861
Adjustments:
General and administrative expenses (855 ) (841 ) (1,683 ) (1,673 )
Income tax (expense) benefit (6 ) (99 ) (6 ) 27
Interest expense, net (394 ) (267 ) (686 ) (513 )
Unit-based compensation 153   131   305   245  
DCF $ 23,297   $ 22,875   $ 48,769   $ 45,947  
 
Total distribution to unitholders $ 23,408 $ 23,398 $ 46,817 $ 46,795
 
 

NuStar GP Holdings, LLC and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars)

 

Note 1: NuStar GP Holdings, LLC utilizes distributable cash flow (DCF) as a financial measure, although it is not defined in U.S. generally accepted accounting principles. Management believes DCF provides useful information to investors and other external users of our financial information because (i) DCF provides additional information about the cash the business is generating and (ii) investors and other external users of our financial statements benefit from having access to the same financial measure being utilized by management and our board of directors when making financial and planning decisions. Our board of directors and management use DCF when assessing our ability to fund distributions and our ability to service debt. DCF is a widely accepted financial indicator used by our industry’s investment community to compare company performance. DCF is used by our industry’s investment community, in part, because the value of our company’s units is partially based on its yield, and its yield is based on the cash distributions a company can pay its unitholders.

 
DCF is not intended to represent cash flows from operations, and is not presented as an alternative to net income. DCF should not be considered in isolation or as a substitute for a measure of performance prepared 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 June 30, Six Months Ended June 30,
2017   2016 2017   2016
Net income $ 51,311 $ 15,073 $ 68,303 $ 31,749
Less equity in earnings of NuStar Energy L.P. (10,963 ) (16,280 ) (29,075 ) (33,295 )
Plus cash distributions expected from NuStar Energy L.P. 24,399 23,951 50,839 47,861
Gain related to NuStar Energy L.P.’s issuance of common limited partner units (41,603 ) (41,603 )
Unit-based compensation items (a) 153   131   305   (368 )
DCF 23,297 22,875 48,769 45,947
Less cash distributions expected from NuStar Energy L.P. (24,399 ) (23,951 ) (50,839 ) (47,861 )
Distributions of equity in earnings of NuStar Energy L.P. 10,963 16,280 29,075 33,295
Changes in current assets and liabilities (11 ) (2,422 ) (373 ) (4,413 )
Changes in noncurrent assets and liabilities and other items 101   185   194   382  
Net cash provided by operating activities $ 9,951   $ 12,967   $ 26,826   $ 27,350  
 
(a)   We intend to satisfy the vestings of equity-based awards with the issuance of our units. As such, the expenses related to these awards are considered non-cash and added back to DCF. These awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF. Also included in this item are gains and losses resulting from the satisfaction of certain long-term incentive awards prior to the employee transfer on March 1, 2016.
 

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 and Chief Administrative Officer,
Corporate Communications: 210-918-2314
website: http://www.nustarenergy.com

Contact Us

 
210-918-INVR (4687)
http://investor.nustargpholdings.com/phoenix.zhtml?c=197894&p=irol-infoReq

K-1 Tax Information

K-1 Support
877-804-9545

Stock Transfer Agent

Computershare Investor Svcs, LLC
Shareholder Communications Team
P.O. Box 505000
Louisville, KY 40233-5000 USA
877-239-9457
http://www.computershare.com/investor