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NuStar Energy L.P. Reports Strong Fourth Quarter and Full-Year 2022 Earnings Results

Highest Fourth Quarter Net Income and Adjusted EBITDA in Company History

Permian Crude System Volumes Hit Record-Breaking Average of 584,000 Barrels Per Day/13 Percent Above 4Q 2021

Operations Performing Well Across all Systems

Fuels Marketing Segment Up Almost $23 Million Year-Over-Year

Optimization Initiative a Huge Success

Encouraging 2023 Full-Year Outlook

NuStar Energy L.P. (NYSE: NS) today announced its highest fourth quarter net income and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the company’s history, along with strong full-year 2022 results fueled by record-breaking volumes in its Permian Crude System and strong performance in its Fuels Marketing Segment.

“Given how 2022’s historic inflation and volatility made for a bumpy ride around the globe and across financial markets, I am particularly proud of our results last year, which once again demonstrate the stability and strength of NuStar’s business,” said NuStar Chairman and CEO Brad Barron. “Most importantly, we were able to deliver on our top financial priorities – to fund all our spending with internally generated cash flows and continue to strengthen our balance sheet by beginning our initiative to repurchase the outstanding Series D preferred units.”

NuStar reported net income of $92 million for the fourth quarter of 2022, or $0.18 per unit, compared to net income of $58 million, or $0.19 per unit, for the fourth quarter of 2021. Results for the fourth quarter of 2022 include a $16 million gain from insurance proceeds to rebuild tanks at its Selby terminal. Earnings per unit (EPU) for the fourth quarter of 2022 also included a $0.31 per unit premium related to the repurchase of a portion of the Series D preferred units. Excluding the effects of these items, adjusted net income was $75 million for the fourth quarter of 2022, or $0.34 per unit, compared to adjusted net income of $52 million, or $0.14 per unit, for the fourth quarter of 2021.

In addition to the insurance proceeds, Barron noted that both 2022 and 2021 included non-cash charges that impacted full-year net income, making an apples-to-apples comparison difficult. For example, for full-year 2022, NuStar reported net income of $223 million, or $0.36 per unit, compared to net income of $38 million, or a net loss of $0.99 per unit, for the year ended 2021.

“However, excluding the non-cash charges and insurance proceeds, as well as the EPU impact from the repurchase of a portion of the Series D preferred units in the fourth quarter of 2022, our full-year 2022 adjusted net income was $250 million, or $0.92 per unit, compared to 2021 adjusted net income of $212 million, or $0.60 per unit,” said Barron.

Barron continued, “Our adjusted EBITDA was $197 million for the fourth quarter of 2022, which is the highest fourth quarter adjusted EBITDA in our company’s history. This is up $28 million, or 16 percent, compared to fourth quarter of 2021 adjusted EBITDA of $169 million. Our adjusted EBITDA for full-year 2022 was $722 million, compared to 2021 adjusted EBITDA of $705 million.

“We are proud to have generated higher adjusted EBITDA for 2022 through a combination of revenue improvement and expense optimization, which helped mitigate some of the impact of 2022’s historic inflation.”

Adjusted distributable cash flow (DCF) was $89 million for the fourth quarter of 2022, compared to fourth quarter of 2021 DCF of $63 million. The adjusted distribution coverage ratio was 2.01 times for the fourth quarter of 2022.

Adjusted DCF was $357 million for full-year 2022, compared to adjusted DCF of $333 million in 2021. The adjusted distribution coverage ratio was 2.02 times for full-year 2022.

Operations Performing Well Across all Systems

“Our Pipeline Segment generated $176 million of EBITDA in the fourth quarter of 2022, up $27 million, or 18 percent, over fourth quarter 2021 EBITDA of $149 million, largely due to the strong performance of our Permian Crude System,” said Barron.

NuStar’s Permian Crude System volumes hit another high in the fourth quarter of 2022 with a record-breaking average of 584,000 barrels per day (BPD), up 13 percent over fourth quarter of 2021 volumes.

He also noted that NuStar’s Mid-Continent refined product systems once again delivered solid, dependable revenue contribution in the fourth quarter of 2022.

“In South Texas, we are pleased that our Corpus Christi Crude System throughputs averaged over 368,000 BPD in the fourth quarter of 2022, which is above our minimum volume commitments for the system and eight percent higher than volumes in the third quarter of 2022. We are also encouraged by the continued improvement we saw in January on that system, as our average volumes rose to almost 400,000 BPD last month.”

Barron also noted that operating income and EBITDA in NuStar’s Fuels Marketing Segment were $12 million in the fourth quarter of 2022, a $7 million increase compared to the fourth quarter of 2021, largely due to stronger margins.

“For full-year 2022, our Fuels Marketing Segment generated near-record operating income and EBITDA of $34 million, which was an increase of approximately $23 million compared to full-year 2021 operating income and EBITDA of $11 million.

“In addition, our West Coast region’s revenues continue to grow, as revenues were up around 20 percent compared to the fourth quarter of 2021 and around 10 percent year-over-year, driven in large part by our West Coast renewable fuels strategy,” said Barron.

Balance Sheet Continues to Improve

NuStar Executive Vice President and Chief Financial Officer Tom Shoaf gave a positive update on the company’s continued progress in reducing its debt and building its financial strength and flexibility.

“We ended the fourth quarter of 2022 with a debt-to-EBITDA ratio of 3.98 times,” said Shoaf. “Our total debt balance was $3.3 billion, and our revolver facility availability was over $775 million of the facility’s $1 billion capacity.

“In November, we were able to repurchase about one-third of our Series D preferred units while keeping our debt-to-EBITDA ratio under 4 times for year-end 2022. As we mentioned last quarter, we are now positioned to accelerate our timeframe for addressing the Series D preferred units by completing the redemption in 2024, which is several years ahead of our previously scheduled timeframe. This redemption is another important step in our ongoing optimization and will meaningfully increase our cash flow over the next few years.”

Encouraging 2023 Outlook

Shoaf also gave full-year guidance for net income and EBITDA, as well as strategic capital and reliability capital for 2023.

“We expect to generate full-year 2023 net income in the range of $202 to $240 million and full-year 2023 EBITDA in the range of $700 to $760 million,” said Shoaf.

He also noted that NuStar now plans to spend $130 to $150 million in strategic capital in 2023.

“We expect to allocate approximately $60 million to growing our Permian system and plan to spend about $25 million to expand our West Coast Renewable Fuels Network,” said Shoaf. “In addition, we expect to spend between $25 and $35 million on reliability this year.”

Optimization Initiative a Huge Success

Barron closed by mentioning how integral NuStar’s optimization initiative was to the company’s solid results and in facilitating an important first step to improve its capital structure in 2022.

“By systematically scrutinizing every dollar of spending, we have been able to significantly increase our cash flow with systematic changes that will continue to reap benefits in 2023 and beyond,” said Barron. “And by investing that increased cash flow in our growth footprint, we are already on the path to compounding those benefits, with the EBITDA growth we expect from organic capital projects on our Permian System and in our West Coast Renewables Network, as well as the projects we hope to announce later this year across our Ammonia System.

“We plan to continue to optimize our business and build our financial strength and unitholder value, while we continue to safely and reliably store and transport the essential energy that fuels our lives,” Barron concluded.

Conference Call Details

A conference call with management is scheduled for 10:00 a.m. CT on Wednesday, February 1, 2023, to discuss the financial and operational results for the fourth quarter of 2022. Persons interested in listen-only participation may access the conference call directly at https://edge.media-server.com/mmc/p/bgpdnpyj. Persons interested in Q&A participation may pre-register for the conference call and obtain a dial-in number and passcode at https://register.vevent.com/register/BI757a142163514824bfe28118ca3c0731. A recorded version will be available two hours after the conclusion of the conference call at https://edge.media-server.com/mmc/p/bgpdnpyj.

The conference call may also be accessed through the “Investors” section of NuStar Energy L.P.’s website at https://investor.nustarenergy.com.

NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, Texas, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The partnership’s combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico. For more information, visit NuStar Energy L.P.’s website at www.nustarenergy.com and its Sustainability page at https://sustainability.nustarenergy.com/.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes, and the related conference call will include, forward-looking statements regarding future events and expectations, such as NuStar’s future performance, plans and expenditures. All forward-looking statements are based on NuStar’s beliefs as well as assumptions made by and information currently available to NuStar. These statements reflect NuStar’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 2021 annual report 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. Except as required by law, NuStar does not intend, or undertake any obligation, to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information

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

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Statement of Income Data:

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Service revenues

$

299,497

 

 

$

288,266

 

 

$

1,120,249

 

 

$

1,157,410

 

Product sales

 

130,463

 

 

 

129,150

 

 

 

562,974

 

 

 

461,090

 

Total revenues

 

429,960

 

 

 

417,416

 

 

 

1,683,223

 

 

 

1,618,500

 

Costs and expenses:

 

 

 

 

 

 

 

Costs associated with service revenues:

 

 

 

 

 

 

 

Operating expenses

 

92,353

 

 

 

100,155

 

 

 

364,989

 

 

 

388,078

 

Depreciation and amortization expense

 

63,195

 

 

 

63,080

 

 

 

251,878

 

 

 

266,588

 

Total costs associated with service revenues

 

155,548

 

 

 

163,235

 

 

 

616,867

 

 

 

654,666

 

Costs associated with product sales

 

108,730

 

 

 

116,612

 

 

 

486,947

 

 

 

417,413

 

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

 

 

 

46,122

 

 

 

154,908

 

General and administrative expenses

 

34,460

 

 

 

33,873

 

 

 

117,116

 

 

 

113,207

 

Other depreciation and amortization expense

 

1,776

 

 

 

1,951

 

 

 

7,358

 

 

 

7,792

 

Total costs and expenses

 

300,514

 

 

 

315,671

 

 

 

1,274,410

 

 

 

1,382,046

 

Operating income

 

129,446

 

 

 

101,745

 

 

 

408,813

 

 

 

236,454

 

Interest expense, net

 

(55,956

)

 

 

(51,774

)

 

 

(209,009

)

 

 

(213,985

)

Other income, net

 

19,024

 

 

 

7,900

 

 

 

26,182

 

 

 

19,644

 

Income before income tax expense

 

92,514

 

 

 

57,871

 

 

 

225,986

 

 

 

42,113

 

Income tax expense

 

911

 

 

 

353

 

 

 

3,239

 

 

 

3,888

 

Net income

$

91,603

 

 

$

57,518

 

 

$

222,747

 

 

$

38,225

 

 

 

 

 

 

 

 

 

Basic and diluted net income (loss) per common unit

$

0.18

 

 

$

0.19

 

 

$

0.36

 

 

$

(0.99

)

Basic and diluted weighted-average common units outstanding

 

110,566,272

 

 

 

109,771,943

 

 

 

110,341,206

 

 

 

109,585,635

 

Other Data (Note 1):

 

 

 

 

 

 

 

Adjusted net income

$

75,237

 

$

52,030

 

$

249,795

 

$

212,333

Adjusted net income per common unit

$

0.34

 

$

0.14

 

$

0.92

 

$

0.60

EBITDA

$

213,441

 

$

174,676

 

$

694,231

 

$

530,478

Adjusted EBITDA

$

197,075

 

$

169,188

 

$

722,423

 

$

704,586

DCF

$

69,937

 

$

63,047

 

$

337,482

 

$

333,034

Adjusted DCF

$

89,216

 

$

63,047

 

$

356,761

 

$

333,034

Distribution coverage ratio

1.58x

 

1.43x

 

1.91x

 

1.90x

Adjusted distribution coverage ratio

2.01x

 

1.43x

 

2.02x

 

1.90x

 

For the Four Quarters Ended December 31,

 

2022

 

2021

Consolidated Debt Coverage Ratio

3.98x

 

3.99x

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Pipeline:

 

 

 

 

 

 

 

Crude oil pipelines throughput (barrels/day)

 

1,410,966

 

 

 

1,401,498

 

 

 

1,319,360

 

 

 

1,281,568

 

Refined products and ammonia pipelines

throughput (barrels/day)

 

611,011

 

 

 

624,209

 

 

 

579,240

 

 

 

585,189

 

Total throughput (barrels/day)

 

2,021,977

 

 

 

2,025,707

 

 

 

1,898,600

 

 

 

1,866,757

 

 

 

 

 

 

 

 

 

Throughput and other revenues

$

229,935

 

 

$

203,897

 

 

$

828,191

 

 

$

762,238

 

Operating expenses

 

53,609

 

 

 

54,719

 

 

 

210,719

 

 

 

202,481

 

Depreciation and amortization expense

 

44,726

 

 

 

43,798

 

 

 

178,802

 

 

 

179,088

 

Other impairment loss

 

 

 

 

 

 

 

 

 

 

59,197

 

Segment operating income

$

131,600

 

 

$

105,380

 

 

$

438,670

 

 

$

321,472

 

Storage:

 

 

 

 

 

 

 

Throughput (barrels/day) (a)

 

512,504

 

 

 

557,448

 

 

 

480,129

 

 

 

516,094

 

 

 

 

 

 

 

 

 

Throughput terminal revenues

$

26,288

 

 

$

31,623

 

 

$

110,591

 

 

$

122,331

 

Storage terminal revenues

 

53,165

 

 

 

60,081

 

 

 

223,958

 

 

 

305,337

 

Total revenues

 

79,453

 

 

 

91,704

 

 

 

334,549

 

 

 

427,668

 

Operating expenses

 

38,744

 

 

 

45,436

 

 

 

154,270

 

 

 

185,597

 

Depreciation and amortization expense

 

18,469

 

 

 

19,282

 

 

 

73,076

 

 

 

87,500

 

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

 

 

 

46,122

 

 

 

95,711

 

Segment operating income

$

22,240

 

 

$

26,986

 

 

$

61,081

 

 

$

24,800

 

Fuels Marketing:

 

 

 

 

 

 

 

Product sales

$

120,574

 

 

$

121,818

 

 

$

520,486

 

 

$

428,608

 

Cost of goods

 

107,850

 

 

 

116,056

 

 

 

484,477

 

 

 

417,000

 

Gross margin

 

12,724

 

 

 

5,762

 

 

 

36,009

 

 

 

11,608

 

Operating expenses

 

882

 

 

 

559

 

 

 

2,473

 

 

 

427

 

Segment operating income

$

11,842

 

 

$

5,203

 

 

$

33,536

 

 

$

11,181

 

Consolidation and Intersegment Eliminations:

 

 

 

 

 

 

 

Revenues

$

(2

)

 

$

(3

)

 

$

(3

)

 

$

(14

)

Cost of goods

 

(2

)

 

 

(3

)

 

 

(3

)

 

 

(14

)

Total

$

 

 

$

 

 

$

 

 

$

 

Consolidated Information:

 

 

 

 

 

 

 

Revenues

$

429,960

 

 

$

417,416

 

 

$

1,683,223

 

 

$

1,618,500

 

Costs associated with service revenues:

 

 

 

 

 

 

 

Operating expenses

 

92,353

 

 

 

100,155

 

 

 

364,989

 

 

 

388,078

 

Depreciation and amortization expense

 

63,195

 

 

 

63,080

 

 

 

251,878

 

 

 

266,588

 

Total costs associated with service revenues

 

155,548

 

 

 

163,235

 

 

 

616,867

 

 

 

654,666

 

Costs associated with product sales

 

108,730

 

 

 

116,612

 

 

 

486,947

 

 

 

417,413

 

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

 

 

 

46,122

 

 

 

154,908

 

Segment operating income

 

165,682

 

 

 

137,569

 

 

 

533,287

 

 

 

357,453

 

General and administrative expenses

 

34,460

 

 

 

33,873

 

 

 

117,116

 

 

 

113,207

 

Other depreciation and amortization expense

 

1,776

 

 

 

1,951

 

 

 

7,358

 

 

 

7,792

 

Consolidated operating income

$

129,446

 

 

$

101,745

 

 

$

408,813

 

 

$

236,454

 

(a)

Prior period throughputs for our Corpus Christi North Beach terminal in the storage segment were restated consistent with current period presentation.

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information

(Unaudited, Thousands of Dollars, Except Ratio Data)

Note 1: NuStar Energy L.P. utilizes financial measures, such as earnings before interest, taxes, depreciation and amortization (EBITDA), distributable cash flow (DCF) and distribution coverage ratio, which are not defined in U.S. generally accepted accounting principles (GAAP). Management believes these financial measures provide useful information to investors and other external users of our financial information because (i) they provide additional information about the operating performance of the partnership’s assets and the cash the business is generating, (ii) investors and other external users of our financial statements benefit from having access to the same financial measures being utilized by management and our board of directors when making financial, operational, compensation and planning decisions and (iii) they highlight the impact of significant transactions. We may also adjust these measures to enhance the comparability of our performance across periods.

Our board of directors and management use EBITDA and/or DCF when assessing the following: (i) the performance of our assets, (ii) the viability of potential projects, (iii) our ability to fund distributions, (iv) our ability to fund capital expenditures and (v) our ability to service debt. In addition, our board of directors uses EBITDA, DCF and a distribution coverage ratio, which is calculated based on DCF, as some of the factors in its compensation determinations. DCF is a financial indicator used by the master limited partnership (MLP) investment community to compare partnership performance. DCF is used by the MLP investment community, in part, because the value of a partnership unit is partially based on its yield, and its yield is based on the cash distributions a partnership can pay its unitholders.

None of these financial measures are presented as an alternative to net income. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP.

The following is a reconciliation of net income to EBITDA, DCF and distribution coverage ratio.

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Net income

$

91,603

 

 

$

57,518

 

 

$

222,747

 

 

$

38,225

 

Interest expense, net

 

55,956

 

 

 

51,774

 

 

 

209,009

 

 

 

213,985

 

Income tax expense

 

911

 

 

 

353

 

 

 

3,239

 

 

 

3,888

 

Depreciation and amortization expense

 

64,971

 

 

 

65,031

 

 

 

259,236

 

 

 

274,380

 

EBITDA

 

213,441

 

 

 

174,676

 

 

 

694,231

 

 

 

530,478

 

Interest expense, net

 

(55,956

)

 

 

(51,774

)

 

 

(209,009

)

 

 

(213,985

)

Reliability capital expenditures

 

(8,118

)

 

 

(12,028

)

 

 

(32,775

)

 

 

(40,266

)

Income tax expense

 

(911

)

 

 

(353

)

 

 

(3,239

)

 

 

(3,888

)

Long-term incentive equity awards (a)

 

3,337

 

 

 

3,222

 

 

 

11,434

 

 

 

11,959

 

Preferred unit distributions

 

(32,511

)

 

 

(31,736

)

 

 

(127,589

)

 

 

(127,399

)

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

 

 

 

46,122

 

 

 

154,908

 

Income tax benefit related to impairment loss

 

 

 

 

 

 

 

(1,144

)

 

 

 

Premium on repurchase of Series D Cumulative Convertible Preferred Units

 

(49,600

)

 

 

 

 

 

(49,600

)

 

 

 

Other items

 

255

 

 

 

(18,960

)

 

 

9,051

 

 

 

(12,833

)

DCF

$

69,937

 

 

$

63,047

 

 

$

337,482

 

 

$

333,034

 

 

 

 

 

 

 

 

 

Distributions applicable to common limited partners

$

44,328

 

 

$

44,008

 

 

$

176,746

 

 

$

175,470

 

Distribution coverage ratio (b)

1.58x

 

1.43x

 

1.91x

 

1.90x

(a)

We intend to satisfy the vestings of these equity-based awards with the issuance of our common units. As such, the expenses related to these awards are considered non-cash and added back to DCF. Certain awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF.

(b)

Distribution coverage ratio is calculated by dividing DCF by distributions applicable to common limited partners.

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information - Continued

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

The following is the reconciliation for the calculation of our Consolidated Debt Coverage Ratio, as defined in our revolving credit agreement (the Revolving Credit Agreement).

 

Year Ended

December 31,

 

2022

 

2021

Operating income

$

408,813

 

 

$

236,454

 

Depreciation and amortization expense

 

259,236

 

 

 

274,380

 

Goodwill impairment loss

 

 

 

 

34,060

 

Other impairment losses

 

46,122

 

 

 

154,908

 

Amortization expense of equity-based awards

 

13,781

 

 

 

14,209

 

Pro forma effects of dispositions (a)

 

(1,760

)

 

 

(22,710

)

Other

 

(3,607

)

 

 

1,762

 

Consolidated EBITDA, as defined in the Revolving Credit Agreement

$

722,585

 

 

$

693,063

 

 

 

 

 

Long-term debt, less current portion of finance leases

$

3,293,415

 

 

$

3,183,555

 

Finance leases (long-term)

 

(51,127

)

 

 

(52,930

)

Net fair value adjustments, unamortized discounts and unamortized debt issuance costs

 

33,252

 

 

 

38,315

 

NuStar Logistics' floating rate subordinated notes

 

(402,500

)

 

 

(402,500

)

Consolidated Debt, as defined in the Revolving Credit Agreement

$

2,873,040

 

 

$

2,766,440

 

 

 

 

 

Consolidated Debt Coverage Ratio (Consolidated Debt to Consolidated EBITDA)

3.98x

 

3.99x

(a)

These adjustments represent the pro forma effects of the dispositions of the Point Tupper terminal, which was sold in April 2022, and the Eastern U.S. terminals, which were sold in October 2021.

The following are reconciliations of net income / net income (loss) per common unit to adjusted net income / adjusted net income per common unit.

 

 

Three Months Ended

December 31, 2022

 

Year Ended

December 31, 2022

Net income / net income per common unit

 

$

91,603

 

 

$

0.18

 

 

$

222,747

 

 

$

0.36

 

Gain from insurance recoveries

 

 

(16,366

)

 

 

(0.15

)

 

 

(16,366

)

 

 

(0.15

)

Impairment loss

 

 

 

 

 

 

 

 

46,122

 

 

 

0.42

 

Income tax benefit related to impairment loss

 

 

 

 

 

 

 

 

(1,144

)

 

 

(0.01

)

Gain on sale

 

 

 

 

 

 

 

 

(1,564

)

 

 

(0.01

)

Premium on repurchase of Series D Cumulative Convertible Preferred Units

 

 

 

 

 

0.31

 

 

 

 

 

 

0.31

 

Adjusted net income / adjusted net income per common unit

 

$

75,237

 

 

$

0.34

 

 

$

249,795

 

 

$

0.92

 

 

 

Three Months Ended

December 31, 2021

 

Year Ended

December 31, 2021

Net income / net income (loss) per common unit

 

$

57,518

 

 

$

0.19

 

 

$

38,225

 

 

$

(0.99

)

Gain from insurance recoveries

 

 

(5,488

)

 

 

(0.05

)

 

 

(14,860

)

 

 

(0.13

)

Goodwill impairment loss

 

 

 

 

 

 

 

 

34,060

 

 

 

0.31

 

Other impairment losses

 

 

 

 

 

 

 

 

154,908

 

 

 

1.41

 

Adjusted net income / adjusted net income per common unit

 

$

52,030

 

 

$

0.14

 

 

$

212,333

 

 

$

0.60

 

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Ratio Data)

The following is a reconciliation of EBITDA to adjusted EBITDA.

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

EBITDA

$

213,441

 

 

$

174,676

 

 

$

694,231

 

 

$

530,478

 

Gain from insurance recoveries

 

(16,366

)

 

 

(5,488

)

 

 

(16,366

)

 

 

(14,860

)

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

 

 

 

46,122

 

 

 

154,908

 

Gain on sale

 

 

 

 

 

 

 

(1,564

)

 

 

 

Adjusted EBITDA

$

197,075

 

 

$

169,188

 

 

$

722,423

 

 

$

704,586

 

The following is a reconciliation of DCF to adjusted DCF and adjusted distribution coverage ratio.

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

DCF

$

69,937

 

 

$

63,047

 

$

337,482

 

 

$

333,034

Gain from insurance recoveries

 

(16,366

)

 

 

 

 

(16,366

)

 

 

Premium on repurchase of Series D Cumulative Convertible Preferred Units

 

49,600

 

 

 

 

 

49,600

 

 

 

Other

 

(13,955

)

 

 

 

 

(13,955

)

 

 

Adjusted DCF

$

89,216

 

 

$

63,047

 

$

356,761

 

 

$

333,034

 

 

 

 

 

 

 

 

Distributions applicable to common limited partners

$

44,328

 

 

$

44,008

 

$

176,746

 

 

$

175,470

Adjusted distribution coverage ratio (a)

2.01x

 

1.43x

 

2.02x

 

1.90x

(a)

Adjusted distribution coverage ratio is calculated by dividing adjusted DCF by distributions applicable to common limited partners.

The following is a reconciliation of projected net income to EBITDA.

 

Projected for the Year Ended

December 31, 2023

Net income

$

202,000 - 240,000

Interest expense, net

235,000 - 245,000

Income tax expense

3,000 - 5,000

Depreciation and amortization expense

260,000 - 270,000

EBITDA

$

700,000 - 760,000

NuStar Energy L.P.

Reconciliation of Non-GAAP Financial Information - Continued

(Unaudited, Thousands of Dollars)

The following are reconciliations for our reported segments of operating income to segment EBITDA and adjusted segment EBITDA.

 

Three Months Ended

December 31, 2022

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

131,600

 

$

22,240

 

$

11,842

Depreciation and amortization expense

 

44,726

 

 

18,469

 

 

Segment EBITDA

$

176,326

 

$

40,709

 

$

11,842

 

 

 

 

 

 

 

Three Months Ended

December 31, 2021

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

105,380

 

$

26,986

 

$

5,203

Depreciation and amortization expense

 

43,798

 

 

19,282

 

 

Segment EBITDA

$

149,178

 

$

46,268

 

$

5,203

 

 

 

 

 

 

 

Year Ended

December 31, 2022

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

438,670

 

$

61,081

 

$

33,536

Depreciation and amortization expense

 

178,802

 

 

73,076

 

 

Segment EBITDA

 

617,472

 

 

134,157

 

 

33,536

Impairment loss

 

 

 

46,122

 

 

Adjusted segment EBITDA

$

617,472

 

$

180,279

 

$

33,536

 

 

 

 

 

 

 

Year Ended

December 31, 2021

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

321,472

 

$

24,800

 

$

11,181

Depreciation and amortization expense

 

179,088

 

 

87,500

 

 

Segment EBITDA

 

500,560

 

 

112,300

 

 

11,181

Impairment losses

 

59,197

 

 

129,771

 

 

Adjusted segment EBITDA

$

559,757

 

$

242,071

 

$

11,181

 

Contacts

Investors, Pam Schmidt, Vice President, Investor Relations

Investor Relations: 210-918-INVR (4687)

or

Media, Mary Rose Brown, Executive Vice President and Chief Administrative Officer,

Corporate Communications: 210-918-2314 / 210-410-8926

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