Business Wire | Nov 4, 2021 06:45AM EDT

NuStar Energy L.P. Reports Solid Third Quarter of 2021 Results

Nov. 04, 2021

SAN ANTONIO--(BUSINESS WIRE)--Nov. 04, 2021--NuStar Energy L.P. (NYSE: NS) today announced solid third quarter of 2021 results fueled by strong throughputs on its refined products and crude oil pipelines.

"In the third quarter, we completed the $250 million sale of our Eastern U.S. terminal facilities to Sunoco LP, which made it possible for us to execute on our plan to optimize our business and strengthen our balance sheet by deploying the sales proceeds to lower our leverage and focus 100 percent of our resources on our core asset footprint. As a result, we are now targeting a year-end debt metric below 4.0 times. We also continue to expect to self-fund all of our spending from our internally generated cash flows in 2021, 2022 and beyond," said NuStar President and CEO Brad Barron.

"We are pleased to see the pieces of our plan coming into place and our ongoing core business performing solidly with a comparable, and in some cases, better quarter-over-quarter performance, despite the lingering effects of the pandemic on the global economy and the non-cash charges associated with the asset sale."

Barron noted the quarter's results include a $130 million non-cash charge related to the sale of its Eastern U.S. terminal assets and a $59 million non-cash impairment charge on a portion of NuStar's Houston 12-inch pipeline, as well as a $9 million cash gain from insurance proceeds to rebuild tanks at its Selby terminal. As a result of the non-cash charges, NuStar reported a net loss of $125 million for the third quarter of 2021, or $1.48 net loss per unit, compared to a net loss of $97 million, or a $1.22 net loss per unit, for the third quarter of 2020, which was negatively impacted by a pandemic-related non-operational charge.

Excluding the effects of the non-cash charges, adjusted net income was $55 million for the third quarter of 2021, or $0.16 per unit, compared to adjusted net income of $45 million, or $0.08 per unit, for the third quarter of 2020.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $177 million for the third quarter of 2021, comparable to the third quarter of 2020 adjusted EBITDA of $180 million and up five percent over the pre-pandemic third quarter of 2019.

Distributable cash flow (DCF) available to common limited partners was $92 million for the third quarter of 2021, up $8 million, or 10 percent, compared to $84 million of adjusted DCF in the third quarter of 2020. The distribution coverage ratio to common limited partners was 2.10 times for the third quarter of 2021 and 2.05 times for the nine months ended September 30, 2021.

"We are pleased with the strong, stable results our business generated in the third quarter, as the world has continued to bounce back from the pandemic. And we are expecting our full-year 2021 results to demonstrate, once again, the strength and resilience of our assets, our employees and our business," said Barron.

Refined Product Demand Maintains Resilience with 105 Percent of Pre-Pandemic Run Rate

"In the third quarter, we continued to see solid, steady refined product demand in the markets we serve, maintaining a strong 105 percent of pre-pandemic demand, which is on pace with the second quarter of this year," said Barron. "Our third quarter refined product throughputs were up 16 percent over the third quarter of 2020 and up eight percent over the pre-pandemic third quarter of 2019.

"We continue to expect our refined products systems to perform at or above 100 percent of our pre-pandemic run-rate for the remainder of 2021."

Permian Crude System Hits Record-Breaking Volumes

Barron continued, "Steady recovery in refined product demand has also continued to stoke a rebound in U.S. refiners' demand for crude, which has contributed to higher throughputs for our crude pipelines in the third quarter, which are up 11 percent over the second quarter of 2021 and the third quarter of 2020.

"Thanks once again to our Permian Crude System's premier 'core of the core' location, lowest producer costs and highest product quality, we have seen strong volume improvement. In the third quarter, our Permian system's volumes grew to a record-breaking average of 502,000 barrels per day, up 12 percent over the second quarter of 2021; up 19 percent over the third quarter of 2020; and up 11 percent over the peak first quarter 2020 pre-COVID quarterly average.

"We are now forecasting we will exit 2021 at around 514,000 barrels per day, which is up from the 500,000 barrels per day we forecasted in the second quarter. Looking back to the beginning of 2021, we are even more encouraged by the fact that our Permian system is up an impressive nine percent from the 470,000 barrels per day we expected back in February."

West Coast Renewable Fuels Network Continues to Handle Impressive Share of California's Market

Barron also reiterated the importance of NuStar's West Coast Renewable Fuels Network, which plays an integral role in facilitating the low-carbon renewable fuels that significantly reduce emissions from transportation.

"NuStar currently handles an impressive share of California's renewable fuels. According to the latest available data from the state of California, for the second quarter of 2021 NuStar handled about seven percent of California's total biodiesel volumes; over 20 percent of the state's ethanol; and close to 30 percent of its renewable diesel volumes, which does not yet include the growing proportion of renewable jet fuel volumes that we handle in the region.

"We expect NuStar's leadership in the low-carbon fuel transition, in California and across the West Coast, to continue to grow as we complete our planned tank conversion projects, and we plan to continue to develop projects to expand our renewable fuel logistics services as low-carbon fuel legislative mandates proliferate and customer demand increases," said Barron.

Exciting Opportunities for Utilization of Ammonia System

Barron mentioned that throughput on NuStar's Ammonia System was up 39 percent over the third quarter of 2020. Barron said NuStar is working to increase its Ammonia System's utilization even more through low-spend, high-return projects to connect and extend the system to new and current customers.

"These projects would supply ammonia for current applications, like the fertilizer that augments U.S. food production, as well as corn for ethanol production, across the Midwest, as well as provide safe, efficient transportation for hydrogen to power fuel-cell vehicles.

"We look forward to providing more details on these projects to increase our Ammonia System's utilization and profitability at multiple locations on our 2,000-mile system," Barron added.

2021 Full-Year Outlook

NuStar CFO Tom Shoaf said after taking into account the Eastern U.S. terminals sale, NuStar expects its 2021 adjusted EBITDA to be in the range of $685 to $715 million, which is slightly higher than previous expectations.

"We also expect to spend $140 to $160 million on strategic capital and $35 to $45 million on reliability capital in 2021.

"Based on these projections, we continue to target our year-end debt-to-EBITDA ratio to be below 4.0 times. And we will be achieving these solid results while generating internal cash flows to meet all of our spending needs," said Shoaf.

Sustainability Report Released

Barron closed by discussing NuStar's newly posted sustainability report, which can be found on the company's website.

"You will see in our recently posted sustainability report that our record demonstrates our commitment to sustainability.

"While traditional sources of energy, like the petroleum products we transport and store, will continue to be an important part of our energy supply, both in the U.S. and across the globe, for many decades to come, we are working to assure NuStar is instrumental in emerging energy opportunities that lower emissions and generate solid returns," said Barron.

Conference Call Details

A conference call with management is scheduled for 10:00 a.m. CT today, November 4, 2021. The partnership plans to discuss the third quarter 2021 earnings results, which will be released earlier that day. Investors interested in listening to the discussion may dial toll-free 844/889-7787, passcode 9989773. International callers may access the discussion by dialing 661/378-9931, passcode 9989773. The partnership intends to have a playback available following the discussion, which may be accessed by dialing toll-free 855/859-2056, passcode 9989773. International callers may access the playback by dialing 404/537-3406, passcode 9989773. The playback will be available until 12:00 p.m. CT on December 4, 2021.

Investors interested in listening to the live discussion or a replay via the internet may access the discussion directly at https://edge.media-server.com/mmc/p/qiscvwwz or by logging on to NuStar Energy L.P.'s website at www.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 10,000 miles of pipeline and 64 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 57 million barrels of storage capacity, and NuStar has operations in the United States, Canada and Mexico. For more information, visit NuStar Energy L.P.'s website at www.nustarenergy.com and its Sustainability page at www.nustarenergy.com/Sustainability.

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 2020 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 Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Statement of Income Data:

Revenues:

Service revenues $ 296,473 $ 295,621 $ 869,144 $ 896,518

Product sales 115,872 66,970 331,940 198,404

Total revenues 412,345 362,591 1,201,084 1,094,922

Costs and expenses:

Costs associatedwith service revenues:

Operating 100,143 95,528 287,923 296,788 expenses

Depreciation andamortization 66,126 70,480 203,508 207,755 expense

Total costsassociated with 166,269 166,008 491,431 504,543 service revenues

Costs associatedwith product 107,047 63,977 300,801 182,103 sales

Asset impairment 154,908 - 154,908 - losses

Goodwillimpairment 34,060 - 34,060 225,000 losses

General andadministrative 27,365 25,457 79,334 72,128 expenses

Otherdepreciation and 1,881 2,105 5,841 6,462 amortizationexpense

Total costs and 491,530 257,547 1,066,375 990,236 expenses

Operating (loss) (79,185 ) 105,044 134,709 104,686 income

Interest (53,513 ) (64,165 ) (162,211 ) (171,158 ) expense, net

Loss onextinguishment - (137,904 ) - (141,746 ) of debt

Other income 8,450 (1,398 ) 11,744 (5,671 ) (expense), net

Loss beforeincome tax (124,248 ) (98,423 ) (15,758 ) (213,889 ) expense(benefit)

Income taxexpense 685 (1,783 ) 3,535 626 (benefit)

Net loss $ (124,933 ) $ (96,640 ) $ (19,293 ) $ (214,515 )



Basic anddiluted net loss $ (1.48 ) $ (1.22 ) $ (1.18 ) $ (2.96 ) per common unit

Basic anddilutedweighted-average 109,532,381 109,195,358 109,522,849 109,096,190 common unitsoutstanding

Other Data (Note 1):

Adjusted net $ 54,663 $ 45,227 $ 160,303 $ 156,194 income

Adjusted netincome per $ 0.16 $ 0.08 $ 0.46 $ 0.44 common unit

EBITDA $ (2,728 ) $ 38,327 $ 355,802 $ 171,486

Adjusted EBITDA $ 176,868 $ 180,194 $ 535,398 $ 542,195

DCF $ 92,067 $ (53,950 ) $ 269,987 $ 130,860

Adjusted DCF $ 92,067 $ 83,954 $ 269,987 $ 272,606

Distribution 2.10x n/a 2.05x 1.00xcoverage ratio

Adjusteddistribution 2.10x 1.92x 2.05x 2.08xcoverage ratio

For the Four Quarters Ended September 30,

2021 2020

ConsolidatedDebt Coverage 4.10x 4.13xRatio

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Pipeline:

Crude oil pipelines throughput (barrels/day)

1,374,909

1,235,176

1,241,152

1,276,834

Refined products and ammonia pipelines throughput (barrels/day)

599,423

516,295

572,040

521,118

Total throughput (barrels/day)

1,974,332

1,751,471

1,813,192

1,797,952

Throughput and other revenues

$

196,207

$

176,210

$

558,341

$

537,999

Operating expenses

51,303

47,121

147,762

147,466

Depreciation and amortization expense

45,506

45,268

135,290

132,655

Asset impairment loss

59,197

-

59,197

-

Goodwill impairment loss

-

-

-

225,000

Segment operating income

$

40,201

$

83,821

$

216,092

$

32,878

Storage:

Throughput (barrels/day)

462,094

466,229

416,288

497,634

Throughput terminal revenues

$

30,771

$

29,260

$

90,708

$

100,182

Storage terminal revenues

77,371

93,175

245,256

264,877

Total revenues

108,142

122,435

335,964

365,059

Operating expenses

48,840

48,407

140,161

149,322

Depreciation and amortization expense

20,620

25,212

68,218

75,100

Asset impairment loss

95,711

-

95,711

-

Goodwill impairment loss

34,060

-

34,060

-

Segment operating (loss) income

$

(91,089

)

$

48,816

$

(2,186

)

$

140,637

Fuels Marketing:

Product sales

$

107,996

$

63,946

$

306,790

$

191,873

Cost of goods

106,478

63,161

300,944

180,230

Gross margin

1,518

785

5,846

11,643

Operating expenses

569

816

(132

)

1,882

Segment operating income (loss)

$

949

$

(31

)

$

5,978

$

9,761

Consolidation and Intersegment Eliminations:

Revenues

$

-

$

-

$

(11

)

$

(9

)

Cost of goods

-

-

(11

)

(9

)

Total

$

-

$

-

$

-

$

-

Consolidated Information:

Revenues

$

412,345

$

362,591

$

1,201,084

$

1,094,922

Costs associated with service revenues:

Operating expenses

100,143

95,528

287,923

296,788

Depreciation and amortization expense

66,126

70,480

203,508

207,755

Total costs associated with service revenues

166,269

166,008

491,431

504,543

Cost of product sales

107,047

63,977

300,801

182,103

Asset impairment losses

154,908

-

154,908

-

Goodwill impairment losses

34,060

-

34,060

225,000

Segment operating (loss) income

(49,939

)

132,606

219,884

183,276

General and administrative expenses

27,365

25,457

79,334

72,128

Other depreciation and amortization expense

1,881

2,105

5,841

6,462

Consolidated operating (loss) income

$

(79,185

)

$

105,044

$

134,709

$

104,686

NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (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 (loss). They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP.

Included in the tables below are the following items: In the the third quarter of 2021, we recorded a non-cash asset impairment loss of $95.7 million and a non-cash goodwill impairment loss of $34.1 million associated with our Eastern U.S. Terminal Operations, which were sold in October 2021 and classified as held for sale as of September 30, 2021, a non-cash asset impairment loss of $59.2 million related to our Houston pipeline and a gain from insurance recoveries of $9.4 million related to damage caused by a fire in 2019 at our Selby terminal. In the second and third quarters of 2020, we recognized losses on extinguishment of debt of $3.8 million and $137.9 million, respectively, mainly related to the repayment of our $750.0 million unsecured term loan credit agreement on September 16, 2020. In the first quarter of 2020, we recorded a non-cash goodwill impairment loss of $225.0 million related to our crude oil pipelines reporting unit.

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

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Pipeline:

Crude oilpipelines 1,374,909 1,235,176 1,241,152 1,276,834 throughput (barrels/day)

Refinedproducts andammonia 599,423 516,295 572,040 521,118 pipelines throughput(barrels/day)

Totalthroughput 1,974,332 1,751,471 1,813,192 1,797,952 (barrels/day)

Throughput and $ 196,207 $ 176,210 $ 558,341 $ 537,999 other revenues

Operating 51,303 47,121 147,762 147,466 expenses

Depreciationand 45,506 45,268 135,290 132,655 amortization expense

Asset 59,197 - 59,197 - impairment loss

Goodwill - - - 225,000 impairment loss

Segmentoperating $ 40,201 $ 83,821 $ 216,092 $ 32,878 income

Storage:

Throughput 462,094 466,229 416,288 497,634 (barrels/day)

Throughputterminal $ 30,771 $ 29,260 $ 90,708 $ 100,182 revenues

Storageterminal 77,371 93,175 245,256 264,877 revenues

Total revenues 108,142 122,435 335,964 365,059

Operating 48,840 48,407 140,161 149,322 expenses

Depreciationand 20,620 25,212 68,218 75,100 amortization expense

Asset 95,711 - 95,711 - impairment loss

Goodwill 34,060 - 34,060 - impairment loss

Segmentoperating $ (91,089 ) $ 48,816 $ (2,186 ) $ 140,637 (loss) income

Fuels Marketing:

Product sales $ 107,996 $ 63,946 $ 306,790 $ 191,873

Cost of goods 106,478 63,161 300,944 180,230

Gross margin 1,518 785 5,846 11,643

Operating 569 816 (132 ) 1,882 expenses

Segmentoperating $ 949 $ (31 ) $ 5,978 $ 9,761 income (loss)

Consolidationand Intersegment Eliminations:

Revenues $ - $ - $ (11 ) $ (9 )

Cost of goods - - (11 ) (9 )

Total $ - $ - $ - $ -

Consolidated Information:

Revenues $ 412,345 $ 362,591 $ 1,201,084 $ 1,094,922

Costsassociated with service revenues:

Operating 100,143 95,528 287,923 296,788 expenses

Depreciationand 66,126 70,480 203,508 207,755 amortization expense

Total costsassociated with 166,269 166,008 491,431 504,543 service revenues

Cost of product 107,047 63,977 300,801 182,103 sales

Assetimpairment 154,908 - 154,908 - losses

Goodwillimpairment 34,060 - 34,060 225,000 losses

Segmentoperating (49,939 ) 132,606 219,884 183,276 (loss) income

General andadministrative 27,365 25,457 79,334 72,128 expenses

Otherdepreciationand 1,881 2,105 5,841 6,462 amortizationexpense

Consolidatedoperating $ (79,185 ) $ 105,044 $ 134,709 $ 104,686 (loss) income

NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (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 (loss). They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP.

Included in the tables below are the following items: In the the third quarter of 2021, we recorded a non-cash asset impairment loss of $95.7 million and a non-cash goodwill impairment loss of $34.1 million associated with our Eastern U.S. Terminal Operations, which were sold in October 2021 and classified as held for sale as of September 30, 2021, a non-cash asset impairment loss of $59.2 million related to our Houston pipeline and a gain from insurance recoveries of $9.4 million related to damage caused by a fire in 2019 at our Selby terminal. In the second and third quarters of 2020, we recognized losses on extinguishment of debt of $3.8 million and $137.9 million, respectively, mainly related to the repayment of our $750.0 million unsecured term loan credit agreement on September 16, 2020. In the first quarter of 2020, we recorded a non-cash goodwill impairment loss of $225.0 million related to our crude oil pipelines reporting unit.

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

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Net loss $ (124,933 ) $ (96,640 ) $ (19,293 ) $ (214,515 )

Interest 53,513 64,165 162,211 171,158 expense, net

Income taxexpense 685 (1,783 ) 3,535 626 (benefit)

Depreciationand 68,007 72,585 209,349 214,217 amortizationexpense

EBITDA (2,728 ) 38,327 355,802 171,486

Interest (53,513 ) (64,165 ) (162,211 ) (171,158 ) expense, net

Reliabilitycapital (10,806 ) (7,279 ) (28,238 ) (18,330 ) expenditures

Income tax(expense) (685 ) 1,783 (3,535 ) (626 ) benefit

Long-termincentive 2,730 2,416 8,737 6,402 equity awards(a)

Preferred unit (31,889 ) (31,888 ) (95,663 ) (92,995 ) distributions

Assetimpairment 154,908 - 154,908 - losses

Goodwillimpairment 34,060 - 34,060 225,000 losses

Other items (10 ) 6,856 6,127 11,081

DCF $ 92,067 $ (53,950 ) $ 269,987 $ 130,860



Distributionsapplicable to $ 43,814 $ 43,678 $ 131,462 $ 131,086 common limitedpartners

Distributioncoverage ratio 2.10x n/a 2.05x 1.00x(b)

(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.

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(a) 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.

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

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Ratio Data)

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

Projected For the Four Quarters Ended for the September 30, Year Ended

December 2021 2020 31, 2021

Operating income $ 239,125 $ 228,742 $ 225,000 - 245,000

Depreciation and amortization 280,233 284,846 270,000 -expense 278,000

Asset impairment losses 154,908 - 155,000

Goodwill impairment losses 34,060 225,000 34,000

Equity awards (a) 13,842 12,424 12,000 - 15,000

Other 5,814 12,727 (13,000) - (3,000)

Consolidated EBITDA, as defined $ 727,982 $ 763,739 $ 683,000 -in the Revolving Credit Agreement 724,000



Total consolidated debt $ 3,387,240 $ 3,585,140 $ 3,100,000 - 3,300,000

NuStar Logistics' floating rate (402,500 ) (402,500 ) (402,500)subordinated notes

Available Cash Netting Amount, asdefined in the Revolving Credit - (30,494 ) -Agreement

Consolidated Debt, as defined in $ 2,984,740 $ 3,152,146 $ 2,697,500the Revolving Credit Agreement - 2,897,500



Consolidated Debt Coverage Ratio 3.95x -(Consolidated Debt to 4.10x 4.13x 4.0xConsolidated EBITDA)

(a) This adjustment represents the non-cash expense related to the vestings of equity-based awards with the issuance of our common units.

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

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

The following are reconciliations of net loss / net loss per common unit toadjusted net income / adjusted net income per common unit.

Three Months Ended September Nine Months Ended September 30, 30,

2021 2021

Net loss / net loss $ (124,933 ) $ (1.48 ) $ (19,293 ) $ (1.18 ) per common unit

Asset impairment 154,908 1.41 154,908 1.41 losses

Goodwill impairment 34,060 0.31 34,060 0.31 loss

Gain from insurance (9,372 ) (0.08 ) (9,372 ) (0.08 ) recoveries

Adjusted net income/ adjusted net $ 54,663 $ 0.16 $ 160,303 $ 0.46 income per commonunit

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2020

Net loss / net loss per common unit

$

(96,640

)

$

(1.22

)

$

(214,515

)

$

(2.96

)

Goodwill impairment loss

-

-

225,000

2.06

Loss on extinguishment of debt

137,904

1.26

141,746

1.30

Other

3,963

0.04

3,963

0.04

Adjusted net income / adjusted net income per common unit

$

45,227

$

0.08

$

156,194

$

0.44

The following is a reconciliation of EBITDA to adjusted EBITDA.

Three Months Ended Nine Months Ended September September 30, 30,

2020 2020

Net loss / net loss $ (96,640 ) $ (1.22 ) $ (214,515 ) $ (2.96 ) per common unit

Goodwill impairment - - 225,000 2.06 loss

Loss onextinguishment of 137,904 1.26 141,746 1.30 debt

Other 3,963 0.04 3,963 0.04

Adjusted net income/ adjusted net $ 45,227 $ 0.08 $ 156,194 $ 0.44 income per commonunit

The following is a reconciliation of EBITDA to adjusted EBITDA.

Three Months Ended Nine Months Ended September September 30, 30,

2021 2020 2021 2020

EBITDA $ (2,728 ) $ 38,327 $ 355,802 $ 171,486

Asset impairment losses 154,908 - 154,908 -

Goodwill impairment 34,060 - 34,060 225,000 losses

Loss on extinguishment - 137,904 - 141,746 of debt

Gain from insurance (9,372 ) - (9,372 ) - recoveries

Other - 3,963 - 3,963

Adjusted EBITDA $ 176,868 $ 180,194 $ 535,398 $ 542,195

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

Three Months Nine Months Ended Ended

September 30, 2020

DCF $ (53,950) $ 130,860

Loss on extinguishment of debt 137,904 141,746

Adjusted DCF $ 83,954 $ 272,606



Distributions applicable to common limited $ 43,678 $ 131,086 partners

Adjusted distribution coverage ratio (a) 1.92x 2.08x

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

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars)

The following is a reconciliation of net income to EBITDA and adjusted EBITDA.

Projected for the Year Ended December 31, 2021

Net income $ 23,000 - 32,000

Interest expense, net 210,000 - 220,000

Income tax expense 2,000 - 5,000

Depreciation and amortization expense 270,000 - 278,000

EBITDA 505,000 - 535,000

Asset impairment losses 155,000

Goodwill impairment loss 34,000

Gain from insurance recoveries (9,000)

Adjusted EBITDA $ 685,000 - 715,000

The following is a reconciliation of net income to EBITDA and adjusted EBITDA.

Three Months Ended September 30, 2019

Net income $ 47,811

Interest expense, net 46,902

Income tax expense 1,090

Depreciation and amortization expense 68,548

EBITDA 164,351

Other 3,942

Adjusted EBITDA $ 168,293

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