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NuStar Energy Reports Increased Total Distributable Cash Flow in First Quarter of 2013



  NuStar Energy Reports Increased Total Distributable Cash Flow in First
  Quarter of 2013

              Quarterly Distribution Remains at $1.095 Per Unit

 Construction on Second Rail Car Off-Loading Facility at St. James has Begun

Business Wire

SAN ANTONIO -- April 24, 2013

NuStar Energy L.P. (NYSE: NS) today announced first quarter distributable cash
flow from continuing operations available to limited partners was $54.7
million, or $0.70 per unit, compared to 2012 first quarter distributable cash
flow from continuing operations of $51.1 million, or $0.72 per unit. First
quarter earnings before interest, taxes, depreciation and amortization
(EBITDA) from continuing operations was $91.6 million compared to first
quarter 2012 EBITDA of $106.3 million.

NuStar Energy L.P. reported first quarter net income applicable to limited
partners of $13.3 million, or $0.17 per unit, compared to $16.0 million, or
$0.23 per unit, earned in the first quarter of 2012.

The partnership also announced that its board of directors has declared a
first quarter 2013 distribution of $1.095 per unit. The first quarter 2013
distribution will be paid on May 10, 2013, to holders of record as of May 6,
2013. Distributable cash flow available to limited partners covers the
distribution to the limited partners by 0.64 times for the first quarter of
2013.

“Recent growth in the Eagle Ford Shale region and the sale of 50% of our
Asphalt Operations in the third quarter of 2012 contributed to improved
distributable cash flow results during the quarter,” said Curt Anastasio,
President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP
Holdings, LLC. “We expect our 2013 distributable cash flow results to be
higher than last year.”

In regard to the first quarter performance Anastasio said, “Our pipeline
segment continues to benefit from several internal growth projects completed
in the Eagle Ford shale region during the past couple of years and the
December 2012 crude oil asset acquisition from TexStar. Throughputs on our
Eagle Ford crude oil pipeline systems increased by 55% compared to the first
quarter of 2012, however these increases were partially offset by lower
throughputs on some other pipelines as a result of turnarounds at some of our
customer’s refineries.”

Anastasio then added, “Internal growth projects completed at our St. James and
St. Eustatius terminal facilities in 2012 and during the first quarter of 2013
benefited our storage segment. However, these internal growth project benefits
were more than offset by reduced demand for storage at several of our terminal
facilities and the impact of the turnarounds and operating issues I mentioned
earlier.”

Anastasio then commented on the company’s fuels marketing segment by saying,
“Primarily as a result of weak demand for bunkers and fuel oil, coupled with
increased competition in the Caribbean, our fuels marketing segment generated
a loss during the quarter.”

Addressing the recent strategic transformation of the company Anastasio
stated, “Beginning in the first quarter of 2013 NuStar has less exposure to
margin-based operations than we have had in several years. This reduced
margin-base exposure should lead to less volatile distributable cash flows in
the future.”

Internal Growth Project Update

“Early in the first quarter we placed a total of 1.7 million barrels of new
storage capacity in service at our St. Eustatius and St. James, Louisiana
terminal facilities,” said Anastasio. “We continue to work on a pipeline
project for ConocoPhillips and continue to lay crude oil gathering lines that
will supply additional crude oil volumes to our Eagle Ford crude oil pipeline
system. All of these projects are expected to contribute to 2013 storage and
pipeline segment results.”

Anastasio went on to say, “NuStar recently began the construction of a second
rail-car offloading facility at our St. James terminal with Great Northern
Gathering & Marketing, LLC being a major customer. This facility should be
operational and contributing to our storage segment results in the fourth
quarter of 2013.”

Full-Year 2013 Outlook

Commenting on the earnings outlook for 2013, Anastasio said, “We continue to
expect the EBITDA results for all three of our segments to be higher than last
year. Our pipeline segment should benefit from our Eagle Ford Shale region
internal growth pipeline projects completed in 2012 and later in 2013 as well
as from the crude oil assets acquired from TexStar. The storage segment is
projected to benefit from the completion of the two rail car offloading
projects at our St. James, Louisiana terminal and the recent completion of the
storage expansion projects at our St. Eustatius terminal and our St. James,
Louisiana terminal. Our fuels marketing segment’s 2013 results should improve
over the remainder of 2013 and as compared to 2012, primarily due to higher
earnings in the bunkering and heavy fuel oil operations.”

Anastasio then said, “These higher 2013 segment results should also lead to
higher distributable cash flow and an improved coverage ratio for the year.”

With regard to capital spending projections Anastasio added, “NuStar expects
to spend $400 to $425 million on internal growth projects during 2013,
primarily on projects in the Eagle Ford Shale, while our reliability capital
spending should be in the range of $35 to $45 million.”

A conference call with management is scheduled for 10:00 a.m. ET (9:00 a.m.
CT) today, April 24, 2013, to discuss the financial and operational results
for the first quarter of 2013. Investors interested in listening to the
presentation may call 800/622-7620, passcode 31554334. International callers
may access the presentation by dialing 706/645-0327, passcode 31554334. The
company intends to have a playback available following the presentation, which
may be accessed by calling 800/585-8367, passcode 31554334. International
callers may access the playback by calling 404/537-3406, passcode 31554334. A
live broadcast of the conference call will also be available on the company’s
Web site at www.nustarenergy.com.

NuStar Energy L.P., a publicly traded master limited partnership based in San
Antonio, is one of the largest independent liquids terminal and pipeline
operators in the nation. NuStar currently has 8,621 miles of pipeline; 88
terminal and storage facilities that store and distribute crude oil, refined
products and specialty liquids; and 50% ownership in a joint venture that owns
a terminal and an asphalt refinery with a throughput capacity of 74,000
barrels per day. The partnership’s combined system has approximately 97
million barrels of storage capacity, and NuStar has operations in the United
States, Canada, Mexico, the Netherlands, including St. Eustatius in the
Caribbean, the United Kingdom and Turkey. For more information, visit NuStar
Energy L.P.'s Web site at www.nustarenergy.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’s
distributions to foreign investors are attributable to income that is
effectively connected with a United States trade or business. Accordingly, all
of NuStar’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, 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. All forward-looking statements are based on the partnership and
company's beliefs as well as assumptions made by and information currently
available to the partnership and company. These statements reflect the
partnership and 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. and NuStar
GP Holdings, LLC’s 2012 annual reports on Form 10-K and subsequent filings
with the Securities and Exchange Commission.

                                                               
                                                                 
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)
                                                                 
                                                                 
                                               Three Months Ended
                                               March 31,
                                               2013             2012
Statement of Income Data (Note 1):
Revenues:
Service revenues                               $ 227,283        $ 209,719
Product sales                                    772,427          1,399,686   
Total revenues                                   999,710          1,609,405
                                                                 
Costs and expenses:
Cost of product sales                            752,254          1,354,530
Operating expenses                               117,574          125,114
General and administrative expenses              27,494           27,167
Depreciation and amortization expense            42,926           43,575      
Total costs and expenses                         940,248          1,550,386   
Operating income                                 59,462           59,019
Equity in (loss) earnings of joint               (11,143    )     2,386
ventures
Interest expense, net                            (30,113    )     (21,377    )
Other income, net                                368              1,367       
Income from continuing operations before         18,574           41,395
income tax expense
Income tax expense                               2,536            3,443       
Income from continuing operations                16,038           37,952
Income from discontinued operations              8,366            (11,698    )
Net income                                     $ 24,404         $ 26,254      
                                                                 
Net income applicable to limited partners      $ 13,268         $ 16,008      
                                                                 
Net income (loss) per unit applicable to
limited partners:
Continuing operations                          $ 0.06           $ 0.39
Discontinued operations                          0.11             (0.16      )
Total                                          $ 0.17           $ 0.23        
                                                                 
Weighted average limited partner units           77,886,078       70,756,078  
outstanding
                                                                 
EBITDA from continuing operations (Note 2)     $ 91,613         $ 106,347
                                                                 
Distributable cash flow from continuing        $ 67,423         $ 62,674
operations (Note 2)
                                                                 
                                                                 
                                                                 
                                               March 31,        December 31,
                                               2013             2012
Balance Sheet Data:
Debt, including current portion (a)            $ 2,418,317      $ 2,411,004
Partners' equity (b)                             2,509,180        2,584,995
Debt-to-capitalization ratio (a) /               49.1       %     48.3       %
((a)+(b))

                                                                
                                                                  
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Barrel Data)
                                                                  
                                                                  
                                                   Three Months Ended
                                                   March 31,
                                                   2013          2012
                                                                  
Segment Data:
Storage:
Throughput (barrels/day)                             669,604       739,076
Throughput revenues                                $ 22,361      $ 22,264
Storage lease revenues                               121,958       123,165    
Total revenues                                       144,319       145,429
Operating expenses                                   68,710        65,982
Depreciation and amortization expense                24,431        23,300     
Segment operating income                           $ 51,178      $ 56,147     
                                                                  
Pipeline:
Refined products pipelines throughput                471,294       491,570
(barrels/day)
Crude oil pipelines throughput (barrels/day)         351,193       330,081    
Total throughput (barrels/day)                       822,487       821,651
Revenues                                           $ 93,277      $ 77,761
Operating expenses                                   37,406        27,564
Depreciation and amortization expense                15,990        12,981     
Segment operating income                           $ 39,881      $ 37,216     
                                                                  
Fuels marketing:
Product sales                                      $ 773,008     $ 1,403,260
Cost of product sales                                758,732       1,360,518  
Gross margin                                         14,276        42,742
Operating expenses                                   15,862        42,655
Depreciation and amortization expense                7             5,480      
Segment operating loss                             $ (1,593  )   $ (5,393    )
                                                                  
Consolidation and intersegment eliminations:
Revenues                                           $ (10,894 )   $ (17,045   )
Cost of product sales                                (6,478  )     (5,988    )
Operating expenses                                   (4,404  )     (11,087   )
Total                                              $ (12     )   $ 30         
                                                                  
Consolidated Information:
Revenues                                           $ 999,710     $ 1,609,405
Cost of product sales                                752,254       1,354,530
Operating expenses                                   117,574       125,114
Depreciation and amortization expense                40,428        41,761     
Segment operating income                             89,454        88,000
General and administrative expenses                  27,494        27,167
Other depreciation and amortization expense          2,498         1,814      
Consolidated operating income                      $ 59,462      $ 59,019     

 
 
NuStar Energy L.P. and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars, Except Per Unit Data)
      
        
Notes:
       The results of operations for the San Antonio Refinery and related
  1.   assets have been reported as discontinued operations for all periods
       presented.
        
       NuStar Energy L.P. utilizes two financial measures, EBITDA from
       continuing operations and distributable cash flow from continuing
       operations, which are not defined in United States generally accepted
       accounting principles. Management uses these financial measures because
       they are widely accepted financial indicators used by investors to
       compare partnership performance. In addition, management believes that
       these measures provide investors an enhanced perspective of the
  2.   operating performance of the partnership's assets and the cash that the
       business is generating. Neither EBITDA from continuing operations nor
       distributable cash flow from continuing operations are intended to
       represent cash flows for the period, nor are they presented as an
       alternative to net income from continuing operations. They should not
       be considered in isolation or as substitutes for a measure of
       performance prepared in accordance with United States generally
       accepted accounting principles.
        
       The following is a reconciliation of income from continuing operations
       to EBITDA from continuing operations and distributable cash flow from
       continuing operations:

                                                    
                                                     Three Months Ended
                                                     March 31,
                                                     2013          2012
                                                                    
Income from continuing operations                    $ 16,038      $ 37,952
Plus interest expense, net                             30,113        21,377
Plus income tax expense                                2,536         3,443
Plus depreciation and amortization expense             42,926        43,575   
EBITDA from continuing operations                      91,613        106,347
Equity in loss (earnings) of joint ventures            11,143        (2,386  )
Interest expense, net                                  (30,113 )     (21,377 )
Reliability capital expenditures                       (5,742  )     (4,628  )
Income tax expense                                     (2,536  )     (3,443  )
Distributions from joint venture                       4,652         -
Mark-to-market impact on hedge transactions (a)        (1,594  )     (11,839 )
Distributable cash flow from continuing                67,423        62,674
operations
                                                                    
Distributable cash flow from continuing
operations
attributable to noncontrolling interest                (92     )     2
Distributable cash flow from continuing
operations
available to general partner                           12,766        11,598   
Distributable cash flow from continuing
operations
available to limited partners                        $ 54,749      $ 51,074   
                                                                    
Distributable cash flow from continuing
operations
per limited partner unit                             $ 0.70        $ 0.72

     
      Distributable cash flow from continuing operations excludes the impact
      of unrealized mark-to-market gains and losses that arise from valuing
(a)   certain derivative contracts, as well as the associated hedged
      inventory. The gain or loss associated with these contracts is realized
      in distributable cash flow from continuing operations when the contracts
      are settled.

Contact:

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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