NuStar Energy Reports Increased EPU, EBITDA & Total DCF Results in Third Quarter of 2013

  NuStar Energy Reports Increased EPU, EBITDA & Total DCF Results in Third
  Quarter of 2013

                    Meets Analysts’ Consensus Expectations

            In Advanced Discussions to Exit Asphalt Joint Venture

Company Plans to Proceed with Phase 2 of South Texas Crude Oil System Pipeline
   Project; Corpus Dock Expansion to be Completed in Second Quarter of 2014

 Idled 12” Pipeline between Mont Belvieu and Corpus Christi to be Reactivated

   Based on 2014 and 2015 Projections, Company Currently Plans to Maintain
                                 Distribution

Business Wire

SAN ANTONIO -- November 12, 2013

NuStar Energy L.P. (NYSE: NS) today announced third quarter earnings before
interest, taxes, depreciation and amortization (EBITDA) from continuing
operations was $109.5 million compared to third quarter 2012 EBITDA of $76.5
million. Third quarter distributable cash flow from continuing operations
available to limited partners was $67.2 million, or $0.86 per unit, compared
to 2012 third quarter distributable cash flow from continuing operations of
$63.0 million, or $0.87 per unit.

NuStar Energy L.P. reported third quarter net income applicable to limited
partners of $21.9 million, or $0.28 per unit, compared to a net loss
applicable to limited partners of $6.5 million, or $0.09 per unit, reported in
the third quarter of 2012.

The third quarter 2012 results included $21.6 million, or $0.29 per unit, of
non-cash losses associated with the September 28, 2012 sale of a 50% voting
interest in the company’s asphalt operations to an affiliate of Lindsay
Goldberg LLC. Excluding these items and other adjustments, third quarter 2012
adjusted net income applicable to limited partners would have been $14.1
million, or $0.19 per unit.

“Our results show we’re on track with our strategic re-direction of the
company focusing on our more stable pipeline and storage segments,” said Curt
Anastasio, President and Chief Executive Officer of NuStar Energy L.P. and
NuStar GP Holdings, LLC. “We continue to focus on internal growth investments
in the Eagle Ford Shale, having completed another project in the region during
the third quarter, which we expect will add about $15 million in incremental
annual EBITDA.

Commenting on the storage segment, Anastasio said, “EBITDA in our storage
segment nearly doubled between 2006 and 2012 growing from $162 million to $288
million of annual EBITDA. And while our storage segment is and will continue
to be very profitable for us, the driver of NuStar’s growth over the last year
or so has shifted from the storage segment to the pipeline segment. As a
result, quarterly results for the pipeline segment are improved over last year
and the storage segment’s third quarter results are lower than last year.
Volumes at our throughput storage facilities were up by seven percent, with
corresponding revenues up 20 percent or almost $5 million. However, these
increases were more than offset by the $13 million impact of reduced revenues
from lower lease renewal rates due to the backwardated market and the reduced
benefit from our profit sharing agreement with EOG at our St. James terminal
as the LLS-to-WTI spread narrowed.”

Anastasio then commented on the company’s fuels marketing segment by saying,
“Weak demand for bunkers and increased competition in the Caribbean continued
to negatively impact our fuels marketing segment. However, during the third
quarter, we entered into a new bunker fuel supply agreement, which reduced our
working capital requirements by approximately $50 million, and we continue to
reduce the segment’s operating costs.”

Anticipated Exit from Asphalt Joint Venture

NuStar is currently in advanced discussions with its asphalt joint venture
partner, Lindsay Goldberg, to finalize an agreement that allows NuStar to exit
the asphalt joint venture. The agreement should also allow NuStar to
materially reduce the $250 million credit facility and the $150 million of
credit support, for guarantees and letters of credit, currently provided to
the joint venture by NuStar Energy.

Success of Open Season Leads to Eagle Ford Expansion

Early in October, NuStar announced it had received enough binding commitments
from shippers to move forward with the first phase of the partnership’s South
Texas Crude Oil Pipeline System Project. The first phase will add incremental
throughput capacity of approximately 35,000 barrels per day to NuStar’s South
Texas Crude Oil Pipeline System. The additional capacity is expected to be
available for service to committed shippers by the third quarter of 2014 and
is expected to generate incremental EBITDA of approximately $20 million per
year.

In addition, NuStar has decided to proceed with the second phase of this
project, which will add approximately 65,000 barrels per day of incremental
throughput capacity to the South Texas Crude Oil Pipeline System as early as
the first quarter of 2015. It is expected to generate incremental annual
EBITDA of up to $40 million, depending on the number of barrels committed to
the second phase. Both phases, when completed, would add a total aggregate
incremental capacity of 100,000 barrels per day.

In the 2nd quarter of 2014, prior to the completion of Phase 1, NuStar plans
to complete the construction of a new private dock at its Corpus Christi North
Beach terminal. This new dock will more than double the current loading
capacity of around 125,000 barrels per day and will allow NuStar to handle all
the new volume associated with Phase 1 and Phase 2 of the South Texas Crude
Oil Pipeline expansion, as well as additional volumes shipped to Corpus
Christi.

Reactivation of Idled 12” Pipeline

NuStar has begun work on a project for its 12-inch pipeline between Mont
Belvieu and Corpus Christi that will reactivate the line, reverse its flow,
and convert the line to NGL service. The project, which is scheduled to be in
service in the second quarter of 2015, will be supported by a long-term anchor
shipper that plans to utilize the majority of the pipeline capacity.

“We are very excited to place this idled pipeline back into service,” said
Anastasio. “This line has the capacity to move approximately 110,000 barrels
per day so we expect to ship additional NGL volumes over and above the
long-term anchor shipment commitment we are announcing today.”

Internal Growth Project Update

In August, NuStar completed a pipeline project for ConocoPhillips in the Eagle
Ford and built some crude oil gathering lines that will supply additional
crude oil volumes to the company’s Eagle Ford crude oil pipeline systems. By
the end of November, the company expects to complete the construction of a
second rail-car offloading facility at the St. James terminal in Louisiana.
These projects are expected to add $5 to $10 million of EBITDA to NuStar’s
pipeline and storage segment results in the fourth quarter of 2013.

Earnings Guidance

“Fourth quarter 2013 EBITDA results for all three of our segments should be
higher than last year’s fourth quarter,” said Anastasio. “The internal growth
projects and the new bunker fuel supply agreement mentioned above should
improve the segment’s fourth quarter results.”

Commenting on guidance for full year 2013, Anastasio said, “Our pipeline
segment EBITDA should be $60 to $70 million higher than last year and our
storage segment EBITDA is now expected to be $5 to $15 million lower than
2012. We expect our fuels marketing segment to generate EBITDA of up to $10
million in 2013.”

Looking ahead to 2014, Anastasio commented, “Increased crude oil throughputs
in the Eagle Ford Shale region should increase our pipeline segment’s EBITDA
by an additional $40 to $60 million next year. We expect our storage segment
to be comparable to 2013’s results. We project our fuels marketing segment
results to improve in 2014 with EBITDA expected to be in the range of $10 to
$30 million.”

“Based on our projections, we expect to fully cover our distribution in 2014.
As previously announced on October 31, 2013, the third quarter 2013
distribution of $1.095 per unit will be paid on November 14, 2013 to holders
of record as of November 11, 2013.”

With regard to capital spending projections Anastasio went on to say, “We plan
to spend $300 to $325 million on internal growth projects in total during 2013
and we plan to spend $350 to $375 million in 2014. Our reliability capital
spending should be in the range of $35 to $45 million in 2013 and in 2014.”

Third Quarter Earnings Conference Call Details

A conference call with management is scheduled for 10:00 a.m. ET (9:00 a.m.
CT) today, November 12, 2013, to discuss the financial and operational results
for the third quarter of 2013. Investors interested in listening to the
presentation may call 800/622-7620, passcode 77504322. International callers
may access the presentation by dialing 706/645-0327, passcode 77504322. The
company intends to have a playback available following the presentation, which
may be accessed by calling 800/585-8367, passcode 77504322. International
callers may access the playback by calling 404/537-3406, passcode 77504322. 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 8,643 miles of pipeline; 87
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 and Per Unit Data)

                          Three Months Ended September      Nine Months Ended September
                             30,                                 30,
                             2013            2012              2013           2012
Statement of Income
Data (Note 1):
Revenues:
Service revenues             $ 245,577         $ 225,068         $  706,493       $ 646,444
Product sales                534,433          1,368,688        1,977,423       4,324,465   
Total revenues               780,010          1,593,756        2,683,916       4,970,909   
Costs and expenses:
Cost of product sales        527,217           1,329,377         1,928,237        4,211,966
Operating expenses           120,491           142,037           353,137          401,648
General and
administrative               18,831            24,953            65,978           75,254
expenses
Depreciation and             47,597            38,037            137,185          125,538
amortization expense
Asset impairment loss        —                 —                 —                249,646
Goodwill impairment          —                 —                 —                22,132
loss
Gain on legal                —                —                —               (28,738     )
settlement
Total costs and              714,136          1,534,404        2,484,537       5,057,446   
expenses
Operating income             65,874            59,352            199,379          (86,537     )
(loss)
Equity in (loss)
earnings of joint            (5,358      )     (951        )     (26,629    )     3,816
ventures
Interest expense, net        (31,078     )     (23,894     )     (93,601    )     (68,118     )
Interest income from         1,828             —                 4,560            —
related party
Other income                 1,407            (19,943     )     3,978           (21,392     )
(expense), net
Income (loss) from
continuing operations        32,673            14,564            87,687           (172,231    )
before income tax
expense
Income tax (benefit)         (563        )     599              6,147           20,318      
expense
Income (loss) from           33,236            13,965            81,540           (192,549    )
continuing operations
(Loss) income from
discontinued                 —                (9,623      )     9,069           (23,665     )
operations, net of tax
Net income (loss)            $ 33,236         $ 4,342          $  90,609       $ (216,214  )
Net income (loss)
applicable to limited        $ 21,924         $ (6,503    )     $  56,811       $ (242,113  )
partners
Net income (loss) per
unit applicable to
limited partners
Continuing operations        $ 0.28            $ 0.04            $  0.61          $ (3.07     )
Discontinued                 —                (0.13       )     0.12            (0.33       )
operations
Total                        $ 0.28           $ (0.09     )     $  0.73         $ (3.40     )
Weighted-average
limited partner units        77,886,078       72,383,578       77,886,078      71,302,538  
outstanding
                                                                                  
EBITDA from continuing       $ 109,520         $ 76,495          $  313,913       $ 21,425
operations (Note 2)
DCF from continuing          $ 79,865          $ 75,753          $  215,023       $ 181,529
operations (Note 2)
                                                                                  
                             September 30,                                        December 31,
                             2013              2012                               2012
Balance Sheet Data:
Debt, including              $ 2,473,678       $ 2,036,406                        $ 2,411,004
current portion (a)
Partners’ equity (b)         2,380,979         2,672,099                          2,584,995
Debt-to-capitalization       51.0        %     43.2        %                      48.3        %
ratio (a) / ((a)+(b))
                                                                                              


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,
                     2013          2012              2013            2012
Storage:
Throughput           832,412         780,560           772,383           755,893
(barrels/day)
Throughput           $ 27,937        $ 23,222          $ 76,924          $ 67,679
revenues
Storage lease        112,579        125,708          353,026          379,473     
revenues
Total revenues       140,516         148,930           429,950           447,152
Operating            74,641          75,210            219,320           214,605
expenses
Depreciation
and                  27,658          23,298            79,498            69,725
amortization
expense
Asset
impairment           —              —                —                2,126       
loss
Segment
operating            $ 38,217       $ 50,422         $ 131,132        $ 160,696   
income
Pipeline:
Refined
products
pipelines            501,511         521,255           477,601           490,775
throughput
(barrels/day)
Crude oil
pipelines            382,539        357,064          361,642          326,454     
throughput
(barrels/day)
Total
throughput           884,050         878,319           839,243           817,229
(barrels/day)
Throughput           $ 111,508       $ 92,570          $ 301,761         $ 244,938
revenues
Operating            36,089          37,621            102,596           95,212
expenses
Depreciation
and                  17,401         13,085           50,039           39,086      
amortization
expense
Segment
operating            $ 58,018       $ 41,864         $ 149,126        $ 110,640   
income
Fuels
Marketing:
Product sales        $ 534,919       $ 1,371,935       $ 1,978,531       $ 4,334,361
Cost of              531,481        1,336,642        1,944,415        4,231,551   
product sales
Gross margin         3,438           35,293            34,116            102,810
Operating            12,510          41,795            41,336            128,001
expenses
Depreciation
and                  7               15                20                11,235
amortization
expense
Asset and
goodwill             —              —                —                266,357     
impairment
loss
Segment              $ (9,079  )     $ (6,517    )     $ (7,240    )     $ (302,783  )
operating loss
Consolidation
and
Intersegment
Eliminations:
Revenues             $ (6,933  )     $ (19,679   )     $ (26,326   )     $ (55,542   )
Cost of              (4,264    )     (7,265      )     (16,178     )     (19,585     )
product sales
Operating            (2,749    )     (12,589     )     (10,115     )     (36,170     )
expenses
Total                $ 80           $ 175            $ (33       )     $ 213       
Consolidated
Information:
Revenues             $ 780,010       $ 1,593,756       $ 2,683,916       $ 4,970,909
Cost of              527,217         1,329,377         1,928,237         4,211,966
product sales
Operating            120,491         142,037           353,137           401,648
expenses
Depreciation
and                  45,066          36,398            129,557           120,046
amortization
expense
Asset and
goodwill             —              —                —                268,483     
impairment
loss
Segment
operating            87,236          85,944            272,985           (31,234     )
income (loss)
General and
administrative       18,831          24,953            65,978            75,254
expenses
Other
depreciation
and                  2,531           1,639             7,628             5,492
amortization
expense
Other asset
impairment           —               —                 —                 3,295
loss
Gain on legal        —              —                —                (28,738     )
settlement
Consolidated
operating            $ 65,874       $ 59,352         $ 199,379        $ (86,537   )
income (loss)
                                                                                     

                     NuStar Energy L.P. and Subsidiaries

                Consolidated Financial Information - Continued

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

Notes:

(1) The results of operations for the San Antonio Refinery and related assets
have been reported as discontinued operations for all periods presented.

(2) NuStar Energy L.P. utilizes financial measures, earnings before interest,
taxes, depreciation and amortization (EBITDA) from continuing operations,
distributable cash flow (DCF) from continuing operations and DCF from
continuing operations per unit, which are not defined in U.S. generally
accepted accounting principles. Management uses these financial measures
because they are widely accepted financial indicators used by investors to
compare partnership performance. In addition, management believes that these
measures provide investors an enhanced perspective of the operating
performance of the partnership’s assets and the cash that the business is
generating. None of EBITDA from continuing operations, DCF from continuing
operations or DCF from continuing operations per unit are intended to
represent cash flows from operations for the period, nor are they presented as
an alternative to net income or income from continuing operations. They should
not be considered in isolation or as substitutes for a measure of performance
prepared in accordance with U.S. generally accepted accounting principles.

The following is a reconciliation of income (loss) from continuing operations
to EBITDA from continuing operations and DCF from continuing operations:

                                             
                     Three Months Ended            Nine Months Ended September
                     September 30,                 30,
                     2013         2012           2013          2012
Income (loss)
from                 $ 33,236       $ 13,965       $ 81,540        $ (192,549 )
continuing
operations
Plus interest
expense, net
and interest         29,250         23,894         89,041          68,118
income from
related party
Plus income
tax (benefit)        (563     )     599            6,147           20,318
expense
Plus
depreciation
and                  47,597        38,037        137,185        125,538    
amortization
expense
EBITDA from
continuing           109,520        76,495         313,913         21,425
operations
Equity in loss
(earnings) of        5,358          951            26,629          (3,816     )
joint ventures
Interest
expense, net
and interest         (29,250  )     (23,894  )     (89,041   )     (68,118    )
income from
related party
Reliability
capital              (12,227  )     (8,520   )     (29,694   )     (18,392    )
expenditures
Income tax
benefit              563            (599     )     (6,147    )     (20,318    )
(expense)
Distributions
from joint           1,135          3,098          5,787           6,364
ventures
Other items          2,457          21,579         (4,043    )     274,677
(a)
Mark-to-market
impact on
hedge                2,309         6,643         (2,381    )     (10,293    )
transactions
(b)
DCF from
continuing           $ 79,865       $ 75,753       $ 215,023       $ 181,529
operations
                                                                   
Less DCF from
continuing
operations           (110     )     30             (290      )     44
available to
noncontrolling
interest
Less DCF from
continuing
operations           12,766        12,766        38,298         35,962     
available to
general
partner
DCF from
continuing
operations           $ 67,209      $ 62,957      $ 177,015      $ 145,523  
available to
limited
partners
                                                                   
DCF from
continuing
operations per       $ 0.86         $ 0.87         $ 2.27          $ 2.04
limited
partner unit
                                                                              

(a) Other items for the three months ended September 30, 2013 consist of $2.5
million of changes in deferred revenue associated with throughput deficiency
payments and construction reimbursements related to certain pipelines. For the
nine months ended September30, 2013, other items also include a $6.5 million
reduction of the contingent consideration recorded in association with an
acquisition. Other items for the three months ended September 30, 2012 consist
of a $21.6 million loss associated with the sale of 50% of our asphalt
operations on September28, 2012. For the nine months ended September 30,
2012, other items also include (i) $271.8 million of long-lived asset
impairment charges mainly related to our asphalt operations, including fixed
assets, goodwill and intangible assets, and (ii) an $18.7 million gain, net of
tax, resulting from a legal settlement.

(b) DCF from continuing operations excludes the impact of unrealized
mark-to-market gains and losses that arise from valuing certain derivative
contracts, as well as the associated hedged inventory. The gain or loss
associated with these contracts is realized in DCF 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