NuStar Energy L.P. Signs Agreement to Divest Remaining 50% Interest in Asphalt Joint Venture

  NuStar Energy L.P. Signs Agreement to Divest Remaining 50% Interest in
  Asphalt Joint Venture

 Exit of Asphalt Refining Business to Significantly Reduce NuStar’s Earnings
                                  Volatility

   Non-cash Charges Associated with Certain Storage Facilities Expected to
                 Negatively Impact 4^th Quarter 2013 Results

Excluding Non-Cash Charges 4^th Quarter 2013 EPU Expected to be Approximately
                                $0.20 per Unit

Business Wire

SAN ANTONIO -- February 3, 2014

NuStar Energy L.P. (NYSE:NS) today announced that it has entered into an
agreement with an affiliate of Lindsay Goldberg LLC, a private investment
firm, to divest all of its 50% voting interest in an asphalt joint venture
that owns a refinery located in Paulsboro, New Jersey, a terminal located in
Savannah, Georgia, and the related working capital. Lindsay Goldberg LLC
currently owns the other 50% voting interest in the asphalt joint venture.
Closing for the transaction is expected to occur no later than February 28,
2014.

As a result of this transaction, a $250 million, seven-year revolving credit
facility between NuStar Logistics and the joint venture will be converted to a
$175 million term loan at closing and reduced to a $150 million term loan six
months after closing. The transaction calls for the term loan to be repaid
with excess cash flows generated by the asphalt business over the next several
years and for the loan to be paid off in full by no later than September 2019.

NuStar Logistics will continue to provide up to $150 million of credit support
for the asphalt business, in the form of guarantees and letters of credit, for
two years after the closing date. This support amount will begin declining two
years after closing and will terminate no later than September 2019.

“This transaction, coupled with the January 1, 2014 termination of our crude
oil supply agreement with PDVSA, significantly reduces our financial liability
related to asphalt refining,” said Brad Barron, President and CEO of NuStar
Energy. “It lowers our financial obligations by $100 million – dropping by $75
million immediately, and then dropping by another $25 million within six
months. Most importantly, our earnings will no longer be burdened by the
volatility and significant losses generated by the asphalt joint venture. As a
result of this divestiture, we can focus on growing our more stable storage
and pipeline fee-based operations.”

Expected Fourth Quarter 2013 Non-Cash Charges

Fourth quarter 2013 earnings before interest, taxes, depreciation and
amortization (EBITDA) and earnings per unit (EPU) are expected to be
negatively impacted by approximately $400 million of non-cash charges. Due to
changing market conditions in certain geographic areas, as well as the
underperformance of a few facilities, the company plans to write down the
asset values and the value of goodwill assigned to several of its storage
facilities.

These expected non-cash write-downs will impact fourth quarter EBITDA and EPU
but will not impact distributable cash flow or the debt to EBITDA covenant
calculation in the company’s debt agreements. After these charges, the company
expects fourth quarter 2013 EPU to be a loss of around $4.75 per unit.
Excluding the non-cash charges and other adjustments, the company should
generate EPU of approximately $0.20 per unit. This revised outlook is based on
the company’s current estimate of results from operations for the fourth
quarter of 2013.

A conference call with management is scheduled for 9:00 a.m. CT on Wednesday,
February 5, 2014, to discuss the fourth quarter 2013 earnings results in more
detail, which will be released earlier that morning, and provide an updated
outlook for the company for 2014. Investors interested in listening to the
presentation may call 800/622-7620, passcode 32985588. International callers
may access the presentation by dialing 706/645-0327, passcode 32985588. The
company intends to have a playback available following the presentation, which
may be accessed by calling 800/585-8367, passcode 32985588. International
callers may access the playback by calling 404/537-3406, passcode 32985588. A
live broadcast of the conference call will also be available on the company’s
Web site at www.nustarenergy.com.

About NuStar Energy

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; 89
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.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding future
events. All forward-looking statements are based on the company’s beliefs, as
well as assumptions made by and information currently available to the
company. These statements reflect the company’s current views with respect to
future events and are subject to various risks, uncertainties and assumptions.
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.

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.

                     NuStar Energy L.P. and Subsidiaries
Reconciliation of Non-GAAP Financial Information Related to the Quarter Ended
                              December 31, 2013
                            (Unaudited, Per Unit)

NuStar Energy L.P. utilizes a financial measure, adjusted net income per unit,
which is not defined in U.S. generally accepted accounting principles.
Management believes that this measure provides investors an enhanced
perspective of the operating performance of the partnership's assets. Adjusted
net income per unit is not presented as an alternative to net income per unit
or income per unit from continuing operations. It should not be considered in
isolation or as a substitute for a measure of performance prepared in
accordance with U.S. generally accepted accounting principles. The following
is a reconciliation of projected net loss per unit to projected adjusted net
income per unit:

                                                          Three Months Ended
                                                            December 31, 2013
Projected net loss per unit                                 $    (4.75    )
Approximate impact from non-cash charges and other              4.95     
adjustments
Projected adjusted net income per unit                      $    0.20     

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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