NuStar GP Holdings, LLC Reports Fourth Quarter and Full Year 2013 Earnings Results

  NuStar GP Holdings, LLC Reports Fourth Quarter and Full Year 2013 Earnings   Results  Earnings Negatively Affected by 4^th Quarter Non-Cash Charges of NuStar Energy    2014 Earnings Expected to Improve Due to the Completion of Internal Growth                           Projects at NuStar Energy  Business Wire  SAN ANTONIO -- February 5, 2014  NuStar GP Holdings, LLC (NYSE: NSH) today announced that distributable cash flow available to unitholders for the fourth quarter of 2013 was $22.7 million, or $0.53 per unit, compared to $23.3 million, or $0.55 per unit, for the fourth quarter of 2012. For the year ended December 31, 2013, distributable cash flow available to unitholders was $91.4 million, or $2.14 per unit, compared to $90.8 million, or $2.13 per unit, in 2012.  The company reported a fourth quarter net loss of $46.7 million, or $1.10 per unit, compared to net income of $5.1 million, or $0.12 per unit, in the fourth quarter of 2012. Without certain NuStar Energy adjustments in the fourth quarters of both years, as described below, the fourth quarter of 2013 would have generated adjusted net income of $11.7 million, or $0.27 per unit, compared to adjusted net income of $11.4 million, or $0.27 per unit, in the fourth quarter of 2012.  For the year ended December 31, 2013, the company reported a net loss of $11.0 million, or $0.26 per unit, compared to net income of $2.1 million, or $0.05 per unit in 2012. Without certain adjustments in both years, as described below, 2013 adjusted net income would have been $45.2 million, or $1.05 per unit, compared to 2012 adjusted net income of $54.0 million, or $1.27 per unit.  As previously announced on January 30, 2014, the fourth quarter 2013 distribution of $0.545 per unit will be paid on February 18, 2014 to holders of record as of February 10, 2014.  “NuStar GP Holdings, LLC’s results should improve in 2014 as NuStar Energy L.P. continues to complete internal growth projects, primarily in the company’s pipeline segment,” said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.  NuStar Energy Fourth Quarter and Year-to-Date Adjustments  NuStar Energy’s fourth quarter 2013 results included $403.6 million, or $4.94 per unit, of adjustments, primarily non-cash charges associated with the write-down of asset values and the value of goodwill assigned to several of NuStar’s terminal facilities. Fourth quarter 2012 results included $41.5 million, or $0.52 per unit, of expense items related primarily to hedge losses recorded following our decision to sell the San Antonio refinery in December 2012 and cancelled projects.  NuStar Energy’s full year 2013 results include $388.8 million, or $4.75 per unit of adjustments, comprised of the fourth quarter 2013 non-cash adjustments mentioned previously and other adjustment items. Full year 2012 results included $323.4 million, or $4.34 per unit of adjustments, which included the fourth quarter 2012 adjustments mentioned previously, and $281.9 million, or $3.82 per unit, of expense items resulting from deconsolidating the asphalt joint venture in September 2012 and other adjustment items.  A conference call with management is scheduled for 10:00 a.m. ET (9:00 a.m. CT) today, February 5, 2014, to discuss the financial results for the fourth quarter of 2013. 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.nustargpholdings.com.  NuStar GP Holdings, LLC is a publicly traded limited liability company that owns the two percent general partner interest, a 12.9 percent limited partner interest and the incentive distribution rights in NuStar Energy L.P., one of the largest independent liquids terminal and pipeline operators in the nation. 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 GP Holdings, LLC’s Web site at www.nustargpholdings.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 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. 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 GP Holdings, LLC Condensed Financial Information (Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)                                                                                Three Months Ended December 31,         Year Ended December 31,                    2013             2012                 2013             2012 Statement of (Loss) Income Data: Equity in (loss) earnings of        $ (45,764    )     $ 6,893              $ (6,741     )     $ (4,578     ) NuStar Energy L.P.                                                                                General and administrative       (746       )       (1,031     )         (3,105     )       (3,337     ) expenses Other income         292                (1,007     )         382                9,801 (expense), net Interest            (244       )      (182       )        (778       )      (624       ) expense, net                                                                                (Loss) income before income        (46,462    )       4,673                (10,242    )       1,262 tax (expense) benefit Income tax (expense)           (241       )      452                (792       )      866         benefit Net (loss)         $ (46,703    )     $ 5,125             $ (11,034    )     $ 2,128       income                                                                                Basic and diluted net        $ (1.10      )     $ 0.12              $ (0.26      )     $ 0.05        (loss) income per unit                                                                                Equity in (Loss) Earnings of NuStar Energy L.P.: General partner            $ (7,512     )     $ (428       )       $ (6,338     )     $ (5,356     ) interest General partner             10,805           10,805             43,220           41,242      incentive distribution General partner’s interest in (loss) earnings and         3,293              10,377               36,882             35,886 incentive distributions of NuStar Energy L.P. Limited partner interest in (loss)               (48,336    )       (2,763     )         (40,739    )       (37,580    ) earnings of NuStar Energy L.P. Amortization of step-up in basis related to NuStar           (721       )      (721       )        (2,884     )      (2,884     ) Energy L.P.’s assets and liabilities Equity in (loss) earnings of        $ (45,764    )     $ 6,893             $ (6,741     )     $ (4,578     ) NuStar Energy L.P.                                                                                Distributable Cash Flow (Note 1): Cash distributions from NuStar Energy L.P. associated with: General partner            $ 1,961            $ 1,961              $ 7,844            $ 7,486 interest General partner              10,805             10,805               43,220             41,242 incentive distribution Limited partner             11,155           11,344             44,975           45,152      interest – common units Total cash distributions expected from        23,921             24,110               96,039             93,880 NuStar Energy L.P. Deduct expenses of NuStar GP Holdings, LLC: General and administrative       (746       )       (1,031     )         (3,105     )       (3,337     ) expenses Income tax (expense)            (241       )       452                  (792       )       866 benefit Interest            (244       )      (182       )        (778       )      (624       ) expense, net DCF                $ 22,690          $ 23,349            $ 91,364          $ 90,785                                                                                     Weighted average number of common            42,630,006         42,581,848           42,619,722         42,576,858 units outstanding                                                                                DCF per unit       $ 0.53             $ 0.55               $ 2.14             $ 2.13 (Note 1)                                                                                Cash distributions to be paid to the unitholders of NuStar GP Holdings, LLC: Distribution       $ 0.545            $ 0.545              $ 2.180            $ 2.110 per unit                                                                                Total              $ 23,249           $ 23,223             $ 92,938           $ 89,860 distribution                                                                                               NuStar GP Holdings, LLC Consolidated Financial Information - Continued (Unaudited, Thousands of Dollars, Except Per Unit Data)      Notes:        NuStar GP Holdings, LLC utilizes financial measures, distributable cash       flow (DCF) and DCF 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 company performance. In addition, management believes that (1)   these measures provide investors an enhanced perspective of the ability       to make a minimum quarterly distribution. DCF and DCF per unit are not       intended to represent cash flows from operations for the period, nor are       they presented as an alternative to net income. They should not be       considered in isolation or as a substitute for a measure of performance       in accordance with U.S. generally accepted accounting principles.        The following is a reconciliation of net (loss) income to DCF and net       cash (used in) provided by operating activities:                         Three Months Ended December    Year Ended December 31,                   31,                   2013          2012              2013          2012 Net (loss)        $ (46,703 )     $ 5,125           $ (11,034 )     $ 2,128 income Less equity in loss (earnings) of       45,764          (6,893  )         6,741           4,578 NuStar Energy L.P. Plus cash distributions expected from       23,921          24,110            96,039          93,880 NuStar Energy L.P. Other (income)           (292    )      1,007           (382    )      (9,801  ) expense, net DCF                 22,690          23,349            91,364          90,785 Less cash distributions expected from       (23,921 )       (24,110 )         (96,039 )       (93,880 ) NuStar Energy L.P. Cumulative earnings less       (39,023 )       —                 —               — than distributions Net effect of changes in         (2,117  )      (1,966  )        (9,899  )      5,640    operating accounts Net cash (used in) provided by       $ (42,371 )     $ (2,727  )       $ (14,574 )     $ 2,545    operating activities  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