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
 
Press spacebar to pause and continue. Press esc to stop.