NuStar GP Holdings, LLC - FORM 8-K - EX-99.01 - EXHIBIT 99.01 - November 2, 2016

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Exhibit 99.01




NuStar GP Holdings, LLC Reports Earnings for the Third Quarter of 2016
Quarterly Distribution Previously Announced at $0.545 per Unit

SAN ANTONIO, November 2, 2016 - NuStar GP Holdings, LLC (NYSE: NSH) today announced third quarter 2016 net income of $17.3 million, or $0.40 per unit. For the nine months ended September 30, 2016, net income was $49.1 million, or $1.14 per unit.

Distributable cash flow (DCF) available to unitholders for the third quarter of 2016 and for the nine months ended September 30, 2016 was $23.2 million and $69.2 million, respectively.

As previously announced on October 28, 2016, the third quarter 2016 distribution of $0.545 per unit will be paid on November 16, 2016 to holders of record as of November 8, 2016.

“NuStar GP Holdings, LLC’s third quarter results were positively impacted by NuStar Energy L.P.’s strong third quarter performance from its pipeline and storage operations,” said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC.

A conference call with management is scheduled for 10:00 a.m. CT today, November 2, 2016, to discuss the financial and operational results for the third quarter of 2016. Investors interested in listening to the discussion may dial toll-free 844/889-7787, passcode 94604384. International callers may access the discussion by dialing 661/378-9931, passcode 94604384. The company intends to have a playback available following the discussion, which may be accessed by dialing toll-free 855/859-2056, passcode 94604384. International callers may access the playback by dialing 404/537-3406, passcode 94604384. The playback will be available until 1:00 p.m. CT on December 2, 2016.

Investors interested in listening to the live discussion or a replay via the internet may access the discussion directly at http://edge.media-server.com/m/p/m6imjyxv/lan/en or by logging on to NuStar GP Holdings, LLC’s website at www.nustargpholdings.com.

The discussion will disclose certain non-GAAP financial measures. Reconciliations of certain of these non-GAAP financial measures to U.S. GAAP may be found in this press release, with additional reconciliations located on the Financials page of the Investors section of NuStar GP Holdings, LLC’s website at www.nustargpholdings.com.

NuStar GP Holdings, LLC is a publicly traded limited liability company that owns the two percent general partner interest, an approximate 13 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, and the United Kingdom. For more information, visit NuStar GP Holdings, LLC’s website 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 GP Holdings, LLC’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of NuStar GP Holdings, LLC’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 GP Holdings, LLC, 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 and/or the related conference call will include forward-looking statements regarding future events, such as the future performance of NuStar Energy L.P. and NuStar GP Holdings, LLC. 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.’s and NuStar GP Holdings, LLC’s 2015 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.  Actual results may differ materially from those described in the forward-looking statements.






NuStar GP Holdings, LLC and Subsidiaries
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016

2015
 
2016
 
2015
Statement of Income Data:
 
 
 
 
 
 
 
Equity in earnings of NuStar Energy L.P.
$
16,130

 
$
18,194

 
$
49,425

 
$
62,284

 
 
 
 
 
 
 
 
General and administrative expenses
(704
)
 
(825
)
 
(2,377
)
 
(2,697
)
Other income (expense), net
2,142

 
(3
)
 
2,755

 
536

Interest expense, net
(276
)
 
(234
)
 
(789
)
 
(661
)
 
 
 
 
 
 
 
 
Income before income tax benefit (expense)
17,292

 
17,132

 
49,014

 
59,462

Income tax benefit (expense)
28

 
(215
)
 
55

 
(213
)
Net income
$
17,320

 
$
16,917

 
$
49,069

 
$
59,249

 
 
 
 
 
 
 
 
Basic and diluted net income per unit
$
0.40

 
$
0.39

 
$
1.14

 
$
1.38

 
 
 
 
 
 
 
 
Equity in Earnings of NuStar Energy L.P.:
 
 
 
 
 
 
 
General partner interest
$
805

 
$
1,084

 
$
2,571

 
$
4,297

General partner incentive distribution
10,890

 
10,805

 
32,500

 
32,415

General partner’s interest in earnings and incentive distributions of NuStar Energy L.P.
11,695

 
11,889

 
35,071

 
36,712

Limited partner interest in earnings of NuStar Energy L.P.
5,156

 
7,026

 
16,517

 
27,735

Amortization of step-up in basis related to NuStar Energy L.P.’s assets and liabilities
(721
)
 
(721
)
 
(2,163
)
 
(2,163
)
Equity in earnings of NuStar Energy L.P.
$
16,130

 
$
18,194

 
$
49,425

 
$
62,284

 
 
 
 
 
 
 
 
Weighted average number of common units outstanding
42,931,242

 
42,913,969

 
42,930,951

 
42,913,675

 
 
 
 
 
 
 
 
Cash Flow Data:
 
 
 
 
 
 
 
Net cash provided by operating activities
$
16,239

 
$
22,052

 
$
43,589

 
$
62,390

Net cash provided by investing activities
$
7,247

 
$
1,269

 
$
23,013

 
$
5,200

Net cash used in financing activities
$
(23,441
)
 
$
(23,388
)
 
$
(66,276
)
 
$
(70,164
)
 
 
 
 
 
 
 
 
Distributable Cash Flow (Note 1):
 
 
 
 
 
 
 
Cash distributions from NuStar Energy L.P. associated with:
 
 
 
 
 
 
 
General partner interest
$
1,976

 
$
1,961

 
$
5,898

 
$
5,883

General partner incentive distribution
10,890

 
10,805

 
32,500

 
32,415

Limited partner interest – common units
11,185

 
11,318

 
33,514

 
33,846

Total cash distributions expected from NuStar Energy L.P.
24,051

 
24,084

 
71,912

 
72,144

Adjustments:
 
 
 
 
 
 
 
General and administrative expenses
(704
)
 
(825
)
 
(2,377
)
 
(2,697
)
Income tax benefit (expense)
28

 
(215
)
 
55

 
(213
)
Interest expense, net
(276
)
 
(234
)
 
(789
)
 
(661
)
Unit-based compensation
131

 
—

 
376

 
—

DCF
$
23,230

 
$
22,810

 
$
69,177

 
$
68,573

 
 
 
 
 
 
 
 
Total distributions to unitholders
$
23,398

 
$
23,388

 
$
70,193

 
$
70,164






NuStar GP Holdings, LLC and Subsidiaries
Consolidated Financial Information - Continued
(Unaudited, Thousands of Dollars)
Notes:
(1)
NuStar GP Holdings, LLC utilizes distributable cash flow (DCF) as a financial measure, although it is not defined in U.S. generally accepted accounting principles. Management believes DCF provides useful information to investors and other external users of our financial information because (i) DCF provides additional information about the cash the business is generating and (ii) investors and other external users of our financial statements benefit from having access to the same financial measure being utilized by management and our board of directors when making financial and planning decisions. Our board of directors and management use DCF when assessing our ability to fund distributions and our ability to service debt. DCF is a widely accepted financial indicator used by our industry’s investment community to compare company performance. DCF is used by our industry’s investment community, in part, because the value of our company’s units is partially based on its yield, and its yield is based on the cash distributions a company can pay its unitholders.
DCF is not intended to represent cash flows from operations, and is not presented as an alternative to net income. DCF 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 income to DCF and net cash provided by operating activities:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Net income
$
17,320

 
$
16,917

 
$
49,069

 
$
59,249

Less equity in earnings of NuStar Energy L.P.
(16,130
)
 
(18,194
)
 
(49,425
)
 
(62,284
)
Plus cash distributions expected from NuStar Energy L.P.
24,051

 
24,084

 
71,912

 
72,144

Gain related to NuStar Energy L.P.’s issuance of limited
partner units
(2,142
)
 
—

 
(2,142
)
 
—

Unit-based compensation items (a)
131

 
3

 
(237
)
 
(536
)
DCF
23,230

 
22,810

 
69,177

 
68,573

Less cash distributions expected from NuStar Energy L.P.
(24,051
)
 
(24,084
)
 
(71,912
)
 
(72,144
)
Distributions of equity in earnings of NuStar Energy L.P.
16,130

 
18,194

 
49,425

 
62,284

Changes in current assets and liabilities
881

 
4,767

 
(3,532
)
 
3,130

Changes in noncurrent assets and liabilities
and other items (b)
49

 
365

 
431

 
547

Net cash provided by operating activities
$
16,239

 
$
22,052

 
$
43,589

 
$
62,390

(a)
We intend to satisfy the vestings of equity-based awards with the issuance of our units. As such, the expenses related to these awards are considered non-cash and added back to DCF. These awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF. Also included in this item are gains and losses resulting from the satisfaction of certain long-term incentive awards prior to the employee transfer on March 1, 2016.
(b)
Other items consist of adjustments for (i) the amortization of deferred debt costs, (ii) the provision/benefit for deferred income taxes and (iii) payments made in connection with DERs.
 



 







NuStar GP Holdings, LLC Reports