ns-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 1-16417

_________________________________________

NuStar Energy L.P.

(Exact name of registrant as specified in its charter)

_________________________________________


Delaware						74-2956831
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

19003 IH-10 West

San Antonio, Texas

(Address of principal executive offices)

78257

(Zip Code)

Registrant’s telephone number, including area code (210) 918-2000

_______________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common units

New York Stock Exchange

Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

NSprA

New York Stock Exchange

Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

NSprB

New York Stock Exchange

Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

NSprC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of common units outstanding as of April 30, 2022 was 110,303,252.

Table of Contents

NUSTAR ENERGY L.P.

FORM 10-Q

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	3

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021	4

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	5

	Consolidated Statements of Partners’ Equity and Mezzanine Equity for the Three Months Ended March 31, 2022 and 2021	6

	Condensed Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION



Item 6.	Exhibits	33

SIGNATURES		34

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited, Thousands of Dollars, Except Unit Data)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	8,398	$	5,637
Accounts receivable, net	142,527		135,126

Inventories	19,310		16,644

Prepaid and other current assets	15,079		27,135
Assets held for sale	86,458		—
Total current assets	271,772		184,542
Property, plant and equipment, at cost	5,625,080		5,728,848
Accumulated depreciation and amortization	(2,171,692)		(2,187,206)
Property, plant and equipment, net	3,453,388		3,541,642
Intangible assets, net	546,679		557,785
Goodwill	732,356		732,356




Other long-term assets, net	125,730		140,007
Total assets	$	5,129,925	$	5,156,332
Liabilities, Mezzanine Equity and Partners’ Equity
Current liabilities:
Accounts payable	$	70,360	$	82,446

Current portion of finance lease obligations	4,000		3,848

Accrued interest payable	72,107		34,139
Accrued liabilities	54,447		79,818

Taxes other than income tax	10,196		14,475

Liabilities held for sale	66,496		—
Total current liabilities	277,606		214,726
Long-term debt, less current portion	3,168,425		3,183,555

Deferred income tax liability	2,848		11,831
Other long-term liabilities	137,763		147,956
Total liabilities	3,586,642		3,558,068

Commitments and contingencies (Note 6)

Series D preferred limited partners (23,246,650 preferred units outstanding as of March 31, 2022 and December 31, 2021) (Note 8)	621,018		616,439

Partners’ equity (Note 9):
Preferred limited partners
Series A (9,060,000 units outstanding as of March 31, 2022 and December 31, 2021)	218,307		218,307
Series B (15,400,000 units outstanding as of March 31, 2022 and December 31, 2021)	371,476		371,476
Series C (6,900,000 units outstanding as of March 31, 2022 and December 31, 2021)	166,518		166,518
Common limited partners (110,297,849 and 109,986,273 common units outstanding as of March 31, 2022 and December 31, 2021, respectively)	239,010		299,502

Accumulated other comprehensive loss	(73,046)		(73,978)
Total partners’ equity	922,265		981,825


Total liabilities, mezzanine equity and partners’ equity	$	5,129,925	$	5,156,332

See Condensed Notes to Consolidated Financial Statements.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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


	Three Months Ended March 31,
	2022		2021
Revenues:
Service revenues	$	265,305	$	271,883
Product sales	144,558		89,763
Total revenues	409,863		361,646
Costs and expenses:
Costs associated with service revenues:
Operating expenses (excluding depreciation and amortization expense)	86,402		87,287
Depreciation and amortization expense	63,303		68,418
Total costs associated with service revenues	149,705		155,705
Costs associated with product sales	126,715		81,113
Impairment loss	46,122		—

General and administrative expenses (excluding depreciation and amortization expense)	27,071		24,492
Other depreciation and amortization expense	1,824		2,047

Total costs and expenses	351,437		263,357
Operating income	58,426		98,289

Interest expense, net	(49,818)		(54,918)


Other income, net	3,671		398
Income before income tax (benefit) expense	12,279		43,769
Income tax (benefit) expense	(33)		1,512
Net income	$	12,312	$	42,257

Basic and diluted net (loss) income per common unit (Note 10)	$	(0.22)	$	0.05



Basic and diluted weighted-average common units outstanding	110,177,045		109,506,222


Comprehensive income	$	13,244	$	44,377

See Condensed Notes to Consolidated Financial Statements.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, Thousands of Dollars)


	Three Months Ended March 31,
	2022		2021
Cash Flows from Operating Activities:
Net income	$	12,312	$	42,257
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense

SEC Form 10-Q filed by NuStar Logistics, L.P.