# EDGAR Filing Document

**Accession Number:** 0001110805
**File Stem:** 0001110805-23-000004
**Filing Date:** 2023-2
**Character Count:** 35394
**Document Hash:** 8be43e847334482d8945a41b1329eb9c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001110805-23-000004.hdr.sgml**: 20230201

**ACCESSION NUMBER**: 0001110805-23-000004

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230201

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230201

**DATE AS OF CHANGE**: 20230201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NuStar Energy L.P.
- **CENTRAL INDEX KEY:** 0001110805
- **STANDARD INDUSTRIAL CLASSIFICATION:** PIPE LINES (NO NATURAL GAS) [4610]
- **IRS NUMBER:** 742956831
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-16417
- **FILM NUMBER:** 23574959

**BUSINESS ADDRESS:**
- **STREET 1:** 19003 IH-10 WEST
- **CITY:** SAN ANTONIO
- **STATE:** TX
- **ZIP:** 78257
- **BUSINESS PHONE:** (210) 918-2000

**MAIL ADDRESS:**
- **STREET 1:** 19003 IH-10 WEST
- **CITY:** SAN ANTONIO
- **STATE:** TX
- **ZIP:** 78257

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** VALERO L P
- **DATE OF NAME CHANGE:** 20020110

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SHAMROCK LOGISTICS LP
- **DATE OF NAME CHANGE:** 20000331

?xml version="1.0" ? ns-20230201

    

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **February 1, 2023** 

**NuStar Energy L.P.** 

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-16417** | **74-2956831** |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |

---

**19003 IH-10 West** 

**San Antonio, Texas 78257** 

(Address of principal executive offices)

**(210) 918-2000** 

(Registrant's telephone number, including area code)

**Not applicable**

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐&nbsp;&nbsp;&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐&nbsp;&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Units | NS | New York Stock Exchange |
| 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units | NSprA | New York Stock Exchange |
| 7.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units | NSprB | New York Stock Exchange |
| 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units | NSprC | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).&nbsp;&nbsp;&nbsp;&nbsp;

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. ☐

    

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition.**

On February 1, 2023, NuStar Energy L.P., a Delaware limited partnership, issued a press release announcing financial results for the quarter ended December 31, 2022. A copy of the press release announcing the financial results is furnished with this report as Exhibit 99.01 and is incorporated herein by reference.

**Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

(d) &nbsp;&nbsp;&nbsp;&nbsp;Exhibits.

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit** |
| <u>[Exhibit 99.01](ns4q228-kex9901.htm)</u> | Press Release dated February 1, 2023. |
| Exhibit 104 | Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101 |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
| | NUSTAR ENERGY L.P. | NUSTAR ENERGY L.P. | |
| | By: | Riverwalk Logistics, L.P. | Riverwalk Logistics, L.P. |
| | | its general partner | its general partner |
| | | NuStar GP, LLC | NuStar GP, LLC |
| | | its general partner | its general partner |
| Date: February 1, 2023 |  | By: | /s/ Amy L. Perry |
|  |  | Name: | Amy L. Perry |
|  |  | Title: | Executive Vice President-Strategic Development and General Counsel |

---

## Exhibit 99.01

**Exhibit 99.01**

**NuStar Energy L.P. Reports Strong Fourth Quarter and Full-Year 2022 Earnings Results**

***Highest Fourth Quarter Net Income and Adjusted EBITDA in Company History***

***Permian Crude System Volumes Hit Record-Breaking Average of 584,000 Barrels Per Day/13 Percent Above 4Q 2021***

***Operations Performing Well Across all Systems***

***Fuels Marketing Segment Up Almost $23 Million Year-Over-Year***

***Optimization Initiative a Huge Success***

***Encouraging 2023 Full-Year Outlook***

**SAN ANTONIO, February 1, 2023 - NuStar Energy L.P. (NYSE: NS)** today announced its **highest fourth quarter net income and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the company's history,** along with strong full-year 2022 results fueled by record-breaking volumes in its Permian Crude System and strong performance in its Fuels Marketing Segment.

"Given how 2022's historic inflation and volatility made for a bumpy ride around the globe and across financial markets, I am particularly proud of our results last year, which once again demonstrate the stability and strength of NuStar's business," said NuStar Chairman and CEO Brad Barron. "Most importantly, we were able to deliver on our top financial priorities – to fund all our spending with internally generated cash flows and continue to strengthen our balance sheet by beginning our initiative to repurchase the outstanding Series D preferred units."

NuStar reported net income of $92 million for the fourth quarter of 2022, or $0.18 per unit, compared to net income of $58 million, or $0.19 per unit, for the fourth quarter of 2021. Results for the fourth quarter of 2022 include a $16 million gain from insurance proceeds to rebuild tanks at its Selby terminal. Earnings per unit (EPU) for the fourth quarter of 2022 also included a $0.31 per unit premium related to the repurchase of a portion of the Series D preferred units. Excluding the effects of these items, **adjusted net income was $75 million for the fourth quarter of 2022, or $0.34 per unit, compared to adjusted net income of $52 million, or $0.14 per unit, for the fourth quarter of 2021.**

In addition to the insurance proceeds, Barron noted that both 2022 and 2021 included non-cash charges that impacted full-year net income, making an apples-to-apples comparison difficult. For example, for full-year 2022, NuStar reported net income of $223 million, or $0.36 per unit, compared to net income of $38 million, or a net loss of $0.99 per unit, for the year ended 2021.

"However, excluding the non-cash charges and insurance proceeds, as well as the EPU impact from the repurchase of a portion of the Series D preferred units in the fourth quarter of 2022, **our full-year 2022 adjusted net income was $250 million, or $0.92 per unit, compared to 2021 adjusted net income of $212 million, or $0.60 per unit**," said Barron.

Barron continued, "**Our adjusted EBITDA was $197 million for the fourth quarter of 2022, which is the highest fourth quarter adjusted EBITDA in our company's history**. This is up $28 million, or 16 percent, compared to fourth quarter of 2021 adjusted EBITDA of $169 million. Our adjusted EBITDA for full-year 2022 was $722 million, compared to 2021 adjusted EBITDA of $705 million.

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"We are proud to have generated higher adjusted EBITDA for 2022 through a combination of revenue improvement and expense optimization, which helped mitigate some of the impact of 2022's historic inflation."

Adjusted distributable cash flow (DCF) was $89 million for the fourth quarter of 2022, compared to fourth quarter of 2021 DCF of $63 million. The adjusted distribution coverage ratio was 2.01 times for the fourth quarter of 2022.

Adjusted DCF was $357 million for full-year 2022, compared to adjusted DCF of $333 million in 2021. The adjusted distribution coverage ratio was 2.02 times for full-year 2022.

***<u>Operations Performing Well Across all Systems</u>***

"Our Pipeline Segment generated $176 million of EBITDA in the fourth quarter of 2022, up $27 million, or 18 percent, over fourth quarter 2021 EBITDA of $149 million, largely due to the strong performance of our Permian Crude System," said Barron.

NuStar's Permian Crude System volumes hit another high in the fourth quarter of 2022 with a record-breaking average of 584,000 barrels per day (BPD), up 13 percent over fourth quarter of 2021 volumes.

He also noted that NuStar's Mid-Continent refined product systems once again delivered solid, dependable revenue contribution in the fourth quarter of 2022.

"In South Texas, we are pleased that our Corpus Christi Crude System throughputs averaged over 368,000 BPD in the fourth quarter of 2022, which is above our minimum volume commitments for the system and eight percent higher than volumes in the third quarter of 2022. We are also encouraged by the continued improvement we saw in January on that system, as our average volumes rose to almost 400,000 BPD last month."

Barron also noted that operating income and EBITDA in NuStar's Fuels Marketing Segment were $12 million in the fourth quarter of 2022, a $7 million increase compared to the fourth quarter of 2021, largely due to stronger margins.

"For full-year 2022, our Fuels Marketing Segment generated near-record operating income and EBITDA of $34 million, which was an increase of approximately $23 million compared to full-year 2021 operating income and EBITDA of $11 million.

"In addition, our West Coast region's revenues continue to grow, as revenues were up around 20 percent compared to the fourth quarter of 2021 and around 10 percent year-over-year, driven in large part by our West Coast renewable fuels strategy," said Barron.

***<u>Balance Sheet Continues to Improve</u>***

NuStar Executive Vice President and Chief Financial Officer Tom Shoaf gave a positive update on the company's continued progress in reducing its debt and building its financial strength and flexibility.

"We ended the fourth quarter of 2022 with a debt-to-EBITDA ratio of 3.98 times," said Shoaf. "Our total debt balance was $3.3 billion, and our revolver facility availability was over $775 million of the facility's $1 billion capacity.

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"In November, we were able to repurchase about one-third of our Series D preferred units while keeping our debt-to-EBITDA ratio under 4 times for year-end 2022. As we mentioned last quarter, we are now positioned to accelerate our timeframe for addressing the Series D preferred units by completing the redemption in 2024, which is several years ahead of our previously scheduled timeframe. This redemption is another important step in our ongoing optimization and will meaningfully increase our cash flow over the next few years."

***<u>Encouraging 2023 Outlook</u>***

Shoaf also gave full-year guidance for net income and EBITDA, as well as strategic capital and reliability capital for 2023.

"We expect to generate full-year 2023 net income in the range of $202 to $240 million and full-year 2023 EBITDA in the range of $700 to $760 million," said Shoaf.

He also noted that NuStar now plans to spend $130 to $150 million in strategic capital in 2023.

"We expect to allocate approximately $60 million to growing our Permian system and plan to spend about $25 million to expand our West Coast Renewable Fuels Network," said Shoaf. "In addition, we expect to spend between $25 and $35 million on reliability this year."

***<u>Optimization Initiative a Huge Success</u>***

Barron closed by mentioning how integral NuStar's optimization initiative was to the company's solid results and in facilitating an important first step to improve its capital structure in 2022.

"By systematically scrutinizing every dollar of spending, we have been able to significantly increase our cash flow with systematic changes that will continue to reap benefits in 2023 and beyond," said Barron. "And by investing that increased cash flow in our growth footprint, we are already on the path to compounding those benefits, with the EBITDA growth we expect from organic capital projects on our Permian System and in our West Coast Renewables Network, as well as the projects we hope to announce later this year across our Ammonia System.

"We plan to continue to optimize our business and build our financial strength and unitholder value, while we continue to safely and reliably store and transport the essential energy that fuels our lives," Baron concluded.

***<u>Conference Call Details</u>***

A conference call with management is scheduled for 10:00 a.m. CT on Wednesday, February 1, 2023, to discuss the financial and operational results for the fourth quarter of 2022. Persons interested in listen-only participation may access the conference call directly at <u>https://edge.media-server.com/mmc/p/bgpdnpyj</u>. Persons interested in Q&A participation may pre-register for the conference call and obtain a dial-in number and passcode at <u>https://register.vevent.com/register/BI757a142163514824bfe28118ca3c0731</u>. A recorded version will be available two hours after the conclusion of the conference call at <u>https://edge.media-server.com/mmc/p/bgpdnpyj</u>.

The conference call may also be accessed through the "Investors" section of NuStar Energy L.P.'s website at <u>https://investor.nustarenergy.com</u>.

NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, Texas, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has

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approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The partnership's combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico. For more information, visit NuStar Energy L.P.'s website at <u>www.nustarenergy.com</u> and its Sustainability page at <u>https://sustainability.nustarenergy.com/</u>.

***<u>Cautionary Statement Regarding Forward-Looking Statements</u>***

*This press release includes, and the related conference call will include, forward-looking statements regarding future events and expectations, such as NuStar's future performance, plans and expenditures. All forward-looking statements are based on NuStar's beliefs as well as assumptions made by and information currently available to NuStar. These statements reflect NuStar'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 2021 annual report 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. Except as required by law, NuStar does not intend, or undertake any obligation, to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.*

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**NuStar Energy L.P. and Subsidiaries**

**Consolidated Financial Information**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| **Statement of Income Data:** |  |  |  |  |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Service revenues | $299497 | $288266 | $1120249 | $1157410 |
| &nbsp;&nbsp;&nbsp;&nbsp;Product sales | 130463 | 129150 | 562974 | 461090 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 429960 | 417416 | 1683223 | 1618500 |
| Costs and expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Costs associated with service revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 92353 | 100155 | 364989 | 388078 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 63195 | 63080 | 251878 | 266588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs associated with service revenues | 155548 | 163235 | 616867 | 654666 |
| &nbsp;&nbsp;&nbsp;&nbsp;Costs associated with product sales | 108730 | 116612 | 486947 | 417413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill impairment loss |  |  |  | 34060 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other impairment losses |  |  | 46122 | 154908 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 34460 | 33873 | 117116 | 113207 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other depreciation and amortization expense | 1776 | 1951 | 7358 | 7792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs and expenses | 300514 | 315671 | 1274410 | 1382046 |
| Operating income | 129446 | 101745 | 408813 | 236454 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (55956) | (51774) | (209009) | (213985) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 19024 | 7900 | 26182 | 19644 |
| Income before income tax expense | 92514 | 57871 | 225986 | 42113 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 911 | 353 | 3239 | 3888 |
| Net income | $91603 | $57518 | $222747 | $38225 |
| Basic and diluted net income (loss) per common unit | $0.18 | $0.19 | $0.36 | $(0.99) |
| Basic and diluted weighted-average common units outstanding | 110566272 | 109771943 | 110341206 | 109585635 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Other Data (Note 1):** | | | | |
| Adjusted net income | $75237 | $52030 | $249795 | $212333 |
| Adjusted net income per common unit | $0.34 | $0.14 | $0.92 | $0.60 |
| EBITDA  | $213441 | $174676 | $694231 | $530478 |
| Adjusted EBITDA | $197075 | $169188 | $722423 | $704586 |
| DCF | $69937 | $63047 | $337482 | $333034 |
| Adjusted DCF | $89216 | $63047 | $356761 | $333034 |
| Distribution coverage ratio | 1.58x | 1.43x | 1.91x | 1.90x |
| Adjusted distribution coverage ratio | 2.01x | 1.43x | 2.02x | 1.90x |

---

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| | | |
|:---|:---|:---|
| | **For the Four Quarters Ended December 31,** | **For the Four Quarters Ended December 31,** |
| | **2022** | **2021** |
| Consolidated Debt Coverage Ratio | 3.98x | 3.99x |

---

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**NuStar Energy L.P. and Subsidiaries**

**Consolidated Financial Information - Continued**

**(Unaudited, Thousands of Dollars, Except Barrel Data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| **Pipeline:** |  |  |  |  |
| &nbsp;&nbsp;Crude oil pipelines throughput (barrels/day) | 1410966 | 1401498 | 1319360 | 1281568 |
| &nbsp;&nbsp;&nbsp;&nbsp;Refined products and ammonia pipelines <br>throughput (barrels/day) | 611011 | 624209 | 579240 | 585189 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total throughput (barrels/day) | 2021977 | 2025707 | 1898600 | 1866757 |
| &nbsp;&nbsp;Throughput and other revenues | $229935 | $203897 | $828191 | $762238 |
| &nbsp;&nbsp;Operating expenses | 53609 | 54719 | 210719 | 202481 |
| &nbsp;&nbsp;Depreciation and amortization expense | 44726 | 43798 | 178802 | 179088 |
| &nbsp;&nbsp;Other impairment loss |  |  |  | 59197 |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment operating income | $131600 | $105380 | $438670 | $321472 |
| **Storage:** |  |  |  |  |
| &nbsp;&nbsp;Throughput (barrels/day) (a) | 512504 | 557448 | 480129 | 516094 |
| &nbsp;&nbsp;Throughput terminal revenues | $26288 | $31623 | $110591 | $122331 |
| &nbsp;&nbsp;Storage terminal revenues | 53165 | 60081 | 223958 | 305337 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 79453 | 91704 | 334549 | 427668 |
| &nbsp;&nbsp;Operating expenses | 38744 | 45436 | 154270 | 185597 |
| &nbsp;&nbsp;Depreciation and amortization expense | 18469 | 19282 | 73076 | 87500 |
| &nbsp;&nbsp;Goodwill impairment loss |  |  |  | 34060 |
| &nbsp;&nbsp;Other impairment losses |  |  | 46122 | 95711 |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment operating income | $22240 | $26986 | $61081 | $24800 |
| **Fuels Marketing:** |  |  |  |  |
| &nbsp;&nbsp;Product sales | $120574 | $121818 | $520486 | $428608 |
| &nbsp;&nbsp;Cost of goods | 107850 | 116056 | 484477 | 417000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross margin | 12724 | 5762 | 36009 | 11608 |
| &nbsp;&nbsp;Operating expenses | 882 | 559 | 2473 | 427 |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment operating income | $11842 | $5203 | $33536 | $11181 |
| **Consolidation and Intersegment Eliminations:** |  |  |  |  |
| &nbsp;&nbsp;Revenues | $(2) | $(3) | $(3) | $(14) |
| &nbsp;&nbsp;Cost of goods | (2) | (3) | (3) | (14) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $— | $— | $— | $— |
| **Consolidated Information:** |  |  |  |  |
| &nbsp;&nbsp;Revenues | $429960 | $417416 | $1683223 | $1618500 |
| &nbsp;&nbsp;Costs associated with service revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 92353 | 100155 | 364989 | 388078 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 63195 | 63080 | 251878 | 266588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs associated with service revenues | 155548 | 163235 | 616867 | 654666 |
| &nbsp;&nbsp;Costs associated with product sales | 108730 | 116612 | 486947 | 417413 |
| &nbsp;&nbsp;Goodwill impairment loss |  |  |  | 34060 |
| &nbsp;&nbsp;Other impairment losses |  |  | 46122 | 154908 |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment operating income | 165682 | 137569 | 533287 | 357453 |
| &nbsp;&nbsp;General and administrative expenses | 34460 | 33873 | 117116 | 113207 |
| &nbsp;&nbsp;Other depreciation and amortization expense | 1776 | 1951 | 7358 | 7792 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consolidated operating income | $129446 | $101745 | $408813 | $236454 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Prior period throughputs for our Corpus Christi North Beach terminal in the storage segment were restated consistent with current period presentation.

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**NuStar Energy L.P. and Subsidiaries**

**Reconciliation of Non-GAAP Financial Information**

**(Unaudited, Thousands of Dollars, Except Ratio Data)**

**Note 1:** NuStar Energy L.P. utilizes financial measures, such as earnings before interest, taxes, depreciation and amortization (EBITDA), distributable cash flow (DCF) and distribution coverage ratio, which are not defined in U.S. generally accepted accounting principles (GAAP). Management believes these financial measures provide useful information to investors and other external users of our financial information because (i) they provide additional information about the operating performance of the partnership's assets and the cash the business is generating, (ii) investors and other external users of our financial statements benefit from having access to the same financial measures being utilized by management and our board of directors when making financial, operational, compensation and planning decisions and (iii) they highlight the impact of significant transactions. We may also adjust these measures to enhance the comparability of our performance across periods.

Our board of directors and management use EBITDA and/or DCF when assessing the following: (i) the performance of our assets, (ii) the viability of potential projects, (iii) our ability to fund distributions, (iv) our ability to fund capital expenditures and (v) our ability to service debt. In addition, our board of directors uses EBITDA, DCF and a distribution coverage ratio, which is calculated based on DCF, as some of the factors in its compensation determinations. DCF is a financial indicator used by the master limited partnership (MLP) investment community to compare partnership performance. DCF is used by the MLP investment community, in part, because the value of a partnership unit is partially based on its yield, and its yield is based on the cash distributions a partnership can pay its unitholders.

None of these financial measures are presented as an alternative to net income. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP.

The following is a reconciliation of net income to EBITDA, DCF and distribution coverage ratio.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| Net income | $91603 | $57518 | $222747 | $38225 |
| &nbsp;&nbsp;Interest expense, net | 55956 | 51774 | 209009 | 213985 |
| &nbsp;&nbsp;Income tax expense | 911 | 353 | 3239 | 3888 |
| &nbsp;&nbsp;Depreciation and amortization expense | 64971 | 65031 | 259236 | 274380 |
| EBITDA | 213441 | 174676 | 694231 | 530478 |
| &nbsp;&nbsp;Interest expense, net | (55956) | (51774) | (209009) | (213985) |
| &nbsp;&nbsp;Reliability capital expenditures | (8118) | (12028) | (32775) | (40266) |
| &nbsp;&nbsp;Income tax expense | (911) | (353) | (3239) | (3888) |
| &nbsp;&nbsp;Long-term incentive equity awards (a) | 3337 | 3222 | 11434 | 11959 |
| &nbsp;&nbsp;Preferred unit distributions | (32511) | (31736) | (127589) | (127399) |
| &nbsp;&nbsp;Goodwill impairment loss |  |  |  | 34060 |
| &nbsp;&nbsp;Other impairment losses |  |  | 46122 | 154908 |
| &nbsp;&nbsp;Income tax benefit related to impairment loss |  |  | (1144) |  |
| &nbsp;&nbsp;Premium on repurchase of Series D Cumulative Convertible Preferred Units | (49600) |  | (49600) |  |
| &nbsp;&nbsp;Other items | 255 | (18960) | 9051 | (12833) |
| DCF | $69937 | $63047 | $337482 | $333034 |
| Distributions applicable to common limited partners | $44328 | $44008 | $176746 | $175470 |
| Distribution coverage ratio (b) | 1.58x | 1.43x | 1.91x | 1.90x |

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&nbsp;&nbsp;&nbsp;&nbsp;(a)We intend to satisfy the vestings of these equity-based awards with the issuance of our common units. As such, the expenses related to these awards are considered non-cash and added back to DCF. Certain awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF.

&nbsp;&nbsp;&nbsp;&nbsp;(b)Distribution coverage ratio is calculated by dividing DCF by distributions applicable to common limited partners.

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**NuStar Energy L.P. and Subsidiaries**

**Reconciliation of Non-GAAP Financial Information - Continued**

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

The following is the reconciliation for the calculation of our Consolidated Debt Coverage Ratio, as defined in our revolving credit agreement (the Revolving Credit Agreement).

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| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** |
| Operating income | $408813 | $236454 |
| &nbsp;&nbsp;Depreciation and amortization expense | 259236 | 274380 |
| &nbsp;&nbsp;Goodwill impairment loss |  | 34060 |
| &nbsp;&nbsp;Other impairment losses | 46122 | 154908 |
| &nbsp;&nbsp;Amortization expense of equity-based awards | 13781 | 14209 |
| &nbsp;&nbsp;Pro forma effects of dispositions (a) | (1760) | (22710) |
| &nbsp;&nbsp;Other | (3607) | 1762 |
| Consolidated EBITDA, as defined in the Revolving Credit Agreement | $722585 | $693063 |
| Long-term debt, less current portion of finance leases | $3293415 | $3183555 |
| &nbsp;&nbsp;Finance leases (long-term) | (51127) | (52930) |
| &nbsp;&nbsp;Net fair value adjustments, unamortized discounts and unamortized debt issuance costs | 33252 | 38315 |
| &nbsp;&nbsp;NuStar Logistics' floating rate subordinated notes | (402500) | (402500) |
| Consolidated Debt, as defined in the Revolving Credit Agreement | $2873040 | $2766440 |
| Consolidated Debt Coverage Ratio (Consolidated Debt to Consolidated EBITDA) | 3.98x | 3.99x |

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&nbsp;&nbsp;&nbsp;&nbsp;(a)These adjustments represent the pro forma effects of the dispositions of the Point Tupper terminal, which was sold in April 2022, and the Eastern U.S. terminals, which were sold in October 2021.

The following are reconciliations of net income / net income (loss) per common unit to adjusted net income / adjusted net income per common unit.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended <br>December 31, 2022** | **Three Months Ended <br>December 31, 2022** | **Year Ended <br>December 31, 2022** | **Year Ended <br>December 31, 2022** |
| Net income / net income per common unit | $91603 | $0.18 | $222747 | $0.36 |
| &nbsp;&nbsp;&nbsp;Gain from insurance recoveries | (16366) | (0.15) | (16366) | (0.15) |
| &nbsp;&nbsp;&nbsp;Impairment loss |  |  | 46122 | 0.42 |
| &nbsp;&nbsp;&nbsp;Income tax benefit related to impairment loss |  |  | (1144) | (0.01) |
| &nbsp;&nbsp;&nbsp;Gain on sale |  |  | (1564) | (0.01) |
| &nbsp;&nbsp;&nbsp;Premium on repurchase of Series D Cumulative Convertible Preferred Units |  | 0.31 |  | 0.31 |
| Adjusted net income / adjusted net income per common unit | $75237 | $0.34 | $249795 | $0.92 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended <br>December 31, 2021** | **Three Months Ended <br>December 31, 2021** | **Year Ended <br>December 31, 2021** | **Year Ended <br>December 31, 2021** |
| Net income / net income (loss) per common unit | $57518 | $0.19 | $38225 | $(0.99) |
| &nbsp;&nbsp;&nbsp;Gain from insurance recoveries | (5488) | (0.05) | (14860) | (0.13) |
| &nbsp;&nbsp;&nbsp;Goodwill impairment loss |  |  | 34060 | 0.31 |
| &nbsp;&nbsp;&nbsp;Other impairment losses |  |  | 154908 | 1.41 |
| Adjusted net income / adjusted net income per common unit | $52030 | $0.14 | $212333 | $0.60 |

---

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**NuStar Energy L.P. and Subsidiaries**

**Reconciliation of Non-GAAP Financial Information - Continued**

**(Unaudited, Thousands of Dollars, Except Ratio Data)**

The following is a reconciliation of EBITDA to adjusted EBITDA.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| EBITDA | $213441 | $174676 | $694231 | $530478 |
| &nbsp;&nbsp;&nbsp;Gain from insurance recoveries | (16366) | (5488) | (16366) | (14860) |
| &nbsp;&nbsp;&nbsp;Goodwill impairment loss |  |  |  | 34060 |
| &nbsp;&nbsp;&nbsp;Other impairment losses |  |  | 46122 | 154908 |
| &nbsp;&nbsp;&nbsp;Gain on sale |  |  | (1564) |  |
| Adjusted EBITDA | $197075 | $169188 | $722423 | $704586 |

---

The following is a reconciliation of DCF to adjusted DCF and adjusted distribution coverage ratio.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| DCF | $69937 | $63047 | $337482 | $333034 |
| &nbsp;&nbsp;&nbsp;Gain from insurance recoveries | (16366) |  | (16366) |  |
| &nbsp;&nbsp;&nbsp;Premium on repurchase of Series D Cumulative Convertible Preferred Units | 49600 |  | 49600 |  |
| &nbsp;&nbsp;&nbsp;Other | (13955) |  | (13955) |  |
| Adjusted DCF | $89216 | $63047 | $356761 | $333034 |
| Distributions applicable to common limited partners | $44328 | $44008 | $176746 | $175470 |
| Adjusted distribution coverage ratio (a) | 2.01x | 1.43x | 2.02x | 1.90x |

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&nbsp;&nbsp;&nbsp;&nbsp;(a)Adjusted distribution coverage ratio is calculated by dividing adjusted DCF by distributions applicable to common limited partners.

The following is a reconciliation of projected net income to EBITDA.

---

| | |
|:---|:---|
| | **Projected for the Year Ended December 31, 2023** |
| Net income | $202000 - 240000 |
| &nbsp;&nbsp;&nbsp;Interest expense, net | 235000 - 245000 |
| &nbsp;&nbsp;&nbsp;Income tax expense | 3000 - 5000 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 260000 - 270000 |
| EBITDA | $700000 - 760000 |

---

------

**NuStar Energy L.P.**

**Reconciliation of Non-GAAP Financial Information - Continued**

**(Unaudited, Thousands of Dollars)**

The following are reconciliations for our reported segments of operating income to segment EBITDA and adjusted segment EBITDA.

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| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2022** |
| | **Pipeline** | **Storage** | **Fuels Marketing** |
| Operating income | $131600 | $22240 | $11842 |
| &nbsp;&nbsp;Depreciation and amortization expense | 44726 | 18469 |  |
| Segment EBITDA | $176326 | $40709 | $11842 |
|  | **Three Months Ended December 31, 2021** | **Three Months Ended December 31, 2021** | **Three Months Ended December 31, 2021** |
|  | **Pipeline** | **Storage** | **Fuels Marketing** |
| Operating income | $105380 | $26986 | $5203 |
| &nbsp;&nbsp;Depreciation and amortization expense | 43798 | 19282 |  |
| Segment EBITDA | $149178 | $46268 | $5203 |
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Pipeline** | **Storage** | **Fuels Marketing** |
| Operating income | $438670 | $61081 | $33536 |
| &nbsp;&nbsp;Depreciation and amortization expense | 178802 | 73076 |  |
| Segment EBITDA | 617472 | 134157 | 33536 |
| &nbsp;&nbsp;Impairment loss |  | 46122 |  |
| Adjusted segment EBITDA | $617472 | $180279 | $33536 |
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Pipeline** | **Storage** | **Fuels Marketing** |
| Operating income | $321472 | $24800 | $11181 |
| &nbsp;&nbsp;Depreciation and amortization expense | 179088 | 87500 |  |
| Segment EBITDA | 500560 | 112300 | 11181 |
| &nbsp;&nbsp;Impairment losses | 59197 | 129771 |  |
| Adjusted segment EBITDA | $559757 | $242071 | $11181 |

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