PARTNERS’ EQUITY

Issuance of Common Units

On September 10, 2012, we issued 7,130,000 common units representing limited partner interests at a price of $48.94 per unit. We used the net proceeds from this offering of $343.9 million, including a contribution of $7.1 million from our general partner to maintain its 2% general partner interest, for general partnership purposes, including repayments of outstanding borrowings under our 2012 Revolving Credit Agreement and working capital purposes.

On December 9, 2011, we issued 6,037,500 common units representing limited partner interests at a price of $53.45 per unit. We used the net proceeds from this offering of $318.0 million, including a contribution of $6.6 million from our general partner to maintain its 2% general partner interest, mainly to reduce outstanding borrowings under our 2007 revolving credit agreement.

On May 23, 2011, we entered into an Equity Distribution Agreement (the Equity Distribution Agreement) with Citigroup Global Markets Inc. (Citigroup). Under the Equity Distribution Agreement, we may from time to time sell an aggregate of up to $200.0 million NuStar Energy common units representing limited partner interests, using Citigroup as our sales agent. In September and October 2011, we issued 108,029 NuStar Energy common units under the Equity Distribution Agreement for net proceeds of $6.0 million, including a contribution of $0.1 million from our general partner to maintain its 2% general partner interest.

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in the components included in “Accumulated other comprehensive income (loss)” were as follows:



	Foreign Currency Translation			Cash Flow Hedges			Total
	(Thousands of Dollars)
Balance as of January 1, 2011	$	11,500		$	35,000		$	46,500
Other comprehensive loss before reclassifications	(15,425		)	(53,452		)	(68,877		)
Net loss reclassified into (loss) income from discontinued operations	—			(5,030		)	$	(5,030	)
Other comprehensive loss	(15,425		)	(58,482		)	(73,907		)
Balance as of December 31, 2011	(3,925		)	(23,482		)	(27,407		)
Other comprehensive income (loss) before reclassifications	9,579			(94,269		)	(84,690		)
Net loss reclassified into interest expense, net	—			1,749			1,749
Net loss reclassified into (loss) income from discontinued operations	—			51,483			51,483
Other comprehensive income (loss)	9,579			(41,037		)	(31,458		)
Balance as of December 31, 2012	5,654			(64,519		)	(58,865		)
Other comprehensive (loss) income before reclassifications	(19,312		)	7,213			(12,099		)
Net loss reclassified into interest expense, net	—			7,570			7,570
Other comprehensive (loss) income	(19,312		)	14,783			(4,529		)
Balance as of December 31, 2013	$	(13,658	)	$	(49,736	)	$	(63,394	)

Other comprehensive income (loss) attributable to the noncontrolling interest consisted of foreign currency translation adjustment losses of $0.1 million, gains of $1.1 million and losses of $3.0 million, for the years ended December 31, 2013, 2012 and 2011, respectively.

Allocations of Net Income

General Partner. Our partnership agreement, as amended, sets forth the calculation to be used to determine the amount and priority of cash distributions that the common unitholders and general partner will receive. The partnership agreement also contains provisions for the allocation of net income and loss to the unitholders and the general partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interests. Normal allocations according to percentage interests are made after giving effect to priority income allocations, if any, in an amount equal to incentive cash distributions allocated 100% to the general partner. The following table details the calculation of net income applicable to the general partner:



	Year Ended December 31,
	2013			2012			2011
	(Thousands of Dollars)
Net income (loss) attributable to NuStar Energy L.P.	$	(273,770	)	$	(226,616	)	$	221,461
Less general partner incentive distribution (a)	43,220			41,242			36,319
Net income (loss) after general partner incentive distribution	(316,990		)	(267,858		)	185,142
General partner interest	2		%	2		%	2		%
General partner allocation of net income (loss) after general partner incentive distribution	(6,338		)	(5,356		)	3,703
General partner incentive distribution	43,220			41,242			36,319
Net income applicable to general partner	$	36,882		$	35,886		$	40,022


(a)	The net income allocation to the general partner’s incentive distribution is less than the actual distribution made with respect to 2011, which is shown in the distribution table below, due to the issuance of common units after the end of the third quarter but before the record date.

Cash Distributions

We make quarterly distributions of 100% of our available cash, generally defined as cash receipts less cash disbursements and cash reserves established by the general partner, in its sole discretion. These quarterly distributions are declared and paid within 45 days subsequent to each quarter-end. The limited partner unitholders are entitled to receive a minimum quarterly distribution of $0.60 per unit each quarter ($2.40 annualized). Our cash is first distributed 98% to the limited partners and 2% to the general partner until the amount distributed to our unitholders is equal to the minimum quarterly distribution and arrearages in the payment of the minimum quarterly distribution for any prior quarter. Cash in excess of the minimum quarterly distributions is distributed to our unitholders and our general partner based on the percentages shown below.

Our general partner is entitled to incentive distributions if the amount we distribute with respect to any quarter exceeds specified target levels shown below:



	Percentage of Distribution
Quarterly Distribution Amount per Unit	Unitholders	General Partner
Up to $0.60	98%	2%
Above $0.60 up to $0.66	90%	10%
Above $0.66	75%	25%

The following table reflects the allocation of total cash distributions to our general and limited partners applicable to the period in which the distributions were earned:



	Year Ended December 31,
	2013		2012		2011
	(Thousands of Dollars, Except Per Unit Data)
General partner interest	$	7,844	$	7,486	$	6,630
General partner incentive distribution	43,220		41,242		36,326
Total general partner distribution	51,064		48,728		42,956
Limited partners’ distribution	341,140		325,526		288,550
Total cash distributions	$	392,204	$	374,254	$	331,506

Cash distributions per unit applicable to limited partners	$	4.380	$	4.380	$	4.360

The following table summarizes information related to our quarterly cash distributions:



Quarter Ended	Cash Distributions Per Unit		Total Cash Distributions (Thousands of Dollars)		Record Date	Payment Date
December 31, 2013 (a)	$	1.095	$	98,051	February 10, 2014	February 14, 2014
September 30, 2013	$	1.095	$	98,051	November 11, 2013	November 14, 2013
June 30, 2013	$	1.095	$	98,051	August 5, 2013	August 9, 2013
March 31, 2013	$	1.095	$	98,051	May 6, 2013	May 10, 2013


(a)	The distribution was announced on January 30, 2014.