| CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
NuStar Energy has no operations and its assets consist mainly of its investments in NuStar Logistics and NuPOP, both wholly owned subsidiaries. The senior and subordinated notes issued by NuStar Logistics are fully and unconditionally guaranteed by NuStar Energy and NuPOP. As a result, the following condensed consolidating financial statements are presented as an alternative to providing separate financial statements for NuStar Logistics and NuPOP.
Condensed Consolidating Balance Sheets March 31, 2014 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Assets | | | | | | | | | | | | Cash and cash equivalents | $ | 904 |
| | $ | 9 |
| | $ | — |
| | $ | 41,685 |
| | $ | — |
| | $ | 42,598 |
| Receivables, net | 5 |
| | 34,845 |
| | 9,368 |
| | 264,878 |
| | (4,828 | ) | | 304,268 |
| Inventories | — |
| | 1,990 |
| | 4,991 |
| | 95,692 |
| | (26 | ) | | 102,647 |
| Income tax receivable | — |
| | — |
| | — |
| | 3,520 |
| | — |
| | 3,520 |
| Other current assets | 63 |
| | 15,778 |
| | 2,574 |
| | 18,371 |
| | — |
| | 36,786 |
| Assets held for sale | — |
| | — |
| | — |
| | 19,920 |
| | — |
| | 19,920 |
| Intercompany receivable | — |
| | 1,347,350 |
| | — |
| | — |
| | (1,347,350 | ) | | — |
| Total current assets | 972 |
| | 1,399,972 |
| | 16,933 |
| | 444,066 |
| | (1,352,204 | ) | | 509,739 |
| Property, plant and equipment, net | — |
| | 1,646,376 |
| | 568,674 |
| | 1,105,068 |
| | — |
| | 3,320,118 |
| Intangible assets, net | — |
| | 60,931 |
| | — |
| | 7,173 |
| | — |
| | 68,104 |
| Goodwill | — |
| | 149,453 |
| | 170,652 |
| | 297,324 |
| | — |
| | 617,429 |
| Investment in wholly owned subsidiaries | 2,411,520 |
| | 180,745 |
| | 873,241 |
| | 950,247 |
| | (4,415,753 | ) | | — |
| Investment in joint venture | — |
| | — |
| | — |
| | 70,342 |
| | — |
| | 70,342 |
| Deferred income tax asset | — |
| | — |
| | — |
| | 4,083 |
| | — |
| | 4,083 |
| Other long-term assets, net | 611 |
| | 290,100 |
| | 26,332 |
| | 7,776 |
| | — |
| | 324,819 |
| Total assets | $ | 2,413,103 |
| | $ | 3,727,577 |
| | $ | 1,655,832 |
| | $ | 2,886,079 |
| | $ | (5,767,957 | ) | | $ | 4,914,634 |
| Liabilities and Partners’ Equity | | | | | | | | | | | | Payables | $ | — |
| | $ | 26,801 |
| | $ | 11,050 |
| | $ | 177,114 |
| | $ | (4,828 | ) | | $ | 210,137 |
| Accrued interest payable | — |
| | 27,346 |
| | — |
| | 53 |
| | — |
| | 27,399 |
| Accrued liabilities | 1,059 |
| | 8,998 |
| | 5,907 |
| | 13,545 |
| | — |
| | 29,509 |
| Taxes other than income tax | — |
| | 3,602 |
| | 3,541 |
| | 1,855 |
| | — |
| | 8,998 |
| Income tax payable | — |
| | 953 |
| | 7 |
| | 4,402 |
| | — |
| | 5,362 |
| Intercompany payable | 504,798 |
| | — |
| | 684,864 |
| | 157,688 |
| | (1,347,350 | ) | | — |
| Total current liabilities | 505,857 |
| | 67,700 |
| | 705,369 |
| | 354,657 |
| | (1,352,178 | ) | | 281,405 |
| Long-term debt | — |
| | 2,710,117 |
| | — |
| | — |
| | — |
| | 2,710,117 |
| Long-term payable to related party | — |
| | 33,999 |
| | — |
| | 5,442 |
| | — |
| | 39,441 |
| Deferred income tax liability | — |
| | — |
| | — |
| | 28,348 |
| | — |
| | 28,348 |
| Other long-term liabilities | — |
| | 5,641 |
| | 273 |
| | 5,925 |
| | — |
| | 11,839 |
| Total partners’ equity | 1,907,246 |
| | 910,120 |
| | 950,190 |
| | 2,491,707 |
| | (4,415,779 | ) | | 1,843,484 |
| Total liabilities and partners’ equity | $ | 2,413,103 |
| | $ | 3,727,577 |
| | $ | 1,655,832 |
| | $ | 2,886,079 |
| | $ | (5,767,957 | ) | | $ | 4,914,634 |
|
Condensed Consolidating Balance Sheets December 31, 2013 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Assets | | | | | | | | | | | | Cash and cash equivalents | $ | 904 |
| | $ | 22,307 |
| | $ | — |
| | $ | 77,532 |
| | $ | — |
| | $ | 100,743 |
| Receivables, net | — |
| | 87,899 |
| | 13,281 |
| | 231,220 |
| | (6 | ) | | 332,394 |
| Inventories | — |
| | 2,083 |
| | 2,879 |
| | 133,195 |
| | (10 | ) | | 138,147 |
| Income tax receivable | — |
| | — |
| | — |
| | 826 |
| | — |
| | 826 |
| Other current assets | — |
| | 18,109 |
| | 2,334 |
| | 19,009 |
| | — |
| | 39,452 |
| Assets held for sale | — |
| | — |
| | — |
| | 21,987 |
| | — |
| | 21,987 |
| Intercompany receivable | — |
| | 1,521,552 |
| | — |
| | — |
| | (1,521,552 | ) | | — |
| Total current assets | 904 |
| | 1,651,950 |
| | 18,494 |
| | 483,769 |
| | (1,521,568 | ) | | 633,549 |
| Property, plant and equipment, net | — |
| | 1,556,893 |
| | 573,694 |
| | 1,180,066 |
| | — |
| | 3,310,653 |
| Intangible assets, net | — |
| | 16,993 |
| | — |
| | 54,256 |
| | — |
| | 71,249 |
| Goodwill | — |
| | 149,453 |
| | 170,652 |
| | 297,324 |
| | — |
| | 617,429 |
| Investment in wholly owned subsidiaries | 2,469,331 |
| | 177,961 |
| | 860,787 |
| | 918,339 |
| | (4,426,418 | ) | | — |
| Investment in joint ventures | — |
| | — |
| | — |
| | 68,735 |
| | — |
| | 68,735 |
| Deferred income tax asset | — |
| | — |
| | — |
| | 5,769 |
| | — |
| | 5,769 |
| Note receivable from related party | — |
| | 165,440 |
| | — |
| | — |
| | — |
| | 165,440 |
| Other long-term assets, net | 611 |
| | 118,254 |
| | 26,331 |
| | 14,166 |
| | — |
| | 159,362 |
| Total assets | $ | 2,470,846 |
| | $ | 3,836,944 |
| | $ | 1,649,958 |
| | $ | 3,022,424 |
| | $ | (5,947,986 | ) | | $ | 5,032,186 |
| Liabilities and Partners’ Equity | | | | | | | | | | | | Payables | $ | 123 |
| | $ | 84,533 |
| | $ | 7,517 |
| | $ | 214,909 |
| | $ | (6 | ) | | $ | 307,076 |
| Accrued interest payable | — |
| | 33,066 |
| | — |
| | 47 |
| | — |
| | 33,113 |
| Accrued liabilities | 585 |
| | 18,850 |
| | 6,133 |
| | 13,064 |
| | — |
| | 38,632 |
| Taxes other than income tax | 125 |
| | 6,272 |
| | 2,873 |
| | 475 |
| | — |
| | 9,745 |
| Income tax payable | — |
| | 618 |
| | 6 |
| | 3,382 |
| | — |
| | 4,006 |
| Intercompany payable | 504,483 |
| | — |
| | 714,847 |
| | 302,222 |
| | (1,521,552 | ) | | — |
| Total current liabilities | 505,316 |
| | 143,339 |
| | 731,376 |
| | 534,099 |
| | (1,521,558 | ) | | 392,572 |
| Long-term debt | — |
| | 2,655,553 |
| | — |
| | — |
| | — |
| | 2,655,553 |
| Long-term payable to related party | — |
| | 35,696 |
| | — |
| | 5,443 |
| | — |
| | 41,139 |
| Deferred income tax liability | — |
| | — |
| | — |
| | 27,350 |
| | — |
| | 27,350 |
| Other long-term liabilities | — |
| | 4,961 |
| | 306 |
| | 6,511 |
| | — |
| | 11,778 |
| Total partners’ equity | 1,965,530 |
| | 997,395 |
| | 918,276 |
| | 2,449,021 |
| | (4,426,428 | ) | | 1,903,794 |
| Total liabilities and partners’ equity | $ | 2,470,846 |
| | $ | 3,836,944 |
| | $ | 1,649,958 |
| | $ | 3,022,424 |
| | $ | (5,947,986 | ) | | $ | 5,032,186 |
|
Condensed Consolidating Statements of Comprehensive Income For the Three Months Ended March 31, 2014 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues | $ | — |
| | $ | 108,219 |
| | $ | 52,421 |
| | $ | 696,564 |
| | $ | (7,991 | ) | | $ | 849,213 |
| Costs and expenses | 473 |
| | 60,581 |
| | 32,955 |
| | 682,076 |
| | (7,975 | ) | | 768,110 |
| Operating (loss) income | (473 | ) | | 47,638 |
| | 19,466 |
| | 14,488 |
| | (16 | ) | | 81,103 |
| Equity in earnings of subsidiaries | 40,218 |
| | 2,784 |
| | 12,454 |
| | 31,915 |
| | (87,371 | ) | | — |
| Equity in (loss) earnings of joint ventures | — |
| | (8,278 | ) | | — |
| | 3,972 |
| | — |
| | (4,306 | ) | Interest (expense) income, net | — |
| | (33,497 | ) | | 14 |
| | 121 |
| | — |
| | (33,362 | ) | Other (loss) income, net | — |
| | (7 | ) | | (19 | ) | | 3,704 |
| | — |
| | 3,678 |
| Income from continuing operations before income tax expense | 39,745 |
| | 8,640 |
| | 31,915 |
| | 54,200 |
| | (87,387 | ) | | 47,113 |
| Income tax expense | 1 |
| | 191 |
| | 1 |
| | 3,924 |
| | — |
| | 4,117 |
| Income from continuing operations | 39,744 |
| | 8,449 |
| | 31,914 |
| | 50,276 |
| | (87,387 | ) | | 42,996 |
| Loss from discontinued operations, net of tax | — |
| | (168 | ) | | — |
| | (3,191 | ) | | — |
| | (3,359 | ) | Net income | 39,744 |
| | 8,281 |
| | 31,914 |
| | 47,085 |
| | (87,387 | ) | | 39,637 |
| Less net loss attributable to noncontrolling interest | — |
| | — |
| | — |
| | (107 | ) | | — |
| | (107 | ) | Net income attributable to NuStar Energy L.P. | $ | 39,744 |
| | $ | 8,281 |
| | $ | 31,914 |
| | $ | 47,192 |
| | $ | (87,387 | ) | | $ | 39,744 |
| | | | | | | | | | | | | Comprehensive income | $ | 39,744 |
| | $ | 10,754 |
| | $ | 31,914 |
| | $ | 42,693 |
| | $ | (87,387 | ) | | $ | 37,718 |
| Less comprehensive loss attributable to noncontrolling interest | — |
| | — |
| | — |
| | (552 | ) | | — |
| | (552 | ) | Comprehensive income attributable to NuStar Energy L.P. | $ | 39,744 |
| | $ | 10,754 |
| | $ | 31,914 |
| | $ | 43,245 |
| | $ | (87,387 | ) | | $ | 38,270 |
|
Condensed Consolidating Statements of Comprehensive Income (Loss) For the Three Months Ended March 31, 2013 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Revenues | $ | — |
| | $ | 98,689 |
| | $ | 52,626 |
| | $ | 854,896 |
| | $ | (8,025 | ) | | $ | 998,186 |
| Costs and expenses | 491 |
| | 65,398 |
| | 36,009 |
| | 840,943 |
| | (8,013 | ) | | 934,828 |
| Operating (loss) income | (491 | ) | | 33,291 |
| | 16,617 |
| | 13,953 |
| | (12 | ) | | 63,358 |
| Equity in earnings of subsidiaries | 25,056 |
| | 6,498 |
| | 8,025 |
| | 21,566 |
| | (61,145 | ) | | — |
| Equity in (loss) earnings of joint venture | — |
| | (11,541 | ) | | — |
| | 398 |
| | — |
| | (11,143 | ) | Interest expense, net | — |
| | (26,790 | ) | | (3,023 | ) | | (56 | ) | | — |
| | (29,869 | ) | Other income (expense), net | — |
| | 2,808 |
| | (84 | ) | | (2,380 | ) | | — |
| | 344 |
| Income from continuing operations before income tax expense | 24,565 |
| | 4,266 |
| | 21,535 |
| | 33,481 |
| | (61,157 | ) | | 22,690 |
| Income tax expense | — |
| | 186 |
| | 2 |
| | 2,903 |
| | — |
| | 3,091 |
| Income from continuing operations | 24,565 |
| | 4,080 |
| | 21,533 |
| | 30,578 |
| | (61,157 | ) | | 19,599 |
| (Loss) income from discontinued operations, net of tax | — |
| | (516 | ) | | — |
| | 5,321 |
| | — |
| | 4,805 |
| Net income | 24,565 |
| | 3,564 |
| | 21,533 |
| | 35,899 |
| | (61,157 | ) | | 24,404 |
| Less net loss attributable to noncontrolling interest | — |
| | — |
| | — |
| | (161 | ) | | — |
| | (161 | ) | Net income attributable to NuStar Energy L.P. | $ | 24,565 |
| | $ | 3,564 |
| | $ | 21,533 |
| | $ | 36,060 |
| | $ | (61,157 | ) | | $ | 24,565 |
| | | | | | | | | | | | | Comprehensive income | $ | 24,565 |
| | $ | 10,532 |
| | $ | 21,533 |
| | $ | 26,541 |
| | $ | (61,157 | ) | | $ | 22,014 |
| Less comprehensive loss attributable to noncontrolling interest | — |
| | — |
| | — |
| | (448 | ) | | — |
| | (448 | ) | Comprehensive income attributable to NuStar Energy L.P. | $ | 24,565 |
| | $ | 10,532 |
| | $ | 21,533 |
| | $ | 26,989 |
| | $ | (61,157 | ) | | $ | 22,462 |
|
Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2014 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net cash provided by operating activities | $ | 97,737 |
| | $ | 18,070 |
| | $ | 32,520 |
| | $ | 13,059 |
| | $ | (98,061 | ) | | $ | 63,325 |
| Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | — |
| | (31,868 | ) | | (2,020 | ) | | (20,598 | ) | | — |
| | (54,486 | ) | Change in accounts payable related to capital expenditures | — |
| | (3,756 | ) | | (374 | ) | | (4,430 | ) | | — |
| | (8,560 | ) | Proceeds from sale or disposition of assets | — |
| | — |
| | 3 |
| | 63 |
| | — |
| | 66 |
| Increase in note receivable from related party | — |
| | (13,328 | ) | | — |
| | — |
| | — |
| | (13,328 | ) | Other, net | — |
| | (46 | ) | | — |
| | (3 | ) | | 26 |
| | (23 | ) | Net cash used in investing activities | — |
| | (48,998 | ) | | (2,391 | ) | | (24,968 | ) | | 26 |
| | (76,331 | ) | Cash flows from financing activities: | | | | | | | | | | | | Debt borrowings | — |
| | 245,213 |
| | — |
| | — |
| | — |
| | 245,213 |
| Debt repayments | — |
| | (189,280 | ) | | — |
| | — |
| | — |
| | (189,280 | ) | Distributions to unitholders and general partner | (98,051 | ) | | (98,051 | ) | | — |
| | (10 | ) | | 98,061 |
| | (98,051 | ) | Net intercompany borrowings (repayments) | 314 |
| | 51,309 |
| | (30,129 | ) | | (21,494 | ) | | — |
| | — |
| Other, net | — |
| | (561 | ) | | — |
| | 3 |
| | (26 | ) | | (584 | ) | Net cash (used in) provided by financing activities | (97,737 | ) | | 8,630 |
| | (30,129 | ) | | (21,501 | ) | | 98,035 |
| | (42,702 | ) | Effect of foreign exchange rate changes on cash | — |
| | — |
| | — |
| | (2,437 | ) | | — |
| | (2,437 | ) | Net decrease in cash and cash equivalents | — |
| | (22,298 | ) | | — |
| | (35,847 | ) | | — |
| | (58,145 | ) | Cash and cash equivalents as of the beginning of the period | 904 |
| | 22,307 |
| | — |
| | 77,532 |
| | — |
| | 100,743 |
| Cash and cash equivalents as of the end of the period | $ | 904 |
| | $ | 9 |
| | $ | — |
| | $ | 41,685 |
| | $ | — |
| | $ | 42,598 |
|
Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2013 (Thousands of Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | NuStar Energy | | NuStar Logistics | | NuPOP | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net cash provided by (used in) operating activities | $ | 97,520 |
| | $ | 25,327 |
| | $ | 30,733 |
| | $ | 88,881 |
| | $ | (98,061 | ) | | $ | 144,400 |
| Cash flows from investing activities: | | | | | | | | | | | | Capital expenditures | — |
| | (39,277 | ) | | (1,478 | ) | | (11,809 | ) | | — |
| | (52,564 | ) | Proceeds from sale or disposition of assets | — |
| | 112,715 |
| | — |
| | — |
| | — |
| | 112,715 |
| Increase in note receivable from related party | — |
| | (63,489 | ) | | — |
| | — |
| | — |
| | (63,489 | ) | Other, net | — |
| | (66 | ) | | 6 |
| | 69 |
| | 211 |
| | 220 |
| Net cash provided by (used in) investing activities | — |
| | 9,883 |
| | (1,472 | ) | | (11,740 | ) | | 211 |
| | (3,118 | ) | Cash flows from financing activities: | | | | | | | | | | | | Debt borrowings | — |
| | 334,226 |
| | — |
| | — |
| | — |
| | 334,226 |
| Note offering, net | — |
| | 391,217 |
| | — |
| | — |
| | — |
| | 391,217 |
| Debt repayments | — |
| | (718,782 | ) | | — |
| | — |
| | — |
| | (718,782 | ) | Distributions to unitholders and general partner | (98,051 | ) | | (98,051 | ) | | — |
| | (10 | ) | | 98,061 |
| | (98,051 | ) | Payments for termination of interest rate swaps | — |
| | (16,255 | ) | | — |
| | — |
| | — |
| | (16,255 | ) | Net intercompany borrowings (repayments) | 520 |
| | 98,175 |
| | (29,261 | ) | | (69,434 | ) | | — |
| | — |
| Other, net | 11 |
| | (53 | ) | | — |
| | 329 |
| | (211 | ) | | 76 |
| Net cash (used in) provided by financing activities | (97,520 | ) | | (9,523 | ) | | (29,261 | ) | | (69,115 | ) | | 97,850 |
| | (107,569 | ) | Effect of foreign exchange rate changes on cash | — |
| | — |
| | — |
| | (802 | ) | | — |
| | (802 | ) | Net increase in cash and cash equivalents | — |
| | 25,687 |
| | — |
| | 7,224 |
| | — |
| | 32,911 |
| Cash and cash equivalents as of the beginning of the period | 7,033 |
| | 1,112 |
| | — |
| | 75,457 |
| | — |
| | 83,602 |
| Cash and cash equivalents as of the end of the period | $ | 7,033 |
| | $ | 26,799 |
| | $ | — |
| | $ | 82,681 |
| | $ | — |
| | $ | 116,513 |
|
|