NuStar Energy L.P. (NYSE:NS) today announced net income applicable to limited partners of $22.6 million, or $0.47 per unit, for the fourth quarter of 2007, compared to $33.0 million, or $0.70 per unit, earned in the fourth quarter of 2006. For the year ended December 31, 2007, net income applicable to limited partners was $129.2 million, or $2.74 per unit, compared to $132.6 million, or $2.83 per unit in 2006.
Distributable cash flow available to limited partners from continuing operations for the fourth quarter of 2007 was $34.9 million, or $0.72 per unit, compared to $45.3 million, or $0.97 per unit, for the fourth quarter of 2006. For the year ended December 31, 2007, distributable cash flow available to limited partners from continuing operations was $198.6 million, or $4.22 per unit, compared to $195.7 million, or $4.18 per unit. As of December 31, 2007, the partnership’s debt-to-capitalization ratio was 42.0 percent compared to 41.9 percent as of December 31, 2006.
With respect to the quarterly distribution to unitholders for the fourth quarter of 2007, NuStar also announced that its board of directors has declared a distribution of $0.985 per unit, or $3.94 per unit on an annual basis, which will be paid on February 14, 2008, to holders of record as of February 7, 2008. This quarterly distribution represents an increase of $0.07 per unit, or 7.7 percent, over the $0.915 distribution for the fourth quarter of 2006.
“2007 was a very active and challenging year for the partnership, while at the same time very rewarding and productive,” said Curt Anastasio, Chief Executive Officer and President of NuStar Energy L.P. and NuStar GP Holdings, LLC. “Our separation from Valero Energy at the beginning of the year, including our name change to NuStar, the move to our new headquarters and the separation of services, was a defining moment in the company’s history. We brought on board a lot of very talented employees and started up a new marketing, supply and trading group, both of which have positioned us well for further growth.
“Financially, we had a good year, despite higher costs associated with our separation from Valero Energy and the impact of a fire at Valero Energy's McKee refinery in the Texas Panhandle. We achieved our stated goal for earnings before interest, taxes, depreciation and amortization ("EBITDA") and increased the annual distribution by around 7 percent to $3.835 per unit in 2007 from $3.60 per unit in 2006, while maintaining a healthy coverage ratio applicable to the limited partners of 1.10 times.
“We are in a great position to achieve greater success in 2008 and beyond. We started construction in 2007 on the majority of projects in our $400 million construction program, the largest capital expenditure program in the history of the company. While many of these projects came online this past year, several more are expected to be in-service in 2008, providing a major benefit to the partnership’s 2008 results. In addition, nearly all of the projects that we have completed, or that will be completed this year, have been and are still expected to be on-time and on-budget. We’ve made NuStar into a global leader in independents liquids storage, as we currently are the second largest independents liquids terminal operator in the world with over 81 million barrels of storage capacity.
“One of the more important accomplishments for 2007 was the announcement to acquire CITGO Asphalt Refining Company. We’re looking forward to completing the acquisition and the significant contribution we expect from these assets. We also look forward to sharing with you more information on the numerous projects we’ve recently identified that will increase the capacity and operational efficiency of these refineries and provide more operating flexibility to reduce the seasonality of the asphalt business.
“We believe 2008 will be a good year for NuStar, as we will benefit significantly from the construction projects that have already come on-stream in late 2007 and the ones that will be coming on-stream this year. The CITGO Asphalt Refining Company acquisition is also expected to be a major contributor to earnings. Although asphalt fundamentals weakened seasonally in the fourth quarter, we continue to see inventories tightening and the forward curve improving significantly from 2007 levels. While we foresee some coker projects coming online this year, the majority of the coker projects are expected to be in service in 2009 and 2010, which should further tighten asphalt supplies, resulting in higher margins. For these and many other reasons, we strongly believe that the best is yet to come for NuStar,” said Anastasio.
A conference call with management is scheduled for 11:00 a.m. ET (10:00 a.m. CT) today, January 25, 2008, to discuss the financial and operational results for the fourth quarter of 2007. Investors interested in listening to the presentation may call 800/622-7620, passcode 30195295.International callers may access the presentation by dialing 706/645-0327, passcode 30195295. The company intends to have a playback available following the presentation, which may be accessed by calling 800/642-1687, passcode 30195295. A live broadcast of the conference call will also be available on the company’s Web site at www.nustarenergy.com.
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NuStar Energy L.P. is a publicly traded, limited partnership based in San Antonio, with 9,113 miles of pipeline, 84 terminal facilities and four crude oil storage tank facilities. The second largest independent liquids terminal operator in the world, NuStar has operations in the United States, the Netherlands Antilles, Canada, Mexico, the Netherlands and the United Kingdom. The partnership’s combined system has over 81 million barrels of storage capacity, and includes crude oil and refined product pipelines, refined product terminals, a petroleum and specialty liquids storage and terminaling business, as well as crude oil storage facilities. For more information, visit NuStar Energy L.P.'s Web site at www.nustarenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of NuStar Energy L.P. All forward-looking statements are based on the partnership's beliefs as well as assumptions made by and information currently available to the partnership. These statements reflect the partnership'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 2006 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.