UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~_________________________________________~~

FORM10-Q

~~_________________________________________~~

(Mark One)


☑
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
~~For the quarterly period ended September 30, 2017~~

ORFor the quarterly period ended March 31, 2024


☐
o	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~~NuStar Energy L.P.

(Exact name of registrant as specified in its charter)


Delaware			74-2956831

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

~~19003 IH-10 West~~ ~~San Antonio, Texas~~	~~78257~~
~~(Address of principal executive offices)~~	~~(Zip Code)~~

19003 IH-10 West

San Antonio, Texas 78257

(Address of principal executive offices) (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

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 (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 xþ No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes xþ No o

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

Large accelerated filer

Accelerated filer

o☐

Non-accelerated filer

☐

o ~~(Do not check if a smaller reporting company)~~

Smaller reporting company

o☐

Emerging growth company

o☐

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 o☐ No xþ

The number of common units outstanding as of ~~October 31, 2017~~April 26, 2024 was ~~93,032,836.~~126,535,349.

Table of Contents

NUSTAR ENERGY L.P.

FORM 10-Q

TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION

Item 1.			Financial Statements		3

~~Item 1.~~	~~Financial Statements:~~

	Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016~~2023	3

	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023			4

	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2024 and ~~2016~~2023			5
			Consolidated Statements of Partners’ Equity and Mezzanine Equity for the Three Months Ended March 31, 2024 and 2023			6
			Condensed Notes to Consolidated Financial Statements		67
			1. Organization and Basis of Presentation			7
			2. New Accounting Pronouncements		8
			3. Revenue from Contracts with Customers		9
			4. Debt		10
			5. Commitments and Contingencies		11
			6. Partners’ Equity		11
			7. Net Income per Common Unit		13
			8. Supplemental Cash Flow Information		14
			9. Segment Information		15

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		2916
			Cautionary Statement Regarding Forward-Looking Information			16
			Overview		16
			Results of Operations		18
			Liquidity and Capital Resources		21
			Critical Accounting Estimates		25
			New Accounting Pronouncements		25

Item 3.			Quantitative and Qualitative Disclosures About Market Risk		4626

Item 4.			Controls and Procedures		4927

PART II – OTHER INFORMATION



Item 6.5.			~~Exhibits~~Other Information		5028

Item 6.			Exhibits		28

SIGNATURES					5129

Table of Contents

PART I – FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1.Financial Statements

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited, Thousands of Dollars, Except Unit Data)


	September 30, 2017			December 31, 2016
	(Unaudited)
	March 31, 2024						March 31, 2024	December 31, 2023
Assets
Current assets:
Current assets:
Current assets:
Cash and cash equivalents	$	33,615		$	35,942
Accounts receivable, net of allowance for doubtful accounts of $7,807 and $7,756 as of September 30, 2017 and December 31, 2016, respectively	152,074			170,293
Receivable from related party	81			317
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable

Inventories	23,297			37,945
Other current assets	24,805			132,686
Inventories
Inventories

Prepaid and other current assets
Prepaid and other current assets
Prepaid and other current assets

Total current assets
Total current assets
Total current assets	233,872			377,183
Property, plant and equipment, at cost	6,073,194			5,435,278
Accumulated depreciation and amortization	(1,885,045		)	(1,712,995		)
Property, plant and equipment, net	4,188,149			3,722,283
Intangible assets, net	797,339			127,083
Goodwill	1,095,943			696,637
Deferred income tax asset	1,070			2,051

Other long-term assets, net

Other long-term assets, net

Other long-term assets, net	102,395			105,308
Total assets	$	6,418,768		$	5,030,545

Liabilities and Partners’ Equity
Liabilities and Partners’ Equity
Liabilities and Partners’ Equity
Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable	$	97,854		$	118,686
Short-term debt	68,000			54,000
Current portion of long-term debt	350,007			—
Accounts payable
Accounts payable

Current portion of finance leases
Current portion of finance leases
Current portion of finance leases

Accrued interest payable
Accrued interest payable
Accrued interest payable	41,811			34,030
Accrued liabilities	60,466			60,485

Taxes other than income tax	19,940			15,685
Income tax payable	2,989			6,510
Taxes other than income tax
Taxes other than income tax

Total current liabilities	641,067			289,396
Long-term debt	3,232,599			3,014,364

Total current liabilities

Total current liabilities
Long-term debt, less current portion of finance leases

Deferred income tax liability	23,166			22,204
Deferred income tax liability
Deferred income tax liability

Other long-term liabilities	102,074			92,964
Other long-term liabilities
Other long-term liabilities
Total liabilities

Commitments and contingencies (Note 5)
Partners’ equity:
Series A preferred limited partners (9,060,000 preferred units outstanding as of September 30, 2017 and December 31, 2016)	218,307			218,400
Series B preferred limited partners (15,400,000 preferred units outstanding as of September 30, 2017)	371,613			—
Common limited partners (93,032,099 and 78,616,228 common units outstanding as of September 30, 2017 and December 31, 2016, respectively)	1,873,382			1,455,642
General partner	39,953			31,752
Commitments and contingencies (Note 5)
Commitments and contingencies (Note 5)

Partners’ equity (Note 6):
Partners’ equity (Note 6):
Partners’ equity (Note 6):
Preferred limited partners
Preferred limited partners
Preferred limited partners
Series A (9,060,000 units outstanding as of March 31, 2024 and December 31, 2023)
Series A (9,060,000 units outstanding as of March 31, 2024 and December 31, 2023)
Series A (9,060,000 units outstanding as of March 31, 2024 and December 31, 2023)
Series B (15,400,000 units outstanding as of March 31, 2024 and December 31, 2023)
Series C (6,900,000 units outstanding as of March 31, 2024 and December 31, 2023)
Common limited partners (126,535,271 and 126,516,713 units outstanding as of March 31, 2024 and December 31, 2023, respectively)
Accumulated other comprehensive loss	(83,393		)	(94,177		)
Total partners’ equity	2,419,862			1,611,617
Total liabilities and partners’ equity	$	6,418,768		$	5,030,545

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 September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Revenues:
Revenues:
Service revenues
Service revenues
Service revenues	$	295,102		$	277,758		$	845,264		$	814,727
Product sales	145,464			163,660			518,220			470,198
Product sales
Product sales
Total revenues	440,566			441,418			1,363,484			1,284,925
Total revenues
Total revenues

Costs and expenses:
Cost of product sales	138,078			155,129			490,363			441,736
Operating expenses:
Third parties	116,590			117,432			334,016			313,634
Related party	—			—			—			21,681
Total operating expenses	116,590			117,432			334,016			335,315
General and administrative expenses:
Third parties	25,003			26,957			83,202			62,906
Related party	—			—			—			10,493
Total general and administrative expenses	25,003			26,957			83,202			73,399

Costs and expenses:

Costs and expenses:
Costs associated with service revenues:
Costs associated with service revenues:
Costs associated with service revenues:
Operating expenses (excluding depreciation and amortization expense)
Operating expenses (excluding depreciation and amortization expense)
Operating expenses (excluding depreciation and amortization expense)
Depreciation and amortization expense	69,178			53,946			193,643			160,739
Depreciation and amortization expense
Depreciation and amortization expense
Total costs associated with service revenues
Total costs associated with service revenues
Total costs associated with service revenues
Costs associated with product sales
Costs associated with product sales
Costs associated with product sales

General and administrative expenses (excluding depreciation and amortization expense)

General and administrative expenses (excluding depreciation and amortization expense)

General and administrative expenses (excluding depreciation and amortization expense)
Other depreciation and amortization expense
Other depreciation and amortization expense
Other depreciation and amortization expense

Total costs and expenses	348,849			353,464			1,101,224			1,011,189

Total costs and expenses

Total costs and expenses

Gain on sale of assets

Gain on sale of assets

Gain on sale of assets

Operating income	91,717			87,954			262,260			273,736

Operating income

Operating income

Interest expense, net	(45,256		)	(35,022		)	(127,282		)	(103,374		)
Other (expense) income, net	(5,126		)	362			(4,898		)	(10		)

Interest expense, net

Interest expense, net

Other income, net

Other income, net

Other income, net
Income before income tax expense
Income before income tax expense
Income before income tax expense	41,335			53,294			130,080			170,352
Income tax expense	2,743			2,153			7,298			9,293
Income tax expense
Income tax expense
Net income
Net income
Net income	$	38,592		$	51,141		$	122,782		$	161,059

Basic and diluted net income per common unit (Note 11)	$	0.15		$	0.49		$	0.65		$	1.58
Basic weighted-average common units outstanding	93,031,320			78,031,053			87,392,597			77,934,802
Diluted weighted-average common units outstanding	93,031,320			78,062,889			87,392,597			77,981,299
Basic and diluted net income per common unit (Note 7)

Basic and diluted net income per common unit (Note 7)

Basic and diluted net income per common unit (Note 7)

Basic and diluted weighted-average common units outstanding

Basic and diluted weighted-average common units outstanding

Basic and diluted weighted-average common units outstanding


Comprehensive income	$	44,482		$	48,652		$	133,566		$	120,453

Comprehensive income

Comprehensive income

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)

Nine Months Ended September 30,
2017 2016
Cash Flows from Operating Activities:
Net income $ 122,782
$ 161,059
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 193,643
160,739
Unit-based compensation expense 7,437
4,820
Amortization of debt related items 4,677
5,762
Loss (gain) from sale or disposition of assets 4,920
(14 )
Deferred income tax (benefit) expense (106 ) 2,989
Changes in current assets and current liabilities (Note 12) (17,671 ) (12,477 )
Other, net (4,667 ) (8,329 )
Net cash provided by operating activities 311,015
314,549
Cash Flows from Investing Activities:
Capital expenditures (220,617 ) (145,414 )
Change in accounts payable related to capital expenditures 13,272
(15,504 )
Proceeds from sale or disposition of assets 2,023
—
Proceeds from Axeon term loan 110,000
—
Acquisitions (1,461,719 ) —
Net cash used in investing activities (1,557,041 ) (160,918 )
Cash Flows from Financing Activities:
Proceeds from long-term debt borrowings 1,223,204
523,982
Proceeds from short-term debt borrowings 748,000
462,000
Proceeds from note offering, net of issuance costs 543,313
—
Long-term debt repayments (1,204,739 ) (410,750 )
Short-term debt repayments (734,000 ) (539,000 )
Proceeds from issuance of preferred units, net of issuance costs 371,802
—
Proceeds from issuance of common units, net of issuance costs 643,858
27,710
Contributions from general partner 13,597
575
Distributions to preferred unitholders (26,681 ) —
Distributions to common unitholders and general partner (331,222 ) (294,153 )
Increase (decrease) in cash book overdrafts 1,564
(12,181 )
Other, net (6,634 ) (1,418 )
Net cash provided by (used in) financing activities 1,242,062
(243,235 )
Effect of foreign exchange rate changes on cash 1,637
3,404
Net decrease in cash and cash equivalents (2,327 ) (86,200 )
Cash and cash equivalents as of the beginning of the period 35,942
118,862
Cash and cash equivalents as of the end of the period $ 33,615
$ 32,662


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net income	$	42,742	$	105,936
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	64,656		63,609
Amortization of unit-based compensation	4,340		3,628
Amortization of debt related items	3,011		2,607
Gain on sale of assets	—		(41,075)





Changes in current assets and current liabilities (Note 8)	20,714		32,614
Decrease in other long-term assets, net	4,681		3,294
Increase (decrease) in other long-term liabilities	1,510		(1,729)
Other, net	(1,920)		(4,300)
Net cash provided by operating activities	139,734		164,584

Cash flows from investing activities:
Capital expenditures	(34,644)		(22,083)
Change in accounts payable related to capital expenditures	(5,546)		(4,308)
Proceeds from insurance recoveries	—		12,395
Proceeds from sale or disposition of assets	42		102,670




Net cash (used in) provided by investing activities	(40,148)		88,674

Cash flows from financing activities:


Proceeds from long-term debt borrowings	142,500		120,300


Long-term debt repayments	(159,600)		(301,600)







Distributions to preferred unitholders	(23,283)		(32,661)
Distributions to common unitholders	(50,613)		(44,362)




Other, net	(5,913)		(4,365)
Net cash used in financing activities	(96,909)		(262,688)

Effect of foreign exchange rate changes on cash	32		170
Net increase (decrease) in cash, cash equivalents and restricted cash	2,709		(9,260)
Cash, cash equivalents and restricted cash as of the beginning of the period	12,016		23,377
Cash, cash equivalents and restricted cash as of the end of the period	$	14,725	$	14,117

See Condensed Notes to Consolidated Financial Statements.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY AND MEZZANINE EQUITY

Three Months Ended March 31, 2024 and 2023

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


	Limited Partners								Mezzanine Equity
	Preferred		Common		Accumulated Other Comprehensive Loss		Total Partners’ Equity (Note 6)		Series D Preferred Limited Partners		Total
Balance as of January 1, 2024	$	756,301	$	312,905	$	(22,925)	$	1,046,281	$	—	$	1,046,281
Net income	23,266		19,476		—		42,742		—		42,742
Other comprehensive income	—		—		184		184		—		184
Distributions to partners:
Series A, B and C preferred	(23,266)		—		—		(23,266)		—		(23,266)
Common ($0.40 per unit)	—		(50,613)		—		(50,613)		—		(50,613)




Unit-based compensation	—		3,546		—		3,546		—		3,546


Other	—		(11)		—		(11)		—		(11)
Balance as of March 31, 2024	$	756,301	$	285,303	$	(22,741)	$	1,018,863	$	—	$	1,018,863




Balance as of January 1, 2023	$	756,301	$	177,620	$	(31,605)	$	902,316	$	446,970	$	1,349,286
Net income	21,584		73,203		—		94,787		11,149		105,936
Other comprehensive income	—		—		204		204		—		204
Distributions to partners:
Series A, B and C preferred	(21,584)		—		—		(21,584)		—		(21,584)
Common ($0.40 per unit)	—		(44,362)		—		(44,362)		—		(44,362)
Series D preferred	—		—		—		—		(11,149)		(11,149)


Unit-based compensation	—		4,384		—		4,384		—		4,384
Series D Preferred Unit accretion	—		(3,671)		—		(3,671)		3,671		—
Other	—		(10)		—		(10)		—		(10)
Balance as of March 31, 2023	$	756,301	$	207,164	$	(31,401)	$	932,064	$	450,641	$	1,382,705

See Condensed Notes to Consolidated Financial Statements.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization and Operations

NuStar Energy L.P. ~~(NYSE: NS)~~(NuStar Energy) is a publicly ~~held~~traded Delaware limited ~~partnership engaged in the transportation of petroleum products and anhydrous ammonia, and the terminalling, storage and marketing of petroleum products.~~partnership. Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole. Our business is managed under the direction of the board of directors of NuStar GP, ~~Holdings,~~ LLC ~~(NuStar GP Holdings or NSH) (NYSE: NSH) owns~~(the Board of Directors), the general partner of our general partner, Riverwalk Logistics, L.P., ~~and owns an approximate 11% common~~both of which are indirectly wholly owned subsidiaries of ours. As of March 31, 2024, our limited partner ~~interest~~interests consisted of the following:

•common units (NYSE: NS); and

•8.50% Series A (NYSE: NSprA), 7.625% Series B (NYSE: NSprB) and 9.00% Series C (NYSE: NSprC) Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.

We are primarily engaged in ~~us as~~the transportation, terminalling and storage of ~~September 30, 2017~~.

petroleum products and renewable fuels and the transportation of anhydrous ammonia. We also market petroleum products. We conduct our operations through our subsidiaries, primarily NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. (NuPOP). We have three business segments: pipeline, storage and fuels marketing.

~~Recent Developments~~Merger Agreement

~~Hurricane Activity.~~ InOn January 22, 2024, NuStar Energy entered into an Agreement and Plan of Merger (the Merger Agreement) with Sunoco LP, a Delaware limited partnership (Sunoco), Saturn Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Sunoco (Merger Sub), Riverwalk Logistics, L.P., NuStar GP, LLC, and Sunoco GP LLC, a Delaware limited liability company and sole general partner of Sunoco (the Sunoco GP). The Merger Agreement provides that, among other things and on the ~~third~~terms and subject to the conditions set forth therein, Sunoco will acquire NuStar Energy in an all-equity transaction by means of a merger of Merger Sub with and into NuStar Energy (the Merger) with NuStar Energy surviving the Merger as a subsidiary of Sunoco.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the Effective Time), each NuStar Energy common unit issued and outstanding immediately prior to the Effective Time will be converted into and shall thereafter represent the right to receive 0.400 of a common unit of Sunoco and, if applicable, cash in lieu of fractional units. See Note 6 for information on the conditional special distribution to our common unitholders.

Each series of NuStar Energy preferred units issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time as limited partnership interests of the surviving entity in the Merger having the same terms as are applicable to the applicable series of preferred units immediately prior to the Effective Time.

The completion of the Merger is subject to the fulfillment or waiver of certain conditions, including, among others, approval and adoption by NuStar Energy’s common unitholders of the Merger Agreement and the transactions contemplated thereby, including the Merger. For more information regarding the Merger and Merger Agreement, see our current report on Form 8-K filed with the SEC on January 22, 2024 and our definitive merger proxy statement on Schedule 14A filed with the SEC on

April 3, 2024.

Other Events

Sale-Leaseback Transaction. On March 21, 2023, we sold our corporate headquarters facility and approximately 24 acres of underlying land located in San Antonio, Texas (the Corporate Headquarters) for an aggregate cash sales price of $103.0 million and immediately entered into an operating lease agreement (the HQ Lease Agreement) to lease back the Corporate Headquarters for an initial term of 20 years, with two renewal options of ten years each (the Sale-Leaseback Transaction). Upon closing of the sale in the first quarter of ~~2017, parts~~2023, the Sale-Leaseback Transaction qualified as a completed sale, and we recognized a gain of ~~the Caribbean and Gulf~~$41.1 million, which is presented in “Gain on sale of Mexico experienced three major hurricanes. Several of our facilities were affected by the hurricanes, with the main impact at our St. Eustatius terminal, which was temporarily shut down. We recorded a $5.0 million loss in “Other (expense) income, net” inassets” on the condensed consolidated statements of comprehensive income.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Series D Preferred Units. In the second and third quarters of 2023, we redeemed all of our outstanding Series D Cumulative Convertible Preferred Units (the Series D Preferred Units) at the then applicable redemption price plus accrued and unpaid distributions. Prior to their redemption, the Series D Preferred Units were presented as mezzanine equity, and we allocated net income into the ~~third quarter of 2017 for property damage at our St. Eustatius terminal, which represents~~Series D Preferred Units equal to the amount of our deductible under our insurance policy. Additionally, we incurred approximately $0.7 million of operating expenses to repair minor property damage at several of our domestic terminals. The shutdown ofdistributions earned during the St. Eustatius terminal also caused lower revenues for our bunker fuel operations in our fuels marketing segment and lower throughput and associated handling fees in our storage segment. We are still evaluatingperiod. Distributions on the extent of property damage at our St. Eustatius terminal, as well as the interruption to our operations; therefore, we are unable to estimate the total impact from the hurricanes at this time. However, we expect that losses incurred above our deductible amount will be covered by our insurance policies.

~~Navigator Acquisition and Financing Transactions.~~ On May 4, 2017, we completed the acquisition of Navigator Energy Services, LLC for approximately $1.5 billion (the Navigator Acquisition). In order to fund the purchase price, we issued 14,375,000 common units for net proceeds of $657.5 million, issued $550.0 million of 5.625% senior notes for net proceeds of $543.3 million and issued 15,400,000 of our 7.625% Series ~~B Fixed-to-Floating Rate Cumulative Redeemable Perpetual~~D Preferred Units ~~(Series B Preferred Units) for net proceeds~~were payable on the 15th day (or next business day) of ~~$371.8 million. Please refer~~each of March, June, September and December, to ~~Notes 3, 4 and 10 for further discussion.~~holders of record on the first business day of each payment month.

~~Axeon Term Loan.~~ On February 22, 2017, we settled and terminated the $190.0 million term loan to Axeon Specialty Products, LLC (the Axeon Term Loan), pursuant to which we also provided credit support, such as guarantees, letters of credit and cash collateral, as applicable, of up to $125.0 million to Axeon Specialty Products, LLC (Axeon). We received $110.0 million in settlement of the Axeon Term Loan, and our obligation to provide ongoing credit support to Axeon ceased. Please refer to Note 6 for further discussion of the Axeon Term Loan and credit support.

Basis of Presentation

These unaudited condensed consolidated financial statements include the accounts of the Partnership and subsidiaries in which the Partnership has a controlling interest. Inter-partnership balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and all disclosures are adequate. All such adjustments are of a normal recurring nature unless disclosed otherwise. ~~Financial information for the three and nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~included in these Condensed Notes to Consolidated Financial Statements is derived from our unaudited condensed consolidated financial statements.~~ Operating results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017. The consolidated balance sheet as of~~ ~~December 31, 2016~~ ~~has been derived from the audited consolidated financial statements as of that date.~~2024. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2023.

2. NEW ACCOUNTING PRONOUNCEMENTS

The Enhancement and Standardization of Climate-Related Disclosures for Investors

In March 2024, the Securities and Exchange Commission (SEC) issued final rules that require disclosure of certain climate-related information in registration statements and annual reports. The rules require presentation of certain climate-related financial metrics in our audited financial statements and disclosure of climate-related risks that are reasonably likely to have a material impact on our business, results of operations, or financial condition. The final rules follow a compliance phase-in timeline, and we will be required to apply the first requirements in our Annual Report on Form 10-K for fiscal year ending December 31, 2025. Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. We are currently evaluating the impact of these final rules on our consolidated financial statements and disclosures. In April 2024, the SEC issued an order staying the final rules.

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (FASB) issued guidance intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through changes to the rate reconciliation and income taxes paid information. The amendments are effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The amendments should be applied prospectively; however, retrospective application is permitted. We plan to adopt the amended guidance on January 1, 2025, and are currently evaluating our method of adoption and the impact of this amended guidance on our disclosures.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued guidance intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Among other changes, the amendments will require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis. Early adoption is permitted. We adopted the annual disclosure requirements on January 1, 2024 and plan to adopt the interim disclosure requirements on January 1, 2025, and are currently evaluating the impact of this amended guidance on our disclosures.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

~~2. NEW ACCOUNTING PRONOUNCEMENTS~~

Contract Assets and Contract Liabilities

~~Derivatives~~The following table provides information about contract assets and ~~Hedging~~contract liabilities from contracts with customers:

~~In August 2017,~~


	2024				2023
	Contract Assets		Contract Liabilities		Contract Assets		Contract Liabilities
	(Thousands of Dollars)
Balances as of January 1:
Current portion	$	3,109	$	(27,131)	$	2,612	$	(17,647)
Noncurrent portion	729		(41,278)		304		(41,405)
Total	3,838		(68,409)		2,916		(59,052)

Activity:
Additions	237		(23,203)		125		(16,829)
Transfer to accounts receivable	(2,834)		—		(2,388)		—
Transfer to revenues	—		12,618		—		14,008

Total	(2,597)		(10,585)		(2,263)		(2,821)

Balances as of March 31:
Current portion	701		(33,603)		406		(21,065)
Noncurrent portion	540		(45,391)		247		(40,808)

Total	$	1,241	$	(78,994)	$	653	$	(61,873)

Current contract assets are included in “Prepaid and other current assets” and noncurrent contract assets are included in “Other long-term assets, net” on the ~~Financial Accounting Standards Board (FASB) issued amended guidance intended to improve~~consolidated balance sheets. The current portion of contract liabilities is included in “Accrued liabilities” and the ~~financial reporting~~noncurrent portion of ~~hedging relationships to better portray~~contract liabilities is included in “Other long-term liabilities” on the ~~economic results~~consolidated balance sheets.

Remaining Performance Obligations

The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenue as of an entity’s risk management activities in its financial statements. The amended guidance also makes certain targeted improvements to simplify the application of current hedge accounting guidance. The guidance is effectiveMarch 31, 2024:


	Remaining Performance Obligations
	(Thousands of Dollars)
2024 (remaining)	$	299,163
2025	274,158
2026	201,486
2027	111,266
2028	74,587
Thereafter	94,828
Total	$	1,055,488

Our contractually committed revenue, for ~~annual and interim periods beginning after December 15, 2018, with early adoption permitted. Certain~~purposes of the ~~new requirements should be applied prospectively while others should be applied using a modified retrospective transition method. We currently expect~~tabular presentation above, is generally limited to ~~adopt the amended guidance on January 1, 2019~~customer contracts that have fixed pricing and are assessing the impact of this amended guidance on our financial position, results of operations and disclosures. We plan to provide additional information about the expected financial impact at a future date.

~~Unit-Based Payments~~

~~In May 2017, the FASB issued amended guidance that clarifies when a change to the~~fixed volume terms and conditions, including contracts with payment obligations for minimum volume commitments.

Table of a unit-based payment award is accounted for as a modification. Under the amended guidance, an entity will apply modification accounting if the value, vesting or classification of the unit-based payment award changes. The guidance is effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied prospectively. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our financial position, results of operations or disclosures.

~~Defined Benefit Plans~~

In March 2017, the FASB issued amended guidance that changes the presentation of net periodic pension cost related to defined benefit plans. Under the amended guidance, the service cost component of net periodic benefit cost will be presented in the same income statement line items as other current employee compensation costs, but the remaining components of net periodic benefit cost will be presented outside of operating income. The changes are effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied retrospectively. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our financial position, results of operations or disclosures.

~~Goodwill~~

In January 2017, the FASB issued amended guidance that simplifies the accounting for goodwill impairment by eliminating step 2 of the goodwill impairment test. Under the amended guidance, goodwill impairment will be measured as the excess of the reporting unit’s carrying value over its fair value, not to exceed the carrying amount of goodwill for that reporting unit. The changes are effective for annual and interim periods beginning after December 15, 2019, and amendments should be applied prospectively. Early adoption is permitted for any impairment tests performed after January 1, 2017, and we are currently evaluating whether we will adopt these provisions early. Regardless of our decision, we do not expect the guidance to have a material impact on our financial position, results of operations or disclosures.

~~Definition of a Business~~

In January 2017, the FASB issued amended guidance that clarifies the definition of a business used in evaluating whether a set of transferred assets and activities constitutes a business. Under the amended guidance, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of transferred assets and activities would not represent a business. To be considered a business, the set of assets transferred is also required to include at least one substantive process that together significantly contribute to the ability to create outputs. In addition, the amended guidance narrows the definition of outputs to be consistent with how outputs are described in the new revenue recognition standard. The changes are effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied prospectively. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our financial position, results of operations or disclosures.

~~Statement of Cash Flows~~

In August 2016, the FASB issued amended guidance that clarifies how entities should present certain cash receipts and cash payments on the statement of cash flows, including, but not limited to, debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and distributions received from equity method investees. The changes are effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied retrospectively. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our statements of cash flows or disclosures.

Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Disaggregation of Revenues

The following table disaggregates our revenues:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars)
Pipeline segment:
Crude oil pipelines	$	94,992	$	96,603
Refined products and ammonia pipelines	121,783		116,580
Total pipeline segment revenues from contracts with customers	216,775		213,183



Storage segment:
Throughput terminals (a)	12,587		27,315
Storage terminals (excluding lessor revenues) (a)	51,720		42,016
Total storage segment revenues from contracts with customers	64,307		69,331
Lessor revenues	11,571		11,326
Total storage segment revenues	75,878		80,657

Fuels marketing segment:
Revenues from contracts with customers	98,175		100,027

Consolidation and intersegment eliminations	(1)		—

Total revenues	$	390,827	$	393,867

(a)Effective January 1, 2024, revenue for certain terminals changed from throughput-based to storage-based, due to changes in customer contracts.

4. DEBT

Revolving Credit ~~Losses~~Agreement

~~In June 2016,~~As of March 31, 2024, NuStar Logistics’ $1.0 billion unsecured revolving credit agreement (as amended, the ~~FASB~~Revolving Credit Agreement), due January 27, 2027, had $670.4 million available for borrowing and $325.0 million of borrowings outstanding. Letters of credit issued ~~amended guidance that requires~~under the ~~use~~Revolving Credit Agreement totaled $4.6 million as of ~~a “current expected loss” model~~March 31, 2024, and limit the amount we can borrow under the Revolving Credit Agreement. Obligations under our Revolving Credit Agreement are guaranteed by NuStar Energy and NuPOP. The Revolving Credit Agreement provides for ~~financial assets measured~~U.S. dollar borrowings, which bear interest, at ~~amortized cost and certain off-balance sheet credit exposures. Under this model, entities will be required to estimate the lifetime expected credit losses on such instruments~~our option, based on ~~historical experience, current conditions,~~an alternative base rate or a secured overnight financing rate (SOFR) based rate. As of March 31, 2024, our weighted-average interest rate related to borrowings under the Revolving Credit Agreement was 7.9%.

Our Revolving Credit Agreement is subject to maximum consolidated debt coverage ratio and ~~reasonable and supportable forecasts. This amended guidance also expands~~minimum consolidated interest coverage ratio requirements, which may limit the ~~disclosure requirements~~amount we can borrow to ~~enable users~~an amount that is less than the total amount available for borrowing. For the rolling period of financial statements to understand an entity’s assumptions, models and methods for estimating expected credit losses. The changes are effective for annual and interim periods beginning after December 15, 2019, and amendments should be applied using a modified retrospective approach. We currently expect to adoptfour quarters ending March 31, 2024, the ~~amended guidance on January 1, 2020 and are assessing~~Consolidated Debt Coverage Ratio (as defined in the ~~impact of this amended guidance on our financial position, results of operations and disclosures. We plan to provide additional information about the expected financial impact at a future date.~~

~~Leases~~

In February 2016, the FASB issued amended guidance that requires lessees to recognize the assets and liabilities that arise from most leases on the balance sheet. For lessors, this amended guidance modifies the classification criteriaRevolving Credit Agreement) may not exceed 5.00-to-1.00, and the ~~accounting for sales-type and direct financing leases. The changes are effective for annual and interim periods beginning after December 15,~~

~~2018, and amendments should be applied using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period~~Consolidated Interest Coverage Ratio (as defined in the ~~financial statements, with the option to use certain expedients. We currently expect to adopt these provisions on January 1, 2019. We have initiated a project to assess the impact~~Revolving Credit Agreement) must not be less than 1.75-to-1.00. As of this amended guidance on our financial position, results of operations, disclosures and internal controls and plan to provide additional information about the expected financial impact at a future date.

~~Financial Instruments~~

~~In January 2016, the FASB issued new guidance~~March 31, 2024, we believe that addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The changes are effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our financial position, results of operations or disclosures.

~~Revenue Recognition~~

In May 2014, the FASB and the International Accounting Standards Board jointly issued a comprehensive new revenue recognition standard. In August 2015, the FASB deferred the effective date by one year. The standard is now effective for public entities for annual and interim periods beginning after December 15, 2017, using one of two retrospective transition methods. Early adoption is permitted, but not before the original effective date. The FASB has subsequently issued several updates that amend and/or clarify the new revenue recognition standard. We expect to complete implementation of the new revenue recognition standard by the end of 2017. We currently expect to adopt the new guidance using the modified retrospective approach, under which the cumulative effect of initially applying the new guidance is recognized as an adjustment to the opening balance of retained earnings, in the first quarter of 2018. Based on our analysis completed to date, we do not believe the standard will significantly impact the amount or timing of revenues recognized under the vast majority of our revenue contracts; however, we are ~~continuing to evaluate the impact~~in compliance with these financial covenants.

Fair Value of ~~this new guidance on our financial position~~Long-Term Debt

The estimated fair values and ~~results~~carrying amounts of ~~operations. We also intend to provide additional disclosures~~long-term debt, excluding finance leases, were as ~~required by the new standard, which we are currently assessing.~~follows:


	March 31, 2024		December 31, 2023
	(Thousands of Dollars)
Fair value	$	3,396,455	$	3,426,307
Carrying amount	$	3,343,976	$	3,359,631

~~3. ACQUISITIONS~~

~~Navigator Acquisition~~

~~On April 11, 2017, we entered into a Membership Interest Purchase and Sale Agreement (the Acquisition Agreement) with FR Navigator Holdings LLC to acquire all~~Table of the issued and outstanding limited liability company interests in Navigator Energy Services, LLC (Navigator) for approximately $1.5 billion. We closed on the Navigator Acquisition on May 4, 2017 and funded the purchase price with the net proceeds of the equity and debt issuances described in Notes 4 and 10. We acquired crude oil transportation, pipeline gathering and storage assets located in the Midland Basin of West Texas consisting of: (i) more than 500 miles of crude oil gathering and transportation pipelines with approximately 92,000 barrels per day ship-or-pay volume commitments and deliverability of approximately 412,000 barrels per day; (ii) a pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity covering over 500,000 dedicated acres with fixed fee contracts; and (iii) approximately 1.0 million barrels of crude oil storage capacity with 440,000 barrels contracted to third parties. We collectively refer to the acquired assets as our Permian Crude System. The assets acquired are included in our pipeline segment.Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~The Navigator Acquisition broadens our geographic footprint by marking our entry into the Permian Basin and complements our existing asset base.~~ We believe the Permian Crude System will provide a strong growth platform that, when coupled with our assets in the Eagle Ford region, serve to solidify our presence in two of the most prolific basins in the United States.

We accounted for the Navigator Acquisition using the acquisition method. The fair value estimates of the assets acquired and liabilities assumed are based on preliminary assumptions, pending the completion of an independent appraisal and other evaluations as information becomes available to us. The following table reflects the preliminary purchase price allocation as of September 30, 2017:

Preliminary Purchase Price Allocation
(Thousands of Dollars)
Accounts receivable $ 4,747
Other current assets 2,436
Property, plant and equipment, net 376,690
Intangible assets (a) 700,000
Goodwill (b) 399,306
Other long-term assets, net 2,125
Current liabilities (23,585 )
Preliminary purchase price allocation, net of cash acquired $ 1,461,719


~~(a)~~	~~Intangible assets, which consist of customer contracts and relationships, are expected to be amortized over a weighted average period of 20 years.~~


~~(b)~~	The goodwill acquired represents the expected benefit from entering new geographic areas and the anticipated opportunities to generate future cash flows from the assets acquired and potential future projects.

In the third quarter of 2017, goodwill increased by approximately $70.0 million due to valuation adjustments to property, plant and equipment and intangible assets. These adjustments had an immaterial effect on our results of operations. The values used in the purchase price allocation above andhave estimated useful lives are preliminary and subject to change after we finalize our review of the specific types, nature and condition of Navigator’s property, plant and equipment and intangible assets, and pending the completion of an independent appraisal. A change in the value used for property, plant and equipment or intangible assets may be significant and would cause a corresponding increase or decrease in goodwill.

The condensed consolidated statements of comprehensive income include the results of operations for Navigator commencing on May 4, 2017. The table below presents certain financial information included on the condensed consolidated statements of comprehensive income related to the Navigator Acquisition:

Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
(Thousands of Dollars)
Permian Crude System:
Revenues $ 15,663
$ 25,142
Operating income (loss) $ 1,050
$ (2,374 )

Transaction costs:
General and administrative expenses $ 169
$ 10,359
Interest expense, net —
3,688
Total transaction costs $ 169
$ 14,047

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The unaudited pro forma information for the three and nine months ended September 30, 2017 and 2016 presented below combines the historical financial information for Navigator and the Partnership for those periods. The information assumes we completed the Navigator Acquisition on January 1, 2016 and the following:

~~we issued approximately 14.4 million common units;~~

~~we received a contribution from our general partner of $13.6 million to maintain its 2% interest;~~

~~we issued 15.4 million Series B Preferred Units;~~

~~we issued $550.0 million of 5.625% senior notes;~~

~~additional depreciation and amortization that would have been incurred assuming~~ the fair value ~~adjustments~~of our publicly traded notes based upon quoted prices in active markets; therefore, we determined that the fair value of our publicly traded notes falls in Level 1 of the fair value hierarchy. With regard to ~~property, plant and equipment and intangible assets reflected in the preliminary purchase~~our other debt, for which a quoted market price ~~allocation above; and~~

~~we satisfied Navigator’s outstanding obligations under its revolving credit agreement.~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 (a) 2016 2017 2016
(Thousands of Dollars, Except Per Unit Data)
Revenues $ 440,566
$ 449,250
$ 1,377,883
$ 1,301,419
Net income $ 38,592
$ 34,417
$ 102,251
$ 104,535

Basic and diluted net income per common unit $ 0.15
$ 0.16
$ 0.31
$ 0.50

~~(a) Represents actual results of operations.~~

The pro forma information for the nine months ended September 30, 2017 includes transaction costs of approximately $14.0 million, which were directly attributable to the Navigator Acquisition. The pro forma information is unaudited and is not ~~necessarily indicative~~available, we have estimated the fair value using a discounted cash flow analysis using current incremental borrowing rates for similar types of borrowing arrangements and determined that the fair value falls in Level 2 of the ~~results of operations that would have resulted had the Navigator Acquisition occurred on January 1, 2016 or that may result in the future.~~fair value hierarchy. The carrying amount includes unamortized debt issuance costs.

~~4. DEBT~~

~~Revolving Credit Agreement~~

On August 22, 2017, NuStar Logistics amended its revolving credit agreement (the Revolving Credit Agreement) to extend the maturity date from October 29, 2019 to October 29, 2020, and to increase the borrowing capacity from $1.50 billion to $1.75 billion. The Revolving Credit Agreement was also amended to increase the maximum allowed consolidated debt coverage ratio (as defined in the Revolving Credit Agreement) from 5.00-to-1.00 to 5.50-to-1.00 through the rolling period ending March 31, 2018. Subsequently, the maximum allowed consolidated debt coverage ratio may not exceed 5.00-to-1.00 for any rolling period ending on or after June 30, 2018. If we complete one or more acquisitions for aggregate net consideration of at least $50.0 million, our maximum consolidated debt coverage ratio will increase to 5.50-to-1.00 for two rolling periods.

The requirement not to exceed a maximum consolidated debt coverage ratio may limit the amount we can borrow under the Revolving Credit Agreement to an amount less than the total amount available for borrowing. As of September 30, 2017, letters of credit issued under the Revolving Credit Agreement totaled $7.7 million, and we had $863.8 million available for borrowing. We believe that we are in compliance with the covenants in the Revolving Credit Agreement as of September 30, 2017.

During the nine months ended September 30, 2017, the balance under the Revolving Credit Agreement increased by $39.4 million. The Revolving Credit Agreement bears interest, at our option, based on an alternative base rate, a LIBOR-based rate or a EURIBOR-based rate. The interest rate on the Revolving Credit Agreement is subject to adjustment if our debt rating is downgraded (or upgraded) by certain credit rating agencies. As of September 30, 2017, our weighted-average interest rate related to borrowings under the Revolving Credit Agreement was 2.9%, and we had $878.4 million outstanding.

~~Issuance of 5.625% Senior Notes~~

On April 28, 2017, NuStar Logistics issued $550.0 million of 5.625% senior notes due April 28, 2027. We used the net proceeds of $543.3 million from the offering to fund a portion of the purchase price for the Navigator Acquisition and to pay related fees and expenses. The interest on the 5.625% senior notes is payable semi-annually in arrears on April 28 and October 28 of each year beginning on October 28, 2017. The 5.625% senior notes do not have sinking fund requirements. These notes rank equally with existing senior unsecured indebtedness and senior to existing subordinated indebtedness of NuStar Logistics. The 5.625% senior notes contain restrictions on NuStar Logistics’ ability to incur secured indebtedness unless the same security is also provided for the benefit of holders of the senior notes. In addition, the senior notes limit NuStar Logistics’ ability to

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~incur indebtedness secured by certain liens, engage in certain sale-leaseback transactions and engage in certain consolidations, mergers or asset sales.~~ ~~The 5.625% senior notes are fully and unconditionally guaranteed by NuStar Energy and NuPOP.~~

At the option of NuStar Logistics, the 5.625% senior notes may be redeemed in whole or in part at any time at a redemption price, plus accrued and unpaid interest to the redemption date. If we undergo a change of control, followed by a ratings decline within 60 days of a change of control, each holder of the notes may require us to repurchase all or a portion of its notes at a price equal to 101% of the principal amount of the notes, plus any accrued and unpaid interest to the date of repurchase.

~~Gulf Opportunity Zone Revenue Bonds~~

In 2008, 2010 and 2011, the Parish of St. James, Louisiana issued, pursuant to the Gulf Opportunity Zone Act of 2005, an aggregate $365.4 million of tax-exempt revenue bonds (the GoZone Bonds) associated with our St. James, Louisiana terminal expansions. The GoZone Bonds bear interest based on a weekly tax-exempt bond market interest rate, and interest is paid monthly. The weighted-average interest rate was 1.0% as of ~~September 30, 2017~~. Following the issuances, the proceeds were deposited with a trustee and are disbursed to us upon our request for reimbursement of expenditures related to our St. James terminal expansions. We include the amount remaining in trust in “Other long-term assets, net,” and we include the amount of bonds issued in “Long-term debt” on the consolidated balance sheets. For the nine months ended September 30, 2017, we did not receive any proceeds from the trustee, and as of September 30, 2017, the amount remaining in trust totaled $42.5 million.

~~Receivables Financing Agreement~~

NuStar Energy and NuStar Finance LLC (NuStar Finance), a special purpose entity and wholly owned subsidiary of NuStar Energy, are parties to a $125.0 million receivables financing agreement with third-party lenders (the Receivables Financing Agreement) and agreements with certain of NuStar Energy’s wholly owned subsidiaries (collectively with the Receivables Financing Agreement, the Securitization Program). NuStar Finance’s sole business consists of purchasing receivables from NuStar Energy’s wholly owned subsidiaries that participate in the Securitization Program and providing these receivables as collateral for NuStar Finance’s revolving borrowings under the Securitization Program. NuStar Finance is a separate legal entity and the assets of NuStar Finance, including these accounts receivable, are not available to satisfy the claims of creditors of NuStar Energy, its subsidiaries selling receivables under the Securitization Program or their affiliates. The amount available for borrowing is based on the availability of eligible receivables and other customary factors and conditions.

On September 20, 2017, the Securitization Program was amended to add certain of NuStar Energy’s wholly owned subsidiaries resulting from the Navigator Acquisition and to extend the Securitization Program’s scheduled termination date from June 15, 2018 to September 20, 2020, with the option to renew for additional 364-day periods thereafter. Borrowings by NuStar Finance under the Receivables Financing Agreement bear interest at the applicable bank rate, as defined under the Receivables Financing Agreement. As of September 30, 2017, $98.6 million of our accounts receivable are included in the Securitization Program. The amount of borrowings outstanding under the Receivables Financing Agreement totaled $46.1 million as of September 30, 2017, which is included in “Long-term debt” on the consolidated balance sheet.

5. COMMITMENTS AND CONTINGENCIES

We have contingent liabilities resulting from various litigation, claims and commitments. We record accruals for loss contingencies when losses are considered probable and can be reasonably estimated. Legal fees associated with defending the Partnership in legal matters are expensed as incurred. We ~~had an accrual of $1.6~~accrued $1.8 million and $1.3 million for contingent losses as of ~~September 30, 2017~~March 31, 2024 and ~~none as of~~ December 31, ~~2016.~~2023, respectively. The amount that will ultimately be paid related to such matters may differ from the recorded accruals, and the timing of such payments is uncertain. ~~In addition, due to the inherent uncertainty of litigation, there can be no assurance~~We evaluate each contingent loss at least quarterly, and more frequently as each matter progresses and develops over time, and we do not believe that the resolution of any particular claim or proceeding, or all matters in the aggregate, would ~~not~~ have a material adverse effect on our results of operations, financial position or liquidity.

6. ~~FAIR VALUE MEASUREMENTS~~

We segregate the inputs used in measuring fair value into three levels: Level 1, defined as observable inputs, such as quoted prices for identical assets or liabilities in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists. We consider counterparty credit risk and our own credit risk in the determination of all estimated fair values.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Recurring Fair Value Measurements~~

~~The following assets and liabilities are measured at fair value on a recurring basis:~~

September 30, 2017
Level 1 Level 2 Level 3 Total
(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances $ 6,960
$ —
$ —
$ 6,960
Liabilities:
Accrued liabilities:
Product imbalances $ (2,164 ) $ —
$ —
$ (2,164 )
Commodity derivatives (791 ) —
—
(791 )
Interest rate swaps —
(7,280 ) —
(7,280 )
Other long-term liabilities:
Interest rate swaps —
(4,043 ) —
(4,043 )
Total $ (2,955 ) $ (11,323 ) $ —
$ (14,278 )

December 31, 2016
Level 1 Level 2 Level 3 Total
(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances $ 1,551
$ —
$ —
$ 1,551
Commodity derivatives —
155
—
155
Other long-term assets, net:
Interest rate swaps —
1,314
—
1,314
Total $ 1,551
$ 1,469
$ —
$ 3,020
Liabilities:
Accrued liabilities:
Product imbalances $ (1,577 ) $ —
$ —
$ (1,577 )
Commodity derivatives (4,887 ) (165 ) —
(5,052 )
Other long-term liabilities:
Guarantee liability —
—
(1,230 ) (1,230 )
Interest rate swaps —
(2,632 ) —
(2,632 )
Total $ (6,464 ) $ (2,797 ) $ (1,230 ) $ (10,491 )

~~Product Imbalances.~~Since we value our assets and liabilities related to product imbalances using quoted market prices in active markets as of the reporting date, we include these product imbalances in Level 1 of the fair value hierarchy.

~~Commodity Derivatives.~~We base the fair value of certain of our commodity derivative instruments on quoted prices on an exchange; accordingly, we include these items in Level 1 of the fair value hierarchy. We also had derivative instruments for which we determined fair value using industry pricing services and other observable inputs, such as quoted prices on an exchange for similar derivative instruments, and we included these derivative instruments in Level 2 of the fair value hierarchy. See Note 7 for a discussion of our derivative instruments.

~~Interest Rate Swaps.Because~~we estimate the fair value of our forward-starting interest rate swaps using discounted cash flows, which use observable inputs such as time to maturity and market interest rates, we include these interest rate swaps in Level 2 of the fair value hierarchy.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Guarantees.~~ In 2014, we sold our remaining 50% ownership interest in Axeon and agreed to provide them with credit support, such as guarantees, letters of credit and cash collateral, as applicable, of up to $125.0 million. As of December 31, 2016, we provided guarantees totaling $54.1 million, and one guarantee that did not specify a maximum amount. Our estimate of the fair value was based on significant inputs not observable in the market and thus fell within Level 3 of the fair value hierarchy. In conjunction with the termination of the Axeon Term Loan on February 22, 2017 discussed in the following section, our obligation to provide credit support to Axeon ceased.

~~Fair Value of Financial Instruments~~

We recognize cash equivalents, receivables, payables and debt in our consolidated balance sheets at their carrying amounts. The fair values of these financial instruments, except for long-term debt, approximate their carrying amounts.

~~The estimated fair values and carrying amounts of long-term debt, including the current portion, and the Axeon Term Loan were as follows:~~

September 30, 2017 December 31, 2016
Long-term Debt Long-term Debt Axeon Term Loan
(Thousands of Dollars)
Fair value $ 3,694,877
$ 3,084,762
$ 110,000
Carrying amount $ 3,582,606
$ 3,014,364
$ 110,000

~~Long-term Debt.~~ We estimated the fair value of our publicly traded senior notes based upon quoted prices in active markets; therefore, we determined that the fair value of our publicly traded senior notes falls in Level 1 of the fair value hierarchy. For our other debt, for which a quoted market price is not available, we estimated the fair value using a discounted cash flow analysis using current incremental borrowing rates for similar types of borrowing arrangements and determined that the fair value falls in Level 2 of the fair value hierarchy.

~~Axeon Term Loan.~~ In December 2016, Lindsay Goldberg LLC, the private investment firm that owned Axeon, informed us that they entered into an agreement to sell Axeon’s retail asphalt sales and distribution business (the Axeon Sale), and we entered into an agreement with Axeon (the Axeon Letter Agreement) to settle and terminate the Axeon Term Loan for $110.0 million upon closing of the Axeon Sale. Therefore, we reduced the carrying amount of the Axeon Term Loan to $110.0 million and reclassified the Axeon Term Loan from “Other long-term assets, net” to “Other current assets” on the consolidated balance sheet as of December 31, 2016. The Axeon Sale closed on February 22, 2017, at which time we received the $110.0 million payment in accordance with the Axeon Letter Agreement. Furthermore, the Axeon Term Loan and our obligation to provide ongoing credit support to Axeon all terminated concurrently on February 22, 2017.

~~7. DERIVATIVES AND RISK MANAGEMENT ACTIVITIES~~

We utilize various derivative instruments to manage our exposure to interest rate risk and commodity price risk. Our risk management policies and procedures are designed to monitor interest rates, futures and swap positions and over-the-counter positions, as well as physical commodity volumes, grades, locations and delivery schedules, to help ensure that our hedging activities address our market risks.

~~Interest Rate Risk~~

We are a party to certain interest rate swap agreements to manage our exposure to changes in interest rates, which include forward-starting interest rate swap agreements related to forecasted debt issuances in 2018 and 2020. We entered into these swaps in order to hedge the risk of changes in the interest payments attributable to changes in the benchmark interest rate during the period from the effective date of the swap to the issuance of the forecasted debt. Under the terms of the swaps, we pay a fixed rate and receive a rate based on the three-month USD LIBOR. These swaps qualify as cash flow hedges, and we designate them as such. We record the effective portion of mark-to-market adjustments as a component of “Accumulated other comprehensive income (loss)” (AOCI), and the amount in AOCI will be recognized in “Interest expense, net” as the forecasted interest payments occur or if the interest payments are probable not to occur. As of September 30, 2017 and December 31, 2016, the aggregate notional amount of forward-starting interest rate swaps totaled $600.0 million.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Commodity Price Risk~~

We are exposed to market risks related to the volatility of petroleum product prices. In order to reduce the risk of commodity price fluctuations with respect to our petroleum product inventories and related firm commitments to purchase and/or sell such inventories, we utilize commodity futures and swap contracts, which qualify, and we designate, as fair value hedges. Derivatives that are intended to hedge our commodity price risk, but fail to qualify as fair value or cash flow hedges, are considered economic hedges, and we record associated gains and losses in net income. Our risk management committee oversees our trading controls and procedures and certain aspects of commodity and trading risk management. Our risk management committee also reviews all new commodity and trading risk management strategies in accordance with our risk management policy, as approved by our board of directors. We ceased marketing crude oil in the second quarter of 2017 and exited our heavy fuels trading operations in the third quarter of 2017, thereby reducing our overall hedging activity.

The volume of commodity contracts is based on open derivative positions and represents the combined volume of our long and short open positions on an absolute basis, which totaled 1.1 million barrels and 4.7 million barrels as of ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively. We had $0.3 million and $1.8 million of margin deposits as of September 30, 2017 and December 31, 2016, respectively.~~

~~The fair values of our derivative instruments included in our consolidated balance sheets were as follows:~~

Asset Derivatives Liability Derivatives
Balance Sheet Location September 30,
2017 December 31,
2016 September 30,
2017 December 31,
2016
(Thousands of Dollars)
Derivatives Designated as
Hedging Instruments:

Interest rate swaps Other long-term assets, net $ —
$ 1,314
$ —
$ —
Commodity contracts Accrued liabilities 18
144
(2 ) (3,566 )
Interest rate swaps Accrued liabilities —
—
(7,280 ) —
Interest rate swaps Other long-term liabilities —
—
(4,043 ) (2,632 )
Total 18
1,458
(11,325 ) (6,198 )

Derivatives Not Designated
as Hedging Instruments:

Commodity contracts Other current assets —
265
—
(110 )
Commodity contracts Accrued liabilities 655
9,128
(1,462 ) (10,758 )
Total 655
9,393
(1,462 ) (10,868 )

Total Derivatives $ 673
$ 10,851
$ (12,787 ) $ (17,066 )

Certain of our derivative instruments are eligible for offset in the consolidated balance sheets and subject to master netting arrangements. Under our master netting arrangements, there is a legally enforceable right to offset amounts, and we intend to settle such amounts on a net basis. The following are the net amounts presented on the consolidated balance sheets:

Commodity Contracts September 30,
2017 December 31,
2016
(Thousands of Dollars)
Net amounts of assets presented in the consolidated balance sheets $ —
$ 155
Net amounts of liabilities presented in the consolidated balance sheets $ (791 ) $ (5,052 )

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~We recognize the impact of our commodity contracts on earnings in “Cost of product sales” on the condensed consolidated statements of comprehensive income, and that impact was as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars)
Derivatives Designated as Fair Value Hedging Instruments:
(Loss) gain recognized in income on derivative $ (1,134 ) $ 558
$ 1,327
$ (6,246 )
Gain (loss) recognized in income on hedged item 1,111
329
(1,036 ) 10,134
(Loss) gain recognized in income for ineffective portion $ (23 ) $ 887
$ 291
$ 3,888

Derivatives Not Designated as Hedging Instruments:
Loss recognized in income on derivative $ (132 ) $ (153 ) $ (218 ) $ (157 )

~~Our interest rate swaps had the following impact on earnings:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars)
Derivatives Designated as Cash Flow Hedging Instruments:
Loss recognized in other comprehensive income on derivative (effective portion) $ (2,064 ) $ (2,035 ) $ (10,005 ) $ (52,213 )
Loss reclassified from AOCI into interest expense, net (effective portion) $ (1,584 ) $ (2,011 ) $ (5,112 ) $ (6,391 )

~~As of~~ ~~September 30, 2017, we expect to reclassify a loss of $5.5 million to “Interest expense, net” within the next twelve months associated with unwound forward-starting interest rate swaps.~~

~~8. RELATED PARTY TRANSACTIONS~~

~~Employee Transfer from NuStar GP, LLC.~~ On March 1, 2016, NuStar GP, LLC, the general partner of our general partner and a wholly owned subsidiary of NuStar GP Holdings, transferred and assigned to NuStar Services Company LLC (NuStar Services Co), a wholly owned subsidiary of NuStar Energy, all of NuStar GP, LLC’s employees and related benefit plans, programs, contracts and policies (the Employee Transfer). As a result of the Employee Transfer, we pay employee costs directly and sponsor the long-term incentive plan and other employee benefit plans. Please refer to Note 9 for a discussion of our employee benefit plans.

~~GP Services Agreement.~~ Prior to the Employee Transfer, our operations were managed by NuStar GP, LLC under a services agreement effective January 1, 2008, pursuant to which employees of NuStar GP, LLC performed services for our U.S. operations. Employees of NuStar GP, LLC provided services to us and NuStar GP Holdings; therefore, we reimbursed NuStar GP, LLC for all employee costs incurred prior to the Employee Transfer, other than the expenses allocated to NuStar GP Holdings. For the nine months ended September 30, 2016, we reimbursed NuStar GP, LLC $21.7 million and $10.5 million for operating expenses and general and administrative expenses, respectively.

In conjunction with the Employee Transfer, we entered into an Amended and Restated Services Agreement with NuStar GP, LLC, effective March 1, 2016 (the Amended GP Services Agreement). The Amended GP Services Agreement provides that we will furnish administrative services necessary to conduct the business of NuStar GP Holdings. NuStar GP Holdings will compensate us for these services through an annual fee of $1.0 million, subject to adjustment based on the annual merit increase percentage applicable to our employees for the most recently completed fiscal year and for changes in level of service. The Amended GP Services Agreement will terminate on March 1, 2020 and will automatically renew for successive two-year terms, unless terminated by either party.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~9. EMPLOYEE BENEFIT PLANS~~

Effective March 1, 2016, in connection with the Employee Transfer, we assumed sponsorship and responsibility for the defined benefit plans and defined contribution plans described below. Prior to the Employee Transfer, NuStar GP, LLC sponsored and maintained these employee benefit plans and we reimbursed all costs incurred by NuStar GP, LLC related to these employee benefit plans at cost.

The NuStar Pension Plan (the Pension Plan) is a qualified non-contributory defined benefit pension plan that provides eligible U.S. employees with retirement income as calculated under a cash balance formula. The NuStar Excess Pension Plan (the Excess Pension Plan) is a nonqualified deferred compensation plan that provides benefits to a select group of management or other highly compensated employees. The Pension Plan and Excess Pension Plan are collectively referred to as the Pension Plans. In September 2017, we contributed $11.0 million to the Pension Plans.

We also sponsor a contributory medical benefits plan for U.S. employees that retired prior to April 1, 2014. For employees that retire on or after April 1, 2014, we provide partial reimbursement for eligible third-party health care premiums.

The following table summarizes the components of net periodic benefit cost (income) for the Pension Plans and other postretirement benefits on a combined basis for periods prior to the Employee Transfer and after the Employee Transfer:

Pension Plans
Other Postretirement
Benefits
2017 2016 2017 2016
(Thousands of Dollars)
For the three months ended September 30:
Service cost $ 2,239
$ 1,926
$ 115
$ 105
Interest cost 1,127
1,006
107
100
Expected return on assets (1,603 ) (1,353 ) —
—
Amortization of prior service credit (515 ) (516 ) (286 ) (286 )
Amortization of net loss 371
273
47
45
Net periodic benefit cost (income) $ 1,619
$ 1,336
$ (17 ) $ (36 )

For the nine months ended September 30:
Service cost $ 6,717
$ 5,778
$ 341
$ 315
Interest cost 3,381
3,018
323
300
Expected return on assets (4,808 ) (4,056 ) —
—
Amortization of prior service credit (1,546 ) (1,549 ) (858 ) (858 )
Amortization of net loss 1,113
819
143
135
Net periodic benefit cost (income) $ 4,857
$ 4,010
$ (51 ) $ (108 )

~~10.~~ PARTNERS’ EQUITY

~~Amendment of Partnership Agreement~~Series A, B and C Preferred Units

~~In the second quarter of 2017,~~We allocate net income to our ~~general partner amended~~8.50% Series A, 7.625% Series B and ~~restated our partnership agreement in connection with the issuance of~~9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (collectively, the Series A, B and C Preferred ~~Units as described below and~~Units) equal to the ~~Navigator Acquisition to waive up to an aggregate $22.0 million~~amount of distributions earned during the quarterly incentive distributions to our general partner for any NS common units issued from the date of the Acquisition Agreement (other than those attributable to NS common units issued under any equity compensation plan) for ten consecutive quarters, starting with the distributions for the second quarter of 2017.

~~Issuance of Common Units~~

On April 18, 2017, we issued 14,375,000 common units representing limited partner interests at a price of $46.35 per unit. We used the net proceeds from this offering of $657.5 million, including a contribution of $13.6 million from our general partner to maintain its 2% general partner interest, to fund a portion of the purchase price for the Navigator Acquisition.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Issuance of Series B Preferred Units~~

On~~April 28, 2017, we issued 15,400,000 of~~period. Distributions on our Series A, B Preferred Units representing limited partner interests at a price of $25.00 per unit. We used the net proceeds of $371.8 million from the issuance of the Series B Preferred Units to fund a portion of the purchase price for the Navigator Acquisition and ~~to pay related fees and expenses.~~

~~Distributions on the Series B~~C Preferred Units are payable out of any legally available funds, accrue and are cumulative from the ~~date of~~ original issuance ~~of the Series B Preferred Units~~dates, and are payable on the 15^th15th day (or next business day) of each of March, June, September and December of each year to holders of record on the first business day of each payment month. ~~The initial distribution rate~~

Information on the Series B Preferred Units to, but not including, June 15, 2022 is 7.625% per annum of the $25.00 liquidation preference per unit (equal to $1.90625 per unit per annum). On and after June 15, 2022, distributions on the Series B Preferred Units accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 5.643%. The Series B Preferred Units rank equal to our Series A, B and C Preferred Units is shown below:

Units

Units Issued and Outstanding as of March 31, 2024

Optional Redemption Date/Date When Distribution Rate Became Floating

Floating Annual Rate (as a Percentage of the $25.00 Liquidation Preference per Unit)

Series A Preferred Units

9,060,000

December 15, 2021

Three-month LIBOR(a) plus 6.766%

Series B Preferred Units

15,400,000

June 15, 2022

Three-month LIBOR(a) plus 5.643%

Series C Preferred Units

6,900,000

December 15, 2022

Three-month LIBOR(a) plus 6.88%

(a)Beginning with the distribution period starting on September 15, 2023, LIBOR was replaced with the corresponding CME Term SOFR plus the applicable tenor spread adjustment of 0.26161%.

Distribution information on our Series A, B and ~~senior~~C Preferred Units is as follows (thousands of dollars, except per unit data):


	Series A Preferred Units				Series B Preferred Units				Series C Preferred Units
Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution
March 15, 2024 - June 14, 2024	$	0.77232	$	6,997	$	0.70213	$	10,813	$	0.77945	$	5,378
December 15, 2023 - March 14, 2024	$	0.77533	$	7,024	$	0.70515	$	10,859	$	0.78246	$	5,399



March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098
December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010

Common Limited Partners

We are required by our partnership agreement to make quarterly distributions to common limited partners of 100% of our Available Cash (as defined in our partnership agreement), which is generally defined as all cash receipts less cash disbursements, including distributions to our preferred unit holders, and cash reserves established by our general partner, in its sole discretion. We are required under our partnership agreement to declare and pay these quarterly distributions within 45 days subsequent to each quarter-end. Upon closing of the pending Merger, our common units will be converted to Sunoco’s common units as described in Note 1, and are expected to receive Sunoco’s distributions related to the first quarter of 2024.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At any time on or after June 15, 2022, we may redeem our Series B Preferred Units, in whole or in part, at a redemption price of $25.00 per unit plus an amount equal to all accumulated and unpaid distributions to, butthe proposed acquisition not including, the date of redemption, whether or not declared. We may also redeem the Series B Preferred Units upon the occurrence of certain rating events or a change of control as defined in our partnership agreement. In the casehaving been terminated. If approval of the ~~latter instance, if we choose~~pending acquisition is not ~~to redeem the Series B Preferred Units, the preferred unitholders may have the ability to convert the Series B Preferred Units to common units~~obtained at the ~~then applicable conversion rate. Holders~~special meeting (including due to the special meeting being postponed, adjourned or canceled) or the Merger Agreement with respect to the acquisition is terminated, the special distribution will not be paid until a date, and to holders of record, later determined by the ~~Series B Preferred Units have no voting rights except for certain exceptions set forth in our partnership agreement.~~Board of Directors, or it may not be paid at all.

~~Partners’ Equity Activity~~

~~The following table summarizes changes to our partners’ equity (in thousands of dollars):~~

Balance as of January 1, 2017 $ 1,611,617
Net income 122,782
Unit-based compensation 4,164
Other comprehensive income 10,784
Distributions to partners (358,138 )
Issuance of preferred and common units, including contribution from general partner 1,029,257
Other (604 )
Balance as of September 30, 2017 $ 2,419,862

Accumulated Other Comprehensive Income (Loss) (AOCI)

The balance of and changes in the components included in AOCI were as follows:


	Three Months Ended March 31,
	2024								2023
	Foreign Currency Translation		Cash Flow Hedges		Pension and Other Postretirement Benefits		Total		Foreign Currency Translation		Cash Flow Hedges		Pension and Other Postretirement Benefits		Total
	(Thousands of Dollars)
Balance as of January 1	$	790	$	(31,799)	$	8,084	$	(22,925)	$	62	$	(34,380)	$	2,713	$	(31,605)
Other comprehensive income before reclassifications	48		—		—		48		435		—		—		435
Net gain reclassified into other income, net	—		—		(729)		(729)		—		—		(737)		(737)
Net loss reclassified into interest expense, net	—		862		—		862		—		515		—		515
Other	—		—		3		3		—		—		(9)		(9)
Other comprehensive income (loss)	48		862		(726)		184		435		515		(746)		204
Balance as of March 31	$	838	$	(30,937)	$	7,358	$	(22,741)	$	497	$	(33,865)	$	1,967	$	(31,401)

As of March 31, 2024, we expect to reclassify a loss of $3.7 million to “Interest expense, net” within the next 12 months associated with unwound forward-starting interest rate swaps.

Foreign
Currency
Translation

Cash Flow
Hedges

Pension and
Other
Postretirement
Benefits
Total
(Thousands of Dollars)
Balance as of January 1, 2017 $ (69,069 ) $ (22,258 ) $ (2,850 ) $ (94,177 )
Other comprehensive income (loss):
Other comprehensive income (loss) before
   reclassification adjustments
16,825
(10,005 ) —
6,820
Net gain on pension costs reclassified into operating
   expense
—
—
(858 ) (858 )
Net gain on pension costs reclassified into general and
   administrative expense
—
—
(290 ) (290 )
Net loss on cash flow hedges reclassified into interest
   expense, net
—
5,112
—
5,112
Other comprehensive income (loss) 16,825
(4,893 ) (1,148 ) 10,784
Balance as of September 30, 2017 $ (52,244 ) $ (27,151 ) $ (3,998 ) $ (83,393 )

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~Allocations of Net Income~~

Our partnership agreement sets forth the calculation to be used to determine the amount and priority of cash distributions that the unitholders and general partner will receive. The partnership agreement also contains provisions for the allocation of net income to the unitholders and the general partner. Our net income for each quarterly reporting period is first allocated to the preferred limited partner unitholders in an amount equal to the earned distributions for the respective reporting period and then to the general partner in an amount equal to the general partner’s incentive distribution calculated based upon the declared distribution for the respective reporting period. We allocate the remaining net income or loss among the common unitholders (98%) and general partner (2%), as set forth in our partnership agreement.

~~The following table details the calculation of net income applicable to the general partner:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars, Except Percentage Data)
Net income attributable to NuStar Energy L.P. $ 38,592
$ 51,141
$ 122,782
$ 161,059
Less preferred limited partner interest 12,153
—
26,916
—
Less general partner incentive distribution 10,912
10,890
34,736
32,500
Net income after general partner incentive distribution and preferred limited partner interest 15,527
40,251
61,130
128,559
General partner interest allocation 2 % 2 % 2 % 2 %
General partner interest allocation of net income 311
805
1,223
2,571
General partner incentive distribution 10,912
10,890
34,736
32,500
Net income applicable to general partner $ 11,223
$ 11,695
$ 35,959
$ 35,071

~~Cash Distributions~~

~~General Partner and Common Limited Partners. The following table reflects the allocation of total cash distributions to the general partner and common limited partners applicable to the period in which the distributions were earned:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars, Except Per Unit Data)
General partner interest $ 2,302
$ 1,976
$ 6,947
$ 5,898
General partner incentive distribution 10,912
10,890
34,736
32,500
Total general partner distribution 13,214
12,866
41,683
38,398
Common limited partners’ distribution 101,870
85,943
305,652
256,513
Total cash distributions $ 115,084
$ 98,809
$ 347,335
$ 294,911

Cash distributions per unit applicable to common limited partners $ 1.095
$ 1.095
$ 3.285
$ 3.285

~~The following table summarizes information related to our quarterly cash distributions to our general partner and common limited partners:~~

Quarter Ended
Cash
Distributions
Per Unit

Total Cash
Distributions
Record Date Payment Date
(Thousands of Dollars)
September 30, 2017 (a) $ 1.095
$ 115,084
November 9, 2017 November 14, 2017
June 30, 2017 $ 1.095
$ 115,083
August 7, 2017 August 11, 2017
March 31, 2017 $ 1.095
$ 117,168
May 8, 2017 May 12, 2017
December 31, 2016 $ 1.095
$ 98,971
February 8, 2017 February 13, 2017


~~(a)~~	~~The distribution was announced on October 18, 2017.~~

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Preferred Units.~~ ~~The following table summarizes information related to our quarterly cash distributions on our Series A and Series B Preferred Units:~~

Period
Cash
Distributions
Per Unit

Total Cash
Distributions
Record Date Payment Date
(Thousands of Dollars)
Series A Preferred Units:
September 15, 2017 - December 14, 2017 (a) $ 0.53125
$ 4,813
December 1, 2017 December 15, 2017
June 15, 2017 - September 14, 2017 $ 0.53125
$ 4,813
September 1, 2017 September 15, 2017
March 15, 2017 - June 14, 2017 $ 0.53125
$ 4,813
June 1, 2017 June 15, 2017
November 25, 2016 - March 14, 2017 $ 0.64930556
$ 5,883
March 1, 2017 March 15, 2017

Series B Preferred Units:
September 15, 2017 - December 14, 2017 (a) $ 0.47657
$ 7,339
December 1, 2017 December 15, 2017
April 28, 2017 - September 14, 2017 $ 0.725434028
$ 11,172
September 1, 2017 September 15, 2017


~~(a)~~	~~The distribution was announced on October 18, 2017.~~

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~11.~~7. NET INCOME PER COMMON UNIT

Basic and diluted net income per common unit is determined pursuant to the two-class method. Under this method, all earnings are allocated to our ~~common~~ limited partners and participating securities based on their respective rights to receive distributions earned during the period. Participating securities include ~~our general partner interest and~~ restricted units awarded under our long-term incentive ~~plan.~~

plans. We compute basic net income per common unit by dividing net income attributable to our common ~~units~~limited partners by the weighted-average number of common units outstanding during the period. We compute diluted net income per common unit by dividing net income attributable to our common limited partners by the sum of (i) the ~~weighted-average~~weighted average number of common units outstanding during the period and (ii) the effect of dilutive potential common units outstanding during the period. ~~Dilutive potential~~

The Series D Preferred Units contained certain unitholder conversion and redemption features, and we used the if-converted method to calculate the dilutive effect of the conversion or redemption feature that would have been most advantageous to the Series D preferred unitholders. The effect of the assumed conversion or redemption of the Series D Preferred Units outstanding, prior to their redemption, was antidilutive for the three months ended March 31, 2023; therefore, we did not include such conversion in the computation of diluted net income per common ~~units include contingently issuable performance units awarded under our long-term incentive plan.~~unit.

The following table details the calculation of basic and diluted net income per common unit:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars, Except Unit and Per Unit Data)
Net income	$	42,742	$	105,936
Distributions to preferred limited partners	(23,266)		(32,733)
Distributions to common limited partners (a)	(50,621)		(44,396)
Distribution equivalent rights to restricted units	(684)		(672)
Distributions (in excess of) less than income	$	(31,829)	$	28,135

Distributions to common limited partners	$	50,621	$	44,396
Allocation of distributions (in excess of) less than income to common limited partners	(31,829)		27,396
Series D Preferred Unit accretion	—		(3,671)

Net income attributable to common units	$	18,792	$	68,121


Basic and diluted weighted-average common units outstanding	126,533,909		110,880,981



Basic and diluted net income per common unit	$	0.15	$	0.61

(a) Distributions to common limited partners were estimated using $0.40 per common unit for the quarter ended March 31, 2024.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars, Except Unit and Per Unit Data)
Net income attributable to NuStar Energy L.P. $ 38,592
$ 51,141
$ 122,782
$ 161,059
Less: Distributions to general partner (including incentive distribution rights) 13,214
12,866
41,683
38,398
Less: Distributions to common limited partners 101,870
85,943
305,652
256,513
Less: Distributions to preferred limited partners 12,153
—
26,916
—
Less: Distribution equivalent rights to restricted units 707
650
2,134
1,969
Distributions in excess of earnings $ (89,352 ) $ (48,318 ) $ (253,603 ) $ (135,821 )

Net income attributable to common units:
Distributions to common limited partners $ 101,870
$ 85,943
$ 305,652
$ 256,513
Allocation of distributions in excess of earnings (87,565 ) (47,351 ) (248,531 ) (133,103 )
Total $ 14,305
$ 38,592
$ 57,121
$ 123,410

Basic weighted-average common units outstanding 93,031,320
78,031,053
87,392,597
77,934,802

Diluted common units outstanding:
Basic weighted-average common units outstanding 93,031,320
78,031,053
87,392,597
77,934,802
Effect of dilutive potential common units —
31,836
—
46,497
Diluted weighted-average common units outstanding 93,031,320
78,062,889
87,392,597
77,981,299

Basic and diluted net income per common unit $ 0.15
$ 0.49
$ 0.65
$ 1.58

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

8. SUPPLEMENTAL CASH FLOW INFORMATION

~~12. STATEMENTS OF CASH FLOWS~~

Changes in current assets and current liabilities were as follows:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars)
Decrease (increase) in current assets:
Accounts receivable	$	(4,728)	$	(131)

Inventories	566		(121)

Prepaid and other current assets	7,868		8,326
Increase (decrease) in current liabilities:
Accounts payable	(4,961)		7,413

Accrued interest payable	37,928		38,505
Accrued liabilities	(13,593)		(18,228)
Taxes other than income tax	(2,366)		(3,150)

Changes in current assets and current liabilities	$	20,714	$	32,614

Nine Months Ended September 30,
2017 2016
(Thousands of Dollars)
Decrease (increase) in current assets:
Accounts receivable $ 24,538
$ (15,200 )
Receivable from related party 236
—
Inventories 15,497
3,767
Other current assets 1,176
4,809
Increase (decrease) in current liabilities:
Accounts payable (52,910 ) 7,706
Payable to related party, net —
806
Accrued interest payable 7,829
(6,672 )
Accrued liabilities (10,702 ) (7,477 )
Taxes other than income tax 279
3,670
Income tax payable (3,614 ) (3,886 )
Changes in current assets and current liabilities $ (17,671 ) $ (12,477 )

The above changes in current assets and current liabilities may differ from changes between amounts reflected in the applicable consolidated balance sheets due to:

~~current assets and current liabilities acquired during the period;~~

•the change in the amount accrued for capital expenditures; and

•the effect of foreign currency ~~translation;~~translation.

Other supplemental cash flow information is as follows:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars)
Cash paid for interest, net of amount capitalized	$	21,871	$	16,600
Refunds received for income taxes, net	$	(88)	$	(1,126)
Right-of-use assets obtained in exchange for operating lease liabilities	$	67	$	82,364
Right-of-use assets obtained in exchange for finance lease liabilities	$	1,154	$	844

Restricted cash, representing legally restricted funds that are unavailable for general use, is included in “Other long-term assets, net” on the consolidated balance sheets. “Cash, cash equivalents and

~~changes~~ restricted cash” on the consolidated statements of cash flows was included in the ~~fair values of our interest rate swap agreements.~~

~~Cash flows related to interest and income taxes were~~consolidated balance sheets as follows:


	March 31, 2024		December 31, 2023
	(Thousands of Dollars)
Cash and cash equivalents	$	5,374	$	2,765

Other long-term assets, net	9,351		9,251
Cash, cash equivalents and restricted cash	$	14,725	$	12,016

Nine Months Ended September 30,
2017 2016
(Thousands of Dollars)
Cash paid for interest, net of amount capitalized $ 112,335
$ 112,796
Cash paid for income taxes, net of tax refunds received $ 10,090
$ 9,873

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~13.~~9. SEGMENT INFORMATION

Our reportable business segments consist of the pipeline, storage and fuels ~~marketing.~~marketing segments. Our segments represent strategic business units that offer different services and products. We evaluate the performance of each segment based on its respective operating income, before general and administrative expenses and certain non-segmental depreciation and amortization expense. General and administrative expenses are not allocated to the operating segments since those expenses relate primarily to the overall management at the entity level. Our principal operations include the transportation of petroleum products and anhydrous ammonia, the terminalling and storage of petroleum products and the marketing of petroleum products. Intersegment revenues result from storage agreements with wholly owned subsidiaries of NuStar Energy at rates consistent with the rates charged to third parties for storage.

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Results of operations for the reportable segments were as follows:


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars)
Revenues:

Pipeline	$	216,775	$	213,183






Storage	75,878		80,657

Fuels marketing	98,175		100,027



Consolidation and intersegment eliminations	(1)		—
Total revenues	$	390,827	$	393,867

Depreciation and amortization expense:
Pipeline	$	44,663	$	43,550
Storage	18,940		18,504
Segment depreciation and amortization expense	$	63,603	$	62,054



Reconciliation of segment operating income to income before income tax expense:
Pipeline	$	119,431	$	119,858
Storage	23,718		22,766
Fuels marketing	4,008		6,566

Segment operating income	147,157		149,190
Gain on sale of assets	—		41,075
General and administrative expenses	42,237		28,725
Other depreciation and amortization expense	1,053		1,555
Operating income	103,867		159,985
Interest expense, net	(62,480)		(57,371)
Other income, net	2,599		4,509
Income before income tax expense	$	43,986	$	107,123

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Thousands of Dollars)
Revenues:
Pipeline $ 137,426
$ 122,481
$ 385,406
$ 362,929
Storage:
Third parties 155,677
152,746
453,995
445,497
Intersegment 2,394
5,021
10,066
16,543
Total storage 158,071
157,767
464,061
462,040
Fuels marketing 147,463
166,191
524,083
476,499
Consolidation and intersegment eliminations (2,394 ) (5,021 ) (10,066 ) (16,543 )
Total revenues $ 440,566
$ 441,418
$ 1,363,484
$ 1,284,925

Operating income (loss):
Pipeline $ 61,119
$ 58,922
$ 179,015
$ 186,739
Storage 59,323
58,420
169,131
166,496
Fuels marketing (1,532 ) (337 ) 3,897
282
Consolidation and intersegment eliminations (1 ) (1 ) —
—
Total segment operating income 118,909
117,004
352,043
353,517
General and administrative expenses 25,003
26,957
83,202
73,399
Other depreciation and amortization expense 2,189
2,093
6,581
6,382
Total operating income $ 91,717
$ 87,954
$ 262,260
$ 273,736

Total assets by reportable segment were as follows:


	March 31, 2024		December 31, 2023
	(Thousands of Dollars)
Pipeline	$	3,274,569	$	3,292,546
Storage	1,387,634		1,398,929
Fuels marketing	42,576		46,151
Total segment assets	4,704,779		4,737,626
Other partnership assets	157,346		158,766
Total consolidated assets	$	4,862,125	$	4,896,392

September 30,
2017 December 31,
2016
(Thousands of Dollars)
Pipeline $ 3,451,302
$ 2,024,633
Storage 2,665,426
2,522,586
Fuels marketing 104,140
168,347
Total segment assets 6,220,868
4,715,566
Other partnership assets 197,900
314,979
Total consolidated assets $ 6,418,768
$ 5,030,545

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~14. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS~~

NuStar Energy has no operations and its assets consist mainly of its 100% indirectly owned subsidiaries, NuStar Logistics and NuPOP. 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~~

~~September 30, 2017~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Assets
Cash and cash equivalents $ 894
$ 28
$ —
$ 32,693
$ —
$ 33,615
Receivables, net —
114
—
152,041
—
152,155
Inventories —
1,733
6,580
14,984
—
23,297
Other current assets 118
9,378
5,405
9,904
—
24,805
Intercompany receivable —
3,183,871
—
—
(3,183,871 ) —
Total current assets 1,012
3,195,124
11,985
209,622
(3,183,871 ) 233,872
Property, plant and equipment, net —
1,904,510
582,390
1,701,249
—
4,188,149
Intangible assets, net —
60,886
—
736,453
—
797,339
Goodwill —
149,453
170,652
775,838
—
1,095,943
Investment in wholly owned
subsidiaries
2,992,907
24,152
1,291,487
816,809
(5,125,355 ) —
Deferred income tax asset —
—
—
1,070
—
1,070
Other long-term assets, net 378
65,393
27,782
8,842
—
102,395
Total assets $ 2,994,297
$ 5,399,518
$ 2,084,296
$ 4,249,883
$ (8,309,226 ) $ 6,418,768
Liabilities and Partners’ Equity
Accounts payable $ 2,201
$ 24,752
$ 13,812
$ 57,089
$ —
$ 97,854
Short-term debt —
68,000
—
—
—
68,000
Current portion of long-term debt —
350,007
—
—
—
350,007
Accrued interest payable —
41,780
—
31
—
41,811
Accrued liabilities 822
19,980
10,527
29,137
—
60,466
Taxes other than income tax 63
7,551
4,922
7,404
—
19,940
Income tax payable —
704
3
2,282
—
2,989
Intercompany payable 487,956
—
1,228,444
1,467,471
(3,183,871 ) —
Total current liabilities 491,042
512,774
1,257,708
1,563,414
(3,183,871 ) 641,067
Long-term debt —
3,186,908
—
45,691
—
3,232,599
Deferred income tax liability —
1,862
13
21,291
—
23,166
Other long-term liabilities —
48,605
9,895
43,574
—
102,074
Total partners’ equity 2,503,255
1,649,369
816,680
2,575,913
(5,125,355 ) 2,419,862
Total liabilities and
partners’ equity
$ 2,994,297
$ 5,399,518
$ 2,084,296
$ 4,249,883
$ (8,309,226 ) $ 6,418,768

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Condensed Consolidating Balance Sheets~~

~~December 31, 2016~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Assets
Cash and cash equivalents $ 870
$ 5
$ —
$ 35,067
$ —
$ 35,942
Receivables, net —
3,040
—
167,570
—
170,610
Inventories —
2,216
2,005
33,724
—
37,945
Other current assets 61
120,350
1,829
10,446
—
132,686
Intercompany receivable —
1,308,415
—
57,785
(1,366,200 ) —
Total current assets 931
1,434,026
3,834
304,592
(1,366,200 ) 377,183
Property, plant and equipment, net —
1,935,172
589,139
1,197,972
—
3,722,283
Intangible assets, net —
71,033
—
56,050
—
127,083
Goodwill —
149,453
170,652
376,532
—
696,637
Investment in wholly owned
subsidiaries
1,964,736
34,778
1,221,717
874,649
(4,095,880 ) —
Deferred income tax asset —
—
—
2,051
—
2,051
Other long-term assets, net 1,255
63,586
28,587
11,880
—
105,308
Total assets $ 1,966,922
$ 3,688,048
$ 2,013,929
$ 2,823,726
$ (5,462,080 ) $ 5,030,545
Liabilities and Partners’ Equity
Accounts payable $ 2,436
$ 24,272
$ 7,124
$ 84,854
$ —
$ 118,686
Short-term debt —
54,000
—
—
—
54,000
Accrued interest payable —
34,008
—
22
—
34,030
Accrued liabilities 1,070
7,118
10,766
41,531
—
60,485
Taxes other than income tax 125
6,854
3,253
5,453
—
15,685
Income tax payable —
1,326
5
5,179
—
6,510
Intercompany payable 257,497
—
1,108,703
—
(1,366,200 ) —
Total current liabilities 261,128
127,578
1,129,851
137,039
(1,366,200 ) 289,396
Long-term debt —
2,956,338
—
58,026
—
3,014,364
Deferred income tax liability —
1,862
13
20,329
—
22,204
Other long-term liabilities —
34,358
9,436
49,170
—
92,964
Total partners’ equity 1,705,794
567,912
874,629
2,559,162
(4,095,880 ) 1,611,617
Total liabilities and
partners’ equity
$ 1,966,922
$ 3,688,048
$ 2,013,929
$ 2,823,726
$ (5,462,080 ) $ 5,030,545

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Condensed Consolidating Statements of Comprehensive Income (Loss)~~

~~For the Three Months Ended~~ ~~September 30, 2017~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Revenues $ —
$ 127,980
$ 58,871
$ 253,854
$ (139 ) $ 440,566
Costs and expenses 332
77,668
38,709
232,279
(139 ) 348,849
Operating (loss) income (332 ) 50,312
20,162
21,575
—
91,717
Equity in earnings (loss) of subsidiaries 38,896
(4,558 ) 20,809
39,508
(94,655 ) —
Interest income (expense), net 28
(46,247 ) (1,455 ) 2,418
—
(45,256 )
Other income (expense), net —
57
(8 ) (5,175 ) —
(5,126 )
Income (loss) before income tax
expense
38,592
(436 ) 39,508
58,326
(94,655 ) 41,335
Income tax expense —
115
1
2,627
—
2,743
Net income (loss) $ 38,592
$ (551 ) $ 39,507
$ 55,699
$ (94,655 ) $ 38,592

Comprehensive income (loss) $ 38,592
$ (1,031 ) $ 39,507
$ 62,069
$ (94,655 ) $ 44,482

~~Condensed Consolidating Statements of Comprehensive Income~~

~~For the Three Months Ended~~ ~~September 30, 2016~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Revenues $ —
$ 131,696
$ 53,158
$ 256,925
$ (361 ) $ 441,418
Costs and expenses 252
79,443
37,957
236,173
(361 ) 353,464
Operating (loss) income (252 ) 52,253
15,201
20,752
—
87,954
Equity in earnings (loss) of subsidiaries 51,397
(44 ) 25,819
43,205
(120,377 ) —
Interest (expense) income, net —
(43,832 ) 2,165
6,645
—
(35,022 )
Other (expense) income, net (4 ) 378
(8 ) (4 ) —
362
Income before income tax
expense (benefit)
51,141
8,755
43,177
70,598
(120,377 ) 53,294
Income tax expense (benefit) —
588
(29 ) 1,594
—
2,153
Net income $ 51,141
$ 8,167
$ 43,206
$ 69,004
$ (120,377 ) $ 51,141

Comprehensive income $ 51,141
$ 8,143
$ 43,206
$ 66,539
$ (120,377 ) $ 48,652

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Condensed Consolidating Statements of Comprehensive Income (Loss)~~

~~For the Nine Months Ended September 30, 2017~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Revenues $ —
$ 380,504
$ 161,689
$ 822,064
$ (773 ) $ 1,363,484
Costs and expenses 1,327
237,086
106,296
757,288
(773 ) 1,101,224
Operating (loss) income (1,327 ) 143,418
55,393
64,776
—
262,260
Equity in earnings (loss) of
subsidiaries
124,073
(10,625 ) 69,770
121,002
(304,220 ) —
Interest income (expense), net 36
(129,551 ) (4,160 ) 6,393
—
(127,282 )
Other income (expense), net —
140
1
(5,039 ) —
(4,898 )
Income before income tax expense 122,782
3,382
121,004
187,132
(304,220 ) 130,080
Income tax expense —
81
3
7,214
—
7,298
Net income $ 122,782
$ 3,301
$ 121,001
$ 179,918
$ (304,220 ) $ 122,782

Comprehensive income (loss) $ 122,782
$ (1,592 ) $ 121,001
$ 195,595
$ (304,220 ) $ 133,566

~~Condensed Consolidating Statements of Comprehensive Income (Loss)~~

~~For the Nine Months Ended September 30, 2016~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Revenues $ —
$ 383,836
$ 159,272
$ 742,890
$ (1,073 ) $ 1,284,925
Costs and expenses 1,204
221,839
104,958
684,261
(1,073 ) 1,011,189
Operating (loss) income (1,204 ) 161,997
54,314
58,629
—
273,736
Equity in earnings (loss) of
subsidiaries
162,248
(5,362 ) 71,273
131,294
(359,453 ) —
Interest (expense) income, net —
(124,619 ) 5,699
15,546
—
(103,374 )
Other income (expense), net 18
400
(18 ) (410 ) —
(10 )
Income before income tax expense (benefit) 161,062
32,416
131,268
205,059
(359,453 ) 170,352
Income tax expense (benefit) 3
1,281
(24 ) 8,033
—
9,293
Net income $ 161,059
$ 31,135
$ 131,292
$ 197,026
$ (359,453 ) $ 161,059

Comprehensive income (loss) $ 161,059
$ (14,687 ) $ 131,292
$ 202,242
$ (359,453 ) $ 120,453

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the~~ ~~Nine~~ ~~Months Ended~~ ~~September 30, 2017~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net cash provided by operating
activities
$ 355,864
$ 128,395
$ 72,711
$ 290,917
$ (536,872 ) $ 311,015
Cash flows from investing activities:
Capital expenditures —
(34,964 ) (18,138 ) (167,515 ) —
(220,617 )
Change in accounts payable
related to capital expenditures
—
(1,223 ) 4,445
10,050
—
13,272
Proceeds from sale or disposition
of assets
—
1,947
17
59
—
2,023
Investment in subsidiaries (1,262,000 ) —
—
(126 ) 1,262,126
—
Proceeds from Axeon term loan —
110,000
—
—
—
110,000
Acquisitions —
—
—
(1,461,719 ) —
(1,461,719 )
Net cash (used in) provided by investing activities (1,262,000 ) 75,760
(13,676 ) (1,619,251 ) 1,262,126
(1,557,041 )
Cash flows from financing activities:
Debt borrowings —
1,901,504
—
69,700
—
1,971,204
Note offering, net of
issuance costs
—
543,313
—
—
—
543,313
Debt repayments —
(1,856,739 ) —
(82,000 ) —
(1,938,739 )
Issuance of preferred units,
net of issuance costs
371,802
—
—
—
—
371,802
Issuance of common units,
net of issuance costs
643,858
—
—
—
—
643,858
General partner contribution 13,597
—
—
—
—
13,597
Distributions to preferred unitholders (26,681 ) (13,340 ) (13,341 ) (13,342 ) 40,023
(26,681 )
Distributions to common unitholders and general partner (331,222 ) (165,611 ) (165,611 ) (165,627 ) 496,849
(331,222 )
Contributions from affiliates —
1,262,000
—
126
(1,262,126 ) —
Net intercompany activity 238,172
(1,873,773 ) 119,917
1,515,684
—
—
Other, net (3,366 ) (1,486 ) —
(218 ) —
(5,070 )
Net cash provided by (used in) financing activities 906,160
(204,132 ) (59,035 ) 1,324,323
(725,254 ) 1,242,062
Effect of foreign exchange rate changes on cash —
—
—
1,637
—
1,637
Net increase (decrease) in cash
and cash equivalents
24
23
—
(2,374 ) —
(2,327 )
Cash and cash equivalents as of the
beginning of the period
870
5
—
35,067
—
35,942
Cash and cash equivalents as of the
end of the period
$ 894
$ 28
$ —
$ 32,693
$ —
$ 33,615

~~NUSTAR ENERGY L.P. AND SUBSIDIARIES~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~Condensed Consolidating Statements of Cash Flows~~

~~For the~~ ~~Nine~~ ~~Months Ended~~ ~~September 30, 2016~~

~~(Thousands of Dollars)~~

NuStar
Energy

NuStar
Logistics
NuPOP
Non-Guarantor
Subsidiaries
Eliminations Consolidated
Net cash provided by operating
activities
$ 292,572
$ 97,253
$ 118,436
$ 281,544
$ (475,256 ) $ 314,549
Cash flows from investing activities:
Capital expenditures —
(53,491 ) (43,329 ) (48,594 ) —
(145,414 )
Change in accounts payable
related to capital expenditures
—
(15,086 ) 2,645
(3,063 ) —
(15,504 )
Investment in subsidiaries —
—
(212,900 ) —
212,900
—
Net cash used in investing activities —
(68,577 ) (253,584 ) (51,657 ) 212,900
(160,918 )
Cash flows from financing activities:
Debt borrowings —
965,082
—
20,900
—
985,982
Debt repayments —
(918,550 ) —
(31,200 ) —
(949,750 )
Issuance of common units, net of
issuance costs
27,710
—
—
—
—
27,710
General partner contribution 575
—
—
—
—
575
Distributions to common unitholders and general partner (294,153 ) (147,076 ) (147,077 ) (147,093 ) 441,246
(294,153 )
Contributions from affiliates —
—
—
178,890
(178,890 ) —
Net intercompany activity (25,372 ) 75,165
282,226
(332,019 ) —
—
Other, net (1,406 ) (3,298 ) (1 ) (8,894 ) —
(13,599 )
Net cash (used in) provided by
financing activities
(292,646 ) (28,677 ) 135,148
(319,416 ) 262,356
(243,235 )
Effect of foreign exchange rate
changes on cash
—
—
—
3,404
—
3,404
Net decrease in cash and
cash equivalents
(74 ) (1 ) —
(86,125 ) —
(86,200 )
Cash and cash equivalents as of the
beginning of the period
885
4
—
117,973
—
118,862
Cash and cash equivalents as of the
end of the period
$ 811
$ 3
$ —
$ 31,848
$ —
$ 32,662

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

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

Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING ~~STATEMENTS~~INFORMATION

~~This~~In this Form 10-Q, ~~contains~~we make certain forward-looking statements, such as statements regarding our plans, strategies, objectives, expectations, estimates, predictions, projections, assumptions, intentions, resources and ~~other forward-looking statements that involve various risks~~the future impact of economic activity and ~~uncertainties.~~the demand for or supply of crude oil, refined products, renewable fuel and anhydrous ammonia. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. These forward-looking statements can generally be identified by the words “anticipates,” “believes,” “expects,” “plans,” “intends,” “estimates,” “forecasts,” “budgets,” “projects,” “will,” “could,” “should,” “may” and similar expressions. These statements reflect our current views with regard to future events and are subject to various risks, uncertainties and ~~assumptions. Please read~~assumptions, which may cause actual results to differ materially. See Item 1A. “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2023, ~~Part I, Item 1A “Risk Factors,”~~ as well as additional information provided from time to time in our subsequent ~~current~~filings with the Securities and ~~quarterly reports,~~Exchange Commission, for a discussion of certain of those risks, uncertainties and assumptions.

If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those described in any forward-looking statement. Other unknown or unpredictable factors could also have material adverse effects on our future results. Readers are cautioned not to place undue reliance on this forward-looking information, which is as of the date of this Form 10-Q. We do not intend to update these statements unless we are required by the securities laws to do so, and we undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

~~OVERVIEW~~

NuStar Energy L.P. (NYSE: NS) is engaged in the transportation of petroleum products and anhydrous ammonia, and the terminalling, storage and marketing of petroleum products. Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole. NuStar GP Holdings, LLC (NuStar GP Holdings or NSH) (NYSE: NSH) owns our general partner, Riverwalk Logistics, L.P., and owns an approximate 11% common limited partner interest in us as of ~~September 30, 2017~~. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in ~~seven~~the following sections:

•Overview, including Trends and Outlook

•Results of Operations

~~Trends and Outlook~~

•Liquidity and Capital Resources

~~Related Party Transactions~~

•Critical Accounting ~~Policies~~Estimates

~~New Accounting Pronouncements~~

~~Recent Developments~~OVERVIEW

~~Hurricane Activity.~~ InNuStar Energy L.P. (NuStar Energy) is a publicly traded Delaware limited partnership. Our business is managed under the ~~third quarter of 2017, parts~~direction of the ~~Caribbean and Gulf~~board of ~~Mexico experienced three major hurricanes. Several~~directors of NuStar GP, LLC (the Board of Directors), the general partner of our ~~facilities were affected by the hurricanes, with the main impact at~~general partner, Riverwalk Logistics, L.P., both of which are wholly owned subsidiaries of ours. As of March 31, 2024, our St. Eustatius terminal, which was temporarily shut down. We recorded a $5.0 million loss in “Other (expense) income, net” in the condensed consolidated statements of comprehensive income in the third quarter of 2017 for property damage at our St. Eustatius terminal, which represents the amount of our deductible under our insurance policy. Additionally, we incurred approximately $0.7 million of operating expenses to repair minor property damage at several of our domestic terminals. The shutdownlimited partner interests consisted of the St. Eustatius terminal also caused lower revenues for our bunker fuel operations in our fuels marketing segment and lower throughput and associated handling fees in our storage segment. We are still evaluating the extent of property damage at our St. Eustatius terminal, as well as the interruption to our operations; therefore, we are unable to estimate the total impact from the hurricanes at this time. However, we expect that losses incurred above our deductible amount will be covered by our insurance policies.following:

~~Navigator Acquisition and Financing Transactions.~~ ~~On May 4, 2017, we completed the acquisition of Navigator Energy Services, LLC for approximately $1.5 billion (the Navigator Acquisition). In order to fund the purchase price, we issued 14,375,000~~ •common units ~~for net proceeds of $657.5 million, issued $550.0 million of 5.625% senior notes for net proceeds of $543.3 million~~(NYSE: NS); and ~~issued 15,400,000 of our~~

•8.50% Series A (NYSE: NSprA), 7.625% Series B (NYSE: NSprB) and 9.00% Series C (NYSE: NSprC) Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ~~(Series~~(collectively, the Series A, B and C Preferred Units) ~~for net proceeds~~.

We are primarily engaged in the transportation, terminalling and storage of ~~$371.8 million.~~petroleum products and renewable fuels and the transportation of anhydrous ammonia. We ~~collectively refer to the acquired~~also market petroleum products. Our operations consist of three reportable business segments: pipeline, storage and fuels marketing. As of March 31, 2024, our assets ~~as our Permian Crude System. The assets acquired are~~ included ~~in our~~9,500 miles of pipeline ~~segment. Please refer to Notes 3, 4~~ and 1063 terminal and storage facilities, which provide approximately 49 million barrels of ~~the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion.~~

~~Table of Contents~~

~~Axeon Term Loan.~~ On February 22, 2017, we settled and terminated the $190.0 million term loan to Axeon Specialty Products, LLC (the Axeon Term Loan), pursuant to which we also provided credit support, such as guarantees, letters of credit and cash collateral, as applicable, of up to $125.0 million to Axeon Specialty Products, LLC (Axeon). We received $110.0 million in settlement of the Axeon Term Loan, and our obligation to provide ongoing credit support to Axeon ceased. Please refer to Note 6 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion of the Axeon Term Loan and credit support.

~~Operations~~

storage capacity. We conduct our operations through our wholly owned subsidiaries, primarily NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. (NuPOP). The term “throughput” as used in this document generally refers to barrels of crude oil, refined product or renewable fuels or tons of ammonia, as applicable, that pass through our pipelines, terminals or storage tanks. We generate revenue primarily from:

•tariffs for transportation through our pipelines;

•fees for the use of our terminal and storage facilities and related ancillary services; and

•sales of petroleum products.

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The following factors affect the results of our operations:

•economic factors and price volatility;

•industry factors, such as changes in the prices of petroleum products that affect demand or production, or regulatory changes that could increase costs or impose restrictions on operations;

•factors that affect our customers and the markets they serve, such as utilization rates and maintenance turnaround schedules of our refining company customers and drilling activity by our crude oil production customers;

•company-specific factors, such as facility integrity issues, maintenance requirements and outages that impact the throughput rates of our assets; and

•seasonal factors that affect the demand for products we transport and/or store in our assets and the demand for products we sell.

Merger Agreement

On January 22, 2024, NuStar Energy entered into an Agreement and Plan of Merger (the Merger Agreement) with Sunoco LP, a Delaware limited partnership (Sunoco), Saturn Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Sunoco (Merger Sub), Riverwalk Logistics, L.P., NuStar GP, LLC, and Sunoco GP LLC, a Delaware limited liability company and sole general partner of Sunoco (the Sunoco GP). For more information regarding the Merger and Merger Agreement, see our current report on Form 8-K filed with the SEC on January 22, 2024 and our definitive merger proxy statement on Schedule 14A filed with the SEC on April 3, 2024.

Other Events

Sale-Leaseback Transaction. On March 21, 2023, we consummated a sale-leaseback (the Sale-Leaseback Transaction) of our corporate headquarters facility and approximately 24 acres of underlying land located in San Antonio, Texas (the Corporate Headquarters) for $103.0 million and recognized a gain of $41.1 million. We used the proceeds to repay outstanding borrowings under our $1.0 billion unsecured revolving credit agreement (as amended, the Revolving Credit Agreement). See Note 1 of the Condensed Notes to the Consolidated Financial Statements in Item 1. “Financial Statements” for additional information.

Redemptions of Series D Preferred Units. In the second and third quarters of 2023, we redeemed all of our outstanding Series D Cumulative Convertible Preferred Units (the Series D Preferred Units).

Trends and Outlook

In 2024, we expect to continue to benefit from the positive revenue impact of the July 2023 tariff indexation increases on most of our pipeline systems, which serve as an important counterbalance to the impact of inflation on our business.

While many terminals in our storage segment are somewhat insulated from demand volatility by contracted rates for storage, index rate adjustments and minimum volume commitments, revenues at our St. James and Corpus Christi North Beach facilities continue to be negatively impacted by ongoing global economic uncertainty. Conversely, we expect our West Coast region to continue to benefit in 2024 from the completion of renewable fuels projects, which continue to expand the capacity of our renewable fuels distribution system.

In 2024, we expect our operations to continue to be impacted by inflation. Our ability to pass along rate increases reflecting changes in producer and/or consumer price indices to our customers, under tariffs and contracts, should help to counterbalance the impact of inflation on our costs. Additionally, we expect uncertain market conditions in 2024, stemming from the uncertainty regarding future actions by the U.S. Federal Reserve and the upcoming election, among other factors, which could impact the cost of operating our assets and executing our capital projects in 2024 and beyond.

Our outlook for the Partnership, both overall and for any of our segments, may change, as we base our expectations on our continuing evaluation of several factors, many of which are outside our control. See Item 1A. “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional discussion on how these factors could affect our financial position, results of operations and cash flows.

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RESULTS OF OPERATIONS

Consolidated Results of Operations

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023


	Three Months Ended March 31,				Change
	2024		2023
	(Unaudited, Thousands of Dollars, Except Per Unit Data)
Statement of Income Data:
Revenues:
Service revenues	$	278,539	$	285,266	$	(6,727)
Product sales	112,288		108,601		3,687
Total revenues	390,827		393,867		(3,040)

Costs and expenses:
Costs associated with service revenues	149,504		151,216		(1,712)
Costs associated with product sales	94,166		93,461		705


General and administrative expenses	42,237		28,725		13,512
Other depreciation and amortization expense	1,053		1,555		(502)

Total costs and expenses	286,960		274,957		12,003

Gain on sale of assets	—		41,075		(41,075)

Operating income	103,867		159,985		(56,118)

Interest expense, net	(62,480)		(57,371)		(5,109)


Other income, net	2,599		4,509		(1,910)
Income before income tax expense	43,986		107,123		(63,137)
Income tax expense	1,244		1,187		57


Net income	$	42,742	$	105,936	$	(63,194)

Basic and diluted net income per common unit	$	0.15	$	0.61	$	(0.46)

Consolidated Overview

Net income decreased $63.2 million and basic and diluted net income per common unit decreased $0.46 for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower operating income of

$56.1 million and an increase in interest expense of $5.1 million. Operating income decreased primarily due to a gain of

$41.1 million related to the Sale-Leaseback Transaction in the first quarter of 2023 and higher general and administrative expenses in the first quarter of 2024.

Total revenues decreased $3.0 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower revenues from our storage segment.

Total costs and expenses increased $12.0 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to higher general and administrative expenses in the first quarter of 2024.

General and administrative expenses increased $13.5 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to transaction costs of $8.6 million related to the Merger Agreement, higher compensation expenses of $2.2 million and an increase in rent expense of $1.8 million, mainly as a result of the Sale-Leaseback Transaction of our Corporate Headquarters in the first quarter of 2023.

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Interest expense, net, increased $5.1 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to higher interest rates on our variable rate debt and higher debt balances due to funding a portion of the Series D Preferred Unit redemptions.

Other income, net decreased $1.9 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower foreign exchange rate gains of $2.3 million.

Pipeline Segment

As of March 31, 2024, our pipeline assets consist of ~~three reportable business segments:~~9,500 miles of pipeline with 33 terminals and 13.0 million barrels of storage ~~and fuels marketing.~~

~~Pipeline.~~ ~~We own 3,140~~capacity. Our Central West System includes 2,915 miles of refined product pipelines and ~~1,830~~2,080 miles of crude oil ~~pipelines and gathering lines, as well as approximately 5.0 million barrels of storage capacity, which comprise~~pipelines. In addition, our Central ~~West System. In addition, we own 2,370~~East System includes 2,495 miles of refined product pipelines, consisting of the East and North ~~Pipelines,~~pipelines, and a ~~2,000-mile~~2,010-mile ammonia pipeline (the Ammonia Pipeline)~~, which together comprise our Central East System. The East and North Pipelines have storage capacity of approximately 6.7 million barrels.~~. We charge tariffs on a per barrel basis for transporting refined products, crude oil and other feedstocks in our refined product and crude oil pipelines and on a per ton basis for transporting anhydrous ammonia in the Ammonia Pipeline. Throughputs on the Ammonia Pipeline are converted from tons to barrels for reporting purposes only. Other revenues include product sales of surplus pipeline loss allowance (PLA) volumes.

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023


	Three Months Ended March 31,				Change
	2024		2023
	(Thousands of Dollars, Except Barrels/Day Information)
Pipeline Segment:
Crude oil pipelines throughput (barrels/day)	1,201,214		1,325,282		(124,068)
Refined products and ammonia pipelines throughput (barrels/day)	577,398		595,622		(18,224)
Total throughput (barrels/day)	1,778,612		1,920,904		(142,292)

Throughput and other revenues	$	216,775	$	213,183	$	3,592
Operating expenses	52,681		49,775		2,906
Depreciation and amortization expense	44,663		43,550		1,113


Segment operating income	$	119,431	$	119,858	$	(427)

Tariff indexations effective July 2023 increased the average tariff rates on most of our pipeline systems and resulted in higher revenues for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Pipeline segment revenues increased $3.6 million, despite a decrease in throughputs of 142,292 barrels per day for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to:

•an increase in revenues of $3.5 million on our Permian Crude System due to higher PLA volumes sold of $4.0 million and higher average tariffs of $1.0 million, while throughputs decreased 10,413 barrels per day due to decreased customer production supplying this system;

•an increase in revenues of $3.2 million, despite a decrease in throughputs of 17,837 barrels per day on our McKee System pipelines; revenues increased primarily due to higher average tariff rates, while throughputs decreased due to lower demand on certain of our pipelines within this system and operational issues at a customer’s refinery;

•an increase in revenues of $2.0 million on our Valley Pipeline, despite comparable throughputs, due to higher average tariff rates;

•an increase in revenues of $0.9 million on our Ardmore System, despite comparable throughputs, due to higher volumes on certain of the pipelines within this system with higher average tariff rates;

•an increase in revenues of $0.8 million on our East Pipeline, despite a slight decrease in throughputs, primarily due to higher PLA revenues;

•a decrease in revenues of $1.1 million and a decrease in throughputs of 2,399 barrels per day on our Ammonia Pipeline due to a delayed start to the 2024 spring agricultural demand season; and

•a decrease in revenues of $6.8 million and a decrease in throughputs of 101,620 barrels per day on our Corpus Christi Crude Pipeline System, primarily due to unfavorable market conditions and changes to customer contracts.

Operating expenses increased $2.9 million, primarily due to an increase of $2.3 million in compensation expense across various pipelines.

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Storage~~. We own terminals~~ Segment

Our storage segment is composed of our facilities that provide storage, handling and other services on a fee basis for refined products, crude oil, specialty chemicals, renewable fuels and other liquids. As of March 31, 2024, we owned and operated 29 terminal and storage facilities in the United States ~~Canada,~~and one terminal in Nuevo Laredo, Mexico, ~~the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom (UK),~~ with ~~approximately 84.7~~an aggregate storage capacity of 36.4 million ~~barrels of storage capacity.~~barrels. Revenues for the storage segment include fees for tank storage agreements, ~~whereby~~under which a customer agrees to pay for a certain amount of storage in a tank over a period of time (storage terminal revenues), and throughput agreements, ~~whereby~~under which a customer pays a fee per barrel for volumes ~~moving~~moved through our terminals (throughput terminal revenues).

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023


	Three Months Ended March 31,				Change
	2024		2023
	(Thousands of Dollars, Except Barrels/Day Information)
Storage Segment:
Throughput (barrels/day)	279,297		502,717		(223,420)

Throughput terminal revenues	$	12,587	$	27,315	$	(14,728)
Storage terminal revenues	63,291		53,342		9,949
Total revenues	75,878		80,657		(4,779)
Operating expenses	33,220		39,387		(6,167)
Depreciation and amortization expense	18,940		18,504		436


Segment operating income	$	23,718	$	22,766	$	952

Effective January 1, 2024, our revenues changed for certain terminals on our McKee and Three Rivers systems from throughput-based to storage-based due to changes to customer contracts.

Throughput terminal revenues decreased $14.7 million and throughputs decreased 223,420 barrels per day for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the following;

•a decrease in revenues of $7.8 million and a decrease in throughputs of 124,450 barrels per day on our Central West Terminals due to the contract changes described above; and

•a decrease in revenues of $7.1 million and a decrease in throughputs of 104,274 barrels per day at our Corpus Christi North Beach terminal, consistent with the decline in volumes on our Corpus Christi Crude Pipeline System, primarily due to unfavorable market conditions and changes to customer contracts.

Storage terminal revenues increased $9.9 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the following:

•an increase in revenues of $9.5 million at our Central West Terminals, primarily due to the contract changes of $7.8 million described above, as well as an increase of $1.4 million due to rate escalations and higher throughput and handling fees across various terminals;

•an increase in revenues of $2.1 million at our West Coast Terminals, primarily due to new contracts and rate escalations; and

•a decrease in revenues of $1.9 million at our St. James terminal, mainly due to a decrease in reimbursable revenues.

Operating expenses decreased $6.2 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, mainly due to a decrease of $4.5 million in reimbursable expenses, primarily at our Corpus Christi North Beach and St. James terminals, and a decrease of $4.0 million in maintenance and regulatory expense, primarily at our St. James terminal.

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Fuels Marketing~~. Within our~~ Segment

Our fuels marketing ~~operations, we purchase~~segment sells petroleum products ~~for resale.~~primarily through our bunkering operations in the Gulf Coast and certain of our blending operations associated with our Central East System. The results of operations for the fuels marketing segment depend largely on the margin between our costs and the sales prices of the products we market. Therefore, the results of operations for this segment are more sensitive to changes in commodity prices compared to the operations of the pipeline and storage segments. We enter into derivative contracts to attempt to mitigate the effects of commodity price fluctuations.

~~We ceased marketing crude oil in~~ The financial impacts of the ~~second quarter of 2017 and exited our heavy fuels trading operations in the third quarter of 2017. These actions are in line~~derivative financial instruments associated with our goal of reducing our exposure to commodity margins, and instead focusing on our core, fee-based pipeline and storage segments. Going forward, the only operations remaining in our fuels marketing segment will be our bunkering operations at our St. Eustatius and Texas City terminals, as well as our butane blending operations.

~~The following factors affect the results of our operations:~~

~~company-specific factors, such as facility integrity issues and maintenance requirements that impact the throughput rates of our assets;~~

~~seasonal factors that affect the demand for products transported by and/or stored in our assets and the demand for products we sell;~~

~~industry factors, such as changes in the prices of petroleum products that affect demand and operations of our competitors;~~

~~economic factors, such as~~ commodity price ~~volatility that impact our fuels marketing segment and the drilling activity by our crude oil production customers; and~~risk were not material for any periods presented.

factors that impact the operations served by our pipeline and storage assets, such as utilization rates and maintenance turnaround schedules of our refining company customers and drilling activity by our crude oil production customers.

~~Current Market Conditions~~

The price of crude oil has recovered only modestly since its sharp initial decline in 2014 and subsequent historic lows during 2015 and 2016. This year, global supply and demand have moved into balance, which seems to have reduced crude price volatility, but crude prices remain stalled at approximately 50% of their 2014 levels. Most energy industry experts now project only modest price recovery through the end of 2018.

~~Table of Contents~~

Increases or decreases in the price of crude oil affect sectors across the energy industry, including our customers in crude oil production, refining and trading, in different ways at different points in any given price cycle. For example, U.S. crude oil producers reduced their capital spending relatively early in this sustained low price cycle, which reduced drilling activity and lowered production, particularly in shale play regions with higher relative drilling costs. As this cycle has continued, producers focused their trimmed-back spending on the most capital-efficient regions, such as, notably, the Permian Basin. Refiners, on the other hand, have benefitted from lower crude oil prices, to the extent they have been able to take advantage of the combination of lower feedstock prices, especially those positioned for healthy regional demand for their refined products; however, as refined product inventories increase, refiners are incentivized to reduce their production levels, which in turn may reduce their ability to benefit from low crude prices. Crude oil traders focus less on the current market commodity price than on whether that price is higher or lower than future market prices: if the future price for a product is believed to be higher than the current market price, or a “contango market,” traders are more likely to purchase and store products to sell in the future at the higher price. On the other hand, when the current price of crude oil nears or exceeds the expected future market price, or “backwardation,” as is currently the case, traders are no longer incentivized to purchase and store product for future sale.

~~RESULTS OF OPERATIONS~~

Three Months Ended ~~September 30, 2017~~March 31, 2024 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2023

~~Financial Highlights~~


	Three Months Ended March 31,				Change
	2024		2023
	(Thousands of Dollars)
Fuels Marketing Segment:
Product sales	$	98,175	$	100,027	$	(1,852)
Cost of goods	93,766		93,186		580
Gross margin	4,409		6,841		(2,432)
Operating expenses	401		275		126


Segment operating income	$	4,008	$	6,566	$	(2,558)

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

Three Months Ended September 30, Change
2017 2016
Statement of Income Data:
Revenues:
Service revenues $ 295,102
$ 277,758
$ 17,344
Product sales 145,464
163,660
(18,196 )
Total revenues 440,566
441,418
(852 )

Costs and expenses:
Cost of product sales 138,078
155,129
(17,051 )
Operating expenses 116,590
117,432
(842 )
General and administrative expenses 25,003
26,957
(1,954 )
Depreciation and amortization expense 69,178
53,946
15,232
Total costs and expenses 348,849
353,464
(4,615 )

Operating income 91,717
87,954
3,763
Interest expense, net (45,256 ) (35,022 ) (10,234 )
Other (expense) income, net (5,126 ) 362
(5,488 )
Income before income tax expense 41,335
53,294
(11,959 )
Income tax expense 2,743
2,153
590
Net income $ 38,592
$ 51,141
$ (12,549 )
Basic and diluted net income per common unit $ 0.15
$ 0.49
$ (0.34 )
Basic weighted-average common units outstanding 93,031,320
78,031,053
15,000,267

~~Overview~~

~~Net income~~Product sales decreased ~~$12.5~~$1.9 million for the three months ended ~~September 30, 2017,~~March 31, 2024, compared to the three months ended ~~September 30, 2016,~~March 31, 2023, primarily due to ~~increased interest expense and other expense, net, which were partially offset by a slight increase in segment operating income.~~

~~Table of Contents~~

~~Segment Operating Highlights~~

~~(Thousands of Dollars, Except Barrels/Day Information)~~

Three Months Ended September 30, Change
2017 2016
Pipeline:
Refined products pipelines throughput (barrels/day) 527,148
536,509
(9,361 )
Crude oil pipelines throughput (barrels/day) 679,721
384,359
295,362
Total throughput (barrels/day) 1,206,869
920,868
286,001
Throughput revenues $ 137,426
$ 122,481
$ 14,945
Operating expenses 41,463
41,331
132
Depreciation and amortization expense 34,844
22,228
12,616
Segment operating income $ 61,119
$ 58,922
$ 2,197
Storage:
Throughput (barrels/day) 294,544
810,470
(515,926 )
Throughput terminal revenues $ 21,120
$ 30,239
$ (9,119 )
Storage terminal revenues 136,951
127,528
9,423
Total revenues 158,071
157,767
304
Operating expenses 66,603
69,722
(3,119 )
Depreciation and amortization expense 32,145
29,625
2,520
Segment operating income $ 59,323
$ 58,420
$ 903
Fuels Marketing:
Product sales and other revenue $ 147,463
$ 166,191
$ (18,728 )
Cost of product sales 140,110
157,567
(17,457 )
Gross margin 7,353
8,624
(1,271 )
Operating expenses 8,885
8,961
(76 )
Segment operating loss $ (1,532 ) $ (337 ) $ (1,195 )
Consolidation and Intersegment Eliminations:
Revenues $ (2,394 ) $ (5,021 ) $ 2,627
Cost of product sales (2,032 ) (2,438 ) 406
Operating expenses (361 ) (2,582 ) 2,221
Total $ (1 ) $ (1 ) $ —
Consolidated Information:
Revenues $ 440,566
$ 441,418
$ (852 )
Cost of product sales 138,078
155,129
(17,051 )
Operating expenses 116,590
117,432
(842 )
Depreciation and amortization expense 66,989
51,853
15,136
Segment operating income 118,909
117,004
1,905
General and administrative expenses 25,003
26,957
(1,954 )
Other depreciation and amortization expense 2,189
2,093
96
Consolidated operating income $ 91,717
$ 87,954
$ 3,763

~~Table of Contents~~

~~Pipeline~~

Total revenues increased $14.9 million and throughputs increased 286,001 barrels per day for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, primarily due to:

~~an increase in revenues of $15.7 million and an increase in throughputs of 282,145 barrels per day resulting from our Permian Crude System acquired in the Navigator Acquisition;~~

an increase in revenues of $1.9 million and an increase in throughputs of 4,998 barrels per day due to maintenance downtime in 2016 on a portion of the Ammonia Pipeline, as well as operational issues in 2016 at certain plants served by the pipeline; and

~~an increase in revenues of $1.7 million and an increase in throughputs of 5,162 barrels per day due to increased production at the refinery served by our North Pipeline.~~

~~These increases were partially offset by:~~

a decrease in revenues of ~~$2.1~~$4.2 million ~~and a decrease in throughputs of 15,995 barrels per day due to a turnaround and operational issues at the refineries served by the East Pipeline in the third quarter of 2017;~~

~~a decrease in revenues of $1.9 million and a decrease in throughputs of 3,113 barrels per day due to operational issues at the refinery served by~~for our ~~McKee Systems; and~~

~~a decrease in revenues of $0.5 million and a decrease in throughputs of 7,126 barrels per day on our Eagle Ford System~~blending operations, mainly due to ~~reduced production in this sustained low crude oil price environment.~~

Operating expenses remained flat for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. Increased operating expenses of $3.6 million resulting from our recently acquired Permian Crude System were offset by a decrease of $2.4 million in maintenance and regulatory expenses and a decrease of $1.2 million from product imbalances on the East Pipeline.

Depreciation and amortization expense increased $12.6 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, mainly due to our acquisition of the Permian Crude System.

~~Storage~~

Beginning January 1, 2017, our agreements for our refinery crude storage tanks at Corpus Christi, TX, Texas City, TX and Benicia, CA changed from throughput-based to storage-based. Excluding the effect from the change to these agreements, throughput terminal revenues would have increased $1.6 million and throughputs would have decreased 24,525 barrels per day for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. Throughput terminal revenues increased $3.3 million, despite decreased throughputs of 9,780 barrels per day, at our Corpus Christi North Beach terminal, mainly resulting from our acquisition of assets from Martin Operating Partnership L.P. in December 2016 (the Martin Terminal Acquisition). The benefit of the Martin Terminal Acquisition waslower volumes sold, partially offset by lower revenues and throughputs resulting from a decrease in Eagle Ford Shale crude oil being shipped to Corpus Christi. Also, revenues decreased $1.6 million and throughputs decreased 32,439 barrels per day at our Paulsboro, NJ terminal as a customer diverted barrels to other terminals.

Excluding the effect of the change to the refinery storage tank agreements described above, storage terminal revenues would have decreased $0.4 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, primarily due to:

a decrease of $4.4 million in domestic revenues, mainly at our St. James, LA terminal due to reduced unit train activity and at our Texas City, TX terminal as a result of the exit from our heavy fuels trading operations and tanks out of service; and

~~a decrease in revenues of $1.3 million at our Point Tupper terminal mainly due to a loss in customer base, tanks out of service and lower reimbursable revenues.~~

~~These decreases were mostly~~ offset by an increase in revenues of ~~$4.7~~$2.5 million atfrom our St. Eustatius terminal, mainly due to new customer contracts and rate escalations, partially offset by decreased lower throughput and associated handling fees as a result of the shutdown of the terminal and damage caused by hurricane activity in the third quarter of 2017.

~~Operating expenses decreased $3.1 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, mainly due to:~~

~~a decrease of $2.0 million in reimbursable expenses mainly at our Texas City, TX and Point Tupper terminals, consistent with the decrease in reimbursable revenues;~~

~~a decrease of $1.4 million in maintenance and regulatory expenses, spread across various terminals; and~~

~~a decrease of $1.1 million in internal overhead expenses, mainly~~bunkering operations, primarily due to higher ~~capitalized overhead related to capital storage projects in 2017.~~

~~Table of Contents~~

~~These decreases were partially offset by an increase in operating expenses of $1.8 million resulting from the Martin Terminal Acquisition.~~

Depreciation and amortization expense increased $2.5 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, as a result of the Martin Terminal Acquisition and the completion of various storage projects.

~~Fuels Marketing~~

Segment operating loss increased $1.2 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, mainly due to lower gross margins from our bunker fuel operations at our St. Eustatius terminal, as well as the temporary shutdown of the terminal caused by hurricane activity in the third quarter of 2017.

~~Consolidation and Intersegment Eliminations~~

~~Revenue and operating expense eliminations primarily relate to storage fees charged to the fuels marketing segment by the storage segment.~~volumes sold. Cost of ~~product sales eliminations represent expenses charged to the fuels marketing segment for costs associated with inventory that are expensed once the inventory is sold.~~

~~General~~

General and administrative expenses decreased $2.0 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, primarily due to a reduction in employee benefit costs.

Interest expense, net increased $10.2 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016, mainly due to the issuance of $550.0 million of 5.625% senior notes in April 2017. Interest expense also increased as a result of lower interest income due to the termination of the Axeon Term Loan in February 2017. Please refer to Note 6 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of the Axeon Term Loan and related credit support.

For the three months ended September 30, 2017, we recognized other expense, net of $5.1 million mainly due to property damage at our St. Eustatius terminal resulting from hurricane activity in the third quarter of 2017.

~~Income tax expense~~goods increased $0.6 million for the three months ended ~~September 30, 2017,~~March 31, 2024, compared to the three months ended ~~September 30, 2016,~~March 31, 2023, primarily due to ~~an increase in the margin tax in Texas as a result of the Navigator Acquisition.~~

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~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Financial Highlights~~

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

Nine Months Ended September 30, Change
2017 2016
Statement of Income Data:
Revenues:
Service revenues $ 845,264
$ 814,727
$ 30,537
Product sales 518,220
470,198
48,022
Total revenues 1,363,484
1,284,925
78,559

Costs and expenses:
Cost of product sales 490,363
441,736
48,627
Operating expenses 334,016
335,315
(1,299 )
General and administrative expenses 83,202
73,399
9,803
Depreciation and amortization expense 193,643
160,739
32,904
Total costs and expenses 1,101,224
1,011,189
90,035

Operating income 262,260
273,736
(11,476 )
Interest expense, net (127,282 ) (103,374 ) (23,908 )
Other expense, net (4,898 ) (10 ) (4,888 )
Income before income tax expense 130,080
170,352
(40,272 )
Income tax expense 7,298
9,293
(1,995 )
Net income $ 122,782
$ 161,059
$ (38,277 )
Basic and diluted net income per common unit $ 0.65
$ 1.58
$ (0.93 )
Basic weighted-average common units outstanding 87,392,597
77,934,802
9,457,795

~~Overview~~

Net income decreased $38.3 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to increases in interest expense, general and administrative expenses and other expense, net. Segment operating income remained flat as a decline in the pipeline segment was mostly offset by increases in the fuels marketing and storage segments.

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~~Segment Operating Highlights~~

~~(Thousands of Dollars, Except Barrels/Day Information)~~

Nine Months Ended September 30, Change
2017 2016
Pipeline:
Refined products pipelines throughput (barrels/day) 524,277
532,275
(7,998 )
Crude oil pipelines throughput (barrels/day) 549,898
398,229
151,669
Total throughput (barrels/day) 1,074,175
930,504
143,671
Throughput revenues $ 385,406
$ 362,929
$ 22,477
Operating expenses 114,734
110,494
4,240
Depreciation and amortization expense 91,657
65,696
25,961
Segment operating income $ 179,015
$ 186,739
$ (7,724 )
Storage:
Throughput (barrels/day) 315,616
788,963
(473,347 )
Throughput terminal revenues $ 63,932
$ 88,307
$ (24,375 )
Storage terminal revenues 400,129
373,733
26,396
Total revenues 464,061
462,040
2,021
Operating expenses 199,525
206,883
(7,358 )
Depreciation and amortization expense 95,405
88,661
6,744
Segment operating income $ 169,131
$ 166,496
$ 2,635
Fuels Marketing:
Product sales and other revenue $ 524,083
$ 476,499
$ 47,584
Cost of product sales 497,722
450,705
47,017
Gross margin 26,361
25,794
567
Operating expenses 22,464
25,512
(3,048 )
Segment operating income $ 3,897
$ 282
$ 3,615
Consolidation and Intersegment Eliminations:
Revenues $ (10,066 ) $ (16,543 ) $ 6,477
Cost of product sales (7,359 ) (8,969 ) 1,610
Operating expenses (2,707 ) (7,574 ) 4,867
Total $ —
$ —
$ —
Consolidated Information:
Revenues $ 1,363,484
$ 1,284,925
$ 78,559
Cost of product sales 490,363
441,736
48,627
Operating expenses 334,016
335,315
(1,299 )
Depreciation and amortization expense 187,062
154,357
32,705
Segment operating income 352,043
353,517
(1,474 )
General and administrative expenses 83,202
73,399
9,803
Other depreciation and amortization expense 6,581
6,382
199
Consolidated operating income $ 262,260
$ 273,736
$ (11,476 )

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~~Pipeline~~

Total revenues increased $22.5 million and total throughputs increased 143,671 barrels per day for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to:

~~an increase in revenues of $25.1 million and an increase in throughputs of 151,481 barrels per day from our recently acquired Permian Crude System;~~

an increase in revenues of $6.7 million and an increase in throughputs of 5,130 barrels per day due to maintenance downtime in 2016 on a portion of the Ammonia Pipeline, as well as operational issues in 2016 at certain plants served by the pipeline;

an increase in revenues of $2.6 million, despite a decrease in throughputs of 3,247 barrels per day, on our East Pipeline due to the completion of various storage projects along the pipeline, as well as an increase in long-haul deliveries resulting in higher ~~average tariffs. A turnaround and operational issues at the refineries served by the East Pipeline in the third quarter of 2017 contributed to the decrease in throughputs; and~~

an increase in revenues of $2.1 million and an increase in throughputs of 21,781 barrels per day due to increased production at the refinery served by the Ardmore System in 2017, as well as a result of a turnaround and operational issues at the refinery in 2016.

These increases were partially offset by a decrease in revenues of $7.2 million and a decrease in throughputs of 10,115 barrels per day due to a turnaround in the second quarter of 2017 at the refinery served by the North Pipeline. Revenues decreased $6.1 million due to a decrease in throughputs of 24,078 barrels per day on our Eagle Ford System mainly due to reduced production in this sustained low crude oil price environment.

Operating expenses increased $4.2 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. Operating expenses increased $6.3 million as a result of our acquisition of the Permian Crude System, which was partially offset by a decrease of $2.0 million from product imbalances on the East Pipeline.

Depreciation and amortization expense increased $26.0 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, due to our acquisition of the Permian Crude System and the completion of various pipeline projects.

~~Storage~~

~~Beginning January 1, 2017, our agreements~~volumes for our refinery crude storage tanks at Corpus Christi, TX, Texas City, TX and Benicia, CA changed from throughput-based to storage-based. Excluding the effect from the change to these agreements, throughput terminal revenues would have increased $6.0 million and throughputs would have decreased 2,207 barrels per day for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. Throughput terminal revenues increased at our Corpus Christi North Beach terminal by $11.3 million due to an increase in throughputs of 15,898 barrels per day, mainly resulting from the Martin Terminal Acquisition. The benefit of the Martin Terminal Acquisition was partially offset by lower revenues and throughputs resulting from a decrease in Eagle Ford Shale crude oil being shipped to Corpus Christi. Revenues increased by $0.3 million and throughputs increased 17,128 barrels per day at our McKee System terminals mainly due to new customer contracts, partially offset by lower additive revenues in 2017. These increases in revenues and throughputs were partially offset by decreased revenues of $5.0 million and decreased throughputs of 32,612 barrels per day at our Paulsboro, NJ terminal as a customer diverted barrels to other terminals.bunkering operations.

Storage terminal revenues would have decreased $2.9 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, excluding the effect of the change to the refinery storage tank agreements described above. Domestic throughput and associated handling fees decreased $5.0 million, mainly at our St. James, LA terminal due to reduced unit train activity and at our Texas City, TX terminal as a result of the exit from our heavy fuels trading operations. Domestic reimbursable revenues decreased $2.5 million, mainly at our Texas City, TX terminal. These decreases were partially offset by an increase in revenues of $4.3 million due to new customer contracts and rate escalations, primarily at our West Coast, North East and St. James, LA terminals.

Storage terminal revenues also increased $5.5 million at our St. Eustatius terminal, mainly due to new customer contracts and rate escalations, partially offset by decreased lower throughput and associated handling fees as a result of the shutdown of the terminal and damage caused by hurricane activity in the third quarter of 2017. This increase was partially offset by a decrease in revenues of $4.6 million at our Point Tupper terminal, mainly resulting from a decrease in customer base, tanks out of service and lower reimbursable revenues.

~~Table of Contents~~

~~Operating expenses decreased $7.4 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to:~~

~~a decrease of $5.1 million in reimbursable expenses, mainly at our Texas City, TX and Point Tupper terminals, consistent with the decrease in reimbursable revenues;~~

~~a decrease of $4.5 million in maintenance and regulatory expenses primarily at our North East and Point Tupper terminals;~~

~~a decrease of $2.4 million in contractor services, mainly at our St. James, LA terminal as a result of reduced unit train activity; and~~

~~a decrease of $2.3 million in compensation expenses resulting from changes in our revenue agreements for our crude refinery storage tanks.~~

~~These decreases were partially offset by increased operating expenses of $6.5 million as a result of the Martin Terminal Acquisition.~~

Depreciation and amortization expense increased $6.7 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, as a result of the Martin Terminal Acquisition and the completion of various storage projects.

~~Fuels Marketing~~

Segment operating income ~~increased $3.6~~decreased $2.6 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2024, compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2023, primarily due to a reduction in losses of $5.8 million from our heavy fuels trading operations following our exit of that business in 2017. Segment operating income from our bunker fuel operations decreased $3.4 million, mainly at our St. Eustatius terminal, resulting from lower blending gross ~~margins and the temporary shutdown of the terminal caused by hurricane activity in the third quarter of 2017.~~margins.

~~Consolidation and Intersegment Eliminations~~

Revenue and operating expense eliminations primarily relate to storage fees charged to the fuels marketing segment by the storage segment. Cost of product sales eliminations represent expenses charged to the fuels marketing segment for costs associated with inventory that are expensed once the inventory is sold.

~~General~~

General and administrative expenses increased $9.8 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to transaction costs related to the Navigator Acquisition.

Interest expense, net increased $23.9 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, mainly due to the issuance of $550.0 million of 5.625% senior notes in April 2017 and as a result of fees for a bridge loan commitment to potentially assist with the financing of the Navigator Acquisition. We did not enter into or borrow under the bridge loan. Interest expense also increased as a result of lower interest income due to the termination of the Axeon Term Loan in February 2017. Please refer to Note 6 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of the Axeon Term Loan and related credit support.

For the nine months ended September 30, 2017, we recognized other expense, net of $4.9 million mainly due to property damage at our St. Eustatius terminal resulting from hurricane activity in the third quarter of 2017.

Income tax expense decreased $2.0 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to a reduction in withholding taxes related to certain of our foreign subsidiaries.

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~~TRENDS AND OUTLOOK~~

As a master limited partnership, our core business strategy is to build long-term unitholder value through stable, consistent growth: to that end, we provide a broad array of logistical solution services to a diverse customer base in sectors across the energy industry with our portfolio of assets positioned in geographic markets around the globe, under primarily fee-based, long-term contractual arrangements. This strategy is intended to mitigate the impact of negative market conditions on our results and position us for the financial health necessary to grow as market conditions improve.

We believe that the fact that we provide both storage and pipeline services, for crude and refined products, to customers across the country and around the world, offers some insulation from the impact of commodity market price fluctuations on our results of operations. Since higher crude oil prices have tended to benefit our producer customers, high prices have also correlated with increased demand for our crude oil pipeline services. On the other hand, lower crude oil prices, when coupled with an industry expectation of higher prices in the future, or a contango market, has historically correlated with increased demand from trading companies for our storage services. In the locations at which our assets are integrated physically with the refineries the assets serve, we believe the results generated by those assets depend to a greater degree on each refinery’s continuing need to receive, store and transport the crude and refined products than on crude or refined product prices.

The Navigator Acquisition broadened our geographic footprint and marked our entry into the Permian Basin, one of the fastest-growing basins in the United States. The Permian Basin currently represents approximately forty percent of all onshore rig activity in the United States, and rig count growth in the Permian continues to outpace all other domestic shale plays. Our Permian Crude System is located in the most economic and highest growth counties in the basin, with some of the lowest break-even values in the United States, and offers our customers access to multiple downstream end-markets. We believe this system provides a strong growth platform in the most prolific basin in the United States. While the addition of the Permian Crude System to our asset portfolio could increase the impact of crude oil prices on our results of operations, we believe that our contracts, many of which are long-term, take-or-pay arrangements for committed storage or throughput capacity, should continue to help to blunt the impact of volatility of crude oil prices on our results of operations.

At the time of the Navigator Acquisition in May, we anticipated that our issuance of common units, senior notes and preferred units to fund the purchase price would increase our ongoing costs of funding our quarterly distribution, as well as our interest expense, but we made the decision to move forward because we believed, and continue to believe, that the Permian Crude System’s future growth will outweigh those costs in the long run.

The Permian Basin and our Permian Crude System have been growing since the acquisition, and we expect that growth to continue, even in a continued low price environment. In contrast, during 2017, our pipeline systems and storage assets outside of the Permian Basin (collectively, our Base Business) have been faced with several unanticipated challenges, on top of the continuing burden of the third year of sustained low crude prices. In September, hurricanes caused damage in the Gulf and significant destruction in the Caribbean. While we successfully prevented severe damage from Hurricane Harvey’s heavy rainfall to our six affected Gulf Coast facilities, Hurricane Irma passed almost directly over our facility at St. Eustatius, which sustained substantial damage inflicted by the storm’s 146-mph winds and 30-foot seas. The facility, which will be fully operational by mid-December, resumed some operations within weeks of the storm, but the repairs will continue into 2018 and beyond. On top of the unanticipated costs of the hurricane damage, our Base Business has also faced significant unanticipated and unplanned turnarounds and downtime at our customers’ refineries in 2017. Further, in the course of our ongoing pipeline integrity program, we identified a 50-mile segment of our ammonia pipeline that we must replace over the next five years. Due to the fact that completing the large, unanticipated reliability project in two years will reduce our overall cost, we plan to complete this project by the end of 2018.

Beyond the challenges to our Base Business that have arisen in 2017, if this current low crude price cycle continues in 2018, our pipeline segment could suffer from decreased throughput in our Base Business pipeline systems. For example, our current committed customers on our South Texas Crude System may decline to renew their commitments as those expire over the next few years and may ship only at lower rates. If backwardation continues into next year, our storage segment results could also decline, due to downward pressure on rates and contract renewals driven by lower demand for capacity, at our St. James terminal and at other locations.

Our outlook for the partnership, both overall and for any of our segments, may change, as we base our expectations on our continuing evaluation of a number of factors, many of which are outside our control. These factors include, but are not limited to, the state of the economy and the capital markets, changes to our customers’ refinery maintenance schedules and unplanned refinery downtime, crude oil prices, the supply of and demand for crude oil, refined products and anhydrous ammonia, demand for our transportation and storage services and changes in laws or regulations affecting our assets.

~~Table of Contents~~

LIQUIDITY AND CAPITAL RESOURCES

~~Overview~~OVERVIEW

Our primary cash requirements ~~are for~~include distributions to our limited partners, debt service, capital expenditures ~~acquisitions~~ and operating expenses. Our partnership agreement requires that we distribute all ~~“Available Cash”~~Available Cash (as defined in our partnership agreement) to our common limited partners each quarter. Available Cash is generally defined as all cash receipts less cash disbursements, including distributions to our preferred unit holders, and cash reserves established by our general partner, ~~each quarter, and this term is defined~~ in the partnership agreement generally as cash on hand at the end of the quarter, plus certain permitted borrowings made subsequent to the end of the quarter, less cash reserves determined by our board of directors.

Each year, our objective is to fund our total annual reliability capital expenditures and distribution requirements with our net cash provided by operating activities during that year. If we do not generate sufficient cash from operations to meet that objective, we utilize cash on hand or other sources of cash flow, which in the past have primarily included borrowings under our revolving credit agreement, sales of non-strategic assets and, to the extent necessary, funds raised through equity or debt offerings under our shelf registration statements.its sole discretion. We have typically funded our strategic capital expenditures and acquisitions from external sources, primarily borrowings under our revolving credit agreement or funds raised through equity or debt offerings. However, our ability to raise funds by issuing debt or equity depends on many factors beyond our control. Our risk factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016 describe the risks inherent to these sources of funding and the availability thereof.

~~During periods when our cash flow from operations is less than our distribution and reliability capital requirements, we~~ may maintain our distribution level ~~because we can utilize~~with other sources of Available Cash, as provided in our partnership agreement, including borrowings under our ~~revolving credit agreement~~Revolving Credit Agreement and proceeds from the ~~sales~~sale of assets. ~~Our risk factors in Item 1A~~

We have no long-term debt maturities until 2025, and as of March 31, 2024, we had $670.4 million available for borrowing under our ~~Annual Report on Form 10-K for the year ended December~~Revolving Credit Agreement.

CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, ~~2016 describe the risks inherent in our ability to maintain or grow our distribution.~~

For 2017, we expect an increase in total cash distributed to our unitholders and higher interest costs due to our issuances of debt and equity securities in 2017. See below for additional discussion of our April 2017 equity and debt issuances. However, we expect cash flows from operations, combined with a portion of the proceeds from the termination of the Axeon Term Loan of $110.0 million to exceed our distribution and reliability capital requirements for 2017.

~~Cash Flows for the~~ ~~Nine~~ ~~Months Ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~2024 AND 2023

The following table summarizes our cash flows from operating, investing and financing ~~activities:~~activities (see also our Consolidated Statements of Cash Flows in Item 1. “Financial Statements”):


	Three Months Ended March 31,
	2024		2023
	(Thousands of Dollars)
Net cash provided by (used in):
Operating activities	$	139,734	$	164,584
Investing activities	(40,148)		88,674
Financing activities	(96,909)		(262,688)
Effect of foreign exchange rate changes on cash	32		170
Net increase (decrease) in cash, cash equivalents and restricted cash	$	2,709	$	(9,260)

Nine Months Ended September 30,
2017 2016
(Thousands of Dollars)
Net cash provided by (used in):
Operating activities $ 311,015
$ 314,549
Investing activities (1,557,041 ) (160,918 )
Financing activities 1,242,062
(243,235 )
Effect of foreign exchange rate changes on cash 1,637
3,404
Net decrease in cash and cash equivalents $ (2,327 ) $ (86,200 )

Table of Contents

Net cash provided by operating activities decreased $24.9 million for the ~~nine~~three months ended ~~September 30, 2017 was $311.0~~March 31, 2024, compared to the three months ended March 31, 2023, mainly due to a decrease in net income of $63.2 million in the first quarter of 2024, partially offset by a gain of $41.1 million related to the Sale-Leaseback Transaction in the first quarter of 2023. In addition, our working capital decreased $20.7 million for the three months ended March 31, 2024, and $32.6 million for the three months ended March 31, 2023. Generally, working capital requirements are affected by our accounts receivable, accounts payable and accrued liabilities balances, which vary depending on the timing of payments.

For the three months ended March 31, 2024, we recorded net cash used in investing activities of $40.1 million, compared to ~~$314.5 million for the nine months ended September 30, 2016. Although net income decreased, the decrease was largely attributable to non-cash expenses. For the nine months ended September 30, 2017,~~ net cash provided by ~~operating~~investing activities ~~and a portion~~ of $88.7 million for the three months ended March 31, 2023, primarily due to the following:

•proceeds of approximately $103.0 million from the ~~termination~~Sale-Leaseback Transaction and insurance proceeds of $12.4 million related to the ~~Axeon Term Loan of $110.0 million were used to fund~~2019 fire at our ~~distributions to unitholders and our general partner~~Selby, California terminal, both in the first quarter of 2023; and

•an aggregate ~~amount of $357.9 million and reliability~~increase in cash outflows related to capital expenditures of ~~$30.2 million. Proceeds from our~~$13.8 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Net cash used in financing activities decreased $165.8 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower net debt ~~and equity issuances of approximately $1.5 billion were used~~repayments. Additionally, for the three months ended March 31, 2024, compared to ~~fund~~ the ~~purchase price~~three months ended March 31, 2023, distributions to preferred unitholders decreased $9.4 million, primarily due to the redemption of the ~~Navigator Acquisition. Please refer to page 5 for our Consolidated Statements~~Series D Preferred Units in the second and third quarters of ~~Cash Flows.~~

~~For the nine months ended September 30, 2016, net cash provided by operating activities and cash on hand was used to fund our~~2023, while distributions to common unitholders ~~and our general partner in the aggregate amount of $294.2~~increased $6.3 million, ~~and reliability capital expenditures of $25.8 million. The proceeds from debt borrowings, net of repayments, proceeds from~~mainly due to the issuance of common units ~~and cash on hand were used to fund our strategic capital expenditures.~~in the third quarter of 2023.

~~Table of Contents~~

SOURCES OF LIQUIDITY

Revolving Credit Agreement

On August 22, 2017, NuStar Logistics amended its revolving credit agreement (the Revolving Credit Agreement) to extend the maturity date from October 29, 2019 to October 29, 2020, and to increase the borrowing capacity from $1.50 billion to $1.75 billion. TheAs of March 31, 2024, our Revolving Credit Agreement, ~~was also amended to increase~~due January 27, 2027, had $670.4 million available for borrowing and $325.0 million of borrowings outstanding. Letters of credit issued under our Revolving Credit Agreement totaled $4.6 million as of March 31, 2024, and limit the ~~maximum allowed consolidated debt coverage ratio (as~~amount we can borrow under our Revolving Credit Agreement. Borrowings under our Revolving Credit Agreement bear interest, at our option, at an alternative base rate or a secured overnight financing rate (SOFR) based rate, each as defined in the Revolving Credit ~~Agreement) from 5.00-to-1.00~~Agreement.

Our Revolving Credit Agreement is subject to 5.50-to-1.00 through the rolling period ending March 31, 2018. Subsequently, the maximum allowed consolidated debt coverage ratio may not exceed 5.00-to-1.00 for any rolling period ending on or after June 30, 2018. If we complete one or more acquisitions for aggregate net consideration of at least $50.0 million, our maximum consolidated debt coverage ratio ~~will increase to 5.50-to-1.00 for two rolling periods.~~

~~The requirement not to exceed a maximum~~and minimum consolidated ~~debt~~interest coverage ratio requirements, which may limit the amount we can borrow ~~under the Revolving Credit Agreement~~ to an amount that is less than the total amount available for borrowing. AsFor the rolling period of ~~September 30, 2017, our consolidated debt coverage ratio was 4.8x, and we had $863.8 million available for borrowing. Letters of credit issued under~~four quarters ending March 31, 2024, the Consolidated Debt Coverage Ratio (as defined in the Revolving Credit ~~Agreement totaled $7.7 million as~~Agreement) may not exceed 5.00-to-1.00, and the Consolidated Interest Coverage Ratio (as defined in the Revolving Credit Agreement) must not be less than 1.75-to-1.00. As of ~~September 30, 2017. Please refer to Note 4 of the Condensed Notes to~~March 31, 2024, our Consolidated ~~Financial Statements in Item 1. “Financial Statements” for a discussion on~~Debt Coverage Ratio was 4.12x and our ~~revolving credit agreement.~~Consolidated Interest Coverage Ratio was 2.05x.

Receivables Financing Agreement

NuStar Energy and NuStar Finance LLC (NuStar Finance), a special purpose entity and wholly owned subsidiary of NuStar Energy, are parties to a ~~$125.0~~$100.0 million receivables financing agreement ~~with third-party lenders (the~~(as amended, the Receivables Financing Agreement), due July 1, 2026, with a third-party lender and agreements with certain of NuStar Energy’s wholly owned subsidiaries ~~(collectively~~(together with the Receivables Financing Agreement, the Securitization Program). ~~On September 20, 2017,~~As of March 31, 2024, $125.0 million of our accounts receivable was included in the Securitization Program ~~was amended to add certain~~and the amount of ~~NuStar Energy’s wholly owned subsidiaries resulting from~~borrowings outstanding under the Navigator Acquisition and to extend the Securitization Program’s scheduled termination date from June 15, 2018 to September 20, 2020, with the option to renew for additional 364-day periods thereafter.Receivables Financing Agreement totaled $70.7 million. The amount available for borrowing under the Receivables Financing Agreement is based on the availability of eligible receivables and other customary factors and conditions. ~~Please refer to Note 4 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for additional discussion.~~

~~Other Sources of Liquidity~~

~~Other sources of liquidity as of September 30, 2017 consist of the following:~~

$365.4 million in revenue bonds pursuant to the Gulf Opportunity Zone Act of 2005 (the GoZone Bonds), with $42.5 million remaining in trust as of September 30, 2017, supported by $370.2 million in letters of credit; and

~~two short-term line of credit agreements with an uncommitted borrowing capacity of up to $85.0 million, with $68.0 million of borrowings outstanding as of September 30, 2017.~~

We are also a party to a $100.0 million uncommitted letter of credit agreement, which provides for standby letters of credit or guarantees with a term of up to one year (LOC Agreement). As of September 30, 2017, we had no letters of credit issuedBorrowings under the ~~LOC Agreement. Please refer to Note 4 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of certain of our debt agreements.~~

~~Issuance of Common Units~~

~~On April 18, 2017, we issued 14,375,000 common units representing limited partner interests~~Receivables Financing Agreement bear interest, at NuStar Finance’s option, at a ~~price of $46.35 per unit.~~ base rate or a SOFR rate, each as defined in the Receivables Financing Agreement.

Asset Sale

We used the ~~net~~ proceeds ~~from this offering~~ of ~~$657.5 million, including a contribution of $13.6~~approximately $103.0 million from the sale of our ~~general partner~~Corporate Headquarters on March 21, 2023 to ~~maintain its 2% general partner interest, to fund a portion of the purchase price for the Navigator Acquisition. Beginning with the distribution earned for the second quarter of 2017,~~repay outstanding borrowings under our general partner will not receive incentive distributions with respect to these common units. Our general partner amended and restated our partnership agreement to waive up to an aggregate $22.0 million of the quarterly incentive distributions to our general partner for any NS common units issued from the date of the Acquisition Agreement (other than those attributable to NS common units issued under any equity compensation plan) for ten consecutive quarters. Please refer toRevolving Credit Agreement. See Note 101 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion.

~~Issuance of Series B Preferred Units~~

On~~April 28, 2017~~, we issued 15,400,000 of our Series B Preferred Units representing limited partner interests at a price of $25.00 per unit. We used the net proceeds of $371.8 million from the issuance of the Series B Preferred Units to fund a portion of the purchase price for the Navigator Acquisition and to pay related fees and expenses.

Distributions on the Series B Preferred Units are payable out of any legally available funds, accrue and are cumulative from the date of original issuance of the Series B Preferred Units and are payable on the 15^th day of each of March, June, September and December of each year to holders of record on the first day of each payment month. The initial distribution rate on the Series B Preferred Units to, but not including, June 15, 2022 is 7.625% per annum of the $25.00 liquidation preference per unit (equal to $1.90625 per unit per annum). On and after June 15, 2022, distributions on the Series B Preferred Units accumulate at a

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percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 5.643%. Please refer to Note 10 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion.

~~Issuance of 5.625% Senior Notes~~

MATERIAL CASH REQUIREMENTS

Capital ~~Requirements~~Expenditures

Our operations require significant investments to maintain, upgrade or enhance the operating capacity of our existing assets. Our capital expenditures consist of:

•strategic capital expenditures, such as those to expand or upgrade the operating capacity, increase efficiency or increase the earnings potential of existing assets, whether through construction or acquisition, as well as certain capital expenditures related to support functions; and

•reliability capital expenditures, such as those required to maintain the ~~existing~~current operating capacity of existing assets or extend their useful lives, as well as those required to maintain equipment reliability and safety.

The following table summarizes our capital expenditures:


	Strategic Capital Expenditures		Reliability Capital Expenditures		Total
	(Thousands of Dollars)
For the three months ended March 31:
2024	$	27,742	$	6,902	$	34,644
2023	$	18,727	$	3,356	$	22,083

Strategic capital expenditures for the three months ended March 31, 2024 and 2023 primarily consisted of expansion projects on our Permian Crude System and Central West Refined Products Pipelines, and biofuel and other projects at our West Coast Terminals. Reliability capital expenditures primarily related to maintenance upgrade projects at our terminals.

We expect our strategic capital expenditures for the ~~amount we expect~~year ended December 31, 2024 to ~~spend for 2017:~~

Strategic Capital
Expenditures

Reliability Capital
Expenditures
Total
(Thousands of Dollars)
For the nine months ended September 30:
2017 $ 190,417
$ 30,200
$ 220,617
2016 $ 119,580
$ 25,834
$ 145,414

Expected for the year ended December 31, 2017 (a) $ 360,000 - 380,000
$ 50,000 - 70,000
$ 410,000 - 450,000

~~(a) Excludes~~be concentrated on expansion projects to accommodate production growth in the ~~purchase price of~~Permian Basin and projects to expand our renewable fuels network on the ~~Navigator Acquisition.~~

West Coast. We continue to evaluate our capital ~~spending forecast~~budget and ~~make changes as economic conditions warrant, and our actual capital expenditures for~~ ~~2017~~ may increase or decrease from our current projections. We believe we can fund our currently expected capital expenditures with cash on hand, combined with the sources of liquidity previously described. Our internal growth projects can be accelerated or scaled back depending on market conditions or customer demand.

~~Working Capital Requirements~~Distributions

~~Working capital requirements, particularly in~~Series A, B and C Preferred Units. Information on our ~~fuels marketing segment, may vary~~Series A, B and C Preferred Units is shown below:

Units

Units Issued and Outstanding as of March 31, 2024

Optional Redemption Date/Date When Distribution Rate Became Floating

Floating Annual Rate (as a Percentage of the $25.00 Liquidation Preference per Unit)

Series A Preferred Units

9,060,000

December 15, 2021

Three-month LIBOR(a) plus 6.766%

Series B Preferred Units

15,400,000

June 15, 2022

Three-month LIBOR(a) plus 5.643%

Series C Preferred Units

6,900,000

December 15, 2022

Three-month LIBOR(a)plus 6.88%

(a)Beginning with the ~~seasonality~~distribution period starting on September 15, 2023, LIBOR was replaced with the corresponding CME Term SOFR plus the applicable tenor spread adjustment of ~~demand~~0.26161%.

Distributions on our outstanding preferred units are payable out of any legally available funds, accrue and are cumulative from the ~~volatility of commodity prices for the products we market. This seasonality in demand~~original issuance dates, and ~~the volatility of commodity prices affect our accounts receivable and accounts~~are payable ~~balances, which vary depending~~ on the ~~timing~~15th day (or next business day) of ~~payments.~~each of March, June, September and December of each year to holders of record on the first business day of each payment month. Distribution information on our Series A, B and C Preferred Units is as follows (thousands of dollars, except per unit data):


	Series A Preferred Units				Series B Preferred Units				Series C Preferred Units
Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution
March 15, 2024 - June 14, 2024	$	0.77232	$	6,997	$	0.70213	$	10,813	$	0.77945	$	5,378
December 15, 2023 - March 14, 2024	$	0.77533	$	7,024	$	0.70515	$	10,859	$	0.78246	$	5,399



March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098
December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010

~~Axeon Term Loan and Credit Support~~

On February 22, 2017, we settled and terminated the $190.0 million Axeon Term Loan, pursuant to which we also provided credit support, such as guarantees, letters of credit and cash collateral, as applicable, of up to $125.0 million to Axeon. We received $110.0 million in settlement of the Axeon Term Loan, and our obligation to provide ongoing credit support to Axeon ceased. Please refer to Note 6 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of the Axeon Term Loan and credit support.

~~Defined Benefit Plans Funding~~

~~In September 2017, we contributed $11.0 million to our pension plans.~~

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~~Distributions~~

~~General Partner and~~ Common ~~Limited Partners~~Units. ~~The following table reflects the allocation of total cash distributions~~Under our partnership agreement, distribution payments are required to ~~the general partner and~~be made to our common limited partners ~~applicable to the period in which the distributions were earned:~~

~~Distribution payments to our general partner and common limited partners are made~~ within 45 days after the end of each quarter as of a record date that is set after the end of each quarter. Upon closing of the pending Merger, our common units will be converted to Sunoco’s common units as described in Note 1 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements,” and are expected to receive Sunoco’s distributions related to the first quarter of 2024.

On April 15, 2024, our Board of Directors declared a special distribution with respect to our common units of $0.212 per common unit, in accordance with the terms of the Merger Agreement. The special distribution totaling $26.8 million is to be paid on May 2, 2024 to holders of record as of April 26, 2024, subject to and conditioned upon our common unitholders approving the Merger at NuStar’s special meeting on May 1, 2024 and the Merger Agreement with respect to the proposed acquisition not having been terminated. If approval of the pending acquisition is not obtained at the special meeting (including due to the special meeting being postponed, adjourned or canceled) or the Merger Agreement with respect to the acquisition is terminated, the special distribution will not be paid until a date, and to holders of record, later determined by the Board of Directors, or it may not be paid at all.

Debt Obligations

The following table summarizes ~~information related to~~ our ~~quarterly cash distributions to our general partner and common limited partners:~~debt obligations:


	Maturity			Outstanding Obligations as of March 31, 2024
				(Thousands of Dollars)
5.75% senior notes	October 1, 2025			$	600,000
6.00% senior notes	June 1, 2026			$	500,000
Receivables Financing Agreement, 7.0% as of March 31, 2024	July 1, 2026			$	70,700
Revolving Credit Agreement, 7.9% as of March 31, 2024	January 27, 2027			$	325,000
5.625% senior notes	April 28, 2027			$	550,000
6.375% senior notes	October 1, 2030			$	600,000
GoZone Bonds 5.85% - 6.35%	2038	thru	2041	$	322,140
Subordinated notes, 12.3% as of March 31, 2024	January 15, 2043			$	402,500


~~(a)~~	~~The distribution was announced on October 18, 2017.~~

~~Preferred Units.~~ ~~The following table summarizes information related to our quarterly cash distributions on our Series A and Series B Preferred Units:~~

Period
Cash
Distributions
Per Unit

Total Cash
Distributions
Record Date Payment Date
(Thousands of Dollars)
Series A Preferred Units:
September 15, 2017 - December 14, 2017 (a) $ 0.53125
$ 4,813
December 1, 2017 December 15, 2017
June 15, 2017 - September 14, 2017 $ 0.53125
$ 4,813
September 1, 2017 September 15, 2017
March 15, 2017 - June 14, 2017 $ 0.53125
$ 4,813
June 1, 2017 June 15, 2017
November 25, 2016 - March 14, 2017 $ 0.64930556
$ 5,883
March 1, 2017 March 15, 2017

Series B Preferred Units:
September 15, 2017 to December 14, 2017 (a) $ 0.47657
$ 7,339
December 1, 2017 December 15, 2017
April 28, 2017 - September 14, 2017 $ 0.725434028
$ 11,172
September 1, 2017 September 15, 2017


~~(a)~~	~~The distribution was announced on October 18, 2017.~~

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~~Debt Obligations~~

~~As of~~ ~~September 30, 2017, we were a party to the following debt agreements:~~

~~Revolving Credit Agreement due October 29, 2020, with $878.4 million of borrowings outstanding as of September 30, 2017;~~

7.65% senior notes due April 15, 2018 with a face value of $350.0 million; 4.80% senior notes due September 1, 2020 with a face value of $450.0 million; 6.75% senior notes due February 1, 2021 with a face value of $300.0 million; 4.75% senior notes due February 1, 2022 with a face value of $250.0 million; ~~5.625%senior notes dueApril 28, 2027 with a face value of $550.0 million; and~~ ~~7.625% subordinated notes due January 15, 2043 with a face value of $402.5 million.~~

~~$365.4 million in GoZone Bonds due from 2038 to 2041;~~

~~Line of credit agreements with $68.0 million of borrowings outstanding as of September 30, 2017; and~~

~~Receivables Financing Agreement due September 20, 2020, with $46.1 million of borrowings outstanding as of September 30, 2017.~~

~~Management believes~~We believe that, as of ~~September 30, 2017~~,March 31, 2024, we are in compliance with the ~~ratios and~~financial covenants ~~contained in~~applicable to our debt ~~instruments.~~obligations. A default under certain of our debt ~~agreements~~obligations would be considered an event of default under other of our debt ~~instruments. Please refer to~~obligations. See Note 4 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of certain of our debt ~~agreements.~~obligations.

~~Credit Ratings~~

Guarantor Summarized Financial Information. NuStar Energy has no operations, and its assets consist primarily of its 100% ownership interest in its indirectly owned subsidiaries, NuStar Logistics and NuPOP. The ~~following table reflects the current outlook~~senior and ~~ratings that have been assigned to our debt:~~



	~~Standard & Poor’s~~ ~~Ratings Services~~	~~Moody’s Investor~~ ~~Service Inc.~~	~~Fitch, Inc.~~

~~Ratings~~	~~BB+~~	~~Ba1~~	BB
~~Outlook~~	~~Stable~~	~~Negative~~	~~Stable~~

~~Following the announcement of the Navigator Acquisition, Standard & Poor’s Ratings Services~~subordinated notes issued by NuStar Logistics are fully and ~~Fitch, Inc. affirmed their ratings and outlook, and Moody’s Investor Service Inc. (Moody’s) announced that it was reviewing~~unconditionally guaranteed by NuStar Energy and NuPOP. Each guarantee of the senior notes by NuStar Energy and NuPOP (i) ranks equally in right of payment with all other existing and future unsecured senior indebtedness of that guarantor, (ii) is structurally subordinated to all existing and any future indebtedness and obligations of any subsidiaries of that guarantor that do not guarantee the notes and (iii) ranks senior to its guarantee of our subordinated indebtedness. Each guarantee of the subordinated notes by NuStar Energy and NuPOP ranks equal in right of payment with all other existing and future subordinated indebtedness of that guarantor and is subordinated in right of payment and upon liquidation to the prior payment in full of all other existing and future senior indebtedness of that guarantor. NuPOP will be released from its guarantee when it no longer guarantees any obligations of NuStar Energy or any of its subsidiaries, including NuStar Logistics, ~~for a downgrade. Following its review in~~under any bank credit facility or public debt instrument. The rights of holders of our senior and subordinated notes may be limited under the ~~second quarter of 2017, Moody’s affirmed its rating and changed its outlook to “Negative.” The change in outlook had no impact on the interest rates payable on the 7.65% senior notes due 2018~~U.S. Bankruptcy Code or ~~the revolving credit agreement, which are subject to adjustment if our debt rating is downgraded (or upgraded) by certain credit rating agencies, but are not impacted by a change in the outlook.~~

~~Interest Rate Swaps~~

As of September 30, 2017 and December 31, 2016, we were a party to forward-starting interest rate swap agreements for the purpose of hedging interest rate risk. As of September 30, 2017 and December 31, 2016, the aggregate notional amount of these forward-starting interest rate swaps was $600.0 million. Please refer tostate fraudulent transfer or conveyance law. See Note 74 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a ~~more detailed~~ discussion of certain of our ~~interest rate swaps.~~debt obligations.

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The following tables present summarized combined balance sheet and income statement information for NuStar Energy, NuStar Logistics and NuPOP (collectively, the Guarantor Issuer Group). Intercompany items among the Guarantor Issuer Group have been eliminated in the summarized combined financial information below, as well as intercompany balances and activity for the Guarantor Issuer Group with non-guarantor subsidiaries, including the Guarantor Issuer Group’s investment balances in non-guarantor subsidiaries.


	March 31, 2024		December 31, 2023
	(Thousands of Dollars)
Summarized Combined Balance Sheet Information for the Guarantor Issuer Group:
Current assets	$	40,814	$	42,000
Long-term assets	$	3,137,265	$	3,160,956
Current liabilities (a)	$	171,437	$	135,366
Long-term liabilities, including long-term debt	$	3,472,138	$	3,487,719
(a)Excludes $1,919.8 million and $1,894.0 million of net intercompany payables as of March 31, 2024 and December 31, 2023, respectively, due to the non-guarantor subsidiaries from the Guarantor Issuer Group.

Long-term assets for the non-guarantor subsidiaries totaled $1,538.8 million and $1,548.3 million as of March 31, 2024 and December 31, 2023, respectively.


	Three Months Ended March 31, 2024
	(Thousands of Dollars)
Summarized Combined Income Statement Information for the Guarantor Issuer Group:
Revenues	$	191,990
Operating income	$	59,625
Interest expense, net	$	(62,208)
Net loss	$	(1,665)

Revenues and net income for the non-guarantor subsidiaries totaled $198.8 million and $44.4 million, respectively, for the three months ended March 31, 2024.

Environmental, Health and Safety

Our operations in the U.S. and Mexico are subject to extensive international, federal, state and local environmental laws and regulations, ~~in the U.S. and in the other countries in which we operate,~~ including those relating to the discharge of materials into the environment, waste management, remediation, the characteristics and composition of fuels, climate change and ~~pollution prevention measures, among others.~~greenhouse gases. Our operations are also subject to extensive ~~federal, state~~health, safety and ~~local health and safety~~security laws and regulations, including those relating to worker and pipeline safety, pipeline and storage tank integrity and ~~operator qualifications.~~operations security. Because more stringent environmental and safety laws and regulations are continuously being enacted or proposed, the level of expenditures required for environmental, health and safety matters is expected to increase in the future.

~~Contingencies~~

We are subject to certain loss contingencies, the outcomes of which could have an adverse effect on our cash flows and results of operations, as further disclosed in Note 5 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements.”

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~~RELATED PARTY TRANSACTIONS~~

~~Please refer to Note 8 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of our related party transactions.~~

CRITICAL ACCOUNTING ~~POLICIES~~ESTIMATES

The preparation of financial statements in accordance with U.S. generally accepted accounting principles (GAAP) requires management to select accounting policies and to make estimates and assumptions related thereto that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Our critical accounting ~~policies~~estimates are disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2023.

NEW ACCOUNTING PRONOUNCEMENTS

Please refer to Note 2 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a discussion of new accounting pronouncements.

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~~Item 3.~~	Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Interest Rate Risk~~

INTEREST RATE RISK

Debt

We manage our exposure to changing interest rates principally through the use of a combination of fixed-rate debt and variable-rate debt. ~~In addition, we utilize forward-starting interest rate swap agreements to lock in the rate on the interest payments related to forecasted debt issuances.~~ Borrowings under our variable-rate debt expose us to increases in interest rates.

~~Please refer to Note 7 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for a more detailed discussion of our interest rate swaps.~~ The following tables present principal cash flows and related weighted-average interest rates by expected maturity dates for our long-term ~~debt:~~

debt, excluding finance leases:

September 30, 2017
Expected Maturity Dates
2017 2018 2019 2020 2021
There-
after
Total
Fair
Value
(Thousands of Dollars, Except Interest Rates)
Long-term Debt:
Fixed-rate $ —
$ 350,000
$ —
$ 450,000
$ 300,000
$ 1,202,500
$ 2,302,500
$ 2,403,835
Weighted-average
interest rate
—
8.2 % —
4.8 % 6.8 % 6.1 % 6.2 %
Variable-rate $ —
$ —
$ —
$ 924,539
$ —
$ 365,440
$ 1,289,979
$ 1,291,042
Weighted-average
interest rate
—
—
—
2.8 % —
1.0 % 2.3 %


	March 31, 2024
	Expected Maturity Dates
	2024		2025			2026			2027			2028		Thereafter			Total			Fair Value
	(Thousands of Dollars, Except Interest Rates)
Fixed-rate debt	$	—	$	600,000		$	500,000		$	550,000		$	—	$	922,140		$	2,572,140		$	2,595,453
Weighted-average rate	—		5.8		%	6.0		%	5.6		%	—		6.3		%	6.0		%	—
Variable-rate debt	$	—	$	—		$	70,700		$	325,000		$	—	$	402,500		$	798,200		$	801,002
Weighted-average rate	—		—			7.0		%	7.9		%	—		12.3		%	10.1		%	—


	December 31, 2023
	Expected Maturity Dates
	2024		2025			2026			2027			2028		Thereafter			Total			Fair Value
	(Thousands of Dollars, Except Interest Rates)
Fixed-rate debt	$	—	$	600,000		$	500,000		$	550,000		$	—	$	922,140		$	2,572,140		$	2,595,857
Weighted-average rate	—		5.8		%	6.0		%	5.6		%	—		6.3		%	6.0		%	—
Variable-rate debt	$	—	$	—		$	69,800		$	343,000		$	—	$	402,500		$	815,300		$	830,450
Weighted-average rate	—		—			7.0		%	8.0		%	—		12.4		%	10.1		%	—

December 31, 2016
Expected Maturity Dates
2017 2018 2019 2020 2021
There-
after
Total
Fair
Value
(Thousands of Dollars, Except Interest Rates)
Long-term Debt:
Fixed-rate $ —
$ 350,000
$ —
$ 450,000
$ 300,000
$ 652,500
$ 1,752,500
$ 1,821,261
Weighted-average
interest rate
—
8.2 % —
4.8 % 6.8 % 6.5 % 6.4 %
Variable-rate $ —
$ 58,400
$ 838,992
$ —
$ —
$ 365,440
$ 1,262,832
$ 1,263,501
Weighted-average
interest rate
—
1.6 % 2.5 % —
—
0.7 % 1.9 %

Series A, B and C Preferred Units

Distributions on our Series A, B and C Preferred Units are payable out of any legally available funds, accrue and are cumulative from the original issuance dates, and are payable on the 15th day (or the next business day) of each of March, June, September and December of each year to holders of record on the first business day of each payment month. The ~~following table presents~~Series A, B and C Preferred Units expose us to changes in interest rates as the distribution rates on these units float along with interest rates. Based upon the 9,060,000 Series A Preferred Units, 15,400,000 Series B Preferred Units and 6,900,000 Series C Preferred Units outstanding as of March 31, 2024 and the $25.00 liquidation preference per unit, a change of 1.0% in interest rates would increase or decrease the annual distributions on our Series A, B and C Preferred Units by an aggregate amount of $7.8 million. See Note 6 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for additional information ~~regarding~~on our ~~forward-starting interest rate swap agreements:~~Series A, B and C Preferred Units.

Notional Amount Weighted-Average Fixed Rate Fair Value
September 30, 2017 December 31, 2016 Period of Hedge September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
(Thousands of Dollars) (Thousands of Dollars)
$ 350,000
$ 350,000
04/2018 - 04/2028 2.6 % 2.6 % $ (7,280 ) $ (1,333 )
250,000
250,000
09/2020 - 09/2030 2.8 % 2.8 % (4,043 ) 15
$ 600,000
$ 600,000
2.7 % 2.7 % $ (11,323 ) $ (1,318 )

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~~Commodity Price Risk~~COMMODITY PRICE RISK

Since the operations of our fuels marketing segment expose us to commodity price risk, we also use derivative instruments to attempt to mitigate the effects of commodity price fluctuations. ~~The derivative~~Derivative financial instruments we use consist primarily of commodity futures and swap contracts. We have a risk management committee that oversees our trading policies and procedures and certain aspects of risk management. Our risk management committee also reviews all new risk management strategies in accordanceassociated with ~~our risk management policy, as approved by our board of directors.~~

We record commodity derivative instruments in the consolidated balance sheets at fair value. We recognize mark-to-market adjustments for derivative instruments designated and qualifying as fair value hedges (Fair Value Hedges) and the related change in the fair value of the associated hedged physical inventory or firm commitment within “Cost of product sales.” For derivative instruments that have associated underlying physical inventory but do not qualify for hedge accounting (Economic Hedges and Other Derivatives), we record the mark-to-market adjustments in “Cost of product sales.”

~~The commodity contracts disclosed below represent only those contracts exposed to~~ commodity price risk ~~at the end of the period. Please refer to Note 7 of Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements”~~were not material for ~~the volume and related fair value of all commodity contracts.~~any periods presented.

September 30, 2017

Contract
Volumes
Weighted Average
Fair Value of
Current
Asset (Liability)
Pay Price Receive Price

(Thousands
of Barrels)

(Thousands of
Dollars)
Fair Value Hedges:
Futures – long:
     (refined products) 4
$ 76.62
N/A
$ (2 )
Futures – short:

     (refined products) 15
N/A
$ 77.21
$ 18

Economic Hedges and Other Derivatives:
Futures – long:

     (refined products) 7
$ 76.62
N/A
$ (4 )
Futures – short:

     (refined products) 12
N/A
$ 76.91
$ 11
Swaps – long:

     (refined products) 254
$ 48.38
N/A
$ (5 )
Swaps – short:

     (refined products) 364
N/A
$ 46.91
$ (499 )

Total fair value of open positions exposed to
commodity price risk
$ (481 )

Table of Contents

December 31, 2016

Contract
Volumes
Weighted Average
Fair Value of
Current
Asset (Liability)
Pay Price Receive Price

(Thousands
of Barrels)

(Thousands of
Dollars)
Fair Value Hedges:
Futures – long:
     (crude oil and refined products) 47
$ 55.53
N/A
$ 2
Futures – short:

     (crude oil and refined products) 107
N/A
$ 58.79
$ (243 )
Swaps – long:

     (refined products) 84
$ 45.99
N/A
$ 141
Swaps – short:

     (refined products) 573
N/A
$ 41.87
$ (3,322 )

Economic Hedges and Other Derivatives:

Futures – long:

     (crude oil and refined products) 18
$ 72.06
N/A
$ 10
Futures – short:

     (crude oil and refined products) 9
N/A
$ 71.88
$ (7 )
Swaps – long:

     (refined products) 869
$ 42.20
N/A
$ 4,737
Swaps – short:

     (refined products) 874
N/A
$ 41.40
$ (5,459 )
Forward purchase contracts:

     (crude oil) 310
$ 52.78
N/A
$ 499
Forward sales contracts:

     (crude oil) 310
N/A
$ 52.76
$ (507 )

Total fair value of open positions exposed to
commodity price risk
$ (4,149 )

~~Table of Contents~~


~~Item 4.~~	~~Controls and Procedures~~

Item 4. Controls and Procedures


~~(a)~~	~~Evaluation of disclosure controls and procedures.~~

(a)Evaluation of disclosure controls and procedures.

Our management has evaluated, with the participation of the principal executive officer and principal financial officer of NuStar GP, LLC, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report, and has concluded that our disclosure controls and procedures were effective as of ~~September 30, 2017~~.March 31, 2024.


~~(b)~~	~~Changes in internal control over financial reporting.~~

(b)Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

Item 5. Other Information

Rule 10b5-1 under the Securities Exchange Act of 1934 provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits our directors and executive officers to enter into trading plans designed to comply with Rule 10b5-1. During the three-month period ending March 31, 2024, we did not adopt or terminate and none of our executive officers or directors adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).


~~Item 6.~~	~~Exhibits~~

Item 6.Exhibits


Exhibit Number		Description

~~Exhibit~~ ~~Number~~ 2.01		~~Description~~

~~10.01~~	~~Maturity Extension Letter (Amendment No. 4) to Letter of Credit~~ Agreement and ~~Subsidiary Guaranty Agreement~~Plan of Merger, dated as of ~~July 13, 2017~~January 22, 2024, among ~~NuStar Logistics, L.P.,~~Sunoco LP, Saturn Merger Sub, LLC, NuStar Energy L.P., ~~the Lenders party thereto~~NuStar GP, LLC, Riverwalk Logistics, L.P., and ~~The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Issuing Bank and Administrative Agent~~Sunoco GP LLC (incorporated by reference to Exhibit ~~10.02 to NuStar Energy L.P.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 001-16417))~~

*10.02	~~First Amendment to Amended and Restated Aircraft Time Sharing Agreement, dated as of August 18, 2017, between NuStar Logistics, L.P. and William E. Greehey~~

~~10.03~~	Second Amendment to Amended and Restated 5-Year Revolving Credit Agreement, dated as of August 22, 2017, among NuStar Logistics, L.P., NuStar Energy L.P., JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.012.1 to NuStar Energy L.P.’s Current Report on Form 8-K filed ~~August~~January 22, ~~2017~~2024 (File No. 001-16417))

~~10.04~~3.01			~~Second~~ Amendment No. 1 to ~~Purchase~~Eighth Amended and ~~Sale~~Restated Agreement of Limited Partnership of NuStar Energy L.P., dated as of ~~September 20, 2017, by and among the Originators listed therein, NuStar Energy L.P., NuStar Finance LLC, Mizuho Bank, Ltd. and PNC Bank, National Association~~January 22, 2024 (incorporated by reference ~~to Exhibit 10.01~~ to NuStar Energy L.P.’s Current Report on Form 8-K filed ~~September 20, 2017~~January 22, 2024 (File No. 001-16417)), Exhibit 3.1)

~~10.05~~10.01			~~Second Amendment to Receivables Financing~~Support Agreement, dated as of ~~September 20, 2017,~~January 22, 2024, by and among ~~NuStar Finance, LLC, as Borrower,~~Sunoco LP, NuStar Energy L.P.~~, as initial Servicer, Mizuho Bank, Ltd.~~ and ~~PNC Bank, National Association~~Energy Transfer L.P. (incorporated by reference ~~to Exhibit 10.02~~ to NuStar Energy L.P.’s Current Report on Form 8-K filed ~~September 20, 2017~~January 22, 2024 (File No. 001-16417), Exhibit 10.1)

22.01		Subsidiary Guarantors and Issuers of Guaranteed Securities (incorporated by reference to Exhibit 22.01 to NuStar Energy L.P.’s Annual Report on Form 10-K for year ended December 31, 2023 (File No. 001-16417))

*~~12.01~~31.01			~~Statement of Computation of Ratio of Earnings to Fixed Charges~~

*31.01	Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal executive officer

*31.02			Rule 13a-14(a) Certification (under Section 302 of the Sarbanes-Oxley Act of 2002) of principal financial officer

**32.01			Section 1350 Certification (under Section 906 of the Sarbanes-Oxley Act of 2002) of principal executive officer

**32.02			Section 1350 Certification (under Section 906 of the Sarbanes-Oxley Act of 2002) of principal financial officer

*101.INS				Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*101.SCH				Inline XBRL Taxonomy Extension Schema Document

*101.CAL				Inline XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF				Inline XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB				Inline XBRL Taxonomy Extension Label Linkbase Document

*101.PRE				Inline XBRL Taxonomy Extension Presentation Linkbase Document

*104		~~Filed herewith.~~Cover Page Interactive Data File - Formatted in Inline XBRL and contained in Exhibit 101
*	Filed herewith.
**				Furnished herewith.

Table of Contents

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, thereunto duly authorized.

NUSTAR ENERGY L.P.

(Registrant)

By: Riverwalk Logistics, L.P., its general partner

By: NuStar GP, LLC, its general partner


By:
~~By:~~	/s/ Bradley C. Barron
		Bradley C. Barron
		Chairman of the Board, President and Chief Executive Officer
		~~November 8, 2017~~April 29, 2024

By:		/s/ Thomas R. Shoaf
		Thomas R. Shoaf
		Executive Vice President and Chief Financial Officer
		~~November 8, 2017~~April 29, 2024

By:		/s/ Jorge A. del Alamo
		Jorge A. del Alamo
		Senior Vice President - Chief Information Officer and Controller
		~~November 8, 2017~~April 29, 2024

5129



	Preliminary Purchase Price Allocation
	(Thousands of Dollars)
Accounts receivable	$	4,747
Other current assets	2,436
Property, plant and equipment, net	376,690
Intangible assets (a)	700,000
Goodwill (b)	399,306
Other long-term assets, net	2,125
Current liabilities	(23,585		)
Preliminary purchase price allocation, net of cash acquired	$	1,461,719



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
	(Thousands of Dollars)
Permian Crude System:
Revenues	$	15,663	$	25,142
Operating income (loss)	$	1,050	$	(2,374	)

Transaction costs:
General and administrative expenses	$	169	$	10,359
Interest expense, net	—		3,688
Total transaction costs	$	169	$	14,047



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017 (a)		2016		2017		2016
	(Thousands of Dollars, Except Per Unit Data)
Revenues	$	440,566	$	449,250	$	1,377,883	$	1,301,419
Net income	$	38,592	$	34,417	$	102,251	$	104,535

Basic and diluted net income per common unit	$	0.15	$	0.16	$	0.31	$	0.50



	September 30, 2017
	Level 1			Level 2			Level 3		Total
	(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances	$	6,960		$	—		$	—	$	6,960
Liabilities:
Accrued liabilities:
Product imbalances	$	(2,164	)	$	—		$	—	$	(2,164	)
Commodity derivatives	(791		)	—			—		(791		)
Interest rate swaps	—			(7,280		)	—		(7,280		)
Other long-term liabilities:
Interest rate swaps	—			(4,043		)	—		(4,043		)
Total	$	(2,955	)	$	(11,323	)	$	—	$	(14,278	)



	December 31, 2016
	Level 1			Level 2			Level 3			Total
	(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances	$	1,551		$	—		$	—		$	1,551
Commodity derivatives	—			155			—			155
Other long-term assets, net:
Interest rate swaps	—			1,314			—			1,314
Total	$	1,551		$	1,469		$	—		$	3,020
Liabilities:
Accrued liabilities:
Product imbalances	$	(1,577	)	$	—		$	—		$	(1,577	)
Commodity derivatives	(4,887		)	(165		)	—			(5,052		)
Other long-term liabilities:
Guarantee liability	—			—			(1,230		)	(1,230		)
Interest rate swaps	—			(2,632		)	—			(2,632		)
Total	$	(6,464	)	$	(2,797	)	$	(1,230	)	$	(10,491	)



		Asset Derivatives				Liability Derivatives
	Balance Sheet Location	September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016
		(Thousands of Dollars)
Derivatives Designated as Hedging Instruments:
Interest rate swaps	Other long-term assets, net	$	—	$	1,314	$	—		$	—
Commodity contracts	Accrued liabilities	18		144		(2		)	(3,566		)
Interest rate swaps	Accrued liabilities	—		—		(7,280		)	—
Interest rate swaps	Other long-term liabilities	—		—		(4,043		)	(2,632		)
Total		18		1,458		(11,325		)	(6,198		)

Derivatives Not Designated as Hedging Instruments:
Commodity contracts	Other current assets	—		265		—			(110		)
Commodity contracts	Accrued liabilities	655		9,128		(1,462		)	(10,758		)
Total		655		9,393		(1,462		)	(10,868		)

Total Derivatives		$	673	$	10,851	$	(12,787	)	$	(17,066	)



	Pension Plans						Other Postretirement Benefits
	2017			2016			2017			2016
	(Thousands of Dollars)
For the three months ended September 30:
Service cost	$	2,239		$	1,926		$	115		$	105
Interest cost	1,127			1,006			107			100
Expected return on assets	(1,603		)	(1,353		)	—			—
Amortization of prior service credit	(515		)	(516		)	(286		)	(286		)
Amortization of net loss	371			273			47			45
Net periodic benefit cost (income)	$	1,619		$	1,336		$	(17	)	$	(36	)

For the nine months ended September 30:
Service cost	$	6,717		$	5,778		$	341		$	315
Interest cost	3,381			3,018			323			300
Expected return on assets	(4,808		)	(4,056		)	—			—
Amortization of prior service credit	(1,546		)	(1,549		)	(858		)	(858		)
Amortization of net loss	1,113			819			143			135
Net periodic benefit cost (income)	$	4,857		$	4,010		$	(51	)	$	(108	)



Balance as of January 1, 2017	$	1,611,617
Net income	122,782
Unit-based compensation	4,164
Other comprehensive income	10,784
Distributions to partners	(358,138		)
Issuance of preferred and common units, including contribution from general partner	1,029,257
Other	(604		)
Balance as of September 30, 2017	$	2,419,862



	Foreign Currency Translation			Cash Flow Hedges			Pension and Other Postretirement Benefits			Total
	(Thousands of Dollars)
Balance as of January 1, 2017	$	(69,069	)	$	(22,258	)	$	(2,850	)	$	(94,177	)
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassification adjustments	16,825			(10,005		)	—			6,820
Net gain on pension costs reclassified into operating expense	—			—			(858		)	(858		)
Net gain on pension costs reclassified into general and administrative expense	—			—			(290		)	(290		)
Net loss on cash flow hedges reclassified into interest expense, net	—			5,112			—			5,112
Other comprehensive income (loss)	16,825			(4,893		)	(1,148		)	10,784
Balance as of September 30, 2017	$	(52,244	)	$	(27,151	)	$	(3,998	)	$	(83,393	)



Quarter Ended	Cash Distributions Per Unit		Total Cash Distributions		Record Date	Payment Date
			(Thousands of Dollars)
September 30, 2017 (a)	$	1.095	$	115,084	November 9, 2017	November 14, 2017
June 30, 2017	$	1.095	$	115,083	August 7, 2017	August 11, 2017
March 31, 2017	$	1.095	$	117,168	May 8, 2017	May 12, 2017
December 31, 2016	$	1.095	$	98,971	February 8, 2017	February 13, 2017



Period	Cash Distributions Per Unit		Total Cash Distributions		Record Date	Payment Date
			(Thousands of Dollars)
Series A Preferred Units:
September 15, 2017 - December 14, 2017 (a)	$	0.53125	$	4,813	December 1, 2017	December 15, 2017
June 15, 2017 - September 14, 2017	$	0.53125	$	4,813	September 1, 2017	September 15, 2017
March 15, 2017 - June 14, 2017	$	0.53125	$	4,813	June 1, 2017	June 15, 2017
November 25, 2016 - March 14, 2017	$	0.64930556	$	5,883	March 1, 2017	March 15, 2017

Series B Preferred Units:
September 15, 2017 - December 14, 2017 (a)	$	0.47657	$	7,339	December 1, 2017	December 15, 2017
April 28, 2017 - September 14, 2017	$	0.725434028	$	11,172	September 1, 2017	September 15, 2017



	NuStar Energy		NuStar Logistics		NuPOP		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	894	$	28	$	—	$	32,693	$	—		$	33,615
Receivables, net	—		114		—		152,041		—			152,155
Inventories	—		1,733		6,580		14,984		—			23,297
Other current assets	118		9,378		5,405		9,904		—			24,805
Intercompany receivable	—		3,183,871		—		—		(3,183,871		)	—
Total current assets	1,012		3,195,124		11,985		209,622		(3,183,871		)	233,872
Property, plant and equipment, net	—		1,904,510		582,390		1,701,249		—			4,188,149
Intangible assets, net	—		60,886		—		736,453		—			797,339
Goodwill	—		149,453		170,652		775,838		—			1,095,943
Investment in wholly owned subsidiaries	2,992,907		24,152		1,291,487		816,809		(5,125,355		)	—
Deferred income tax asset	—		—		—		1,070		—			1,070
Other long-term assets, net	378		65,393		27,782		8,842		—			102,395
Total assets	$	2,994,297	$	5,399,518	$	2,084,296	$	4,249,883	$	(8,309,226	)	$	6,418,768
Liabilities and Partners’ Equity
Accounts payable	$	2,201	$	24,752	$	13,812	$	57,089	$	—		$	97,854
Short-term debt	—		68,000		—		—		—			68,000
Current portion of long-term debt	—		350,007		—		—		—			350,007
Accrued interest payable	—		41,780		—		31		—			41,811
Accrued liabilities	822		19,980		10,527		29,137		—			60,466
Taxes other than income tax	63		7,551		4,922		7,404		—			19,940
Income tax payable	—		704		3		2,282		—			2,989
Intercompany payable	487,956		—		1,228,444		1,467,471		(3,183,871		)	—
Total current liabilities	491,042		512,774		1,257,708		1,563,414		(3,183,871		)	641,067
Long-term debt	—		3,186,908		—		45,691		—			3,232,599
Deferred income tax liability	—		1,862		13		21,291		—			23,166
Other long-term liabilities	—		48,605		9,895		43,574		—			102,074
Total partners’ equity	2,503,255		1,649,369		816,680		2,575,913		(5,125,355		)	2,419,862
Total liabilities and partners’ equity	$	2,994,297	$	5,399,518	$	2,084,296	$	4,249,883	$	(8,309,226	)	$	6,418,768



	Strategic Capital Expenditures		Reliability Capital Expenditures		Total
	(Thousands of Dollars)
For the nine months ended September 30:
2017	$	190,417	$	30,200	$	220,617
2016	$	119,580	$	25,834	$	145,414

Expected for the year ended December 31, 2017 (a)	$ 360,000 - 380,000		$ 50,000 - 70,000		$ 410,000 - 450,000



Notional Amount					Weighted-Average Fixed Rate				Fair Value
September 30, 2017		December 31, 2016		Period of Hedge	September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016
(Thousands of Dollars)									(Thousands of Dollars)
$	350,000	$	350,000	04/2018 - 04/2028	2.6	%	2.6	%	$	(7,280	)	$	(1,333	)
250,000		250,000		09/2020 - 09/2030	2.8	%	2.8	%	(4,043		)	15
$	600,000	$	600,000		2.7	%	2.7	%	$	(11,323	)	$	(1,318	)



	September 30, 2017
	Contract Volumes	Weighted Average				Fair Value of Current Asset (Liability)
	Contract Volumes	Pay Price		Receive Price		Fair Value of Current Asset (Liability)
	(Thousands of Barrels)					(Thousands of Dollars)
Fair Value Hedges:
Futures – long:
(refined products)	4	$	76.62	N/A		$	(2	)
Futures – short:
(refined products)	15	N/A		$	77.21	$	18

Economic Hedges and Other Derivatives:
Futures – long:
(refined products)	7	$	76.62	N/A		$	(4	)
Futures – short:
(refined products)	12	N/A		$	76.91	$	11
Swaps – long:
(refined products)	254	$	48.38	N/A		$	(5	)
Swaps – short:
(refined products)	364	N/A		$	46.91	$	(499	)

Total fair value of open positions exposed to commodity price risk						$	(481	)